##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number 1-5263
 THE LUBRIZOL CORPORATION
  Ohio
    
    34-0367600(State or other jurisdiction of
    
    (I.R.S.Employerincorporation or organization)
    
    Identification No.)
 
 
 þ o
 o o
  Large accelerated filer: þ
    
    Accelerated filer: o
    
    Non-accelerated filer: o
    
    Smaller reporting company: o(Do not check if a smaller reporting company)
 o þ




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##### 



THE LUBRIZOL CORPORATION  Quarterly Report on Form 10-Q  Three Months Ended March 31, 2009
 Table of Contents
  
 Page NumberPART I. FINANCIAL INFORMATIONItem 1
    
    Financial Statements (unaudited):Consolidated Statements of Income
    
    1Consolidated Balance Sheets
    
    2Consolidated Statements of Cash Flows
    
    3Notes to Consolidated Financial Statements
    
    4Item 2
    
    Management's Discussion and Analysis of Financial Condition and Results of Operations
    
    21Item 3
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    34Item 4
    
    Controls and Procedures
    
    35PART II. OTHER INFORMATIONItem 2
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    36Item 6
    
    Exhibits
    
    37Signatures
    
    38EX-3.1EX-3.2EX-31.1EX-31.2EX-32.1




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PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 THE LUBRIZOL CORPORATION
 
   Three Months EndedMarch 31,(In Millions of Dollars Except Per Share Data)
    
    2009
    
    
    2008Revenues
    
    $
    1,012.4
    
    
    $
    1,227.3Cost of sales
    
    
    738.5
    
    
    
    934.5Gross profit
    
    
    273.9
    
    
    
    292.8Selling and administrative expenses
    
    
    93.8
    
    
    
    108.6Research, testing and development expenses
    
    
    49.0
    
    
    
    54.1Amortization of intangible assets
    
    
    6.3
    
    
    
    7.0Restructuring and impairment charges
    
    
    11.4
    
    
    
    4.8Other income-net
    
    
    (5.2
    )
    
    
    (4.9
    )Interest income
    
    
    (2.7
    )
    
    
    (4.2
    )Interest expense
    
    
    29.4
    
    
    
    17.9Income before income taxes
    
    
    91.9
    
    
    
    109.5Provision for income taxes
    
    
    26.7
    
    
    
    33.5Net income
    
    
    65.2
    
    
    
    76.0Net income attributable to noncontrolling interests
    
    
    1.0
    
    
    
    2.4Net income attributable to The Lubrizol Corporation
    
    $
    64.2
    
    
    $
    73.6Net income per share attributable to

The Lubrizol Corporation, basic
    
    $
    0.95
    
    
    $
    1.07Net income per share attributable to
The Lubrizol Corporation, diluted
    
    $
    0.95
    
    
    $
    1.06Dividends paid per share
    
    $
    0.31
    
    
    $
    0.30
 Amounts shown are unaudited.   The accompanying notes are an integral part of these consolidated financial statements.
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THE LUBRIZOL CORPORATION
 
   March 31,
    
    
    December 31,(In Millions of Dollars Except Share Data)
    
    2009
    
    
    2008ASSETSCash and cash equivalents
    
    $
    623.7
    
    
    $
    186.2Investments
    
    
    3.7
    
    
    
    9.8Receivables
    
    
    600.8
    
    
    
    608.5Inventories
    
    
    642.5
    
    
    
    814.6Other current assets
    
    
    92.5
    
    
    
    80.8Total current assets
    
    
    1,963.2
    
    
    
    1,699.9Property and equipment  at cost
    
    
    2,860.0
    
    
    
    2,878.0Less accumulated depreciation
    
    
    1,671.8
    
    
    
    1,680.4Property and equipment  net
    
    
    1,188.2
    
    
    
    1,197.6Goodwill
    
    
    773.2
    
    
    
    782.1Intangible assets  net
    
    
    347.9
    
    
    
    361.0Investments in non-consolidated companies
    
    
    9.0
    
    
    
    7.3Other assets
    
    
    107.6
    
    
    
    102.6TOTAL
    
    $
    4,389.1
    
    
    $
    4,150.5LIABILITIES AND SHAREHOLDERS EQUITYShort-term debt and current portion of long-term debt
    
    $
    212.8
    
    
    $
    391.2Accounts payable
    
    
    209.8
    
    
    
    350.4Accrued expenses and other current liabilities
    
    
    273.1
    
    
    
    279.7Total current liabilities
    
    
    695.7
    
    
    
    1,021.3Long-term debt
    
    
    1,491.0
    
    
    
    954.6Pension obligations
    
    
    335.8
    
    
    
    340.1Other postretirement benefit obligations
    
    
    84.0
    
    
    
    83.1Noncurrent liabilities
    
    
    124.9
    
    
    
    129.1Deferred income taxes
    
    
    36.4
    
    
    
    37.7Total liabilities
    
    
    2,767.8
    
    
    
    2,565.9Contingencies and commitmentsPreferred stock without par value  unissued
    
    
    
    
    
    
    Common shares without par value:Authorized  120,000,000 sharesOutstanding  67,396,719 shares at March 31, 2009 after deducting
18,799,175 treasury shares; 67,257,963 shares at December 31, 2008
after deducting 18,937,931 treasury shares
    
    
    765.4
    
    
    
    764.7Retained earnings
    
    
    970.5
    
    
    
    906.3Accumulated other comprehensive loss
    
    
    (175.6
    )
    
    
    (147.3
    )Total of The Lubrizol Corporation shareholders equity
    
    
    1,560.3
    
    
    
    1,523.7Noncontrolling interests
    
    
    61.0
    
    
    
    60.9Total shareholders equity
    
    
    1,621.3
    
    
    
    1,584.6TOTAL
    
    $
    4,389.1
    
    
    $
    4,150.5
 Amounts shown are unaudited.   The accompanying notes are an integral part of these consolidated financial statements.
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THE LUBRIZOL CORPORATION
 
   Three Months EndedMarch 31,(In Millions of Dollars)
    
    2009
    
    
    2008CASH PROVIDED BY (USED FOR):OPERATING ACTIVITIESNet income
    
    $
    65.2
    
    
    $
    76.0Adjustments to reconcile net income to cash provided by
operating activities:Depreciation and amortization
    
    
    41.3
    
    
    
    41.4Deferred income taxes
    
    
    (9.3
    )
    
    
    0.1Deferred compensation
    
    
    2.5
    
    
    
    2.5Restructuring and impairment charges
    
    
    
    
    
    
    4.0Loss (gain) from investments and sales of property and equipment
    
    
    0.1
    
    
    
