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|                                  
|----------------------------------
|SECURITIES AND EXCHANGE COMMISSION
|WASHINGTON, D.C. 20549            
|FORM 10-K                         

|           |                                                         
|---------- | --------------------------------------------------------
|(Mark One) |                                                         
|x          | ANNUAL
  REPORT UNDER SECTION 13 OR 15(d)               
|           | OF
  THE SECURITIES EXCHANGE ACT OF 1934                
|           | For
  the fiscal year ended December 31, 2006           
|           | 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
  001-14789                      
|           | GENTEK INC.                                             
|           | (Exact name of
  Registrant as specified in its charter)

|                                                                     |  |                                          
|-------------------------------------------------------------------- |  | -----------------------------------------
|Delaware                                                             |  | 02-0505547                               
|(State of other
  jurisdiction of incorporation or organization)     |  | (I.R.S. Employer
  Identification Number)
|90
  East Halsey Road                                                |  |                                          
|Parsippany,
  New Jersey                                             |  | 07054                                    
|(Address of principal
  executive offices)                           |  | (Zip Code)                               
|                                                                     |  |                                          
|Registrants
  telephone number, including area code: (973) 515-3221
|Securities
  registered pursuant to Section 12(b) of the Act:       
|None                                                                
|Securities
  registered pursuant to Section 12(g) of the Act:       
|Common stock, no par
  value                                        
|(Title of class)                                                    

Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.Yes oNox

Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.Yes oNox

Indicate
by check mark whether the Registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.Yes xNoo

Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of Registrants knowledge, in the definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. x

Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer or a non-accelerated filer (as defined in Rule 12b-2 of the
Act).Large Accelerated Filer oAccelerated
FilerxNon-accelerated Filero

Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).Yes oNox

State
the aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity
was last sold, or the average bid and asked price of such common equity, as of
the last business day of the registrants most recently completed second fiscal
quarter: $ 257,598,497.

Applicable
to issuers involved in bankruptcy proceedings during the preceding five years:Indicate by check mark
whether the registrant has filed all documents and reports required to be filed
by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent
to the distribution of securities under a plan confirmed by a court.Yes xNoo

The
number of outstanding shares of the Registrants Common Stock as of February 28, 2007 was 10,362,748.

Documents Incorporated by Reference:

Portions
of the Registrants definitive Proxy Statement for the Annual Meeting of
Stockholders to be held on May 17, 2007, to be filed within 120 days after the
close of the Registrants fiscal year, are incorporated by reference into Part
III of this Annual Report on Form 10-K.

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PART
I

Item 1. Business.

Overview

GenTek
Inc. (the Company or GenTek) is a holding company whose subsidiaries
manufacture industrial components and performance chemicals. GenTeks
subsidiaries operate through two primary business segments: manufacturing and
performance chemicals. The manufacturing segment provides a broad range of
engineered components and services to two principal markets: automotive and
industrial. The performance chemicals segment provides value-added chemical
products and services to four principal markets: water treatment, chemical
processing, pharmaceutical and personal care, and technology. The Companys
products are frequently highly engineered and are important components of, or
provide critical attributes to, its customers end products or operations. The
Company operates over 50 manufacturing and production facilities located
primarily in the U.S. and Canada. GenTek has no independent operations and,
therefore, is dependent upon cash flow from its subsidiaries to meet its
obligations.

Acquisitions

On
February 6, 2007, the Company acquired the assets of Chalum, Inc. The
acquisition included the manufacturing facility in Sacaton, Arizona. Chalum
produces aluminum sulfate for the greater Phoenix, Arizona municipal water
treatment market. The purchase price was $3 million.

On
September 21, 2006, the Company acquired the assets of GAC MidAmerica, Inc. The
acquisition included manufacturing facilities in Toledo, Ohio, Indianapolis,
Indiana, and Saukville, Wisconsin. GAC produces aluminum sulfate and bleach, as
well as distributing specialty water treatment chemicals, sulfuric acid and
caustic soda. The purchase price of the transaction was $8 million.

On
July 31, 2006, the Company acquired the assets of Precision Engine Products
Corp., a wholly owned subsidiary of Stanadyne Corporation. Precision Engine
Products is dedicated principally to the manufacturing of hydraulic lash
adjusters and die cast aluminum rocker arm assemblies utilized in valve train
systems for both OEM and after market applications to the global automotive and
light truck markets. Precision Engine Products has manufacturing facilities in
Tallahassee, Florida and Curitiba, Brazil. The purchase price of the
transaction was $26 million in cash, plus the potential of an earn out for
Stanadyne of up to $10 million, payable, if at all, based on certain
performance metrics being achieved during the twelve months following the
closing date.

On
July 27, 2006, the Company acquired the assets of Repauno Products, LLC. The
acquisition included the manufacturing facility in Gibbstown, New Jersey.
Repauno Products manufactures sodium nitrite which is used in a wide range of
industries including metal finishing, heat transfer salts, rubber processing,
meat curing, odor control and inks and dyes. The purchase price of the
transaction was $6 million.

Discontinued
Operations

On
February 16, 2007, the Company completed the sale of its Noma wire and cable
harness assembly business. The net proceeds from the
transaction were used to repay outstanding debt. During April 2006, the Company
    completed the sale of its cable and wire manufacturing business

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in Stouffville, Canada. Proceeds from the transaction
were used to repay $22 million of the Companys second lien term loan.
Accordingly, these businesses have been classified as discontinued operations.

During
the second quarter of 2005, the Company ceased operations of its printing plate
business. The business had become unprofitable as it had experienced severe
competitive pressures over the last several years and had been hurt by a
continued shift in technology in the printing plate market. Accordingly, all
financial information included herein has been reclassified to reflect the
business as discontinued operations.

Products
and Services by Segment

The
following table sets forth the Companys sales by segment:

|                      |  |                          |         |      |   |         |  |   |         | 
|--------------------- |  | ------------------------ | ------- | ---- | - | ------- |  | - | ------- | 
|                      |  | Years Ended December 31, |        
|                      |  |                          |        
|                      |  | 2006                     |         | 2005 |   | 2004    | 
|                      |  |                          |         |      |   |         | 
|                      |  | (In millions)            |        
|Manufacturing         |  | $                        | 238,021 |      | $ | 222,384 |  | $ | 214,550 | 
|Performance Chemicals |  |                          | 373,347 |      |   | 334,113 |  |   | 316,573 | 
|                      |  |                          |         |      |   |         |  |   |         | 
|                      |  | $                        | 611,368 |      | $ | 556,497 |  | $ | 531,123 | 
|                      |  |                          |         |      |   |         |  |   |         | 

Manufacturing Segment

The
manufacturing segment provides a broad range of engineered components, wiring
products and services to two principal markets: automotive and industrial.The
Companys products for these markets are described below:

Automotive.For the automotive market, the Company provides:

| |   |                                                                                                                                                                                                                                                                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | precision-engineered components for valve-train
  systems, including stamped and machined rocker and roller-rocker arms, cam
  follower rollers, cam follower roller axles, antifriction needle roller
  bearings, hydraulic lash adjusters, hydraulic flat and roller lifters,
  mechanical roller tappets and other hardened/machined components;
| |   |                                                                                                                                                                                                                                                                                                                                                    
| |  | computer-aided and mechanical vehicle and component
  testing services for the transportation industry; and                                                                                                                                                                                                                                        
| |   |                                                                                                                                                                                                                                                                                                                                                    
| |  | fluid transport and handling equipment for
  automotive service applications.                                                                                                                                                                                                                                                                      

The
Companys precision-engineered stamped and machined engine components for
valve-train systems improve engine efficiency by reducing engine friction and
component mass. These components are used both in traditional overhead valve
and in the increasingly popular single and double overhead cam engines which
power cars, light trucks and sport utility vehicles. Over the last several
years, the Company has benefited from the design transition of overhead valve
engines to overhead cam engines providing a strong position with which to
participate in the industrys latest efforts to improve fuel efficiency and
power. Increased design use of additional valves per cylinder to improve
fuel/air throughput have resulted in volume growth on specific engine
applications. The majority of the Companys valve-train production is sold to
U.S. automobile and diesel engine manufacturers and their Tier 1 suppliers.

Through
its automotive testing offerings, the Company provides mechanical testing
services and computer-aided design, engineering and simulation services for
automotive structural and mechanical systems to OEMs and Tier 1 suppliers. The
Company provides a wide range of testing services for

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automotive components and systems from single
sub-systems, such as chassis, suspension, seats and seating assemblies, to
entire vehicles. The Companys engineering and simulation services provide
customers with finite element modeling, kinematics, and crash and variation
simulation analyses, and allow its customers to test their automotive products
for durability, stress, noise, vibration and environmental considerations.

Automotive
and diesel engine manufacturers generally award business to their suppliers by
individual engine line for the life of the engine. The loss of any single
engine line contract would not be material to the Company. However, an economic
downturn in the automotive industry as a whole or other events (e.g., labor
disruptions) resulting in significantly reduced operations of DaimlerChrysler
or Ford could have a material adverse impact on the results of the Companys
manufacturing segment. Neither of these customers accounted for 10 percent or
more of the Companys revenues in 2006.

Industrial.
For the industrial market, the Company manufactures wire and cable for a broad
range of applications in the electronic, appliance, automotive and consumer
electrical markets. These products are sold to OEMs throughout North America.

The
Company produces a broad product line of single and multi conductor wire and
cable. The Companys wire jacketing expertise includes the use of polyvinyl
chloride (PVC), thermoplastic elastomer (TPE) and ethylene vinyl acetate (EVA)
engineered materials.

Performance Chemicals Segment

The
Companys performance chemicals segment provides value-added products and
services to four principal markets: (i)water treatment; (ii)chemical
processing; (iii)pharmaceutical and personal care; and (iv)technology. The
Companys products and services for these markets are described below.

Water
Treatment.With a network of 35 water treatment chemical
plants located throughout the United States and Canada, the Company is the
largest North American producer of aluminum sulfate, or alum, which is used
as a coagulant in potable water and waste water treatment applications, and a
leading supplier of ferric sulfate and other specialty flocculents
(polymer-based materials used for settling and/or separating solids from
liquids) and sodium nitrate. The Companys water treatment products are
designed to address the important environmental issues confronting its
customers. These value-added products provide cleaner drinking water, restore
algae-infested lakes, reduce damaging phosphorus runoff from agricultural
operations, and significantly reduce pollution from industrial waste water.

Chemical
Processing.The Company operates three sulfuric acid
production facilities which produce various grades of sulfuric acid which is
used in the manufacture of titanium pigments, fertilizers, synthetic fibers,
steel, petroleum and paper, as well as many other products. In addition, the
Company provides sulfuric acid regeneration services to the refining and
chemical industries, and pollution abatement and sulfur recovery services to
selected refinery customers. Refineries use sulfuric acid as a catalyst in the
production of alkylate, a gasoline blending component with favorable
performance and environmental properties. The alkylation process contaminates
and dilutes the sulfuric acid, thereby creating the need to dispose of or
regenerate the contaminated acid. The Company transports the contaminated acid
back to the Companys facilities for recycling and redelivers the fresh,
recycled acid back to customers. This closed loop process offers customers
significant savings versus alternative disposal methods and also benefits the
environment by significantly reducing refineries waste streams.

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Pharmaceutical
and Personal Care. The Company is a leading supplier of the
active chemical ingredients used in the manufacture of antiperspirants, and
also supplies ingredients used in prescription pharmaceuticals, nutritional
supplements, veterinary health products and other personal care products. The
customer base includes many of the worlds leading personal care companies, and
the Company is favorably positioned with both North American and European
sourcing capabilities.

Technology.
The Company provides ultrahigh-purity electronic chemicals for the
semiconductor and disk drive industries. The Companys electronic chemicals
include ultrahigh-purity acids, caustics, solvents, etchants and formulated
photo ancillaries for use in the manufacture of semiconductor processing chips
and computer disk drives.

Competition

Competition
in the manufacturing segments markets is based upon a number of factors
including design and engineering capabilities, quality, price and the ability
to meet customer delivery requirements. In the automotive market, the Company
competes with, among others, Delphi, Eaton, INA, Timken, and captive OEMs. In
the industrial markets, the Company competes with Copperfield, General Cable
and Southwire, among others.

Although
the Companys performance chemicals segment generally has significant market
share positions in the product areas in which it competes, most of its end
markets are highly competitive. In the pharmaceuticals and personal care
market, the Companys major competitors include BK Giulini Corp. and Summit
Research Labs as well as the captive production facilities of certain personal
care companies. The Companys competitors in the chemical processing market
include the refineries that perform their own sulfuric acid regeneration, as
well as DuPont, Marsulex, Chemtrade Logistics, PVS and Rhodia, which also have
sulfuric acid regeneration facilities that are generally located near their
major customers. In water treatment the Company competes with Geo Specialty
Chemicals, Kemiron Companies Inc., U.S. Aluminates and other regional players.
Competitors in the technology market include Air Products, Honeywell Electronic
Materials and Tyco/Mallinckrodt-Baker.

Suppliers;
Availability of Raw Materials

The
Company purchases a variety of raw materials for its businesses. The primary
raw materials used by the manufacturing segment are copper and steel. The
Companys performance chemicals segments competitive cost position is, in
part, attributable to its sourcing relationships for certain raw materials that
serve as the feedstock for many of its products. Consequently, major raw
material purchases are limited primarily to sulfuric acid where it is uneconomical
for the Company to supply itself due to distribution costs, bauxite and
aluminum tri-hydrate (for the manufacture of alum), zirconium based products
(for the manufacture of antiperspirant active ingredients), sulfur (for the
manufacture of sulfuric acid), and soda ash (for the manufacture of sodium
nitrite).

The
Company purchases raw materials from a number of suppliers and, in most cases,
believes that alternative sources are available to fulfill its needs. A number
of the raw materials the Company will purchase are subject to cyclical price
movements. In the performance chemicals segment, the Company is able to pass
through all or a portion of raw material price increases, but often on a lagged
basis. While the Company has been able to pass through a significant portion of
copper raw material price increases, it has had limited success in doing so
with steel cost increases in its automotive business. The Company continues its
efforts to ensure it has sufficient access to required raw materials at
competitive prices and to pass along raw material price increases where
possible.

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Sales
and Distribution

The
Companys manufacturing segment has approximately 50 sales, marketing,
engineering and customer service personnel. Generally, the Company markets its
products directly to its customers, but in certain industrial markets a
distribution network is used. The manufacturing segments technical and
engineering staff is an integral part of the segments sales and distribution effort.
Since many of the Companys products are precision-engineered and
custom-designed to customer specifications, the Companys sales force and
engineers work closely with its customers in designing, producing, testing and
improving its products.

In
the Companys performance chemicals segment, the Company employs approximately
70 sales, marketing, distribution and customer service personnel. The sales
force is divided into several specialized groups which focus on specific products,
end-users and geographic regions. This targeted approach provides the Company
with insight into emerging industry trends and creates opportunities for
product development.

Seasonality;
Backlog

The
business of the manufacturing segment is generally not seasonal. Within the
performance chemicals segment, the water treatment and sulfur products
businesses have higher volumes in the second and third quarters of the year,
owing to (i) higher spring and summer demand for sulfuric acid regeneration
services from gasoline refinery customers to meet peak summer driving season
demand and (ii) higher spring and summer demand from water treatment chemical
customers to manage seasonally high and low water conditions. The other markets
that the performance chemicals segment serves are generally not seasonal. Due
to the nature of the Companys businesses, there are no significant backlogs.

Environmental
Matters

The
Companys various manufacturing operations, which have been conducted at a
number of facilities for many years, are subject to numerous laws and
regulations relating to the protection of human health and the environment in
the U.S., Canada and other countries. The Company believes that it is in
substantial compliance with such laws and regulations. However, as a result of
its operations, the Company is involved from time to time in administrative and
judicial proceedings and inquiries relating to environmental matters. Based on
information available at this time with respect to potential liability involving
these facilities, the Company believes that any such liability will not have a
material adverse effect on its financial condition, cash flows or results of
operations. However, modifications of existing laws and regulations or the
adoption of new laws and regulations in the future, particularly with respect
to environmental and safety standards, or the discovery of additional or
unknown environmental contamination of any of the Companys current or former
facilities, could require the Company to make expenditures which may be
material or otherwise adversely impact the Companys operations.

The
Company maintains a program to manage its facilities compliance with
environmental laws and regulations. Expenditures for 2006 approximated $8
million (of which approximately $1 million represented capital expenditures and
approximately $7 million related to ongoing operations and the management and
remediation of potential environmental contamination from prior operations).
Expenditures for 2005 approximated $9 million (of which approximately $2
million represented capital expenditures and approximately $7 million related
to ongoing operations and the management and remediation of potential
environmental contamination from prior operations). The Company expects
expenditures similar to 2006 levels in 2007. In addition, if environmental laws
and regulations affecting

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the Companys operations become more stringent, costs
for environmental compliance may increase above historical levels.

The
Comprehensive Environmental Response Compensation and Liability Act of 1980
(CERCLA) and similar statutes, have been construed as imposing joint and
several liability, under certain circumstances, on present and former owners
and operators of contaminated sites, and transporters and generators of
hazardous substances, regardless of fault. The Companys facilities have been
operated for many years by the Company or its prior owners and operators, and
adverse environmental conditions of which the Company is not aware may exist.
Modifications of existing laws and regulations and discovery of additional or
unknown environmental contamination at any of the Companys current or former
facilities could have a material adverse effect on the Companys financial
condition, cash flows and/or results of operations. In addition, the Company
has received written notice from the Environmental Protection Agency that it
has been identified as a potentially responsible party under CERCLA at two
third-party sites. The Company does not believe that its liability, if any, for
these sites will be material to its results of operations, cash flows or
financial condition.

At
any time, the Company may be involved in proceedings with various regulatory
authorities which could require the Company to pay various fines and penalties
due to violations of environmental laws and regulations at its sites, remediate
contamination at some of these sites, comply with applicable standards or other
requirements, or incur capital expenditures to modify certain pollution control
equipment or processes at its sites. Again, although the amount of any
liability that could arise with respect to these matters cannot be accurately
predicted, the Company believes that the ultimate resolution of these matters
will have no material adverse effect on its results of operations, cash flows
or financial condition.