    (0.1
    )Change in current assets and liabilities, net of acquisitions:Receivables
    
    
    1.3
    
    
    
    (66.9
    )Inventories
    
    
    156.3
    
    
    
    (38.0
    )Accounts payable, accrued expenses and other current liabilities
    
    
    (93.4
    )
    
    
    26.8Other current assets
    
    
    (2.3
    )
    
    
    (8.0
    )61.9
    
    
    
    (86.1
    )Other items-net
    
    
    3.9
    
    
    
    5.3Total operating activities
    
    
    165.6
    
    
    
    43.1INVESTING ACTIVITIESCapital expenditures
    
    
    (44.3
    )
    
    
    (51.5
    )Acquisitions
    
    
    (2.6
    )
    
    
    0.9Proceeds from investments
    
    
    3.3
    
    
    
    Net proceeds from sales of property and equipment
    
    
    
    
    
    
    0.3Other items-net
    
    
    
    
    
    
    (0.1
    )Total investing activities
    
    
    (43.6
    )
    
    
    (50.4
    )FINANCING ACTIVITIESChanges in short-term debt-net
    
    
    (0.2
    )
    
    
    0.2Repayments of long-term debt
    
    
    (285.7
    )
    
    
    Proceeds from the issuance of long-term debt
    
    
    646.3
    
    
    
    Payment of Treasury rate lock upon settlement
    
    
    (16.7
    )
    
    
    Payment of debt issuance costs
    
    
    (4.8
    )
    
    
    Dividends paid
    
    
    (20.8
    )
    
    
    (20.5
    )Common shares purchased
    
    
    
    
    
    
    (25.0
    )Proceeds from the exercise of stock options
    
    
    0.8
    
    
    
    2.1Excess tax benefit from the exercise of stock options and awards
    
    
    0.1
    
    
    
    1.7Total financing activities
    
    
    319.0
    
    
    
    (41.5
    )Effect of exchange rate changes on cash
    
    
    (3.5
    )
    
    
    5.7Net increase (decrease) in cash and cash equivalents
    
    
    437.5
    
    
    
    (43.1
    )Cash and cash equivalents at the beginning of period
    
    
    186.2
    
    
    
    502.3Cash and cash equivalents at the end of period
    
    $
    623.7
    
    
    $
    459.2
 Amounts shown are unaudited.   The accompanying notes are an integral part of these consolidated financial statements.
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THE LUBRIZOL CORPORATION
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Three Months Ended March 31, 2009 and 2008
 (In Millions, Except Share and Per Share Data)
 (Unaudited)
 1. Basis of Presentation
   2. Significant Accounting Policies
 Net Income per Share Attributable to The Lubrizol Corporation
  Three Months EndedMarch 31,2009
    
    
    2008Numerator:Net income attributable to The Lubrizol Corporation
    
    $
    64.2
    
    
    $
    73.6Denominator (in millions of shares):Weighted-average common shares outstanding
    
    
    67.7
    
    
    
    68.6Dilutive effect of stock options and awards
    
    
    0.3
    
    
    
    0.7Denominator for net income per share, diluted
    
    
    68.0
    
    
    
    69.3Net income per share attributable to The Lubrizol Corporation, basic
    
    $
    0.95
    
    
    $
    1.07Net income per share attributable to The Lubrizol Corporation, diluted
    
    $
    0.95
    
    
    $
    1.06
  Use of Estimates
  4




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New Accounting Standards
      5




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3. Acquisitions
    4. Inventories
  March 31,
    
    
    December 31,2009
    
    
    2008Finished products
    
    $
    378.9
    
    
    $
    468.8Products in process
    
    
    106.9
    
    
    
    137.8Raw materials
    
    
    121.3
    
    
    
    172.8Supplies and engine test parts
    
    
    35.4
    
    
    
    35.2Total inventory
    
    $
    642.5
    
    
    $
    814.6
  6




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5. Goodwill and Intangible Assets
 ® ® ®
 LubrizolAdvanced
    
    
    LubrizolMaterials
    
    
    Additives
    
    
    TotalBalance, December 31, 2008
    
        
        
    $
    599.0
    
    
    $
    183.1
    
    
    $
    782.1Goodwill acquired and purchase adjustments
    
        
        
    
    0.8
    
    
    
    
    
    
    
    0.8Translation adjustments
    
        
        
    
    (9.0
    )
    
    
    (0.7
    )
    
    
    (9.7
    )Balance, March 31, 2009
    
        
        
    $
    590.8
    
    
    $
    182.4
    
    
    $
    773.2The major components of the companys identifiable intangible assets are customer lists,
technology, trademarks, patents, land-use rights, favorable lease arrangements and non-compete
agreements. Finite-lived intangible assets are amortized over their useful lives, which range
between 3 and 50 years. The companys indefinite-lived intangible assets include certain
trademarks that are tested for impairment each year as of October 1 or more frequently if
impairment indicators arise. Indefinite-lived trademarks are assessed for impairment separately
from goodwill.The following table shows the components of identifiable intangible assets:March 31, 2009
    
    
    December 31, 2008Gross
    
    
    
    
    
    
    GrossCarrying
    
    
    Accumulated
    
    
    Carrying
    
    
    AccumulatedAmount
    
    
    Amortization
    
    
    Amount
    
    
    AmortizationAmortized intangible assets:Customer lists
    
    $
    185.8
    
    
    $
    46.8
    
    
    $
    189.2
    
    
    $
    44.1Technology
    
    
    148.3
    
    
    
    56.1
    
    
    
    160.3
    
    
    
    66.9Trademarks
    
    
    29.8
    
    
    
    8.6
    
    
    
    30.3
    
    
    
    8.3Patents
    
    
    10.0
    
    
    
    4.7
    
    
    
    10.2
    
    
    
    4.6Land-use rights and favorable lease arrangements
    
    
    11.4
    
    
    
    2.0
    
    
    
    14.6
    
    
    
    1.9Non-compete agreements
    
    
    0.8
    
    
    
    0.2
    
    
    
    1.0
    
    
    
    0.3Total amortized intangible assets
    
    
    386.1
    
    
    
    118.4
    
    
    
    405.6
    
    
    
    126.1Non-amortized trademarks
    
    
    80.2
    
    
    
    
    
    
    
    81.5
    
    
    
    Total
    
    $
    466.3
    
    
    $
    118.4
    
    
    $
    487.1
    
    
    $
    126.1
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6. Debt
  March 31,
    
    
    December 31,2009
    
    
    2008Short-term debt and current portion of long-term debt:Current portion of long-term debt
    
    $
    208.1
    
    
    $
    386.3Other short-term debt
    
    
    4.7
    
    
    
    4.9$
    212.8
    
    
    $
    391.2Long-term debt:4.625% notes, due 2009, net of original issue discount of $0.1 million at
December 31, 2008, and fair value adjustments of $2.9 million and $4.3
million for unrealized gains on derivative instruments at March 31, 2009
and December 31, 2008, respectively
    
    $
    207.8
    
    
    $
    386.05.5% notes, due 2014, net of original issue discount of $1.8 million and
$1.9 million at March 31, 2009 and December 31, 2008, respectively
    
    
    448.2
    
    
    
    448.18.875% notes, due 2019, net of original issue discount of $3.7 million at
March 31, 2009
    
    
    496.3
    
    
    
    7.25% debentures, due 2025
    
    
    100.0
    
    
    
    100.06.5% debentures, due 2034, net of original issue discount of $4.7 million
at March 31, 2009 and December 31, 2008
    
    
    295.3
    
    
    
    295.3Debt supported by long-term banking arrangements:Term loan, at LIBOR plus 2.75% (3.98% at March 31, 2009)
    
    
    150.0
    
    
    
    U.S. revolving credit borrowing, at prime (3.25% at December 31, 2008)
    
    
    
    
    
    
    75.0Euro revolving credit borrowing, at EURIBOR plus .325% (3.036% at
December 31, 2008)
    
    
    
    
    
    
    34.9Other
    
    
    1.5
    
    
    
    1.61,699.1
    
    
    
    1,340.9Less: current portion of long-term debt
    
    
    208.1
    
    
    
    386.3Total long-term debt
    
    $
    1,491.0
    
    
    $
    954.6
    8




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7. Derivative Instruments and Hedging Activities
   9




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Asset DerivativesMarch 31,
    
    
    December 31,Balance Sheet Location
    
    2009
    
    
    2008Derivatives designated
as hedging instruments:Interest rate swap agreements
    
    Other current assets
    
    $
    2.9
    
    
    $
    4.3Derivatives not designated
as hedging instruments:Foreign currency forward contracts
    
    Other current assets
    
    $
    1.0
    
    
    $
    2.1Liability DerivativesMarch 31,
    
    
    December 31,Balance Sheet Location
    
    2009
    
    
    2008Derivatives designated as
hedging instruments:Treasury rate lock agreements
    
    Accrued expenses and other current liabilities
    
    $
    
    
    
    $
    20.0Commodity purchase contracts
    
    Accrued expenses and other current liabilities
    
    
    6.9
    
    
    
    5.5Commodity purchase contracts
    
    Noncurrent liabilities
    
    
    1.7
    
    
    
    1.5$
    8.6
    
    
    $
    27.0Derivatives not designated as
hedging instruments:Foreign currency forward contracts
    
    Accrued expenses and other current liabilities
    
    $
    0.1
    
    
    $
    0.3
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Fair Value Hedges
  Three Months EndedLocation of Gain (Loss)
    
    
    March 31,Derivative
    
    Recognized in Earnings
    
    
    2009
    
    
    2008Interest rate swap agreements
    
    Interest expense
    
    $
    (1.4
    )
    
    $
    8.5Three Months EndedLocation of Gain (Loss)
    
    
    March 31,Hedged Item
    
    Recognized in Earnings
    
    
    2009
    
    
    2008Long-term debt
    
    Interest expense
    
    $
    1.4
    
    
    $
    (8.5
    )
 Cash Flow Hedges
    11




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Three Months EndedMarch 31,Derivative
    
    
    
    2009
    
    
    2008Commodity purchase contracts
    
    
    
    $
    (2.4
    )
    
    $
    2.6Treasury rate lock agreements
    
    
    
    
    2.1
    
    
    
    $
    (0.3
    )
    
    $
    2.6The effective portions of pre-tax losses on derivative instruments designated as cash flow hedges
reclassified from accumulated other comprehensive loss (AOCL) into earnings for the three months
ended March 31, 2009 and 2008 were as follows:Location of Loss
    
    Three Months EndedReclassified from
    
    March 31,Derivative
    
    AOCL into Earnings
    
    2009
    
    
    2008Commodity purchase contracts
    
    Cost of sales
    
    $
    (2.0
    )
    
    $
    (0.3
    )Treasury rate lock agreements
    
    Interest expense
    
    
    (1.8
    )
    
    
    (1.7
    )$
    (3.8
    )
    
    $
    (2.0
    )The company estimates that it will reclassify into earnings during the next twelve months losses of
approximately $5.1 million ($3.3 million net of tax) and $6.9 million ($4.5 million net of tax)
from the amounts recorded in accumulated other comprehensive loss for Treasury rate lock agreements
and commodity purchase contracts, respectively.Derivative Instruments Not Designated as HedgesThe company selectively uses foreign currency forward contracts, in addition to working capital
management, pricing and sourcing, to minimize the potential effect of currency changes on its
earnings. The companys principal currency exposures are the euro, the pound sterling, the
Japanese yen, the Canadian dollar and the Brazilian real. The company does not designate these
foreign currency forward contracts as hedges, as the objective for entering into these contracts is
to minimize the amount of transaction gains or losses that are included in current earnings arising
from exchange rate changes. The maximum amount of foreign currency forward contracts outstanding
at any one time was $29.3 million during the three months ended March 31, 2009. At March 31, 2009
and December 31, 2008, the notional amounts of open short-term forward contracts to buy or sell
currencies were $9.5 million and $25.0 million, respectively. The company recognized the gains on
foreign currency forward contracts for the three months ended March 31, 2009 and 2008 as follows:Three Months EndedLocation of Gain
    
    March 31,Derivative
    
    Recognized in Earnings
    
    2009
    
    
    2008Foreign currency forward contracts
    
    Other income-net
    
    $
    0.2
    
    
    $
    0.2
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8. Fair Value Measurements
   Fair Value Measurements at Reporting Date UsingQuoted Prices
    
    
    Significantin Active
    
    
    Other
    
    
    SignificantMarkets for
    
    
    Observable
    
    
    UnobservableMarch 31,
    
    
    Identical Assets
    
    
    Inputs
    
    
    Inputs2009
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Assets:Money market mutual funds
    
    $
    498.9
    
    
    $
    492.5
    
    
    $
    6.4
    
    
    $
    Interest rate swaps
    
    
    2.9
    
    
    
    
    
    
    
    2.9
    
    
    
    Foreign currency forward contracts
    
    
    1.0
    
    
    
    
    
    
    
    1.0
    
    
    