Avtex
Site at Front Royal, Virginia.On March 22, 1990, the
Environmental Protection Agency (the EPA) issued to the Company a Notice of
Potential Liability pursuant to Section 107(a) of CERCLA with respect to a site located in Front Royal, Virginia, owned at
the time by Avtex Fibers Front Royal, Inc., (Avtex) which filed for
bankruptcy. A sulfuric acid plant adjacent to the main Avtex site was
previously owned and operated by the Company. The Company reacquired the
sulfuric acid plant site through the bankruptcy in order to control the
required investigation and, if necessary, remediation. On September 30, 1998,
the EPA issued an administrative order under Section 106 of CERCLA, which
requires the Company, through its predecessor, AlliedSignal Inc. (now Honeywell
Inc.) and Avtex to undertake certain removal actions at the acid plant. On
October 19, 1998, the Company delivered to the EPA written notice of its
intention to comply with that order, subject to numerous defenses. The Company
investigated potential soil and groundwater contamination and decommissioned
the site. As a result of the Companys bankruptcy filing, the Company entered
into an agreement with Honeywell, the previous owner and operator, whereby
Honeywell agreed to take back all environmental liability at the site, past,
present and future, and took back ownership of the site. Although the EPA
refused to formally drop the Company from the administrative order, the EPA
signed a letter acknowledging Honeywells agreement to be responsible for all
liability at the site and agreed to seek recourse against Honeywell for such
liability and only look to the Company in the event of a default by Honeywell.
The Company believes that there is a strong likelihood that no further costs
will be incurred at this site.

Delaware
Valley Facility.On September 7, 2000, the EPA issued to the Company an Initial
Administrative Order (an IAO) pursuant to Section 3008(h) of the Resource
Conservation and Recovery Act (RCRA), which requires that the Company conduct
an environmental investigation of the Companys Delaware Valley facility (the
Facility) and, if necessary, propose and implement corrective measures to
address any historical environmental contamination at the Facility. Over the
past six years,

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the Company has been working cooperatively with the
EPA and Honeywell, a prior owner of the Facility and current owner of a plant
adjacent to the Facility, to implement the actions required under the IAO. The
Company conducted the first investigatory steps required by the IAO, the
evaluation of potential soil and groundwater contamination, in both the North
Plant (the area of the facility north of US Route 18) and the South Plant (the
area south of US Route 18) that borders the Delaware River. As a result of the
Companys bankruptcy filing, the Company entered into an agreement with
Honeywell dated April 30, 2004 in which Honeywell agreed to take back all
environmental liability at the North Plant, past, present and future, as well
as ownership of the North Plant. In addition, Honeywell took responsibility for
the cost to address groundwater contamination at the South Plant. The Company
remains responsible only for soil contamination at the South Plant. Although
the EPA refused to formally drop the Company from the IAO, the EPA signed a
letter acknowledging Honeywells agreement to be responsible for all liability
at the North Plant and for groundwater contamination at the South Plant and to
seek recourse against Honeywell for those liabilities and only look to the
Company in the event of a default by Honeywell. The remaining requirements of
the IAO will be performed over the course of the next several years. The
Company closed the South Plant operations of its Delaware Valley facility on
November 10, 2003. This closure resulted in an expansion of the investigation
to be performed under the IAO. Depending on the results of that additional
investigation, additional remedial activity may be required for soils in the
South Plant. The Company has provided for the estimated costs of $2 million for
compliance with the IAO in its accrual for environmental liabilities. As such,
the Company believes that compliance with the IAO will not have a material
effect on its results of operations or financial condition.

Employees/Labor
Relations

At
December 31, 2006, the Company had approximately 1,525 employees, of whom
approximately 560 were full-time salaried employees, approximately 590 were
full-time hourly employees (represented by 8 different unions) and
approximately 375 were hourly employees working in nonunion facilities.

The
Companys union contracts have durations which vary from two to four years. The
Companys relationships with its unions are generally good.

Executive
Officers and Key Employees

Set
forth below is information with respect to each of the Companys executive
officers and/or key employees.

William
E. Redmond, Jr., 47, President and Chief Executive Officer of the Company since
May, 2005 and a Director of the Company since November 2003. Since 2005, Mr.
Redmond has served as Chairman and a Director of Maxim Crane Works and as
Chairman and a Director of Citation Corporation. From 1996 until 2003, Mr.
Redmond held the position of Chairman, President and Chief Executive Officer of
Garden Way Incorporated.

George
G. Gilbert, 58, Vice President and General Manager  Valve Train Group since
2001. From 1997 to 2001, Mr. Gilbert held the position of Vice President
Technical Services/Strategic Development, for Simpson Industries.

Douglas
J. Grierson, 42, Vice President and Controller since April 2005. Mr. Grierson
served as Director of Accounting and Assistant Controller from June 1999 to
April 2005.

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James
Imbriaco, 54, Vice President, General Counsel and Secretary since July 2005.
From May 2004 to June 2005, Mr. Imbriaco held the position of Consulting
Corporate Counsel with Bowne & Co., Inc. From October 2000 to August 2003,
Mr. Imbriaco held the position of Vice President, General Counsel and Secretary
with Agency.com, Ltd.

Robert
D. Novo, 49, Vice President of Human Resources and Environmental Health and
Safety since August 2004. Mr. Novo served as the Vice President of Human
Resources from July 2003 to August 2004. Prior to July 2003, Mr. Novo held
various senior level human resource positions with Honeywell International
since 1995.

Vincent
J. Opalewski, 44, Vice President and General Manager  Performance Chemicals
Group since September 2006. Mr. Opalewski served as Vice President - Sales and
Marketing, for the Performance Chemicals Group from July 2005 to September
2006. He previously served as General Manager of the Sulfur Products Group from
January 2000 to July 2005.

Thomas
B. Testa, 45, Vice President and Chief Financial Officer since September 2006.
Mr. Testa served as Vice President and General Manager  Performance Chemicals
Group since August 2004. From April 2002 to August 2004, Mr. Testa served as
Vice President  Operations for the Performance Chemicals Group. He previously
served as General Manager of the Electronic Chemicals business group from
October 1997 to April 2002.

Corporate
Governance and Internet Address

The
Company emphasizes the importance of professional business conduct and ethics
through its corporate governance initiatives. The Companys board of directors
has adopted a code of business conduct and ethics that applies to all
employees, directors and officers, including the Companys principal executive
officer, principal financial officer and principal accounting officer. The
Companys board of directors consists of a majority of independent directors.

The
Companys internet address is www.gentek-global.com. The Company makes
available, free of charge through a link on its site, the annual reports on
Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and
amendments to such reports, if any, as filed with the SEC as soon as reasonably
practicable after such filing. The site also contains the Companys code of
business conduct and ethics and the charters of the audit committee, corporate
governance and nominating committee and compensation committee of its board of
directors. The Companys principal executive offices are located at 90 East
Halsey Road, Parsippany, New Jersey 07054, and its telephone number is (973)
515-3221.

Item 1A.
Risk
Factors.

The
following is a discussion of certain factors that currently impact or may
impact the Companys business, operating results and/or financial condition. An
investment in the Companys common stock involves a high degree of risk. You
should carefully consider the risks described below before deciding to invest
in its common stock. In assessing these risks, you should also refer to the
other information in this Annual Report on Form 10-K, including the Companys
financial statements and the related notes. Various statements in this Annual
Report on Form 10-K, including some of the following risk factors, constitute
forward-looking statements.

Risks
Related to the Companys Capital Structure

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The Companys ability to make payments on its debt will be
contingent on GenTeks future operating performance, which will depend on a
number of factors that are outside of its control.

The
Companys debt service obligations are estimated to be approximately $28
million to $30 million in 2007, including approximately $5 million of principal
repayments. This debt service may have an adverse impact on
the Companys earnings and cash flow, which could in turn negatively impact
GenTeks stock price.

The
Companys ability to make principal and interest payments on its debt is
contingent on its future operating performance, which will depend on a number
of factors, many of which are outside of its control. The degree to which
GenTek is leveraged could have other important negative consequences, including
the following:

| |   |                                                                                                                                                                                                                                                                              
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the Company must dedicate a substantial portion of
  its cash flows from operations to the payment of its indebtedness, reducing
  the funds available for future working capital requirements, capital
  expenditures, acquisitions or other general corporate requirements;
| |   |                                                                                                                                                                                                                                                                              
| |  | a significant portion of its borrowings are, and
  will continue to be, at variable rates of interest, which may result in
  higher interest expense in the event of increases in interest rates;                                                                            
| |   |                                                                                                                                                                                                                                                                              
| |  | the Company may be more vulnerable to a downturn in
  the industries in which it operates or a downturn in the economy in general;                                                                                                                                           
| |   |                                                                                                                                                                                                                                                                              
| |  | the Company may be limited in its flexibility to
  plan for, or react to, changes in its businesses and the industries in which
  it operates;                                                                                                                               
| |   |                                                                                                                                                                                                                                                                              
| |  | the Company may be placed at a competitive
  disadvantage compared to its competitors that have less debt;                                                                                                                                                                   
| |   |                                                                                                                                                                                                                                                                              
| |  | the Company may be limited in its ability to react
  to unforeseen increases in certain costs and obligations arising in its
  businesses, including environmental, pension and tax liabilities;                                                                             
| |   |                                                                                                                                                                                                                                                                              
| |  | the Company may determine it to be necessary to
  dispose of certain assets or one or more of its businesses to reduce its
  debt; and                                                                                                                                       
| |   |                                                                                                                                                                                                                                                                              
| |  | the Companys ability to borrow additional funds may
  be limited.                                                                                                                                                                                                           

The
Company can provide no assurance that its businesses will generate sufficient
cash flow from operations or that future borrowings will be available in
amounts sufficient to enable the Company to pay its indebtedness or to fund its
other liquidity needs. Moreover, the Company may need to refinance all or a
portion of its indebtedness on or before maturity. In such a case, the Company
cannot make assurances that it will be able to refinance any of its
indebtedness on commercially reasonable terms or at all. If the Company is
unable to make scheduled debt payments or comply with the other provisions of
its debt instruments, the Companys various lenders may be permitted under
certain circumstances to accelerate the maturity of the indebtedness owed to
them and exercise other remedies provided for in those instruments and under
applicable law.

The Company is subject to restrictive debt covenants
pursuant to its indebtedness. These covenants may restrict its ability to
finance its business and, if the Company does not comply with the covenants or
otherwise default under them, the Company may not have the funds necessary to
pay all amounts that could become due and the lenders could foreclose on
substantially all of its assets.

The
Companys indebtedness contains covenants that, among other things,
significantly restricts and, in some cases, effectively eliminates the
Companys ability and the ability of most of its subsidiaries to:

-9-

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| |   |                                                                                       
| | - | --------------------------------------------------------------------------------------
| |  | incur additional debt;                                                                
| |   |                                                                                       
| |  | create or incur liens;                                                                
| |   |                                                                                       
| |  | pay dividends or make other equity distributions to
  the Companys shareholders;     
| |   |                                                                                       
| |  | purchase or redeem share capital;                                                     
| |   |                                                                                       
| |  | make investments;                                                                     
| |   |                                                                                       
| |  | sell assets;                                                                          
| |   |                                                                                       
| |  | issue or sell share capital of certain subsidiaries;                                  
| |   |                                                                                       
| |  | engage in transactions with affiliates;                                               
| |   |                                                                                       
| |  | issue or become liable on a guarantee;                                                
| |   |                                                                                       
| |  | voluntarily prepay, repurchase or redeem debt;                                        
| |   |                                                                                       
| |  | create or acquire new subsidiaries; and                                               
| |   |                                                                                       
| |  | effect a merger or consolidation of, or sell all or
  substantially all of its assets.

In
addition, the Company and its subsidiaries must comply with certain financial
covenants. In the event the Company was to fail to meet any of such covenants
and were unable to cure such breach or otherwise renegotiate such covenants,
the Companys lenders would have significant rights to deny future access to
liquidity and/or seize control of substantially all of its assets. The material
financial covenants with which the Company must comply include total leverage,
total interest coverage, and maximum capital expenditures.

The
covenants contained in the Companys indebtedness and any credit agreement
governing future debt may significantly restrict its future operations.
Furthermore, upon the occurrence of any event of default, the Companys lenders
could elect to declare all amounts outstanding under such agreements, together
with accrued interest, to be immediately due and payable. If those lenders were
to accelerate the payment of those amounts, the Company cannot assure you that
its assets and the assets of its subsidiaries would be sufficient to repay
those amounts in full.

The
Company is also subject to interest rate risk due to its indebtedness at
variable interest rates, based on a base rate or LIBOR plus an applicable
margin. The Company cannot assure you that shifts in interest rates will not
have a material adverse effect on it.

The Company may be required to prepay its
indebtedness prior to its stated maturity, which may limit its ability to
pursue business opportunities.

Pursuant
to the terms of certain of the Companys indebtedness, in certain instances
it is required to prepay outstanding indebtedness prior to its stated maturity
date. Specifically, if certain tests are not met, a portion of excess cash flow,
as defined in the credit agreement, and certain non-recurring cash inflows such
as proceeds from asset sales, insurance recoveries, and equity offerings must
be used to pay down indebtedness and may not be reborrowed. These prepayment
provisions may limit the Companys ability to utilize this excess cash flow
to pursue business opportunities.

The Companys business is capital intensive. It cannot
assure you that it will have sufficient liquidity to fund its working capital
and capital expenditures and to meet its obligations under existing debt
instruments.

The
Companys business is capital intensive and it cannot be certain that it will
achieve sufficient cash flow in the future. Failure to maintain profitability
and generate sufficient cash flow could diminish its ability to sustain
operations, meet financial covenants, obtain additional required funds and make

-10-

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required payments on any indebtedness it may have
incurred or may incur in the future. If the Company does not comply with the
covenants in its credit agreements or otherwise default under them, it may not
have access to borrowings under its $60 million revolving credit facility or
the funds necessary to pay amounts that become due.

Although
the Company believes that its current levels of cash and cash equivalents,
along with available borrowings on its revolving credit facility, will be
sufficient for its cash requirements during the next twelve months, it is
possible that these sources of cash will be insufficient, resulting in the
Company having to raise additional funds for liquidity. There can be no
assurance the Company will have access to additional funding should the need
arise.

The Company is a holding company that is dependent upon cash
flow from its subsidiaries to meet its financial obligations; its ability to
access that cash flow may be limited in some circumstances.

The Company is a holding company with no
independent operations or significant operating assets other than its
investments in, and advances to, its subsidiaries. The Company depends upon the
receipt of sufficient funds from its subsidiaries through its centralized cash
management system from its domestic subsidiaries and through dividends, loans
or other distributions from its foreign subsidiaries to meet its financial
obligations. In addition, the terms of the Company and its subsidiaries
existing indebtedness, and the laws of the jurisdictions under which it and its
subsidiaries are organized, limit the payment of dividends, loan repayments and
other distributions by its subsidiaries to the Company under some
circumstances. Any indebtedness that it, or its subsidiaries, may incur in the
future may contain similar restrictions.

Risks Related to the Companys Operations

The industries in which the Company operates are highly
competitive. This competition may prevent it from raising prices at the same
pace as its costs increase, making it difficult for the Company to maintain
existing business and win new business.

The
Company faces significant competition in most of its businesses. Certain of its
competitors have large market shares and substantially greater financial and
technical resources than it does. The Company may be required to reduce prices
if its competitors reduce prices, or as a result of any other downward pressure
on prices for its products and services, which could have an adverse effect on
the Company.

In
each of its business segments, the Company operates in competitive markets. Its
manufacturing segment competes with numerous international and North American
companies, including various captive operations of automotive original
equipment manufacturers (OEMs) and Tier 1 suppliers to automotive
manufacturers. Competition in the manufacturing segments markets is based on a
number of factors, including design and engineering capabilities, price,
quality and the ability to meet customer delivery requirements. Due to the
level of competition, its customers have regularly requested price decreases
and maintaining or raising prices has been difficult over the past several
years and will likely continue to be so in the near future. Most of the markets
in which its performance chemicals segment does business are highly
competitive, with competitors typically segregated by end market. Competition
in the performance chemicals segments markets is based on a number of factors,
including price, freight economics, product quality and technical support. If
the Company is unable to compete successfully, its financial condition and
results of operations could be adversely affected.

-11-

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The industries the Company competes in are subject to
economic downturns.

An economic downturn in the automotive
industry as a whole or other events (e.g., labor disruptions) resulting in
significantly reduced operations at DaimlerChrysler or Ford, or at certain of
its manufacturing plants, could have a material adverse impact on the results
of its manufacturing segment. In addition, in the industrial markets, risks
include loss of market share by its major customers and continued price
pressure from major customers. For the Companys performance chemicals
business, weakness in the pulp and paper, electronics or petroleum refining
industries could have an adverse effect on its results of operations.

The Company may experience increased costs and production
delays if suppliers fail to deliver materials to the Company or if prices
increase for raw materials and other goods and services that it purchases from
third parties.

The
Company purchases raw materials from a number of domestic and foreign suppliers.
Although it believes that the raw materials it requires will be available in
sufficient supply on a competitive basis for the foreseeable future, continued
increases in the cost of raw materials, including energy and other inputs used
to make the Companys products, could affect future sales volumes, prices and
margins for its products. If a supplier should cease to deliver goods or
services to the Company, it would probably find other sources, however, such a
disruption could result in added cost and manufacturing delays. In addition,
political instability, war, terrorism and other disruptions to international
transit routes control could adversely impact its ability to obtain key raw
materials in a timely fashion, or at all.

The Companys revenues are dependent on the continued
operation of its manufacturing facilities, and breakdowns or other problems in
its operations could adversely affect its results of operations.

The
Companys revenues are dependent on the continued operation of its various
manufacturing facilities. In particular, the operation of chemical
manufacturing plants involves many risks, including the breakdown, failure or
substandard performance of equipment, natural disasters, acts of terrorism,
power outages, the need to comply with directives of government agencies, and
dependence on the ability of railroads and other shippers to transport raw
materials and finished products in a timely manner. The occurrence of material
operational problems, including but not limited to the foregoing events, at one
or more of the Companys facilities could have a material adverse effect on its
results of operations or financial condition. Certain facilities within each of
its business segments account for a significant share of its profits.
Disruption to operations at one of these facilities could have a material
adverse impact on segment financial performance and its overall financial
condition. In addition, in certain circumstances the Company could also be
materially affected by a disruption or closure of a customers plant or
facility to which it supplies its products.