    $
    502.8
    
    
    $
    492.5
    
    
    $
    10.3
    
    
    $
    Liabilities:Deferred compensation plans
    
    $
    20.2
    
    
    $
    20.2
    
    
    $
    
    
    
    $
    Forward commodity contracts
    
    
    8.6
    
    
    
    
    
    
    
    8.6
    
    
    
    Foreign currency forward contracts
    
    
    0.1
    
    
    
    
    
    
    
    0.1
    
    
    
    $
    28.9
    
    
    $
    20.2
    
    
    $
    8.7
    
    
    $
    9. Comprehensive IncomeTotal comprehensive income was comprised of the following:Three Months EndedMarch 31,2009
    
    
    2008Net income
    
    
    
    
    
    
    
    
    
    $
    65.2
    
    
    $
    76.0Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    (34.2
    )
    
    
    76.1Pension and other postretirement benefit plans
    
    
    
    
    
    
    
    
    
    
    2.8
    
    
    
    0.6(Loss) gain on natural gas hedges, net
    
    
    
    
    
    
    
    
    
    
    (1.1
    )
    
    
    2.8Changes in treasury rate locks, net
    
    
    
    
    
    
    
    
    
    
    3.3
    
    
    
    1.1Total comprehensive income
    
    
    
    
    
    
    
    
    
    $
    36.0
    
    
    $
    156.6Comprehensive income attributable to
noncontrolling interests
    
    
    
    0.1
    
    
    
    2.4Comprehensive income attributable to
The Lubrizol Corporation
    
    
    
    
    
    $
    35.9
    
    
    $
    154.2
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10. Shareholders Equity
  Shareholders EquityAccumulatedNumber of
    
    
    
    
    
    
    
    
    
    
    OtherShares
    
    
    Common
    
    
    Retained
    
    
    Comprehensive
    
    
    NoncontrollingOutstanding
    
    
    Shares
    
    
    Earnings
    
    
    Loss
    
    
    Interests
    
    
    TotalBalance, January 1, 2009
    
    
    67.3
    
    
    $
    764.7
    
    
    $
    906.3
    
    
    $
    (147.3
    )
    
    $
    60.9
    
    
    $
    1,584.6Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    64.2
    
    
    
    
    
    
    
    1.0
    
    
    
    65.2Other comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (28.3
    )
    
    
    (0.9
    )
    
    
    (29.2
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    36.0Deferred stock compensation
    
    
    
    
    
    
    0.7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.7Shares issued upon exercise
of stock options and awards
    
    
    0.1
    
    
    
    0.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.8Tax benefit (shortfall) from stock
compensation
    
    
    
    
    
    
    (0.8
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.8
    )Balance, March 31, 2009
    
    
    67.4
    
    
    $
    765.4
    
    
    $
    970.5
    
    
    $
    (175.6
    )
    
    $
    61.0
    
    
    $
    1,621.3
  11. Segment Reporting
    14




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##### Table of Contents




    
    The AMPS® specialty monomer business, with 2008 annual revenues of $35.3
million, which previously was reported as part of the Noveon consumer specialties product
line, and
    
    The ADEXTM explosives emulsifier business, with 2008 annual revenues of $45.0
million, which previously was reported as part of the engineered polymers product line.
    Three Months EndedMarch 31,2009
    
    
    2008Revenues from external customers:Lubrizol Additives
    
    $
    727.8
    
    
    $
    844.7Lubrizol Advanced Materials
    
    
    284.6
    
    
    
    382.6Total revenues
    
    $
    1,012.4
    
    
    $
    1,227.3Segment operating income:Lubrizol Additives
    
    $
    118.7
    
    
    $
    116.8Lubrizol Advanced Materials
    
    
    25.5
    
    
    
    29.2Segment operating income
    
    
    144.2
    
    
    
    146.0Corporate expenses
    
    
    (16.0
    )
    
    
    (21.2
    )Corporate other income-net
    
    
    1.8
    
    
    
    3.2Restructuring and impairment charges
    
    
    (11.4
    )
    
    
    (4.8
    )Interest expense-net
    
    
    (26.7
    )
    
    
    (13.7
    )Income before income taxes
    
    $
    91.9
    
    
    $
    109.5
 15




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##### Table of Contents



March 31,
    
    
    December 31,2009
    
    
    2008Segment total assets:Lubrizol Additives
    
    $
    1,703.5
    
    
    $
    1,853.8Lubrizol Advanced Materials
    
    
    1,801.4
    
    
    
    1,843.2Total segment assets
    
    
    3,504.9
    
    
    
    3,697.0Corporate assets
    
    
    884.2
    
    
    
    453.5Total consolidated assets
    
    $
    4,389.1
    
    
    $
    4,150.5
 12. Pension and Postretirement Benefits
    Three Months Ended
    
    
    Three Months EndedMarch 31, 2009
    
    
    March 31, 2008Non-
    
    
    
    
    
    
    
    
    
    
    Non-U.S. Plans
    
    
    U.S. Plans
    
    
    Total
    
    
    U.S. Plans
    
    
    U.S. Plans
    
    
    TotalService cost  benefits earned during period
    
    $
    5.6
    
    
    $
    2.0
    
    
    $
    7.6
    
    
    $
    4.4
    
    
    $
    3.1
    
    
    $
    7.5Interest cost on projected benefit obligation
    
    
    7.0
    
    
    
    3.6
    
    
    
    10.6
    
    
    
    6.5
    
    
    
    4.5
    
    
    
    11.0Expected return on plan assets
    
    
    (6.0
    )
    
    
    (3.1
    )
    
    
    (9.1
    )
    
    
    (6.0
    )
    
    
    (3.8
    )
    
    
    (9.8
    )Amortization of prior service costs
    
    
    0.6
    
    
    
    0.1
    
    
    
    0.7
    
    
    
    0.5
    
    
    
    0.2
    
    
    
    0.7Recognized net actuarial loss
    
    
    1.2
    
    
    
    0.3
    
    
    
    1.5
    
    
    
    0.2
    
    
    
    0.5
    
    
    
    0.7Net periodic pension cost
    
    $
    8.4
    
    
    $
    2.9
    
    
    $
    11.3
    
    
    $
    5.6
    
    
    $
    4.5
    
    
    $
    10.1
 16




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##### Table of Contents



Three Months EndedMarch 31,2009
    
    
    2008Service cost  benefits earned during period
    
    $
    0.3
    
    
    $
    0.5Interest cost on projected benefit obligation
    
    
    1.4
    
    
    
    1.5Amortization of prior service credits
    
    
    (1.7
    )
    
    
    (1.7
    )Amortization of initial net obligation
    
    
    0.1
    
    
    
    0.1Recognized net actuarial loss
    
    
    0.1
    
    
    
    0.2Settlement / curtailment gain
    
    
    
    
    
    
    (1.1
    )Net periodic non-pension postretirement benefit cost (credit)
    
    $
    0.2
    
    
    $
    (0.5
    )
 13. Stock-Based Compensation
    Three Months EndedMarch 31,2009
    
    2008Risk-free interest rate
    
    
    2.8
    %
    
    
    3.5
    %Dividend yield
    
    
    4.5
    %
    
    
    2.1
    %Expected volatility
    
    
    27.9
    %
    
    
    20.0
    %Expected life (years)
    
    
    6.5
    
    
    
    6.5Weighted-average fair value per share
of options granted during the period
    
    $
    5.03
    
    
    $
    12.27
  17




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##### Table of Contents



Weighted-AverageShare
    
    Grant DateUnits
    
    Fair ValueNonvested at January 1, 2009
    
    
    232,161
    
    
    $
    53.07Granted
    
    
    290,520
    
    
    $
    27.77Forfeited
    
    
    (11,820
    )
    
    $
    53.07Nonvested at March 31, 2009
    
    
    510,861
    
    
    $
    38.68
  Expected
    
    Weighted-Number
    
    Averageof Units
    
    Grant DateAward
    
    to be Issued
    
    Fair Value2007-2009
    
    
    220,341
    
    
    $
    53.072008-2010
    
    
    
    
    
    $
    58.452009-2011
    
    
    290,520
    
    
    $
    27.77
    18




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14. Restructuring and Impairment Charges
   RestructuringLiability
    
    
    and
    
    
    
    
    
    
    LiabilityJanuary 1,
    
    
    Impairment
    
    
    
    
    
    
    March 31,2009
    
    
    Charges
    
    
    Cash Paid
    
    
    2009Performance coatings 2008 business
improvement initiatives
    
    $
    0.9
    
    
    $
    
    
    
    $
    (0.1
    )
    
    $
    0.8Lubrizol Additives plant closure
and workforce reductions
    
    
    0.7
    
    
    
    0.5
    
    
    
    (0.2
    )
    
    
    1.0Corporate organizational restructuring
    
    
    
    
    
    
    10.9
    
    
    
    (6.1
    )
    
    
    4.8Noveon International, Inc. restructuring
liabilities assumed
    
    
    0.5
    
    
    
    
    
    
    
    
    
    
    
    0.5$
    2.1
    
    
    $
    11.4
    
    
    $
    (6.4
    )
    
    $
    7.1
  15. Contingencies
 General
  Environmental
   19




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20




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  This Managements Discussion and Analysis of Financial Condition and Results of Operations should
be read in conjunction with the unaudited consolidated financial statements and the notes thereto
appearing elsewhere in this Quarterly Report on Form 10-Q . Historical results and percentage
relationships set forth in the consolidated financial statements, including trends that might
appear, should not be taken as indicative of future operations. The following discussion contains
forward-looking statements that involve risks and uncertainties. Our actual results may differ
materially from those discussed in such forward-looking statements as a result of various factors,
including those described under the section Cautionary Statements for Safe Harbor Purposes
included elsewhere in this Quarterly Report on Form 10-Q .
 OVERVIEW
 .
    ® ® ®
 21




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
    
    The ongoing global recession has affected the markets we serve and negatively impacted our
results. Volume declined 27% compared with the same period in 2008 as demand declined sharply
and customers continued to reduce their inventory levels.
    
    Our disciplined margin management largely offset the volume decline and resulted in an
increase in our gross profit percentage to 27.1% from 23.9% in the same period in 2008.
    
    Our aggressive cost reduction actions and organizational restructuring eliminated operating
inefficiencies and improved profitability. We reduced manufacturing expenses during the
quarter by curtailing production and reducing spending on supplies and services. Selling,
testing, administrative and research (STAR) expenses declined by 12% due to reductions in
travel and entertainment, salaries and benefits, information technology expenses, outside
services and lower incentive compensation. Manufacturing and STAR expenses both benefited
from a favorable currency impact. In conjunction with our organizational restructuring, we
incurred $10.9 million of severance and benefit charges. We estimate these cost reduction and
organizational restructuring actions will result in approximately $50.0 million to $60.0
million of pre-tax savings during 2009.
    
    Our inventory reduction initiatives contributed to the significant cash flow from operations.
We significantly reduced production to achieve our inventory reduction goals and in response
to lower sales volume. As a result of our abnormally low production, we incurred $38.1
million of unabsorbed manufacturing costs. The reduction in inventory quantities also
resulted in incremental charges of $7.1 million due to a liquidation of LIFO inventory
quantities carried at higher costs.
    
    As compared with the same period in 2008, currency fluctuations were unfavorable to revenues
by 3%, favorable to operating costs and unfavorable to net income
attributable to The Lubrizol Corporation by an estimated $0.08 per
share.
    
    Our issuance of $500.0 million of 8.875% senior unsecured notes at a price of 99.256% in
January 2009 was intended primarily to repay our 4.625% notes due October 1, 2009. We entered
into a $150.0 million term loan in February 2009 to fund, in part, the acquisition of the
thermoplastic polyurethane business from The Dow Chemical Company (Dow). The proceeds from
these borrowings will be sufficient to retire in full the 4.625% notes due 2009 and enabled us
to repay in full our outstanding U.S. revolver balance, while strengthening our liquidity with
approximately $175.0 million of additional cash. However, the additional interest costs
associated with these borrowings, coupled with lower interest income, reduced our earnings by
approximately $0.12 per share as compared with the same period in 2008.
  22




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RESULTS OF OPERATIONS
 Three Months Ended March 31, 2009 Compared With Three Months Ended March 31, 2008
 Three MonthsEnded March 31,(In Millions of Dollars Except Per Share Data)
    
    2009
    
    
    2008
    
    

$ Change
    
    
    % ChangeRevenues
    
    $
    1,012.4
    
    
    $
    1,227.3
    
    
    $
    (214.9
    )
    
    
    (18
    %)Cost of sales
    
    
    738.5
    
    
    
    934.5
    
    
    
    (196.0
    )
    
    
    (21
    %)Gross profit
    
    
    273.9
    
    
    
    292.8
    
    
    
    (18.9
    )
    
    
    (6
    %)Selling and administrative expenses
    
    
    93.8
    
    
    
    108.6
    
    
    
    (14.8
    )
    
    
    (14
    %)Research, testing and development expenses
    
    
    49.0
    
    
    
    54.1
    
    
    
    (5.1
    )
    