A significant portion of the Companys
revenue and operating income from its manufacturing segment has been, and is
expected to continue to be, concentrated in a small number of customers.

The
Company derives and is expected to continue to derive significant portions of
its revenues and operating income in its manufacturing segment from sales of
products to Ford and DaimlerChrysler. As a result, the loss of, or reduced
demand from these customers could adversely effect the Companys revenues and
operating income.

-12-

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Material changes in pension and other post-retirement
benefit costs may occur in the future. In addition, investment returns on
pension assets may be lower than assumed, which could result in larger cash
funding requirements for the Companys pension plans, which could have an
adverse impact on it.

The
Company maintains several defined benefit pension plans covering certain
employees in Canada and the United States. It records pension and
post-retirement benefit costs in amounts developed from actuarial valuations.
Inherent in these valuations are key assumptions including the discount rate
and expected long-term rate of return on plan assets. Material changes in
pension and other post-retirement benefit costs may occur in the future due to
changes in these assumptions, differences between actual experience and the
assumptions used, and changes in the benefit plans. Amounts required to be
funded are also dependent upon interest rates. Due to current interest rates
and investment returns, some of the plans are underfunded. The Company is
required to rectify this underfunding in accordance with federal guidelines.
The Company expects to be required to make substantial cash contributions
beginning in 2008 and continuing beyond such time. Moreover, if investment
returns on pension assets are lower than assumed, it may have substantially
larger cash funding requirements for its pension plans, which may have a
material adverse impact on its liquidity.

The Companys principal businesses are subject to government
regulation, including environmental regulation, and changes in current
regulations may adversely affect it.

The
Companys principal business activities are regulated and supervised by various
governmental bodies. Changes in laws, regulations or governmental policy or the
interpretations of those laws or regulations affecting its activities and those
of its competitors could have a material adverse effect on it.

For
example, the Companys various manufacturing operations, which have been
conducted at a number of facilities for many years, are subject to numerous
laws and regulations relating to the protection of human health and the
environment in the U.S., Canada and other countries. The Company believes that
it is in substantial compliance with such laws and regulations. However, as a
result of its operations, from time to time it is involved in administrative
and judicial proceedings and inquiries relating to environmental matters. Based
on information available to it at this time with respect to potential liability
involving these facilities, the Company believes that any such liability will
not have a material adverse effect on its financial condition, cash flows or
results of operations. However, modifications to existing laws and regulations
or the adoption of new laws and regulations in the future, particularly with
respect to environmental and safety standards, could require it to make
expenditures which may be material or may otherwise adversely impact its
operations.

The production of chemicals is associated with a variety of
hazards, which could create significant liabilities or cause the Companys
facilities to suspend its operations.

The
Companys operations are subject to various hazards incident to the production
of chemicals, including the use, handling, processing, storage and
transportation of certain hazardous materials. These hazards, which include the
risk of explosions, fires and chemical spills or releases, can cause personal
injury and loss of life, severe damage to and destruction of property and
equipment, environmental damage, suspension of operations and potentially
subject us to lawsuits relating to personal injury and property damages. Any
such event or circumstance could have a material adverse effect on its results
of operations or financial condition.

-13-

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The
Companys facilities have been operated for many years by it or prior owners
and operators, and adverse environmental conditions of which it is not aware
may exist. The discovery of additional or unknown environmental contamination
at any of its current or former facilities could have a material adverse effect
on its financial condition, cash flows and/or results of operations.

The seasonal nature of the water treatment and chemical
processing businesses could increase the Companys costs or have other negative
effects.

Within
its performance chemicals segment, the water treatment and chemical processing
businesses have higher volumes in the second and third quarters of the year,
owing to higher spring and summer demand for sulfuric acid regeneration
services from gasoline refinery customers to meet peak summer driving season
demand and higher spring and summer demand from water treatment chemical
customers to manage seasonally high and low water conditions. The degree of
seasonal peaks and declines in the volumes of its business could increase its
costs, negatively impact its manufacturing efficiency, or have other negative
effects on its operations or financial performance.

The Company may not be able to obtain
insurance at its historical rates and its insurance coverage may not cover all
claims and losses.

The
Company maintains insurance coverage on its properties, machines, supplies and
other elements integral to its business and against certain third party
litigation, environmental matters and similar events. Due to recent changes in
market conditions in the insurance industry and other factors, the Company may
not be able to secure insurance at a similar cost to what it may have
previously paid, if at all. In addition, there are certain types of losses,
such as earthquakes, floods, hurricanes, terrorism, acts of war or product
warranty, that may be uninsurable or not economically insurable. Inflation,
changes in building codes and ordinances, environmental considerations, and
other factors, including terrorism or acts of war, also may make insurance
proceeds insufficient to repair or replace a property if it is damaged or
destroyed.

The Company is dependent upon many critical
systems and processes, many of which are dependent upon hardware that is
concentrated in a limited number of locations. If a catastrophe were to occur
at one or more of those locations, it could have a material adverse effect on
its business.

The
business is dependent on certain critical systems, which support various
aspects of its operations, from its computer network to its billing and
customer service systems. The hardware supporting a large number of such
systems is housed in a small number of locations. If one or more of these
locations were to be subject to fire, natural disaster, terrorism, power loss,
or other catastrophe, it could have a material adverse effect on its business.
While the Company believes that it maintains reasonable disaster recovery
programs, there can be no assurance that, despite these efforts, any disaster
recovery, security and service continuity protection measures it may have or
may take in the future will be sufficient.

In
addition, computer viruses, electronic break-ins or other similar disruptive
technological problems could also adversely affect its operations. The Companys
insurance policies may not adequately compensate it for any losses that may
occur due to any failures or interruptions in its computer systems.

The Company cannot predict the impact of
any asset or business disposition.

-14-

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From time to time the Company considers
dispositions of assets or businesses. The Company cannot predict the types of
dispositions that may be undertaken in the future or the financial impact of
such actions. For example, after-tax cash proceeds received in connection with
any disposition would be dependent on levels of interest from potential
purchasers and the tax and other structuring elements of such transaction. As a
result, there can be no assurance as to the terms of any such disposition, the
level of any disruption to the operations of the Company caused by such
transaction, or the long-term effect of such transaction on the Companys
financial condition.

The Company has recently completed several acquisitions and
may continue to pursue new acquisitions or joint ventures, and any such
transaction could adversely affect operating results or result in increased
costs or other operating or management problems. The Company remains subject to
the ongoing risks of successfully integrating and managing the acquisitions and
joint ventures that have been completed.

The
Company has recently completed several acquisitions. These transactions expose
the Company to the risk of successfully integrating those acquisitions. Such
integration could impact various areas of the Companys business, including,
but not limited to, its workforce, management, production facilities,
information systems, accounting and financial reporting, and customer service.
Disruption to any of these areas could materially harm the Companys financial
condition or results of operations.

The
Company may continue to pursue new acquisitions or joint ventures in the
future, a pursuit which could consume substantial time and resources. The
successful implementation of the Companys operating strategy in current and
future acquisitions and joint ventures may require substantial attention from
its management team, which could divert management attention from existing
businesses. The businesses acquired, or the joint ventures entered into, may
not generate the cash flow and earnings, or yield the other benefits
anticipated at the time of their acquisition or formation. The risks inherent
in any such strategy could have an adverse impact on the Companys results of
operation or financial condition.

The Company may be unable to identify
liabilities associated with the properties that may be acquired or obtain
protection from sellers against them.

The
acquisition of properties requires assessment of a number of factors, including
physical condition and potential environmental and other liabilities. Such
assessments are inexact and inherently uncertain. The assessments made result
from a due diligence review of the subject properties, but such a review will
not reveal all existing or potential problems. The Company may not be able to
obtain contractual indemnities from the seller for liabilities that it created
or that were created by any predecessor of the seller. The Company may be
required to assume the risk of the physical or environmental condition of the
properties in addition to the risk that the properties may not perform in
accordance with expectations.

Risks Related to The Companys Common Stock

The market price of the Companys common stock is subject to
volatility.

The
market price of the Companys common stock could be subject to wide
fluctuations in response to numerous factors, many of which are beyond its
control. These factors include, among other things, actual or anticipated
variations in its operating results and cash flow, the nature and content of
its earnings releases and its competitors earnings releases, announcements of
technological innovations that impact its products, customers, competitors or
markets, changes in financial estimates by securities analysts, business
conditions in its markets and the general state of the securities markets and
the market

-15-

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for similar
stocks, changes in capital markets that affect the perceived availability of
capital to companies in its industries, governmental legislation or regulation,
as well as general economic and market conditions, such as recessions.

Sales
of large amounts of the Companys common stock, or the perception that large
sales could occur, may cause volatility in its stock price. In connection with
GenTeks emergence from bankruptcy protection on November 10, 2003, the Company
issued an aggregate of 10,000,000 shares of its common stock to former holders
of its debt securities and other claimants. This relatively small float of
shares available for purchase/sale may result in share price volatility in
cases where an investor seeks, or is perceived to be seeking, to acquire or
divest a large block of shares in the public market.

The exercise of the Companys Tranche B and
Tranche C warrants could create substantial dilution, or there may be other
events which would have a dilutive effect on its common stock.

The
Company currently has options and warrants outstanding covering the purchase of
approximately 3 million shares of common stock. If options or warrants to
purchase the Companys common stock are exercised, or other equity interests are
granted under its management and directors incentive plan or under other
plans adopted in the future, such equity interests will have a dilutive effect
on its common stock. The Company cannot predict the effect any such dilution
may have on the price of its common stock.

Item 1B. Unresolved
Staff Comments.

None

Item 2. Properties.

The
Company operates over 50 manufacturing and production facilities located
primarily in the United States and Canada. The Companys headquarters are located
in Parsippany, New Jersey.

Set
forth below are the locations and uses of the Companys major properties:

| |                                  |  |                                              
| | -------------------------------- |  | ---------------------------------------------
| | Location                         |  | Use                                          
| |                                  |  |                                              
| |                                  |  |                                              
| | Manufacturing Segment            |  |                                              
| | Tallahassee,
  Florida           |  | Production
  Facility                        
| | Troy,
  Michigan(1)              |  | Production
  Facility and Offices            
| | Westland,
  Michigan(1)          |  | Production
  Facility, R&D Center and Offices
| | Weaverville,
  North Carolina(2) |  | Production
  Facility and Offices            
| | Toledo, Ohio                     |  | Production
  Facility                        
| | Defiance,
  Ohio(2)              |  | Production
  Facility                        
| | Perrysburg,
  Ohio(2)            |  | Production
  Facility                        
| | Mineral
  Wells, Texas           |  | Production
  Facility and Offices            
| | Curitiba,
  Brazil               |  | Production
  Facility                        
| |                                  |  |                                              
| | Performance Chemicals Segment    |  |                                              
| | Hollister,
  California(2)       |  | Production
  Facility and Offices            
| | Pittsburg,
  California(2)       |  | Production
  Facility                        
| | Richmond,
  California(2)        |  | Production
  Facility                        
| | Augusta,
  Georgia               |  | Production
  Facility                        

-16-

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| |                                   |  |                                             
| | --------------------------------- |  | --------------------------------------------
| | East St.
  Louis, Illinois        |  | Production
  Facility                       
| | Berkeley
  Heights, New Jersey(2) |  | Production
  Facility, Offices and Warehouse
| | Solvay, New
  York                |  | Production Facility                         
| | Celina,
  Texas                   |  | Production
  Facility                       
| | Midlothian,
  Texas               |  | Production
  Facility                       
| | Anacortes,
  Washington           |  | Production
  Facility                       
| | Thorold,
  Ontario                |  | Production
  Facility                       
| | Valleyfield,
  Quebec             |  | Production
  Facility                       
| |                                   |  |                                             
| | Offices                           |  |                                             
| | Parsippany,
  New Jersey(1)       |  | Headquarters                                

|    |                                                             
|--- | ------------------------------------------------------------
|   
|(1) | Leased.                                                     
|    |                                                             
|(2) | Mortgaged as security under
  the Companys debt facilities.

Item 3. Legal
Proceedings.

The
Company is involved in claims, litigation, administrative proceedings and
investigations of various types, including the Richmond litigation discussed
below, and certain environmental proceedings previously discussed. See Item 1.
Business - Environmental Matters above. Although the amount of any liability
that could arise with respect to these actions cannot be accurately predicted,
the opinion of management based upon currently-available information is that
any such liability not covered by insurance will have no material adverse
effect on the Companys results of operations, cash flows or financial
condition.

Richmond
Litigation.
Prior to October 2002, lawyers claiming to represent more than 47,000 persons
filed approximately 24 lawsuits in several counties in California state court
(Alameda, Contra Costa, San Francisco superior courts), making claims against
General Chemical Corporation and, in some cases, a third party arising out of
May 1, 2001 and/or November 29, 2001 releases of sulfur dioxide and/or sulfur
trioxide from the Companys Richmond, California sulfuric acid facility.

The
first case was filed in 2001 and subsequent cases were filed from March through
July 2002. On May 1, 2002, a class action lawsuit arising out of the same facts
was also filed. The lawsuits claim various damages for alleged injuries,
including, without limitation, claims for personal injury, emotional distress,
medical monitoring, nuisance, loss of consortium and punitive damages. The
Company filed a petition for coordination to consolidate the state court cases
before a single judge. The petition for coordination was granted and follow-on
petitions to add additional cases to the coordinated proceedings were also
granted. The state court cases were stayed as a result of the Companys
bankruptcy filing. Approximately 73,000 proofs of claim were submitted in the bankruptcy
proceedings on behalf of the Richmond claimants, seeking damages for the May 1,
2001 and/or November 29, 2001 releases. A preliminary review of the claimant
list indicated that the claimants included most of the plaintiffs in the state
court cases, plus several thousand duplicates and some additional claimants. In
addition, one class proof of claim was submitted. A motion for class
certification was filed but the motion was later withdrawn subject to being
re-filed in state court. The Company filed a motion to lift the automatic stay
and discharge injunction to allow liquidation of the claims to proceed in
California State Court. That motion was granted upon stipulation of the
parties, and the action is proceeding in California State Court.

On
April 20, 2005 an order was entered substantially granting the Companys motion
to dismiss approximately 36,000 of the original 73,000 proofs of claim. As a
result of further stipulations and orders

-17-

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dismissing an additional 6,000 proofs
of claim, there were approximately 30,000 claims remaining at the time that the
litigation was stayed for settlement purposes (see below). There were
approximately an additional 6,000 claims as to which further dismissal motions
were contemplated at the time the stay went into effect. In addition to the
claims against the Company and others seeking damages allegedly arising from
chemical releases from the Companys Richmond facility in 2001, certain
Richmond claimants also commenced a class action in California State Court
against third parties that the Richmond claimants alleged to have received
fraudulent transfers of the Companys assets or aided in such transfers. The
Company believed that the fraudulent transfer claims and causes of action
asserted in the state law complaint were foreclosed by the Companys plan of
reorganization and certain bankruptcy court orders, including the order
confirming the plan of reorganization. Accordingly, the Company filed a motion
with the bankruptcy court, which was heard May 18, 2005, seeking to enforce the
plan of reorganization and bankruptcy court orders to preclude the continued
prosecution of the asserted fraudulent transfer claims. That motion was granted
in significant part in August 2005. On December 16, 2005, the California State
Court granted preliminary approval to the proposed class action settlement
agreement totaling $6,250,000 and resolving all claims asserted in the
litigation and granted final approval of the settlement agreement on May 25,
2006. On October 26, 2006, in accordance with the terms and conditions of the
finally approved settlement agreement, the Court entered an Order of Dismissal
with prejudice dismissing the entire action. The portion of the settlement that
will be the Companys responsibility has been fully accrued for.

Item 4. Submission
of Matters to a Vote of Security Holders.

No
items were submitted to a vote of security holders of the Company, through the
solicitation of proxies or otherwise, during the fourth quarter of fiscal 2006.

-18-

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PART
II

Item 5. Market for
Registrants Common Equity and Related Stockholder Matters.

Market
Information

The
common stock is quoted on the NASDAQ National Market under the symbol GETI.
The following table sets forth, for the period indicated, the high and low sale
prices in dollars as quoted on the NASDAQ National Market for its common stock.

|                 |  |      |       |     |   |       | 
|---------------- |  | ---- | ----- | --- | - | ----- | 
|                 |  | High |       | Low |  
|                 |  |      |       |     |  
|2005             |  |      |       |     |   |       | 
|First
  Quarter  |  | $    | 51.44 |     | $ | 15.30 | 
|Second Quarter   |  | $    | 16.50 |     | $ | 9.51  | 
|Third Quarter    |  | $    | 15.60 |     | $ | 9.63  | 
|Fourth
  Quarter |  | $    | 18.43 |     | $ | 12.05 | 
|                 |  |      |       |     |   |       | 
|2006             |  |      |       |     |   |       | 
|First
  Quarter  |  | $    | 20.96 |     | $ | 17.77 | 
|Second Quarter   |  | $    | 29.04 |     | $ | 22.60 | 
|Third Quarter    |  | $    | 30.47 |     | $ | 26.57 | 
|Fourth
  Quarter |  | $    | 36.15 |     | $ | 27.46 | 

As
of March 13, 2007, there were 2,953 stockholders of record of the Companys
common stock.

Dividends

The
Company paid a special dividend of $31.00 per share on March 16, 2005. The
Company currently intends to retain its earnings for use in the operation and
expansion of its business and for debt service and, therefore, it does not
anticipate paying regular cash dividends in the foreseeable future.
Additionally, the Companys credit facilities directly limit the ability of the
Company to pay cash dividends.

-19-

---



Equity
Compensation Plan Information

The
following table gives information about its existing Common Stock that may be
issued upon the exercise of options, warrants and rights under its 2003
Management and Directors Incentive Plan as of December 31, 2006.

|                                                             |  |                                                                                                           |         |                                                                                         |  |                                                                                                                                                             |       |  |  |  |         |     | 
|------------------------------------------------------------ |  | --------------------------------------------------------------------------------------------------------- | ------- | --------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------- | ----- |  |  |  | ------- | --- | 
|                                                             |  | Equity
  Compensation Plan Information                                                                    |        
|                                                             |  |                                                                                                           |        
|Plan
  Category                                              |  | Number of Securities
  to be issued upon
  exercise of outstanding
  options, warrants and
  rights
  (a) |         | Weighted average
  exercise price of
  outstanding options,
  warrants and rights
  (b) |  | Number of Securities
  remaining available for
  future issuance under
  equity compensation plans
  (excluding securities
  reflected in column (a))
  (c) |      
|                                                             |  |                                                                                                           |         |                                                                                         |  |                                                                                                                                                             |      
|Equity
  compensation plans approved by security holders     |  |                                                                                                           | 0       |                                                                                         |  |                                                                                                                                                             | N/A   |  |  |  | 0       |     | 
|                                                             |  |                                                                                                           |         |                                                                                         |  |                                                                                                                                                             |       |  |  |  |         |     | 
|Equity compensation plans not
  approved by security holders |  |                                                                                                           | 366,848 |                                                                                         |  | $                                                                                                                                                           | 15.28 |  |  |  | 283,960 | (1) | 
|                                                             |  |                                                                                                           |         |                                                                                         |  |                                                                                                                                                             |       |  |  |  |         |     | 
|Total                                                        |  |                                                                                                           | 366,848 |                                                                                         |  | $                                                                                                                                                           | 15.28 |  |  |  | 283,960 |     | 
|                                                             |  |                                                                                                           |         |                                                                                         |  |                                                                                                                                                             |       |  |  |  |         |     | 



---

|    |                                                                                                                                                                                                                                                
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Available for issuance
  under the 2003 Management and Directors Incentive Plan. This plan was
  approved by the bankruptcy court and became effective on November 10, 2003
  concurrent with the effective date of the plan of reorganization.

2003
Management and Directors Incentive Plan

Pursuant
to the Companys 2003 Management and Directors Incentive Plan, employees and
directors of the Company and its subsidiaries may be granted stock options,
restricted stock, stock appreciation rights, performance share awards, dividend
equivalent rights or any other stock-based awards. The compensation committee
of the Board has the authority to select participants and determine grants of
awards. The maximum number of shares with respect to which any awards may be
granted during a calendar year to any participant is 100,000. Upon a change in
control of the Company, unless otherwise determined by the compensation
committee, each outstanding award shall automatically become fully exercisable.
The Board may, at any time, amend or discontinue the plan and the compensation
committee may, at any time, amend or cancel any outstanding award or provide
substitute awards in accordance with the plan, provided that such action does
not adversely affect the participant. The term of the Plan is 10 years.

Performance
Graph

In
accordance with the rules of the SEC, this section entitled Performance Graph
shall not be incorporated by reference into any of our future filings under the
Securities Act or the Exchange Act, and shall not be deemed to be soliciting
material or to be filed under the Securities Act or the Exchange Act.

-20-

---



The following graph illustrates the cumulative total
stockholder return that would have been realized (assuming reinvestment of
dividends) by an investor who invested $100 on November 11, 2003 (the first
trading day of the Companys Common Stock following the Effective Date) in each
of: (i) GenTek Inc. Common Stock, (ii) the Russell 2000 Index, (iii) the
Standard & Poors MidCap Auto Components Index, and (iv) the Standard &
Poors SmallCap Chemicals Index.



GenTek Indexed Performance

|                                   |  |            |  |            |        |            |  |            |  |            |        |  |  |        |  | 
|---------------------------------- |  | ---------- |  | ---------- | ------ | ---------- |  | ---------- |  | ---------- | ------ |  |  | ------ |  | 
|                                   |  | 11/11/2003 |  | 12/31/2003 |        | 12/31/2004 |  | 12/31/2005 |  | 12/31/2006 |       
|                                   |  |            |  |            |        |            |  |            |  |            |       
|GenTek (GETI)                      |  | 100.00     |  |            | 99.72  |            |  | 147.02     |  |            | 159.94 |  |  | 309.41 |  | 
|Russell 2000 Index                 |  | 100.00     |  |            | 105.57 |            |  | 125.03     |  |            | 130.81 |  |  | 154.94 |  | 
|S&P MidCap Auto Components
  Index |  | 100.00     |  |            | 111.27 |            |  | 112.82     |  |            | 95.30  |  |  | 92.47  |  | 
|S&P SmallCap Chemicals
  Index     |  | 100.00     |  |            | 114.69 |            |  | 138.00     |  |            | 108.48 |  |  | 132.10 |  | 

-21-

---



Item 6. Selected
Financial Data.

The
following selected consolidated financial data of the Company have been derived
from and should be read in conjunction with the Companys Consolidated
Financial Statements. In connection with its
emergence from bankruptcy on November 10, 2003, the Company has adopted
fresh-start reporting in accordance with Statement of Position 90-7, Financial
Reporting by Entities in Reorganization Under the Bankruptcy Code.
Accordingly, the Companys post-emergence financial statements (Successor)
will not be comparable with its pre-emergence financial statements
(Predecessor).

|                                                        |  |                                       |         |              |   |              |   |              |         |      |   |           |   |   |         |  |   |          |     
|------------------------------------------------------- |  | ------------------------------------- | ------- | ------------ | - | ------------ | - | ------------ | ------- | ---- | - | --------- | - | - | ------- |  | - | -------- | ----
|                                                        |  | Successor                             |         | Predecessor  |  
|                                                        |  |                                       |         |              |  
|                                                        |  | Years Ended December 31,              |         | Period Ended |   | Period Ended |   | Year Ended   |        
|                                                        |  |                                       |         | December 31, |   | November 10, |   | December 31, |        
|                                                        |  | 2006                                  |         | 2005         |   | 2004         |   | 2003         |         | 2003 |   | 2002      |  
|                                                        |  |                                       |         |              |   |              |   |              |         |      |   |           |  
|                                                        |  | (In thousands, except per share data) |        
|                                                        |  |                                       |        
|Statement of Operations Data:                           |  |                                       |         |              |   |              |   |              |         |      |   |           |   |   |         |  |   |          |     
|Net revenues                                            |  | $                                     | 611,368 |              | $ | 556,497      |   | $            | 531,123 |      | $ | 65,310    |   | $ | 475,693 |  | $ | 664,608  |     
|Restructuring and impairment charges                    |  |                                       | 2,974   |              |   | 6,989        |   |              | 8,934   |      |   | 293       |   |   | 24,597  |  |   |         |     
|Operating profit (loss)                                 |  |                                       | 53,709  |              |   | 39,231       |   |              | 32,058  |      |   | 3,395     |   |   | 11,494  |  |   | 45,937   |     
|Interest expense                                        |  |                                       | 29,137  |              |   | 24,736       |   |              | 7,938   |      |   | 2,430     |   |   | 865     |  |   | 52,364   |     
|Income (loss) from continuing operations(1)(2)          |  |                                       | 15,449  |              |   | 9,123        |   |              | 16,097  |      |   | 1,564     |   |   | 441,607 |  |   | (106,019 | )   
|Income (loss) from discontinued operations              |  |                                       | (17,552 | )            |   | (9,945       | ) |              | 179,221 |      |   | (472      | ) |   | 52,785  |  |   | (93,505  | )   
|Net income (loss)(1)(2)                                 |  | $                                     | (2,103  | )            | $ | (822         | ) | $            | 195,318 |      | $ | 1,092     |   | $ | 494,392 |  | $ | (360,649 | )(3)
|                                                       
|Per Share:                                              |  |                                       |         |              |   |              |   |              |         |      |   |           |   |   |         |  |   |          |     
|Income (loss) from continuing operations
basic(1)(2)   |  | $                                     | 1.52    |              | $ | 0.91         |   | $            | 1.61    |      | $ | 0.16      |   | $ | 17.27   |  | $ | (4.15    | )   
|Income (loss) from continuing operations
diluted(1)(2) |  |                                       | 1.41    |              |   | 0.90         |   |              | 1.61    |      |   | 0.16      |   |   | 17.27   |  |   | (4.15    | )   
|Income (loss) from discontinued operations basic       |  |                                       | (1.73   | )            |   | (0.99        | ) |              | 17.92   |      |   | (0.05     | ) |   | 2.06    |  |   | (3.66    | )   
|Income (loss) from discontinued operations diluted     |  |                                       | (1.60   | )            |   | (0.98        | ) |              | 17.87   |      |   | (0.05     | ) |   | 2.06    |  |   | (3.66    | )   
|Net income (loss)basic(1)(2)                           |  |                                       | (0.21   | )            |   | (0.08        | ) |              | 19.53   |      |   | 0.11      |   |   | 19.34   |  |   | (14.13   | )(3)
|Net income (loss)diluted(1)(2)                         |  |                                       | (0.19   | )            |   | (0.08        | ) |              | 19.48   |      |   | 0.11      |   |   | 19.34   |  |   | (14.13   | )(3)
|Dividends(4)                                            |  |                                       |        |              |   | 31.00        |   |              | 7.00    |      |   |          |   |   |        |  |   |         |     
|                                                       
|Balance Sheet Data (at end of period):                  |  |                                       |         |              |   |              |   |              |         |      |   |           |   |   |         |  |   |          |     
|Total assets                                            |  | $                                     | 730,206 |              | $ | 761,075      |   | $            | 755,519 |      | $ | 1,067,534 |   |   |         |  | $ | 959,391  |     
|Long-term debt (including current portion)              |  |                                       | 345,299 |              |   | 360,269      |   |              | 11,793  |      |   | 251,188   |   |   |         |  |   | 922,683  |     
|                                                       
|Total equity (deficit)                                  |  |                                       | 95,933  |              |   | 85,375       |   |              | 400,427 |      |   | 278,787   |   |   |         |  |   | (510,321 | )   



---

|    |                                                                                                                                                                                                                                                                                                                   
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes a decrease to the
  deferred tax asset valuation allowance of $98.5 million ($3.85 per share) in
  2003, and an increase to the deferred tax asset valuation allowance of $97.7
  million ($3.83 per share) in 2002 to record a valuation allowance for the
  Companys net domestic deferred tax assets.
|    |                                                                                                                                                                                                                                                                                                                   
|(2) | Includes reorganization
  items of $397.0 million ($15.53 per share) of income for the period ended
  November 10, 2003 and $11.7 million ($0.46 per share) of expense in 2002.                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                   
|(3) | Includes the cumulative
  effect of a change in accounting principle of $161.1 million ($6.31 per
  share).                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                   
|(4) | During 2005 and 2004, the
  Company paid special dividends of $31.00 and $7.00 per share, respectively.                                                                                                                                                                                                           

-22-

---



Item 7. Managements Discussion and
Analysis of Financial Condition and Results of Operations.

The
following section should be read in conjunction with the consolidated financial
statements and the notes indicated elsewhere in this Annual Report. This Annual
Report on Form 10-K includes forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Certain statements, other
than statements of historical facts, included in this Annual Report may
constitute forward-looking statements. Forward-looking statements are generally
identifiable by use of forward-looking terminology such as may, will,
should, potential, intend, expect, endeavor, seek,
anticipate,
estimate, overestimate, underestimate, believe, could,
project,
predict, continue or other similar words or expressions. The Company has
based these forward-looking statements on its current expectations and
projections about future events. Although the Company believes that its
assumptions made in connection with the forward-looking statements are
reasonable, there can be no assurances that these assumptions and expectations
will prove to have been correct. Important factors that could cause actual
results to differ from these expectations are disclosed in this Annual Report
and include various risks, uncertainties and assumptions. Such
factors include, but are not limited to, those set forth in the section of this
annual report captioned Business  Risk Factors.

The Company
undertakes no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
In light of these risks, uncertainties and assumptions, the forward-looking
events discussed in this Annual Report might not occur.

Acquisitions

On
September 21, 2006, the Company acquired the assets of GAC MidAmerica, Inc. The
acquisition included manufacturing facilities in Toledo, Ohio, Indianapolis,
Indiana, and Saukville, Wisconsin. GAC produces aluminum sulfate and bleach, as
well as distributing specialty water treatment chemicals, sulfuric acid and
caustic soda. The purchase price of the transaction was $8 million.

On July 31,
2006, the Company acquired the assets of Precision Engine Products Corp., a
wholly owned subsidiary of Stanadyne Corporation. Precision Engine Products is
dedicated principally to the manufacturing of hydraulic lash adjusters and die
cast aluminum rocker arm assemblies utilized in valve train systems for both
OEM and after market applications to the global automotive and light truck
markets. Precision Engine Products has manufacturing facilities in Tallahassee,
Florida and Curitiba, Brazil. The purchase price of the transaction was $26
million in cash, plus the potential of an earn out for Stanadyne of up to $10
million, payable, if at all, based on certain performance metrics being
achieved during the twelve months following the closing date.

On
July 27, 2006, the Company acquired the assets of Repauno Products, LLC. The
acquisition included the manufacturing facility in Gibbstown, New Jersey.
Repauno Products manufactures sodium nitrite which is used in a wide range of
industries including metal finishing, heat transfer salts, rubber processing,
meat curing, odor control and inks and dyes. The purchase price of the
transaction was $6 million.

Discontinued Operations

On
February 16, 2007, the Company completed the sale of its Noma wire and cable
harness assembly business. The net proceeds from the
transaction were used to repay outstanding debt. During April 2006, the Company
    completed the sale of its cable and wire manufacturing business

-23-

---



in Stouffville, Canada. Proceeds from the transaction were used to
repay $22 million of the Companys second lien term loan. Accordingly, these
businesses have been classified as discontinued operations.

During the
second quarter of 2005, the Company ceased operations of its printing plate
business. The business had become unprofitable as it has experienced severe
competitive pressures over the last several years and has been hurt by a
continued shift in technology in the printing plate market. Accordingly, all
financial information included herein has been reclassified to reflect the
business as discontinued operations.

On May 18,
2004, the Company sold its KRONE communications business to ADC
Telecommunications, Inc. (ADC). Accordingly, all financial information included
herein has been reclassified to reflect the KRONE communications business as
discontinued operations. Net proceeds from the transaction of approximately
$291 million were used to repay the Companys then-outstanding Senior Term Loan
Agreement in full, and the related loan agreement was terminated. Consummation
of this transaction triggered the contingent redemption feature of the
Companys tranche A warrants. The Company made the required payment of $8.4
million ($7.13 per warrant) on June 30, 2004, and the tranche A warrants
expired.

Overview

The Company
is a holding company whose subsidiaries manufacture industrial components and
performance chemicals. It operates through two primary business segments:
manufacturing and performance chemicals. Its products are frequently highly
engineered and are important components of, or provide critical attributes to,
its customers end products or operations. The Company operates over 50
manufacturing and production facilities located primarily in the U.S. and
Canada. GenTek has no independent operations and, therefore, is dependent upon
cash flow from its subsidiaries to meet its obligations.

Manufacturing

The
manufacturing segment provides a broad range of engineered components and
services to two principal markets: automotive and industrial. Over the last
several years the Companys automotive sales and operating profits have been
adversely impacted by industry conditions affecting its major customers
operations. Volume reductions and pricing pressure by auto manufacturers and
Tier 1 suppliers has resulted in lower volumes and selling prices. Sales to the
automotive market, which accounted for approximately 74 percent of the
manufacturing segments revenue in 2006, declined approximately 2 percent
during the past year, due in large part to industry issues discussed above. The
Company expects that revenues from the full year impact of the Precison Engine
Products acquisition will more than offset weakness in the Companys historic
North American customer base in 2007. In response to competitive pressures from
offshore suppliers in the automotive markets, the manufacturing segment has
taken aggressive action to improve its cost position. The Company has closed
certain facilities, reduced headcount and other operating expenses, and outsourced
production of certain less complex components to lower cost, third party
manufacturers in Asia. Sales to the industrial market, which accounted for
approximately 26 percent of the manufacturing segments revenues in 2006, have
increased from 22 percent last year principally due to the impact of the pass
through of higher raw material prices for copper.

Due to the
Companys dependence on the North American automotive market, production levels
of the automotive OEMs influence the manufacturing segments sales and
profitability. The North

-24-

---



American automobile and light truck build rate is one commonly used
indicator of such production levels. More specifically, though, the production
levels of the individual engine programs that it supplies impact its sales and
profitability in the automotive market. The Companys revenues in this market
are also influenced, to a lesser degree, by the North American class 8 heavy
duty diesel truck build rate.

Profitability
in the Companys manufacturing segment can be influenced by a number of
factors, including: production levels at its individual manufacturing
facilities, as well as the volume and consistency of production levels at its
customers manufacturing facilities; demands from its customers to reduce the
prices of its products; the prices it pays for key raw materials and
transportation costs.

Performance Chemicals

The
performance chemicals segment provides a broad range of value-added chemical
products and services to four principal markets: water treatment, chemical
processing, pharmaceutical and personal care, and technology. Sales to the
water treatment and chemical processing markets, which account for
approximately 65 percent of the performance chemicals segments revenues, have
increased approximately 14 percent over the last year. This increase is
principally due to price increases as well as the impact of the acquisitions of
GAC and Repauno. The Company anticipates that sales to the water treatment
market will grow in 2007 primarily due to the full year impact of the
acquisitions. Sales to the pharmaceutical and personal care market, which
account for approximately 20 percent of the performance chemicals segments
revenue, increased by approximately 8 percent over the last year primarily due
to price increases. The Company anticipates sales to this market in the year
2007 will be flat year over year. Sales to the technology market, which account
for approximately 15 percent of the performance chemicals segments revenues,
have increased 12 percent over the last year. The Company anticipates that
sales into this market will be flat year over year. Operating efficiency and
price improvement offsetting raw material and other cost increases are expected
to maintain the performance chemicals segments profitability in 2007.

In the
chemical processing market, its revenues are derived principally from the sale
of sulfuric acid regeneration services to large oil refineries on the West
Coast of the United States and from the sale of sulfuric acid which is used in
the manufacture of synthetic fibers, paper, fertilizers as well as many other
products. In the water treatment chemicals market its revenues are derived from
the sale of water treatment chemicals to large municipal treatment facilities
and pulp and paper operations. In the pharmaceutical and personal care market,
GenTeks revenues and profitability are driven by sales of active ingredients
to manufacturers of antiperspirants, with such manufacturers production levels
influenced by antiperspirant market share trends and new product introductions.
The Companys sales in the technology market are influenced by North American
production levels of semiconductor devices.

Profitability
in its performance chemicals segment can be influenced by a number of factors,
including: competitive market conditions; production levels at its individual
manufacturing facilities; energy costs, including the prices of natural gas and
electricity; the prices it pays for its key raw materials, including sulfur,
bauxite, aluminum tri-hydrate and zirconium-based products; and transportation
costs.