    
    (9
    %)Amortization of intangible assets
    
    
    6.3
    
    
    
    7.0
    
    
    
    (0.7
    )
    
    
    (10
    %)Restructuring and impairment charges
    
    
    11.4
    
    
    
    4.8
    
    
    
    6.6
    
    
    
    *Other income
 net
    
    
    (5.2
    )
    
    
    (4.9
    )
    
    
    0.3
    
    
    
    6
    %Interest income
    
    
    (2.7
    )
    
    
    (4.2
    )
    
    
    (1.5
    )
    
    
    (36
    %)Interest expense
    
    
    29.4
    
    
    
    17.9
    
    
    
    11.5
    
    
    
    64
    %Income before income taxes
    
    
    91.9
    
    
    
    109.5
    
    
    
    (17.6
    )
    
    
    (16
    %)Provision for income taxes
    
    
    26.7
    
    
    
    33.5
    
    
    
    (6.8
    )
    
    
    (20
    %)Net income
    
    
    65.2
    
    
    
    76.0
    
    
    
    (10.8
    )
    
    
    (14
    %)Net income attributable to noncontrolling interests
    
    
    1.0
    
    
    
    2.4
    
    
    
    (1.4
    )
    
    
    (58
    %)Net income attributable to The Lubrizol Corporation
    
    $
    64.2
    
    
    $
    73.6
    
    
    $
    (9.4
    )
    
    
    (13
    %)Basic earnings per share attributable to
The Lubrizol Corporation
    
    $
    0.95
    
    
    $
    1.07
    
    
    $
    (0.12
    )
    
    
    (11
    %)Diluted earnings per share attributable to
The Lubrizol Corporation
    
    $
    0.95
    
    
    $
    1.06
    
    
    $
    (0.11
    )
    
    
    (10
    %)
 
 *
    
    Calculation not meaningful Revenues
 23




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Excludingthe Impact of2009
    
    2009 vs. 2008
    
    AcquisitionsVolume
    
    % Change
    
    % ChangeNorth America
    
    
    42
    %
    
    
    (30
    %)
    
    
    (31
    %)Europe
    
    
    28
    %
    
    
    (25
    %)
    
    
    (25
    %)Asia-Pacific / Middle East
    
    
    23
    %
    
    
    (24
    %)
    
    
    (25
    %)Latin America
    
    
    7
    %
    
    
    (27
    %)
    
    
    (27
    %)Total
    
    
    100
    %
    
    
    (27
    %)
    
    
    (28
    %)
   Cost of Sales
 Gross Profit
 Selling and Administrative Expenses
 Research, Testing and Development Expenses
 24




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Restructuring and Impairment Charges
 Three Months Ended March 31, 2009Asset
    
    
    SeveranceImpairments
    
    
    and Benefits
    
    
    TotalCorporate organizational restructuring
    
    $
    
    
    
    $
    10.9
    
    
    $
    10.9Lubrizol Additives plant closure and workforce
reductions
    
    
    
    
    
    
    0.5
    
    
    
    0.5Total restructuring charges
    
    $
    
    
    
    $
    11.4
    
    
    $
    11.4Restructuring charges of $10.9 million related to our organizational restructuring initiated during
the first quarter of 2009, which eliminated operating inefficiencies and improved profitability.
These organizational changes are expected to result in approximately $14.0 million of pre-tax
savings for 2009.Restructuring charges of $0.5 million related to the decision made in the third quarter of 2008 to
close a Lubrizol Additives blending, packaging and warehouse facility in Ontario, Canada. We
expect to record an additional $5.3 million of restructuring charges related to this facility
closure, of which $0.8 million is expected to be recognized in 2009.The components of restructuring and impairment charges recorded during the first quarter of 2008
are as follows:Three Months Ended March 31, 2008Asset
    
    
    SeveranceImpairments
    
    
    and Benefits
    
    
    TotalPerformance coatings 2008 business improvement
initiatives
    
    $
    4.0
    
    
    $
    0.8
    
    
    $
    4.8
  Interest Expense
 Provision for Income Taxes
 Net Income Attributable to The Lubrizol Corporation
 25




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SEGMENT ANALYSIS
   
    
    The AMPS® specialty monomer business, with 2008 annual revenues of $35.3
million, which previously was reported as part of the Noveon consumer specialties product
line, and
    
    The ADEXTM explosives emulsifier business, with 2008 annual revenues of $45.0
million, which previously was reported as part of the engineered polymers product line.
    Three Months EndedMarch 31,2009
    
    2008Revenues:Lubrizol Additives
    
    
    72
    %
    
    
    69
    %Lubrizol Advanced Materials
    
    
    28
    %
    
    
    31
    %Segment Operating Income:Lubrizol Additives
    
    
    82
    %
    
    
    80
    %Lubrizol Advanced Materials
    
    
    18
    %
    
    
    20
    %
 26




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OPERATING RESULTS BY SEGMENT
 Three Months EndedMarch 31,
    
    
    
    
    
    
    %2009
    
    
    2008
    
    
    $ Change
    
    
    ChangeRevenues:Lubrizol Additives
    
    $
    727.8
    
    
    $
    844.7
    
    
    $
    (116.9
    )
    
    
    (14
    %)Lubrizol Advanced Materials
    
    
    284.6
    
    
    
    382.6
    
    
    
    (98.0
    )
    
    
    (26
    %)Total
    
    $
    1,012.4
    
    
    $
    1,227.3
    
    
    $
    (214.9
    )
    
    
    (18
    %)Gross Profit:Lubrizol Additives
    
    $
    188.7
    
    
    $
    193.0
    
    
    $
    (4.3
    )
    
    
    (2
    %)Lubrizol Advanced Materials
    
    
    85.2
    
    
    
    99.8
    
    
    
    (14.6
    )
    
    
    (15
    %)Total
    
    $
    273.9
    
    
    $
    292.8
    
    
    $
    (18.9
    )
    
    
    (6
    %)Segment Operating Income:Lubrizol Additives
    
    $
    118.7
    
    
    $
    116.8
    
    
    $
    1.9
    
    
    
    2
    %Lubrizol Advanced Materials
    
    
    25.5
    
    
    
    29.2
    
    
    
    (3.7
    )
    
    
    (13
    %)Total
    
    $
    144.2
    
    
    $
    146.0
    
    
    $
    (1.8
    )
    
    
    (1
    %)Three Months Ended March 31, 2009 Compared With Three Months Ended March 31, 2008LUBRIZOL ADDITIVES SEGMENTRevenuesRevenues decreased 14% during the first quarter of 2009 compared with the same period in
2008. The decrease was due to a 24% decrease in volume and a 3% unfavorable currency impact,
partially offset by a 13% increase in the combination of price and product mix.The following table shows the geographic mix of our volume during the first quarter of 2009 as
well as the percentage changes compared with the same period in 2008:
 2009
    