Results of Operations

The
following table sets forth certain line items from its Consolidated Statements
of Operations for the three years ended December 31, 2006 and the corresponding
percentage of net revenues for the relevant periods presented as a percentage
of revenue for the periods indicated.

-25-

---



|                                                    |  |                          |       |      |  |      |   |   |       |   |  |     |   |   |       |   |  |     |  
|--------------------------------------------------- |  | ------------------------ | ----- | ---- |  | ---- | - | - | ----- | - |  | --- | - | - | ----- | - |  | --- | -
|                                                    |  | Years Ended December 31, |      
|                                                    |  |                          |      
|                                                    |  | 2006                     |       | 2005 |  | 2004 |  
|                                                    |  |                          |       |      |  |      |  
|                                                    |  | (In millions)            |      
|Net revenues                                        |  | $                        | 611.4 |      |  | 100  | % | $ | 556.5 |   |  | 100 | % | $ | 531.1 |   |  | 100 | %
|Cost of
  sales                                     |  |                          | 503.8 |      |  | 82   |   |   | 452.8 |   |  | 81  |   |   | 438.8 |   |  | 83  |  
|Selling,
  general and administrative expense       |  |                          | 51.5  |      |  | 8    |   |   | 56.8  |   |  | 10  |   |   | 64.8  |   |  | 12  |  
|Restructuring
  and impairment charges              |  |                          | 3.0   |      |  |     |   |   | 7.0   |   |  | 1   |   |   | 8.9   |   |  | 2   |  
|Pension
  curtailment and settlement (gains) losses |  |                          | (0.6  | )    |  |     |   |   | 0.6   |   |  |    |   |   | (13.4 | ) |  | (3  | )
|                                                    |  |                          |       |      |  |      |   |   |       |   |  |     |   |   |       |   |  |     |  
|Operating profit                                    |  |                          | 53.7  |      |  | 9    |   |   | 39.2  |   |  | 7   |   |   | 32.1  |   |  | 6   |  
|Interest
  expense                                  |  |                          | 29.1  |      |  | 5    |   |   | 24.7  |   |  | 4   |   |   | 7.9   |   |  | 1   |  
|Interest
  income                                   |  |                          | 0.6   |      |  |     |   |   | 0.6   |   |  |    |   |   | 0.6   |   |  |    |  
|Other
  (income) expense, net                       |  |                          | 0.3   |      |  |     |   |   | (2.3  | ) |  |    |   |   | (3.1  | ) |  | (1  | )
|Income tax
  provision (benefit)                    |  |                          | 9.4   |      |  | 2    |   |   | 8.2   |   |  | 1   |   |   | 11.8  |   |  | 2   |  
|                                                    |  |                          |       |      |  |      |   |   |       |   |  |     |   |   |       |   |  |     |  
|Income from continuing operations                   |  | $                        | 15.4  |      |  | 2    | % | $ | 9.1   |   |  | 2   | % | $ | 16.1  |   |  | 3   | %
|                                                    |  |                          |       |      |  |      |   |   |       |   |  |     |   |   |       |   |  |     |  

2006 Compared with
2005

Net
revenues were $611 million for the year 2006 compared with $557 million for the
prior year. This increase was due to higher sales of $39 million in the
performance chemicals segment and $16 million in the manufacturing segment. The
increase in the performance chemicals segment is due to broad based strength
across all market segments as well as the impact of the acquisitions of GAC and
Repauno. The increase in the manufacturing segment is  primarily the result
of higher sales revenues in the industrial market. Reduced sales in the
automotive base business were offset by the favorable impact of the acquisition
of Precision Engine Products.

Gross
profit was $108 million for the year 2006 as compared with $104 million for
2005. This reflects higher gross profit in performance chemicals and lower
gross profit in manufacturing of $10 million and $6 million, respectively. The
increase in the performance chemicals segment gross profit was driven primarily
by the strong revenue performance. The decrease in gross profit in the
manufacturing segment is principally due to reduced volumes and unfavorable
product mix in the automotive market.

Selling,
general and administrative expense was $52 million for the year ended December
31, 2006 as compared with $57 million in the prior year. This reduction is
primarily attributable to the Companys cost reduction efforts. In addition,
2005 was adversely impacted by a $2 million charge relating to the former Chief
Executive Officers separation from the Company.

Restructuring
and impairment charges were $3 million for the year ended December 31, 2006 as
compared with charges of $7 million for the prior year ended December 31, 2005.
During 2006, impairment charges of $1 million were recorded relating to
machinery and equipment for a discontinued product line. Restructuring charges
recorded in 2006 included $1 million associated with the closure of two
production facilities and $1 million for continuing costs from activities
initiated during prior years. The Company expects that the reduction in costs
from the current year restructuring actions will be approximately offset by the
resulting reductions in revenues. Revenues from the affected products were
approximately $6 million in 2006, and were discontinued in December, 2006. The
Company expects to substantially complete implementation of the current year
restructuring actions during 2007. Restructuring actions initiated in prior years have been substantially
completed. The Company will continue to review its operations, and may record
additional restructuring charges to tailor its cost

-26-

---



structure to current
economic conditions.

During
2006, the Company adopted plan amendments that froze pension plan benefit
accruals for hourly employees covered by certain collective bargaining
agreements, and announced the closure of one of its manufacturing facilities.
These actions resulted in a net curtailment gain of $0.6 million. During 2005,
the Company terminated its two defined benefit pension plans relating to former
employees of the Companys personal care chemicals manufacturing operations in
Ireland, which were closed in 2004. As a result of this action, a settlement
loss of $0.6 million was recorded.

Operating
profit was $54 million for the year 2006 as compared with $39 million for the
prior year. The higher operating profit is the result of higher gross margin
and lower selling, general and administrative expense plus the reduction in
restructuring costs as compared with 2005.

Interest
expense was $29 million for the year 2006 as compared to $25 million for the
prior year. The increase in interest expense is the result of higher average
principal balances and higher interest rates during 2006 as compared to the
prior year.

Income tax
expense for the year 2006 was $9 million as compared to $8 million for the year
2005. In both years, the effective tax rate was negatively affected by the
impact of the Companys foreign operations. During 2006, this impact was
partially offset by a one-time benefit related to the payment of dividends on
restricted stock.

Loss from
discontinued operations was $18 million versus $10 million in 2005. Included in
loss from discontinued operations in 2006 are impairment charges of $2 million
related to the Canadian wire and cable business and $12 million related to the
Noma wire and cable harness assembly business. Included in loss from
discontinued operations in 2005 is an impairment charge of $7 million relating
to the Canadian wire and cable business.

2005 Compared with
2004

Net
revenues were $556 million for the year 2005 compared with $531 million for the
prior year. This increase was due to higher sales of $18 million in the
performance chemicals segment and $7 million in the manufacturing segment. The
increase in the performance chemicals segment is due to increased sales across
the water treatment, chemical processing and the companys pharmaceutical and
personal care product lines partially offset by lost revenues attributable to
closed facilities. The increase in the manufacturing segment is the result of
higher sales to the industrial market partially offset by a decrease in sales
in the automotive market. The increase in revenues in the industrial market is
primarily due to strong volumes in the industrial wire market compounded by the
impact of the pass through of higher raw material prices for copper. The
decrease in sales in the automotive market is due to lower sales volumes to the
Companys North American automotive customer base.

Gross
profit was $104 million for the year 2005 as compared with $92 million for
2004. This reflects higher gross profit in performance chemicals and
manufacturing of $11 million and $1 million, respectively. The increase in the
performance chemicals segment gross profit includes an insurance recovery
related to the Companys closed Delaware Valley Works South Plant, the
increased volumes discussed above, as well as plant cost savings net of lost
revenue due to the closure of the North Plant of the Delaware Valley Works in
January 2005. The increase in gross profit in the manufacturing segment
is principally due to the performance of the industrial wire
business.

-27-

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Selling,
general and administrative expense was $57 million for the year ended December
31, 2005 as compared with $65 million in the prior year. This reduction is
primarily attributable to the Companys cost reduction efforts and lower
pension and other postretirement benefits expense, partially offset by a $2
million charge relating to the former Chief Executive Officers separation from
the Company.

Restructuring
and impairment charges were $7 million for the year ended December 31, 2005 as
compared with charges of $9 million for the prior year ended December 31, 2004.
During 2005, impairment charges of $2 million were recorded relating to closed
facilities. Restructuring charges recorded in 2005 included $3 million
associated with the closure of three production facilities and headcount
reductions and $2 million for continuing costs from activities initiated during
prior years. The charges recorded in the prior year were associated with the
closure of four production facilities.

During 2005, the Company terminated its two defined benefit pension plans
relating to former employees of the Companys personal care chemicals
manufacturing operations in Ireland, which were closed in 2004. As a result of
this action, a settlement loss of $0.6 million was recorded. During 2004, the
Company notified its employees that benefit accruals in defined benefit pension
plans covering domestic salaried and certain hourly employees would be frozen
effective April 1, 2004. As a result, a curtailment gain of approximately $13
million was recognized in 2004.

Operating profit was $39 million for the year 2005 as compared with $32 million
for the prior year. The improvement in operating profit in 2005 reflects higher
gross margin and lower selling, general and administrative expense in 2005
partly offset by a pension curtailment gain in 2004.

Interest
expense was $25 million for the year 2005 as compared to $8 million for the
prior year. Interest expense for the year 2005 consisted principally of
interest expense on the Companys new credit facilities and a charge of $3
million to write-off deferred financing costs as a result of the
recapitalization.

Income
tax expense for the year 2005 was $8 million as compared to $12 million for the
year 2004. The principal reason that income tax expense was significantly
higher than the US federal statutory rate was due to the impact of the
Companys foreign operations and state and local taxes.

Loss
from discontinued operations was $10 million in 2005 as compared with income
from discontinued operations of $179 million in 2004. Included in loss from
discontinued operations in 2005 is an impairment charge of $7 million relating
to the Canadian wire and cable business. Included in income from discontinued
operations in 2004 is a gain on the sale of the KRONE communications business
of $185 million.

Results of Operations
by Segment

2006 Compared with
2005

|                      |  |                            |       |      |   |        |  |   |      | 
|--------------------- |  | -------------------------- | ----- | ---- | - | ------ |  | - | ---- | 
|                      |  | Years
  Ended December 31, |       |      |  
|                      |  |                            |       |      |  
|                      |  | 2006                       |       | 2005 |   | Change | 
|                      |  |                            |       |      |   |        | 
|                      |  | (In
  millions)            |       |      |   |       
|                     
|Net
  Revenues:       |  |                            |       |      |   |        |  |   |      | 
|Manufacturing         |  | $                          | 238.0 |      | $ | 222.4  |  | $ | 15.6 | 
|Performance chemicals |  |                            | 373.4 |      |   | 334.1  |  |   | 39.3 | 
|                      |  |                            |       |      |   |        |  |   |      | 
|Total                 |  | $                          | 611.4 |      | $ | 556.5  |  | $ | 54.9 | 
|                      |  |                            |       |      |   |        |  |   |      | 

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|                           |  |   |      |   |   |       |   |   |      |  
|-------------------------- |  | - | ---- | - | - | ----- | - | - | ---- | -
|Operating
  Profit (Loss): |  |   |      |   |   |       |   |   |      |  
|Manufacturing              |  | $ | 15.1 |   | $ | 20.7  |   | $ | (5.6 | )
|Performance chemicals      |  |   | 44.7 |   |   | 29.3  |   |   | 15.4 |  
|Corporate                  |  |   | (6.1 | ) |   | (10.8 | ) |   | 4.7  |  
|                           |  |   |      |   |   |       |   |   |      |  
|Total                      |  | $ | 53.7 |   | $ | 39.2  |   | $ | 14.5 |  
|                           |  |   |      |   |   |       |   |   |      |  

Manufacturing Segment

Net
revenues for the manufacturing segment were $238 million for the year 2006 as
compared to $222 million for 2005. This increase is the result of higher sales
in the both the industrial and automotive markets of $13 million and $3
million, respectively. The increase in the revenues in the industrial market is
primarily due to the impact of the pass through of higher raw material prices
for copper. The increase in sales in the automotive market is due to lower
sales volumes to the Companys existing North American automotive customer base
of $17 million which were more than offset by revenue resulting from the
acquisition of Precision Engine Products of $20 million. Gross profit was $37
million for the year 2006 as compared to $42 million for 2005. This decrease is
principally due to reduced volumes and unfavorable product mix in the
automotive market. Selling, general and administrative expense was $19 million
for 2006 which was flat with 2005. Restructuring and impairment charges were $2
million for 2006 and $3 million for 2005. Operating profit for 2006 was $15
million as compared with $21 million for 2005. This decrease is the result of
the above-mentioned lower gross profit and the slightly higher restructuring
charges.

Performance Chemicals Segment

Net
revenues were $373 million for the year 2006 as compared with $334 million for
the comparable prior year period. This was due to higher sales in the Companys
water treatment, chemical processing, technology, and pharmaceutical and
personal care product lines of $22 million, $6 million, $5 million, and $5
million, respectively. The increase in sales was due to increased pricing of
$24 million which was primarily the result of the pass through of higher raw material
costs, increased volumes in the sulfur products and technology markets of $8
million as well $7 million attributable to the acquisition of the assets of
Repauno and GAC during 2006. Gross profit was $71 million as compared with $61
million for the prior year. The increase in gross profit is primarily
attributable to the increase in revenues. Reduced environmental remediation
costs of $3 million vs. the prior period were offset by an insurance recovery
of $3 million in 2005 related to the Companys closed Delaware Valley Works
South Plant. Selling, general and administrative expense was $26 million for
the year 2006 as compared with $29 million for 2005. This decrease was
primarily due to cost reduction efforts. There were no net restructuring and
pension curtailment charges in 2006 as compared with $3 million of charges
recorded during 2005. Operating profit for 2006 was $45 million as compared
with $29 million for 2004. The increase is principally due to the increased
gross profit, lower selling, general and administrative expense and increased
operating efficiencies.

2005 Compared with
2004

|                |  |                          |       |      |   |        |  |   |     | 
|--------------- |  | ------------------------ | ----- | ---- | - | ------ |  | - | --- | 
|                |  | Years Ended December 31, |       |      |   |       
|                |  |                          |       |      |   |       
|                |  | 2005                     |       | 2004 |   | Change | 
|                |  |                          |       |      |   |        | 
|                |  | (In
  millions)          |       |      |   |       
|               
|Net
  Revenues: |  |                          |       |      |   |        |  |   |     | 
|Manufacturing   |  | $                        | 222.4 |      | $ | 214.5  |  | $ | 7.9 | 

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|                           |  |   |       |   |   |       |   |   |      |  
|-------------------------- |  | - | ----- | - | - | ----- | - | - | ---- | -
|Performance chemicals      |  |   | 334.1 |   |   | 316.6 |   |   | 17.5 |  
|                           |  |   |       |   |   |       |   |   |      |  
|Total                      |  | $ | 556.5 |   | $ | 531.1 |   | $ | 25.4 |  
|                           |  |   |       |   |   |       |   |   |      |  
|Operating
  Profit (Loss): |  |   |       |   |   |       |   |   |      |  
|Manufacturing              |  | $ | 20.7  |   | $ | 22.2  |   | $ | (1.5 | )
|Performance chemicals      |  |   | 29.3  |   |   | 21.3  |   |   | 8.0  |  
|Corporate                  |  |   | (10.8 | ) |   | (11.4 | ) |   | 0.6  |  
|                           |  |   |       |   |   |       |   |   |      |  
|Total                      |  | $ | 39.2  |   | $ | 32.1  |   | $ | 7.1  |  
|                           |  |   |       |   |   |       |   |   |      |  

Manufacturing Segment

Net
revenues for the manufacturing segment were $222 million for the year 2005 as
compared to $215 million for 2004. This increase is primarily the result of
higher sales to the industrial markets of $8 million partly offset by lower
sales to the automotive markets of $1 million. The increase in revenues in the
industrial market is primarily due to strong wire sales volumes compounded by
the impact of the pass through of higher raw material prices for copper. The
decrease in sales in the automotive market is due to lower sales to the
Companys North American automotive testing customer base. Gross profit was $42
million for the year 2005 which was flat with 2004. Selling, general and
administrative expense was $19 million for 2005 as compared with $22 million
for 2004. This decrease was principally due to cost reduction programs, and
lower sales commissions. Restructuring and impairment charges were $3 million
for 2005, there were no restructuring charges for 2004. Operating profit for
2005 was $21 million as compared with $22 million for 2004, primarily as a
result of the restructuring charges incurred in 2005, partially offset by the
reduction in selling, general and administrative spending.

Performance Chemicals Segment

Net revenues were $334 million for the year 2005 as
compared with $317 million for the prior year. This increase was principally
the result of higher sales in the Companys water treatment, chemical
processing and pharmaceutical personal care product line of $19 million, $4
million and $7 million, respectively, partially offset by lost revenues of $11
million attributable to closed facilities. The increase was primarily the
result of the pass through of higher raw material prices and freight costs as
well as higher volumes in the environmental and personal care product lines.
Gross profit for 2005 was $61 million as compared to $50 million for the prior
year. The increase was principally the result of the increased volumes and the
pass through of previously incurred raw material price increases discussed
above, an insurance recovery of $3 million related to the Companys closed
Delaware Valley Works South Plant, and plant cost savings net of lost revenue
of $2 million due to the closure of the North Plant of the Delaware Valley
Works in January 2005. Selling, general and administrative expense was $29
million for the year 2005 as compared with $31 million for 2004. The decrease
was principally due to lower pension expense and lower salaries and other cost
reductions. Restructuring and impairment charges were $3 million for the year
2005 as compared with a $9 million charge recorded during 2004. Operating
income for 2005 was $29 million as compared with $21 million for 2004. The
increase is principally due to the increased gross profit, lower selling,
general and administrative expense and increased operating efficiencies.

Liquidity and Capital Resources

Cash
and cash equivalents were $6 million at December 31, 2006, compared with $12
million at December 31, 2005. Significant cash flows during 2006 included
acquisitions of $40 million, capital expenditures
of $22 million, and net debt payments of $14 million offset by proceeds from
asset sales of $29 million and cash provided by operations of $42 million. The
Company had working capital (current

-30-

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assets minus current liabilities) of $148
million at December 31, 2006 as compared with working capital of $193 million
at December 31, 2005. This decrease is primarily a result of a decrease in
receivables and assets held for sale, in connection with the sale of the
Companys Canadian wire and cable manufacturing business, partially offset
by an increase in inventory.

Cash
payments for employee termination costs and facility exit costs totaled $1
million in the year ended December 31, 2006. Management expects that cash
outlays of approximately $2 million related to these actions will be substantially
completed by the end of 2007. Management intends to fund these cash outlays
from existing cash balances and cash flow generated by operations.

In February, 2005, the Company closed on a secured financing consisting of $370
million of term loans and a $60 million revolving credit facility (the Credit
Facilities). The term loans included a $235 million first lien loan due
on February 28, 2011 and a $135 million second lien loan due on February 28,
2012. The first lien term loan is subject to amortization of $2 million per year
for five years, with the remainder payable in the sixth year. There is no
amortization over the term of the second lien loan. The $60 million revolving
credit facility matures on February 28, 2010 and carries an interest rate of
LIBOR plus 2.50 percent subject to rate changes under a pricing grid if the
Companys leverage ratio changes. In April, 2006, the Company entered into
amendments to its first and second term loan agreements which reduced the
interest rate margins to LIBOR plus 2.25 percent or base rate plus 1.25 pecent
on the first lien loan and LIBOR plus 4.25 percent on the second lien loan. In
addition, the debt holders agreed to allow a partial redemption of the second
lien term loan. On May 1, 2006, the Company repaid $22 million of its second
lien term loan. This redemption was sourced from proceeds of the Companys
sale of its Canadian wire and cable business. In September, 2006, the first lien
interest rate margin was reduced by an additional 0.25 percent when Moodys
Investor Services upgraded the rating on that loan to B1. The Credit Facilities
are secured by liens on substantially all of the personal property and certain
real property of the Company and its domestic subsidiaries. The Credit Facilities
contain covenants which impose certain restrictions on the Companys ability
to, among other things, incur additional debt, pay dividends, make investments
or sell assets. Additionally, if certain tests are not met, a portion of excess
cash flow, as defined in the Credit Facilities, and certain non-recurring cash
inflows such as proceeds from asset sales, insurance recoveries, and equity offerings
must be used to pay down indebtedness and may not be reborrowed. In addition,
the Credit Facilities contain certain financial covenants which include a maximum
leverage ratio, minimum interest coverage ratio and maximum annual capital expenditures.
At December 31, 2006, the Company was in compliance with the covenants in the
Credit Facilities.

On
    March 19, 2007, the Company completed an amendment to its credit facilities
    which enabled it to increase borrowings under the first lien term loan by
    $50 million and to use these borrowings and the net proceeds from the Noma wire
    and cable harness assembly business sale to redeem the entire second lien
    term loan.

In
April 2005, the Company entered into two no-cost interest rate collar
agreements, effectively hedging $185 million of its LIBOR-based floating rate
term debt for five years. As a result of entering into the agreements, the
interest rate to be paid by the Company relating to the hedged portion of its
debt will be based on a minimum three-month LIBOR rate of 4.05 percent on
average and a maximum three-month LIBOR rate of 5.00 percent.

During
2006, the Company made $22 million of capital expenditures. Capital
expenditures are expected to be approximately $35 to $40 million in 2007.
Contributions to pension plan trusts are expected to be approximately $1
million in 2007.

Management
believes that the Companys cash flow from operations and availability under
its revolving credit facility will be sufficient to cover debt service
requirements, capital expenditures, and working capital requirements during
2007.

Off-Balance Sheet
Agreements

-31-

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The
Company has approximately $10 million of standby letters of credit outstanding
as of December 31, 2006.

Contractual
Obligations

|                                |  |                        |        |           |   |           |  |                 |         |       |   |         |  |   |         | 
|------------------------------- |  | ---------------------- | ------ | --------- | - | --------- |  | --------------- | ------- | ----- | - | ------- |  | - | ------- | 
|                                |  | Payments Due by Period |       
|                                |  |                        |       
|                                |  | (In thousands)         |       
|                                |  | Less than
  1 Year     |        | 1-3 Years |   | 4-5 Years |  | After
  5 Years |         | Total |  
|                                |  |                        |        |           |   |           |  |                 |         |       |  
|Long-term
  debt(1)             |  | $                      | 4,612  |           | $ | 5,025     |  | $               | 222,501 |       | $ | 113,161 |  | $ | 345,299 | 
|Interest on outstanding debt(2) |  |                        | 27,854 |           |   | 54,998    |  |                 | 35,208  |       |   | 1,812   |  |   | 119,872 | 
|Operating
  leases              |  |                        | 3,882  |           |   | 5,717     |  |                 | 2,815   |       |   | 403     |  |   | 12,817  | 
|Purchase
  obligations          |  |                        | 4,827  |           |   |          |  |                 |        |       |   |        |  |   | 4,827   | 
|                                |  |                        |        |           |   |           |  |                 |         |       |   |         |  |   |         | 
|Total
  contractual obligations |  | $                      | 41,175 |           | $ | 65,740    |  | $               | 260,524 |       | $ | 115,376 |  | $ | 482,815 | 
|                                |  |                        |        |           |   |           |  |                 |         |       |   |         |  |   |         | 

|   
|---
|(1)
|(2)

Environmental Matters

The
Companys various manufacturing operations, which have been conducted at a
number of facilities for many years, are subject to numerous laws and
regulations relating to the protection of human health and the environment in
the U.S., Canada and other countries. The Company believes that it is in
substantial compliance with such laws and regulations. However, as a result of
its operations, the Company is involved from time to time in administrative and
judicial proceedings and inquiries relating to environmental matters. Based on
information available at this time with respect to potential liability
involving these facilities, the Company believes that any such liability will
not have a material adverse effect on its financial condition, cash flows or
results of operations. However, modifications of existing laws and regulations
or the adoption of new laws and regulations in the future, particularly with
respect to environmental and safety standards, could require the Company to
make expenditures which may be material or otherwise adversely impact the
Companys operations. See also Item 1. Business - Environmental Matters.

The
Companys accruals for environmental liabilities are recorded based on current
interpretation of environmental laws and regulations when it is probable that a
liability has been incurred and the amount of such liability can be reasonably
estimated. At December 31, 2006, accruals for environmental matters were $25
million. The Company maintains a comprehensive insurance program, including
customary comprehensive general liability insurance for bodily injury and
property damage caused by various activities and occurrences and significant
excess coverage to insure against catastrophic occurrences. However, the
Company generally does not maintain insurance other than as described above for
potential liabilities related specifically to remediation of existing
environmental contamination or future environmental contamination, if any.

The
Company maintains a program to manage its facilities compliance with
environmental laws and regulations. Expenditures for 2006 approximated $8
million (of which approximately $1 million represented capital expenditures and
approximately $7 million related to ongoing operations and the management and
remediation of potential environmental contamination from prior operations).
Expenditures for 2005 approximated $9 million (of which approximately $2
million represented capital expenditures and approximately $7 million related
to ongoing operations and the management and remediation of potential
environmental contamination from prior operations). The Company expects
expenditures similar to 2006 levels in 2007. In addition, if environmental laws
and regulations affecting the Companys
operations become more stringent, costs for environmental compliance may
increase above historical levels.

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Recent Accounting Pronouncements

In December 2004, the Financial Accounting
Standards Board (FASB) issued SFAS No. 123R, Share-Based Payment (Revised 2004)
(SFAS 123R). This statement addresses the accounting for
share-based payment transactions in which a company receives employee services
in exchange for the companys equity instruments or liabilities that are based
on the fair value of the companys equity securities or may be settled by the
issuance of these securities. SFAS No. 123R eliminates the ability to account
for share-based compensation using the intrinsic value method and generally
requires that such transactions be accounted for using a fair value method. The
Company adopted SFAS 123R using the modified prospective transition method.
Under this method, compensation cost is recognized for the unvested portion of
share-based payments granted prior to January 1, 2006 and all share-based
payments granted subsequent to December 31, 2005 over the related vesting
period. Prior to January 1, 2006, the Company applied the intrinsic value
method prescribed in APB Opinion No. 25 in accounting for employee stock based
compensation. Prior period results have not been restated.

In
June 2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income
Taxes, an Interpretation of FASB Statement No. 109 (FIN 48). FIN
48 clarifies the accounting for uncertainty in income taxes recognized in a
companys financial statements and prescribes a recognition threshold and
measurement attribute for the financial statement recognition and measurement
of tax positions taken or expected to be taken in a tax return. The
interpretation also provides guidance on derecognition, classification,
interest and penalties, accounting in interim periods, disclosure and
transition. FIN 48 will be effective for the Company beginning in the first
quarter of 2007. The Company is currently evaluating the impact of adopting FIN
48.

In
September 2006, the FASB issued SFAS No. 157, Fair Value Measurements,
(SFAS 157), to define fair value, establish a framework for measuring fair
value in accordance with generally accepted accounting principles and expand
disclosures about fair value measurements. SFAS 157 requires quantitative
disclosures using a tabular format in all periods (interim and annual) and
qualitative disclosures about the valuation techniques used to measure fair
value in all annual periods. The provisions of this Statement shall be
effective for financial statements issued for fiscal years beginning after
November 15, 2007 and interim periods within those fiscal years. The Company
will be required to adopt the provisions of this statement as of January 1,
2008. The Company is currently evaluating the impact of adopting SFAS 157.

In
September 2006, the FASB issued SFAS No. 158, Employers Accounting for Defined
Benefit Pensions and Other Postretirement Plans, (SFAS 158). SFAS
158 requires an employer to recognize the overfunded or underfunded status of a
defined benefit postretirement plan (other than a multiemployer plan) as an
asset or liability in its statement of financial position and to recognize
changes in that funded status in the year in which the changes occur through
comprehensive income. Employers are required to initially recognize the funded
status and provide the required disclosures beginning for fiscal year ends
after December 15, 2006. The net impact on the December 31, 2006 balance sheet
is to decrease prepaid pension costs by $1.7 million, decrease other current
liabilities by $0.9 million, reduce accrued pension and and postretirement benefit
costs by $15.9 million and increase deferred tax liabilities by $6.0 million, with
the offset increasing stockholders equity by $9.1 million. Additionally, for
fiscal years ending after December 15, 2008, SFAS 158 will require employers to
measure the plan assets and obligations as of the date of the employers fiscal
year end. The Company currently utilizes a measurement
date of October 31. The Company does not anticipate the change in the fiscal
year end measurement date to have a material impact on the Companys results of
operations or financial condition.

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In
September 2006, the Securities and Exchange Commission (SEC) issued Staff
Accounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements
when Quantifying Misstatements in Current Year Financial Statements
(SAB 108). SAB 108 requires the use of two alternative approaches in
quantitatively evaluating materiality of misstatements. If the misstatement as
quantified under either approach is material to the current year financial
statements, the misstatement must be corrected. If the effect of correcting the
prior year misstatements, if any, in the current year income statement is
material, the prior year financial statements should be corrected. In the year
of adoption, the misstatements may be corrected as an accounting change by
adjusting the opening retained earnings rather than including the adjustment in
the current year income statement. The Company has adopted the provisions of
SAB 108 and there was no effect on its consolidated financial statements.

In
February 2007, the FASB issued SFAS No. 159 The Fair Value Option for Financial Assets and
Financial Liabilities  including an Amendment of SFAS No. 115,
(SFAS No. 159), which permits an entity to measure many financial assets and
financial liabilities at fair value that are not currently required to be
measured at fair value. Entities that elect the fair value option will report
unrealized gains and losses in earnings at each subsequent reporting date. The
fair value option may be elected on an instrument-by-instrument basis, with few
exceptions. SFAS No. 159 amends previous guidance to extend the use of the fair
value option to available-for-sale and held-to-maturity securities. The
Statement also establishes presentation and disclosure requirements to help
financial statement users understand the effect of the election. SFAS No. 159
is effective as of the beginning of the first fiscal year beginning after
November 15, 2007. The Company is currently evaluating the impact of adopting
SFAS No. 159.

Critical Accounting Policies and Estimates

The
preparation of financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates. The Companys significant accounting policies are described in Note
2 to the audited consolidated financial statements. The significant accounting
policies which it believes are the most critical to the understanding of
reported financial results include the following:

Revenue
Recognition  GenTek recognizes revenue when
persuasive evidence of an arrangement exists, delivery has occurred, the fee is
fixed or determinable, and collectibility is reasonably assured. Revenue is
recognized from product sales when title and risk of loss has passed to the
customer consistent with the related shipping terms, generally at the time
products are shipped. The Company records a provision for estimated sales
returns and other allowances as a reduction of revenue at the time of revenue
recognition. Provisions for sales returns and other allowances are determined
using managements judgments of required amounts, based upon the Companys
historical experience. Actual returns could differ from these estimates.
However, if the total actual level of sales returns differed from managements
estimates by 10 percent, the effect would not be material.

Accounts
Receivable  GenTek maintains allowances for doubtful
accounts for estimated losses resulting from the inability of its customers to
make required payments. Allowances are based upon historical experience and
information available to management about the creditworthiness, financial
condition and payment history of its customers. If the financial condition of
the customers were to deteriorate, additional allowances may be required. To
the extent that managements estimate of the uncollectible
amount of receivables differs from the amount the Company is ultimately not
able to collect by 10 percent, its results would be impacted by approximately
$1 million.

-34-

---



Deferred
Taxes  GenTek records a valuation allowance to reduce
its deferred tax assets to the amount the Company believes is more likely than
not to be realized based upon historical taxable income, projected future
taxable income and available tax planning strategies. Its estimates of future
taxable income are based upon its current operating forecast, which it believes
to be reasonable. The Company will continue to monitor the likelihood of
realizing its net deferred tax assets and future adjustments to the deferred
tax asset valuation allowances will be recorded as necessary. However,
different assumptions regarding its current operating forecast could materially
effect its estimates.

Purchase
Accounting GenTek applies the purchase method of
accounting for acquisitions. Under this method, the purchase price, including
any capitalized acquisition costs is allocated to the underlying tangible and
intangible assets acquired and liabilities assumed based on their respective
fair market values, with any excess recorded as goodwill. The Company
determines the fair values of such assets and liabilities, generally in
consultation with third-party valuation advisors. Such fair value assessments
require significant judgments and estimates such as projected cash flows,
discount rates, royalty rates, and remaining useful lives. The initial fair
values assigned to certain of these acquisitions are preliminiary and may be
revised prior to finalization, which is to be completed within a reasonable
period, generally within one year of acquisition. Different assumptions and
estimates that underlie the fair value assessments could materially affect its
results.

Impairment
of Goodwill and Other Intangible Assets  GenTek records impairment
losses on goodwill and indefinite lived intangible assets based upon an annual
review of the value of the assets or when events and circumstances indicate
that the asset might be impaired and when the recorded value of the asset is
more than its fair value. Its estimates of fair value are based upon its
current operating forecast, which it believes to be reasonable. Significant
assumptions that underlie the fair value estimates include future growth rates
and weighted average cost of capital rates. However, different assumptions
regarding its current operating forecast could materially affect its results.

Impairment
of Long-Lived Assets  GenTek records impairment
losses on long-lived assets when events and circumstances indicate that the
assets might be impaired and the undiscounted cash flows estimated to be
generated by those assets are less than their carrying amount. In this case,
the Company records an impairment loss equal to the difference between the fair
value of the long-lived assets and their carrying amount. Managements
estimates of fair value are based on discounted cash flow analyses and/or
independent appraisals. Significant assumptions underlying these estimates
include future growth rates and weighted average cost of capital rates. Its
estimates of future cash flows are based upon its current operating forecast,
which it believes to be reasonable. However, different assumptions regarding
such cash flows or other assumptions that underlie its fair value estimates
could materially affect its results.

Pension and Other Post Retirement Benefits
 GenTek records pension and other post retirement benefit costs based on
amounts developed from actuarial valuations. Inherent in these valuations are
key assumptions provided by the Company to its actuaries, including the
discount rate and expected long-term rate of return on plan assets. For
example, holding all other components of the calculations constant, a change in
the assumed discount rate by 1⁄4 percent would change 2006 pension and other post
retirement benefit costs by approximately $0.1 million and the projected
pension and other post retirement benefit obligations by approximately $7
million. A change in the expected long-term rate of return on plan assets of 1
percent would change 2006 pension cost by approximately $2 million. Material
changes in pension and other post retirement benefit costs may occur in the
future due to changes in these assumptions, differences between actual
experience and the assumptions used and changes in the benefit plans.

-35-

---



Environmental
Liabilities  GenTek has recorded accruals for
environmental liabilities based on current interpretation of environmental laws
and regulations when it is probable that a liability has been incurred and the
amount of such liability can be reasonably estimated. These estimates are
established based upon information available to management to date, including
the nature and extent of any environmental contamination, the available
remedial alternatives, cost estimates obtained from outside consultants for the
implementation of such remedial alternatives, the Companys experience with
similar activities undertaken at similar sites, and the legal and regulatory
framework in the jurisdiction in which the liability arose. Differences between
actual amounts incurred and its estimates or the receipt of new information
with respect to these liabilities could have a material effect on its estimates
and results of operations. In addition, discovery of unknown environmental
contamination, the adoption of new laws or regulations or modifications or
changes in enforcement of existing laws and regulations could require
adjustments to these accruals.

The
impact and any associated risks related to these policies on its business
operations is discussed throughout Managements Discussion and Analysis of
Financial Condition and Results of Operations where such policies affect its
reported and expected financial results.

-36-

---



Item 7A. Quantitative
and Qualitative Disclosures About Market Risk.

The
Companys cash flows and earnings are subject to fluctuations resulting from
changes in interest rates, foreign currency exchange rates and commodity prices
and the Company selectively uses financial instruments to manage these risks.
The Companys objective in managing its exposure to changes in interest rates,
foreign currency exchange rates and commodity prices is to reduce volatility on
earnings and cash flow associated with such changes. The Company has not
entered, and does not intend to enter, into financial instruments for
speculation or trading purposes.