    2009 vs. 2008Volume
    
    % ChangeNorth America
    
    
    
    
    
    
    
    
    
    
    34
    %
    
    
    (25
    %)Europe
    
    
    
    
    
    
    
    
    
    
    32
    %
    
    
    (24
    %)Asia-Pacific / Middle East
    
    
    
    
    
    
    
    
    
    
    26
    %
    
    
    (23
    %)Latin America
    
    
    
    
    
    
    
    
    
    
    8
    %
    
    
    (24
    %)Total
    
    
    
    
    
    
    
    
    
    
    100
    %
    
    
    (24
    %)
  Gross Profit
 27




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Selling, Testing, Administrative and Research Expenses
 Segment Operating Income
 LUBRIZOL ADVANCED MATERIALS SEGMENT
 Revenues
  Excludingthe Impact of2009
    
    2009 vs. 2008
    
    AcquisitionsVolume
    
    % Change
    
    % ChangeNorth America
    
    
    66
    %
    
    
    (36
    %)
    
    
    (38
    %)Europe
    
    
    18
    %
    
    
    (31
    %)
    
    
    (31
    %)Asia-Pacific / Middle East
    
    
    13
    %
    
    
    (31
    %)
    
    
    (37
    %)Latin America
    
    
    3
    %
    
    
    (47
    %)
    
    
    (47
    %)Total
    
    
    100
    %
    
    
    (35
    %)
    
    
    (37
    %)
  Gross Profit
 28




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Selling, Testing, Administrative and Research Expenses
 Segment Operating Income
 WORKING CAPITAL, LIQUIDITY AND CAPITAL RESOURCES
  Three Months EndedMarch 31,2009
    
    
    2008Cash provided by (used for):Operating activities
    
    $
    165.6
    
    
    $
    43.1Investing activities
    
    
    (43.6
    )
    
    
    (50.4
    )Financing activities
    
    
    319.0
    
    
    
    (41.5
    )Effect of exchange rate changes on cash
    
    
    (3.5
    )
    
    
    5.7Net increase (decrease) in cash and cash equivalents
    
    $
    437.5
    
    
    $
    (43.1
    )
 OPERATING ACTIVITIES
   29




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INVESTING ACTIVITIES
  FINANCING ACTIVITIES
  CAPITALIZATION, LIQUIDITY AND CREDIT FACILITIES
    
   30




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CONTRACTUAL CASH OBLIGATIONS
  
  NEW ACCOUNTING STANDARDS
  31




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CAUTIONARY STATEMENTS FOR SAFE HARBOR PURPOSES
   
    
    The cost, availability and quality of raw materials, especially petroleum-based products.
    
    Our ability to sustain profitability of our products in a competitive environment.
    
    The demand for our products as influenced by factors such as the global economic environment,
longer-term technology developments and the success of our commercial development programs.
    
    The effects of required principal and interest payments and the access to capital on our
ability to fund capital expenditures and acquisitions and to meet operating needs.
    
    The risks of conducting business in foreign countries, including the effects of fluctuations
in currency exchange rates upon our consolidated results and political, social, economic and
regulatory factors.
    
    The extent to which we are successful in expanding our business in new and existing markets
and in identifying, understanding and managing the risks inherent in those markets.
    
    Our ability to identify, complete and integrate acquisitions for profitable growth and
operating efficiencies.
    
    Our success at continuing to develop proprietary technology to meet or exceed new industry
performance standards and individual customer expectations.
    
    Our ability to implement a new common information systems platform primarily into our
Lubrizol Advanced Materials segment successfully, including the management of project costs,
its timely completion and realization of its benefits.
    
    Our ability to continue to reduce complexities and conversion costs and modify our cost
structure to maintain and enhance our competitiveness.
    
    Our success in retaining and growing the business that we have with our largest customers.
    
    The cost and availability of energy, especially natural gas and electricity.
    
    The effect of interest rate fluctuations on our net interest expense.
 33




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
    
    The risk of weather-related disruptions to our Lubrizol Additives production facilities
located near the U.S. Gulf Coast.
    
    Significant changes in government regulations affecting environmental compliance.
 
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
       34




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Item 4. Controls and Procedures
   35




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##### Table of Contents



PART II. OTHER INFORMATION
 
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 (a)
    
    On January 1, 2009, we issued 2,314 common shares in transactions exempt from
registration under Regulation S of the Securities Act of 1933
(Securities Act). We issued the common shares
to 21 employees of a wholly owned Canadian subsidiary under an employee benefit plan.On January 28, 2009, we issued 468 common shares in a transaction exempt from registration
under Regulation S of the Securities Act. We issued the common shares to one employee of a
wholly owned United Kingdom subsidiary under an employee benefit plan.On February 5, 2009, we issued 468 common shares in a transaction exempt from registration
under Regulation S of the Securities Act. We issued the common shares to one employee of a
wholly owned United Kingdom subsidiary under an employee benefit plan.On February 9, 2009, we issued 468 common shares in a transaction exempt from registration
under Regulation S of the Securities Act. We issued the common shares to one employee of a
wholly owned United Kingdom subsidiary under an employee benefit plan.On March 16, 2009, we issued 348 common shares in a transaction exempt from registration
under Regulation S of the Securities Act. We issued the common shares to one employee of a
wholly owned United Kingdom subsidiary under an employee benefit plan.On March 25, 2009, we issued 1,564 common shares in a transaction exempt from registration
under Regulation S of the Securities Act. We issued the common shares to one employee of a
wholly owned United Kingdom subsidiary under an employee benefit plan.(c)
    
    The following table provides information regarding our purchases of Lubrizol common shares
during the quarter.
 Maximum NumberTotal Number
    
    (or Approximate Dollarof Shares (or Units)
    
    Value) of Shares (orTotal Number of
    
    Average Price
    
    Purchased as Part of
    
    Units) that May Yet beShares (or Units)
    
    Paid per Share
    
    Publicly Announced
    
    Purchased Under thePeriod
    
    Purchased
    
    (or Unit)
    
    Plans or Programs
    
    Plans or Programs1Month #1
(Jan. 1, 2009 through Jan. 31, 2009)
    
    
    
    
    
    
    N/A
    
    
    
    
    
    
    
    3,755,918Month #2

(Feb. 1, 2009 through Feb. 28, 2009)
    
    
    
    
    
    
    N/A
    
    
    