Interest rate risk

At
December 31, 2006, the Companys debt financing consisted primarily of amounts
outstanding under the Companys credit facility. The borrowings outstanding
under the Companys credit facility are collateralized by substantially all of
the personal property and certain real property of the Company and its domestic
subsidiaries. Borrowings under the Companys credit facility are sensitive to
changes in interest rates. Given the existing level of borrowings under the
credit facility of $342 million as of December 31, 2006, a 1⁄2 percent change in
the weighted-average interest rate would have an interest impact of
approximately $0.1 million each month.

| |                   |             |            |   |                                                       |  |                    |  |                  
| | ----------------- | ----------- | ---------- | - | ----------------------------------------------------- |  | ------------------ |  | -----------------
| | Principal Balance |             | Fair Value |   | Weighted-Average Interest Rate at
  December 31, 2006 |  | Scheduled Maturity
| |                   |             |            |   |                                                       |  |                   
| | $                 | 219 million |            | $ | 221 million                                           |  | 7.36%              |  | February 28, 2011
| | $                 | 113 million |            | $ | 115 million                                           |  | 9.62%              |  | February 28, 2012
| | $                 | 10 million  |            | $ | 10 million                                            |  | 7.85%              |  | February 28, 2010

The
Company has two interest rate collar agreements in the aggregate notional
amount of $185 million, in order to hedge against the effect that interest rate
fluctuations may have on the Companys floating rate debt. The interest rate to
be paid is based on a minimum three-month LIBOR of 4.05 percent on average and
a maximum three-month LIBOR of 5.00 percent. These interest rate collar
agreements are scheduled to mature in 2010. The fair value of the agreements
was $2 million at December 31, 2006.

Foreign currency exchange rate and commodity
price risks

The
Company measures the market risk related to its holding of financial
instruments based on changes in foreign currency rates and commodity prices
using a sensitivity analysis. The sensitivity analysis measures the potential
loss in fair values, cash flows and earnings based on a hypothetical 10 percent
change in foreign currency exchange rates and commodity prices. Such analysis
indicates that a hypothetical 10 percent change in foreign currency exchange
rates or commodity prices would not have a material impact on the fair values,
cash flows or earnings of the Company.

-37-

---



Item 8. Financial Statements and Supplementary Data.

Index

| |                                                                                              |          | 
| | -------------------------------------------------------------------------------------------- | -------- | 
| |                                                                                              | Page No.
| |                                                                                              |         
| |                                                                                              |         
| | Report of
  Independent Registered Public Accounting Firm                                    | 39       | 
|
| | Consolidated Statements of
  Operations  Years Ended December 31, 2006, 2005 and 2004       | 40       | 
|
| | Consolidated Balance Sheets  As of
  December 31, 2006 and 2005                             | 41       | 
|
| | Consolidated Statements of Cash
  Flows  Years Ended December 31, 2006, 2005 and 2004       | 42       | 
|
| | Consolidated Statement of Changes in
  Equity  Years Ended December 31, 2006, 2005 and 2004 | 43       | 
|
| | Notes to the Consolidated Financial
  Statements                                             | 44-69    | 

-38-

---



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM

To the Board of Directors and Stockholders of 
GenTek Inc.
Parsippany, New Jersey

We have audited the accompanying
consolidated
balance sheets of GenTek Inc.
and subsidiaries (the Company) as of December 31, 2006 and 2005, and the
related consolidated statements of operations, changes in equity, and cash
flows for each of the three years in the period ended December 31, 2006. Our
audits also included the financial statement schedule listed in the Index at
Item 15. These financial statements and financial statement schedule are the
responsibility of the Companys management. Our responsibility is to express an
opinion on the financial statements and financial statement schedule based on
our audits.

We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In
our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of GenTek Inc. and subsidiaries at December 31, 2006 and 2005, and
the results of their operations and their cash flows for each of the three
years in the period ended December 31, 2006, in conformity with accounting
principles generally accepted in the United States of America. Also, in our
opinion, such financial statement schedule, when considered in relation to the
basic consolidated financial statements taken as a whole, presents fairly, in
all material respects, the information set forth therein.

As
discussed in Note 2 to the consolidated financial statements, the Company
adopted Statement of Financial Accounting Standards No. 123(R),
Share-Based Payment.

As
discussed in Note 2 to the consolidated financial statements, the Company
adopted Statement of Financial Accounting Standards No. 158, Employers
Accounting for Defined Benefit Pension and Other Postretirement Plans.

As
discussed in Note 16 to the consolidated financial statements, in December 2006
the Company entered into an agreement to sell its Noma wire and cable assembly
business. The Company has classified the related operations as discontinued
operations in accordance with Statement of Financial Accounting Standards No.
144, Accounting for the Impairment or Disposal of Long-Lived Assets.

We
have also audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the effectiveness of the Companys
internal control over financial reporting as of December 31, 2006, based on the
criteria established in Internal
ControlIntegrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission and our report dated March 20, 2007
expressed an unqualified opinion on managements assessment of the effectiveness
of the Companys internal control over financial reporting and an unqualified
opinion on the effectiveness of the Companys internal control over financial
reporting.

/s/ Deloitte & Touche LLP
Parsippany, New Jersey
March 20, 2007

-39-

---



GENTEK
INC.CONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except per share data)

|                                                                                                                                                   |  |                          |         |      |   |         |   |   |         |  
|-------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------ | ------- | ---- | - | ------- | - | - | ------- | -
|                                                                                                                                                   |  | Years Ended December 31, |        
|                                                                                                                                                   |  |                          |        
|                                                                                                                                                   |  | 2006                     |         | 2005 |   | 2004    |  
|                                                                                                                                                   |  |                          |         |      |   |         |  
|Net revenues                                                                                                                                       |  | $                        | 611,368 |      | $ | 556,497 |   | $ | 531,123 |  
|Cost of sales                                                                                                                                      |  |                          | 503,806 |      |   | 452,835 |   |   | 438,775 |  
|Selling, general and administrative expense                                                                                                        |  |                          | 51,523  |      |   | 56,816  |   |   | 64,770  |  
|Restructuring and impairment charges                                                                                                               |  |                          | 2,974   |      |   | 6,989   |   |   | 8,934   |  
|Pension curtailment and settlement (gains) losses                                                                                                  |  |                          | (644    | )    |   | 626     |   |   | (13,414 | )
|                                                                                                                                                   |  |                          |         |      |   |         |   |   |         |  
|Operating profit                                                                                                                                   |  |                          | 53,709  |      |   | 39,231  |   |   | 32,058  |  
|Interest expense                                                                                                                                   |  |                          | 29,137  |      |   | 24,736  |   |   | 7,938   |  
|Interest income                                                                                                                                    |  |                          | 645     |      |   | 579     |   |   | 592     |  
|Other (income) expense, net                                                                                                                        |  |                          | 343     |      |   | (2,274  | ) |   | (3,120  | )
|                                                                                                                                                   |  |                          |         |      |   |         |   |   |         |  
|Income from
  continuing operations before income taxes                                                                                            |  |                          | 24,874  |      |   | 17,348  |   |   | 27,832  |  
|Income tax provision                                                                                                                               |  |                          | 9,425   |      |   | 8,225   |   |   | 11,735  |  
|                                                                                                                                                   |  |                          |         |      |   |         |   |   |         |  
|Income from
  continuing operations                                                                                                                |  |                          | 15,449  |      |   | 9,123   |   |   | 16,097  |  
|Income (loss) from discontinued operations (net of
  tax for the years ended December 31, 2006, 2005 and 2004 of $(8,121),
  $(5,356) and $89,745) |  |                          | (17,552 | )    |   | (9,945  | ) |   | 179,221 |  
|                                                                                                                                                   |  |                          |         |      |   |         |   |   |         |  
|Net income
  (loss)                                                                                                                                |  | $                        | (2,103  | )    | $ | (822    | ) | $ | 195,318 |  
|                                                                                                                                                   |  |                          |         |      |   |         |   |   |         |  
|                                                                                                                                                   |  |                          |         |      |   |         |   |   |         |  
|Earnings per common share  basic:                                                                                                                 |  |                          |         |      |   |         |   |   |         |  
|Income from continuing operations                                                                                                                  |  | $                        | 1.52    |      | $ | 0.91    |   | $ | 1.61    |  
|Income (loss) from discontinued operations                                                                                                         |  |                          | (1.73   | )    |   | (0.99   | ) |   | 17.92   |  
|                                                                                                                                                   |  |                          |         |      |   |         |   |   |         |  
|Net income
  (loss)                                                                                                                                |  | $                        | (0.21   | )    | $ | (0.08   | ) | $ | 19.53   |  
|                                                                                                                                                   |  |                          |         |      |   |         |   |   |         |  
|                                                                                                                                                   |  |                          |         |      |   |         |   |   |         |  
|Earnings per common share  assuming dilution:                                                                                                     |  |                          |         |      |   |         |   |   |         |  
|Income from continuing operations                                                                                                                  |  | $                        | 1.41    |      | $ | 0.90    |   | $ | 1.61    |  
|Income (loss) from discontinued operations                                                                                                         |  |                          | (1.60   | )    |   | (0.98   | ) |   | 17.87   |  
|                                                                                                                                                   |  |                          |         |      |   |         |   |   |         |  
|Net income
  (loss)                                                                                                                                |  | $                        | (0.19   | )    | $ | (0.08   | ) | $ | 19.48   |  
|                                                                                                                                                   |  |                          |         |      |   |         |   |   |         |  

See the
accompanying notes to the consolidated financial statements.

-40-

---



GENTEK
INC.CONSOLIDATED BALANCE SHEETS(In thousands, except share data)

|                                                                                                                                                     |  |              |         |      |   |         |  
|---------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | ------- | ---- | - | ------- | -
|                                                                                                                                                     |  | December 31, |        
|                                                                                                                                                     |  |              |        
|                                                                                                                                                     |  | 2006         |         | 2005 |  
|                                                                                                                                                     |  |              |         |      |  
|ASSETS                                                                                                                                               |  |              |         |      |   |         |  
|Current assets:                                                                                                                                      |  |              |         |      |   |         |  
|Cash and cash
  equivalents                                                                                                                          |  | $            | 5,715   |      | $ | 11,645  |  
|Receivables, net                                                                                                                                     |  |              | 80,413  |      |   | 91,960  |  
|Inventories                                                                                                                                          |  |              | 46,885  |      |   | 35,843  |  
|Deferred income
  taxes                                                                                                                              |  |              | 31,578  |      |   | 32,623  |  
|Assets held for
  sale                                                                                                                               |  |              | 111,544 |      |   | 143,779 |  
|Other current
  assets                                                                                                                               |  |              | 6,811   |      |   | 9,672   |  
|                                                                                                                                                     |  |              |         |      |   |         |  
|Total current
  assets                                                                                                                               |  |              | 282,946 |      |   | 325,522 |  
|Property, plant and equipment, net                                                                                                                   |  |              | 232,180 |      |   | 221,346 |  
|Goodwill                                                                                                                                             |  |              | 150,253 |      |   | 147,369 |  
|Intangible assets                                                                                                                                    |  |              | 56,703  |      |   | 53,664  |  
|Deferred income taxes                                                                                                                                |  |              | 611     |      |   | 220     |  
|Other assets                                                                                                                                         |  |              | 7,513   |      |   | 12,954  |  
|                                                                                                                                                     |  |              |         |      |   |         |  
|Total assets                                                                                                                                         |  | $            | 730,206 |      | $ | 761,075 |  
|                                                                                                                                                     |  |              |         |      |   |         |  
|LIABILITIES
  AND EQUITY                                                                                                                             |  |              |         |      |   |         |  
|Current liabilities:                                                                                                                                 |  |              |         |      |   |         |  
|Accounts payable                                                                                                                                     |  | $            | 43,026  |      | $ | 36,017  |  
|Accrued
  liabilities                                                                                                                                |  |              | 57,021  |      |   | 54,675  |  
|Current portion
  of long-term debt                                                                                                                  |  |              | 4,612   |      |   | 3,840   |  
|Liabilities of
  businesses held for sale                                                                                                            |  |              | 30,516  |      |   | 38,220  |  
|                                                                                                                                                     |  |              |         |      |   |         |  
|Total current
  liabilities                                                                                                                          |  |              | 135,175 |      |   | 132,752 |  
|Long-term debt                                                                                                                                       |  |              | 340,687 |      |   | 356,429 |  
|Pension and postretirement obligations                                                                                                               |  |              | 85,501  |      |   | 107,887 |  
|Other liabilities                                                                                                                                    |  |              | 72,910  |      |   | 78,632  |  
|                                                                                                                                                     |  |              |         |      |   |         |  
|Total
  liabilities                                                                                                                                  |  |              | 634,273 |      |   | 675,700 |  
|                                                                                                                                                     |  |              |         |      |   |         |  
|Equity:                                                                                                                                              |  |              |         |      |   |         |  
|Preferred stock,
  $.01 par value; authorized: 10,000,000 shares; none issued or outstanding                                                         |  |              |        |      |   |        |  
|Common stock, no
  par value; authorized: 100,000,000 shares; issued: 10,359,716 and 10,194,571
  shares at December 31, 2006 and 2005, respectively |  |              | 83,516  |      |   | 81,395  |  
|Unearned compensation                                                                                                                                |  |              |        |      |   | (859    | )
|Warrants                                                                                                                                             |  |              | 8,355   |      |   | 8,361   |  
|Accumulated
  other comprehensive income (loss)                                                                                                      |  |              | 6,004   |      |   | (3,861  | )
|Retained
  earnings (deficit)                                                                                                                        |  |              | (1,678  | )    |   | 425     |  
|Treasury stock,
  at cost: 12,198 and 5,191 shares at December 31, 2006 and 2005, respectively                                                       |  |              | (264    | )    |   | (86     | )
|                                                                                                                                                     |  |              |         |      |   |         |  
|Total equity                                                                                                                                         |  |              | 95,933  |      |   | 85,375  |  
|                                                                                                                                                     |  |              |         |      |   |         |  
|Total
  liabilities and equity                                                                                                                       |  | $            | 730,206 |      | $ | 761,075 |  
|                                                                                                                                                     |  |              |         |      |   |         |  

See the accompanying
notes to the consolidated financial statements.

-41-

---



GENTEK
INC.CONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands)

|                                                                                           |  |                            |         |      |   |          |   |   |          |  
|------------------------------------------------------------------------------------------ |  | -------------------------- | ------- | ---- | - | -------- | - | - | -------- | -
|                                                                                           |  | Years
  Ended December 31, |        
|                                                                                           |  |                            |        
|                                                                                           |  | 2006                       |         | 2005 |   | 2004     |  
|                                                                                           |  |                            |         |      |   |          |  
|Cash flows from
  operating activities:                                                    |  |                            |         |      |   |          |   |   |          |  
|Net income
  (loss)                                                                        |  | $                          | (2,103  | )    | $ | (822     | ) | $ | 195,318  |  
|Adjustments to
  reconcile net income (loss) to net cash provided by operating activities: |  |                            |         |      |   |          |   |   |          |  
|Discontinued
  operations                                                                  |  |                            | 15,423  |      |   | 9,945    |   |   | (179,221 | )
|Pension
  curtailment gain                                                                 |  |                            | (644    | )    |   |         |   |   | (13,414  | )
|Depreciation and
  amortization                                                            |  |                            | 36,314  |      |   | 37,224   |   |   | 40,175   |  
|Asset impairment
  charges                                                                 |  |                            | 1,231   |      |   | 1,852    |   |   |         |  
|Net (gain) loss
  on disposition of long-term assets                                       |  |                            | 476     |      |   | (1,622   | ) |   | (4,823   | )
|Long-term
  incentive plan costs, net                                                      |  |                            | 1,793   |      |   | 1,176    |   |   | 1,483    |  
|Excess tax
  benefit from stock option exercises                                           |  |                            | (318    | )    |   |         |   |   |         |  
|(Increase)
  decrease in receivables                                                       |  |                            | 3,381   |      |   | (7,328   | ) |   | (416     | )
|(Increase)
  decrease in inventories                                                       |  |                            | (2,230  | )    |   | 21       |   |   | (2,248   | )
|(Increase)
  decrease in deferred tax assets                                               |  |                            | (5,055  | )    |   | (14,828  | ) |   | 6,693    |  
|Increase
  (decrease) in accounts payable                                                  |  |                            | 5,549   |      |   | (2,149   | ) |   | 11,127   |  
|Increase
  (decrease) in accrued liabilities                                               |  |                            | 3,899   |      |   | (6,531   | ) |   | (38,883  | )
|Increase (decrease) in other liabilities and assets, net                                   |  |                            | 3,750   |      |   | (16,377  | ) |   | (5,171   | )
|                                                                                           |  |                            |         |      |   |          |   |   |          |  
|Net cash
  provided by continuing operations                                               |  |                            | 61,466  |      |   | 561      |   |   | 10,620   |  
|Net cash
  provided by (used for) discontinued operations                                  |  |                            | (19,434 | )    |   | 3,164    |   |   | 37,543   |  
|                                                                                           |  |                            |         |      |   |          |   |   |          |  
|Net cash
  provided by operating activities                                                |  |                            | 42,032  |      |   | 3,725    |   |   | 48,163   |  
|                                                                                           |  |                            |         |      |   |          |   |   |          |  
|Cash flows from
  investing activities:                                                    |  |                            |         |      |   |          |   |   |          |  
|Capital expenditures                                                                       |  |                            | (22,409 | )    |   | (21,605  | ) |   | (25,040  | )
|Proceeds from
  sales or disposals of long-term assets                                     |  |                            | 849     |      |   | 2,499    |   |   | 10,127   |  
|Purchase of
  short-term investments                                                       |  |                            | 2,367   |      |   | (2,229   | ) |   |         |  
|Acquisition of
  businesses net of cash acquired*                                          |  |                            | (40,119 | )    |   |         |   |   | (1,451   | )
|Other investing
  activities                                                               |  |                            |        |      |   |         |   |   | (75      | )
|                                                                                           |  |                            |         |      |   |          |   |   |          |  
|Net cash used
  for continuing operations                                                  |  |                            | (59,312 | )    |   | (21,335  | ) |   | (16,439  | )
|Net cash
  provided by (used for) discontinued operations                                  |  |                            | 28,489  |      |   | (6,582   | ) |   | 285,488  |  
|                                                                                           |  |                            |         |      |   |          |   |   |          |  
|Net cash
  provided by (used for) investing activities                                     |  |                            | (30,823 | )    |   | (27,917  | ) |   | 269,049  |  
|                                                                                           |  |                            |         |      |   |          |   |   |          |  
|Cash flows from
  financing activities:                                                    |  |                            |         |      |   |          |   |   |          |  
|Proceeds from
  long-term debt                                                             |  |                            | 15,533  |      |   | 400,767  |   |   | 18,131   |  
|Repayment of
  long-term debt                                                              |  |                            | (29,589 | )    |   | (56,061  | ) |   | (268,336 | )
|Redemption of
  tranche A warrants                                                         |  |                            |        |      |   |         |   |   | (8,365   | )
|Dividends                                                                                  |  |                            | (2,367  | )    |   | (310,742 | ) |   | (70,690  | )
|Exercise of
  stock options and warrants                                                   |  |                            | 872     |      |   | 708      |   |   |         |  
|Excess tax
  benefit from stock option exercises                                           |  |                            | 318     |      |   |         |   |   |         |  
|Payments to
  acquire treasury stock                                                       |  |                            | (178    | )    |   | (86      | ) |   |         |  
|                                                                                           |  |                            |         |      |   |          |   |   |          |  
|Net cash
  provided by (used for) continuing operations                                    |  |                            | (15,411 | )    |   | 34,586   |   |   | (329,260 | )
|Net cash used
  for discontinued operations                                                |  |                            | (1,738  | )    |   | (7,319   | ) |   | (5,663   | )
|                                                                                           |  |                            |         |      |   |          |   |   |          |  
|Net cash
  provided by (used for) financing activities                                     |  |                            | (17,149 | )    |   | 27,267   |   |   | (334,923 | )
|                                                                                           |  |                            |         |      |   |          |   |   |          |  
|Effect of
  exchange rate changes on cash                                                  |  |                            | 10      |      |   | (151     | ) |   | 246      |  
|                                                                                           |  |                            |         |      |   |          |   |   |          |  
|Increase
  (decrease) in cash and cash equivalents                                         |  |                            | (5,930  | )    |   | 2,924    |   |   | (17,465  | )
|Cash and cash
  equivalents at beginning of period                                         |  |                            | 11,645  |      |   | 8,721    |   |   | 26,186   |  
|                                                                                           |  |                            |         |      |   |          |   |   |          |  
|Cash and cash
  equivalents at end of period                                               |  | $                          | 5,715   |      | $ | 11,645   |   | $ | 8,721    |  
|                                                                                           |  |                            |         |      |   |          |   |   |          |  
|Supplemental
  information:                                                                |  |                            |         |      |   |          |   |   |          |  
|Cash paid
  (refunded) for income taxes                                                    |  | $                          | (287    | )    | $ | (283     | ) | $ | 13,282   |  
|                                                                                           |  |                            |         |      |   |          |   |   |          |  
|Cash paid for
  interest                                                                   |  | $                          | 29,358  |      | $ | 19,079   |   | $ | 8,505    |  
|                                                                                           |  |                            |         |      |   |          |   |   |          |  
|*Acquisition of
  businesses, net of cash acquired:                                        |  |                            |         |      |   |          |   |   |          |  
|Working capital,
  other than cash                                                         |  | $                          | (10,771 | )    | $ |         |   | $ | (29      | )
|Property, plant
  and equipment                                                            |  |                            | (21,647 | )    |   |         |   |   | (968     | )
|Other assets                                                                               |  |                            | (13,438 | )    |   |         |   |   | (454     | )
|Non-current laibilities                                                                    |  |                            | 5,737   |      |   |         |   |   |         |  
|                                                                                           |  |                            |         |      |   |          |   |   |          |  
|Total cash used
  to acquire businesses                                                    |  | $                          | (40,119 | )    | $ |         |   | $ | (1,451   | )
|                                                                                           |  |                            |         |      |   |          |   |   |          |  