    
    
    
    
    3,755,918Month #3

(Mar. 1, 2009 through Mar. 31, 2009)
    
    
    
    
    
    
    N/A
    
    
    
    
    
    
    
    3,755,918Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,755,918
 1
    
    This column represents common shares that we are permitted to purchase
pursuant to a share repurchase program authorized by our board of directors and announced on
April 27, 2007. This share repurchase program permits the company to repurchase up to 5.0
million of its common shares in the open market or through negotiated transactions. The
program will expire when all authorized shares have been repurchased. In the third quarter
of 2008, we suspended temporarily our share repurchase program. 36




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Item 6. Exhibits
 3.1
    
    Second Amended and Restated Articles of Incorporation of The Lubrizol Corporation,
effective as of May 6, 2009.3.2
    
    Amended and Restated Regulations of The Lubrizol Corporation, effective as of April 27,
2009.4.1
    
    Indenture, dated as of January 27, 2009, by and between The Lubrizol Corporation and
Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1
to the companys current report on Form 8-K filed with the SEC on January 27, 2009).4.2
    
    First Supplemental Indenture to the Indenture dated as of January 27, 2009, by and
between The Lubrizol Corporation and Wells Fargo Bank, National Association, as trustee
(incorporated by reference to Exhibit 4.2 to the companys current report on Form 8-K filed
with the SEC on January 27, 2009).4.3
    
    Form of $500,000,000 8.875% Notes due 2019 (incorporated by reference to Exhibit 4.3 to
the companys current report on Form 8-K filed with the SEC on January 27, 2009).10.1
    
    Credit Agreement dated as of February 2, 2009 among The Lubrizol Corporation, the Initial
Lenders named therein, KeyBanc Capital Markets, as joint lead arranger and sole bookrunner,
PNC Capital Markets LLC, as joint lead arranger, PNC Bank, National Association, as
syndication agent, and KeyBank National Association, as administrative agent (incorporated
herein by reference to Exhibit 10.1 to the companys current report on Form 8-K filed with
the SEC on February 5, 2009).10.2
    
    Letter Amendment No. 3 dated March 4, 2009, to the Credit Agreement dated as of
August 24, 2004, among The Lubrizol Corporation, Citigroup North America, Inc., as agent,
and the banks, financial institutions and other institutional lenders named therein, as
amended and restated as of March 29, 2005, and as further amended as of August 23, 2005 and
September 20, 2006 (incorporated herein by reference to Exhibit 4.1 to the companys current
report on Form 8-K/A filed with the SEC on March 10, 2009).10.3
    
    Letter Amendment No. 2 dated March 4, 2009, to the Five Year Credit Agreement dated as of
September 14, 2005 among Lubrizol Holdings France S.A.S. and Lubrizol Advanced Materials
Europe BVBA, The Lubrizol Corporation, ABN AMRO Bank N.V. as agent and the lenders named
therein, as amended as of September 20, 2006 (incorporated herein by reference to Exhibit
4.2 to the companys current report on Form 8-K/A filed with the SEC on March 10, 2009).31.1
    
    Rule 13a-14(a) Certification of the Chief Executive Officer, as created by Section 302 of
the Sarbanes-Oxley Act of 2002.31.2
    
    Rule 13a-14(a) Certification of the Chief Financial Officer, as created by Section 302 of
the Sarbanes-Oxley Act of 2002.32.1
    
    Certification of Chief Executive Officer and Chief Financial Officer of The Lubrizol
Corporation pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the
Sarbanes-Oxley Act of 2002.
 
 37




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##### Table of Contents



Signatures
  THE LUBRIZOL CORPORATION/s/ W. Scott EmerickW. Scott EmerickChief Accounting Officer and Duly Authorized
Signatory of The Lubrizol Corporation  38




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Exhibit Index
 3.1
    
    Second Amended and Restated Articles of Incorporation of The Lubrizol Corporation,
effective as of May 6, 2009.3.2
    
    Amended and Restated Regulations of The Lubrizol Corporation, effective as of April 27,
2009.4.1
    
    Indenture, dated as of January 27, 2009, by and between The Lubrizol Corporation and
Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1
to the companys current report on Form 8-K filed with the SEC on January 27, 2009).4.2
    
    First Supplemental Indenture to the Indenture dated as of January 27, 2009, by and
between The Lubrizol Corporation and Wells Fargo Bank, National Association, as trustee
(incorporated by reference to Exhibit 4.2 to the companys current report on Form 8-K filed
with the SEC on January 27, 2009).4.3
    
    Form of $500,000,000 8.875% Notes due 2019 (incorporated by reference to Exhibit 4.3 to
the companys current report on Form 8-K filed with the SEC on January 27, 2009).10.1
    
    Credit Agreement dated as of February 2, 2009 among The Lubrizol Corporation, the Initial
Lenders named therein, KeyBanc Capital Markets, as joint lead arranger and sole bookrunner,
PNC Capital Markets LLC, as joint lead arranger, PNC Bank, National Association, as
syndication agent, and KeyBank National Association, as administrative agent (incorporated
herein by reference to Exhibit 10.1 to the companys current report on Form 8-K filed with
the SEC on February 5, 2009).10.2
    
    Letter Amendment No. 3 dated March 4, 2009, to the Credit Agreement dated as of
August 24, 2004, among The Lubrizol Corporation, Citigroup North America, Inc., as agent,
and the banks, financial institutions and other institutional lenders named therein, as
amended and restated as of March 29, 2005, and as further amended as of August 23, 2005 and
September 20, 2006 (incorporated herein by reference to Exhibit 4.1 to the companys current
report on Form 8-K/A filed with the SEC on March 10, 2009).10.3
    
    Letter Amendment No. 2 dated March 4, 2009, to the Five Year Credit Agreement dated as of
September 14, 2005 among Lubrizol Holdings France S.A.S. and Lubrizol Advanced Materials
Europe BVBA, The Lubrizol Corporation, ABN AMRO Bank N.V. as agent and the lenders named
therein, as amended as of September 20, 2006 (incorporated herein by reference to Exhibit
4.2 to the companys current report on Form 8-K/A filed with the SEC on March 10, 2009).31.1
    
    Rule 13a-14(a) Certification of the Chief Executive Officer, as created by Section 302 of
the Sarbanes-Oxley Act of 2002.31.2
    
    Rule 13a-14(a) Certification of the Chief Financial Officer, as created by Section 302 of
the Sarbanes-Oxley Act of 2002.32.1
    
    Certification of Chief Executive Officer and Chief Financial Officer of The Lubrizol
Corporation pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the
Sarbanes-Oxley Act of 2002.