See the
accompanying notes to the consolidated financial statements.

-42-

---



GENTEK
INC.CONSOLIDATED STATEMENTS OF CHANGES IN EQUITYFor the Three Years Ended December 31, 2006
(In thousands, except per share data)

|                                                                                |  |                |          |                         |   |          |   |                  |       |                                                       |   |                              |   |       |        |   |   |          |   |   |          |  
|------------------------------------------------------------------------------- |  | -------------- | -------- | ----------------------- | - | -------- | - | ---------------- | ----- | ----------------------------------------------------- | - | ---------------------------- | - | ----- | ------ | - | - | -------- | - | - | -------- | -
|                                                                                |  | Common
  Stock |          | Unearned
  Compensation |   | Warrants |   | Treasury
  Stock |       | Accumulated
  Other
  Comprehensive
  Income
  (Loss) |   | RetainedEarnings
  (Deficit) |   | Total |       
|                                                                                |  |                |          |                         |   |          |   |                  |       |                                                       |   |                              |   |       |       
|                                                                                |  |                |          |                         |   |          |   |                  |       |                                                       |   |                              |   |       |        |   |   |          |   |   |          |  
|Balance at
  January 1, 2004                                                    |  | $              | 268,084  |                         | $ |         |   | $                | 8,361 |                                                       | $ |                             |   | $     | 1,250  |   | $ | 1,092    |   | $ | 278,787  |  
|Components of
  comprehensive income:                                           |  |                |          |                         |   |          |   |                  |       |                                                       |   |                              |   |       |        |   |   |          |   |   |          |  
|Net income                                                                      |  |                |         |                         |   |         |   |                  |      |                                                       |   |                             |   |       |       |   |   | 195,318  |   |   | 195,318  |  
|Minimum pension
  liability adjustments (net of tax of $(1,010))                |  |                |         |                         |   |         |   |                  |      |                                                       |   |                             |   |       | (1,543 | ) |   |         |   |   | (1,543   | )
|Foreign currency
  translation adjustments (net of tax of $(420))               |  |                |         |                         |   |         |   |                  |      |                                                       |   |                             |   |       | (644   | ) |   |         |   |   | (644     | )
|Change in
  unrealized gain on derivative instruments (net of tax of $34)       |  |                |         |                         |   |         |   |                  |      |                                                       |   |                             |   |       | 51     |   |   |         |   |   | 51       |  
|                                                                                |  |                |          |                         |   |          |   |                  |       |                                                       |   |                              |   |       |        |   |   |          |   |   |          |  
|Comprehensive
  income                                                          |  |                |          |                         |   |          |   |                  |       |                                                       |   |                              |   |       |        |   |   |          |   |   | 193,182  |  
|Long-term
  incentive plan grants, net                                          |  |                | 3,606    |                         |   | (2,123   | ) |                  |      |                                                       |   |                             |   |       |       |   |   |         |   |   | 1,483    |  
|Tranche A
  warrant payment                                                     |  |                |         |                         |   |         |   |                  |      |                                                       |   |                             |   |       |       |   |   | (2,335   | ) |   | (2,335   | )
|Dividends ($7.00
  per share)                                                   |  |                |         |                         |   |         |   |                  |      |                                                       |   |                             |   |       |       |   |   | (70,690  | ) |   | (70,690  | )
|                                                                                |  |                |          |                         |   |          |   |                  |       |                                                       |   |                              |   |       |        |   |   |          |   |   |          |  
|Balance at
  December 31, 2004                                                  |  |                | 271,690  |                         |   | (2,123   | ) |                  | 8,361 |                                                       |   |                             |   |       | (886   | ) |   | 123,385  |   |   | 400,427  |  
|Components of
  comprehensive loss:                                             |  |                |          |                         |   |          |   |                  |       |                                                       |   |                              |   |       |        |   |   |          |   |   |          |  
|Net loss                                                                        |  |                |         |                         |   |         |   |                  |      |                                                       |   |                             |   |       |       |   |   | (822     | ) |   | (822     | )
|Minimum pension
  liability adjustments (net of tax of $(2,197))                |  |                |         |                         |   |         |   |                  |      |                                                       |   |                             |   |       | (3,357 | ) |   |         |   |   | (3,357   | )
|Foreign currency
  translation adjustments (net of tax of $(95))                |  |                |         |                         |   |         |   |                  |      |                                                       |   |                             |   |       | (145   | ) |   |         |   |   | (145     | )
|Change in
  unrealized gain on derivative instruments (net of tax of $345)      |  |                |         |                         |   |         |   |                  |      |                                                       |   |                             |   |       | 527    |   |   |         |   |   | 527      |  
|                                                                                |  |                |          |                         |   |          |   |                  |       |                                                       |   |                              |   |       |        |   |   |          |   |   |          |  
|Comprehensive
  loss                                                            |  |                |          |                         |   |          |   |                  |       |                                                       |   |                              |   |       |        |   |   |          |   |   | (3,797   | )
|Long-term
  incentive plan grants, net                                          |  |                | (88      | )                       |   | 1,264    |   |                  |      |                                                       |   |                             |   |       |       |   |   |         |   |   | 1,176    |  
|Exercise of
  warrants                                                          |  |                | 2        |                         |   |         |   |                  |      |                                                       |   |                             |   |       |       |   |   |         |   |   | 2        |  
|Dividends
  ($31.00 per share)                                                  |  |                | (190,917 | )                       |   |         |   |                  |      |                                                       |   |                             |   |       |       |   |   | (122,138 | ) |   | (313,055 | )
|Exercise of
  stock options                                                     |  |                | 708      |                         |   |         |   |                  |      |                                                       |   |                             |   |       |       |   |   |         |   |   | 708      |  
|Acquisition of
  treasury stock                                                 |  |                |         |                         |   |         |   |                  |      |                                                       |   | (86                          | ) |       |       |   |   |         |   |   | (86      | )
|                                                                                |  |                |          |                         |   |          |   |                  |       |                                                       |   |                              |   |       |        |   |   |          |   |   |          |  
|Balance at
  December 31, 2005                                                  |  |                | 81,395   |                         |   | (859     | ) |                  | 8,361 |                                                       |   | (86                          | ) |       | (3,861 | ) |   | 425      |   |   | 85,375   |  
|Components of
  comprehensive income:                                           |  |                |          |                         |   |          |   |                  |       |                                                       |   |                              |   |       |        |   |   |          |   |   |          |  
|Net (loss)                                                                      |  |                |         |                         |   |         |   |                  |      |                                                       |   |                             |   |       |       |   |   | (2,103   | ) |   | (2,103   | )
|Minimum pension
  liability adjustment (net of tax $(283))                      |  |                |         |                         |   |         |   |                  |      |                                                       |   |                             |   |       | 432    |   |   |         |   |   | 432      |  
|Adjustment to
  initially apply FASB Statement No. 158 (net of tax of $(5,956)) |  |                |         |                         |   |         |   |                  |      |                                                       |   |                             |   |       | 9,102  |   |   |         |   |   | 9,102    |  
|Foreign currency
  translation adjustments (net of tax of $59)                  |  |                |         |                         |   |         |   |                  |      |                                                       |   |                             |   |       | 92     |   |   |         |   |   | 92       |  
|Change in
  unrealized gain on derivative instruments (net of tax of $157)      |  |                |         |                         |   |         |   |                  |      |                                                       |   |                             |   |       | 239    |   |   |         |   |   | 239      |  
|                                                                                |  |                |          |                         |   |          |   |                  |       |                                                       |   |                              |   |       |        |   |   |          |   |   |          |  
|Comprehensive
  income                                                          |  |                |          |                         |   |          |   |                  |       |                                                       |   |                              |   |       |        |   |   |          |   |   | 7,762    |  
|Long-term
  incentive plan grants, net                                          |  |                | 1,243    |                         |   | 859      |   |                  |      |                                                       |   |                             |   |       |       |   |   |         |   |   | 2,102    |  
|Exercise of
  warrants                                                          |  |                | 48       |                         |   |         |   |                  | (6    | )                                                     |   |                             |   |       |       |   |   |         |   |   | 42       |  
|Exercise of
  stock options                                                     |  |                | 830      |                         |   |         |   |                  |      |                                                       |   |                             |   |       |       |   |   |         |   |   | 830      |  
|Acquisition of
  treasury stock                                                 |  |                |         |                         |   |         |   |                  |      |                                                       |   | (178                         | ) |       |       |   |   |         |   |   | (178     | )
|                                                                                |  |                |          |                         |   |          |   |                  |       |                                                       |   |                              |   |       |        |   |   |          |   |   |          |  
|Balance at
  December 31, 2006                                                  |  | $              | 83,516   |                         | $ |         |   | $                | 8,355 |                                                       | $ | (264                         | ) | $     | 6,004  |   | $ | (1.678   | ) | $ | 95,933   |  
|                                                                                |  |                |          |                         |   |          |   |                  |       |                                                       |   |                              |   |       |        |   |   |          |   |   |          |  

See the accompanying
notes to the consolidated financial statements.

-43-

---



GENTEK INC.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Dollars in thousands, except per
share data)

Note 1  Basis of Presentation

GenTek
Inc. (GenTek or the Company) is a holding company with no independent
operations and, therefore, is dependent upon cash flow from its subsidiaries to
meet obligations. GenTeks subsidiaries operate through two primary business
segments: manufacturing and performance chemicals. The manufacturing segment
provides a broad range of engineered components and services to two principal
markets: automotive and industrial. The performance chemicals segment provides
a broad range of value-added products and services to four principal markets:
water treatment, chemical processing, pharmaceutical and personal care and
technology. The Company operates over 50 manufacturing and production
facilities located primarily in the U.S. and Canada.

On
May 18, 2004, the Company sold its KRONE communications business to ADC
Telecommunications, Inc. During the second quarter of 2005, the Company ceased
operations of its printing plate business. During April 2006, the Company
completed the sale of its cable and wire manufacturing business in Stouffville,
Canada. On February 16, 2007, the Company completed the sale of its Noma wire
and cable harness assembly business. Accordingly, these businesses have been
classified as discontinued operations. See Note 16.

Note 2  Summary of Significant Accounting
Policies

The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.

The
consolidated financial statements include the accounts of the Company and all
of its majority owned subsidiaries. Investments in affiliates in which
ownership is at least 20 percent, but less than a majority voting interest, are
accounted for using the equity method. Investments in less than 20 percent
owned affiliates are accounted for using the cost method. Intercompany balances
and transactions are eliminated in consolidation.

All
highly liquid instruments purchased with a maturity of three months or less are
considered to be cash equivalents.

Inventories
are valued at the lower of cost or market, using the last-in, first-out
(LIFO) method for certain domestic production inventories and the first-in,
first-out (FIFO) or average-cost method for all other inventories. Production
inventory costs include material, labor and factory overhead.

Property,
plant and equipment are carried at cost and are depreciated principally using
the straight-line method. Estimated lives range from five to 35 years for
buildings and leasehold improvements and three to 15 years for machinery and
equipment.

Intangible
assets that have finite lives are amortized using the straight-line method,
over their estimated useful lives, which range from four to 15 years.

-44-

---



GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)(Dollars in thousands, except per share data)

The
Company reviews long-lived assets for impairment whenever events and
circumstances indicate that the carrying amount of an asset may not be
recoverable. Recoverability of assets to be held and used is measured by
comparing the carrying amount of these assets against the estimated
undiscounted future cash flows to be generated by the assets. At the time such
evaluations indicate that the future cash flows are not sufficient to recover
the carrying value of such assets, the carrying values are adjusted to their
fair values, which have been determined on a discounted cash flow basis. Assets
to be disposed of are reported at the lower of their carrying amount or fair
value less costs to sell.

The
Company reviews goodwill and indefinite lived intangible assets for impairment
annually and whenever events and circumstances indicate that the recorded value
of the assets might be more than its fair value. Estimated fair values are
determined based upon a number of factors, including independent appraisals and
current operating forecasts.

Accruals
for product warranties are estimated based upon historical warranty experience
and are recorded at the time revenue is recognized.

Accruals
for environmental liabilities are recorded based on current interpretations of
environmental laws and regulations when it is probable that a liability has
been incurred and the amount of such a liability can be reasonably estimated.

Accruals
for pension and other post-retirement benefit costs utilize a number of
accounting mechanisms that reduce the volatility of reported costs. Differences
between actuarial assumptions and actual plan results are deferred and are
amortized into expense only when the accumulated differences exceed 10 percent
of the greater of the projected benefit obligation or the market-related value
of plan assets. If necessary, the excess is amortized over the average
remaining service period of active employees. Additionally, the impact of asset
performance on pension expense is recognized over a five-year phase-in period
though a market-related value of assets calculation. Since the market-related
value of assets recognizes investment gains or losses over a five-year period,
the future value of assets will be impacted as previously deferred gains or
losses are recognized.

The
Company recognizes revenue when persuasive evidence of an arrangement exists,
delivery has occurred, the amount is fixed or determinable, and collectibility
is reasonably assured. Revenue is recognized from product sales when title and
risk of loss has passed to the customer consistent with the related shipping
terms, generally at the time products are shipped. The Company records a
provision for estimated sales returns and other allowances as a reduction of
revenue at the time of revenue recognition.

Effective
January 1, 2006, the Company adopted SFAS No. 123R, Share-Based Payment (Revised 2004)
(SFAS 123R). This statement addresses the accounting for share-based payment
transactions in which a company receives employee services in exchange for the
companys equity instruments or liabilities that are based on the fair value of
the companys equity securities or may be settled by the issuance of these
securities. SFAS 123R eliminates the ability to account for share-based
compensation using the intrinsic value method and generally requires that such
transactions be accounted for using a fair value method. The Company adopted
SFAS 123R using the modified prospective transition method. Under this method,
compensation cost is recognized for the unvested portion of share-based
payments granted prior to January 1, 2006 and all share-based payments granted
subsequent to

-45-

---



GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)(Dollars in thousands, except per share data)

December 31,
2005 over the related vesting period. Prior to January 1, 2006, the Company
applied the intrinsic value method prescribed in APB Opinion No. 25 in
accounting for employee stock based compensation. Prior period results have not
been restated. Due to the adoption of SFAS 123R, the Companys results for the
year ended December 31, 2006 include incremental share-based compensation
expense totaling $599.

The
following table illustrates the effect on net income and net income per share
if the Company had applied the fair value based method to recognize stock-based
employee compensation for the years ended December 31, 2005 and 2004:

|                                                                                                                                                |  |                          |        |      |   |         |  
|----------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------ | ------ | ---- | - | ------- | -
|                                                                                                                                                |  | Years Ended December 31, |       
|                                                                                                                                                |  |                          |       
|                                                                                                                                                |  | 2005                     |        | 2004 |  
|                                                                                                                                                |  |                          |        |      |  
|                                                                                                                                               
|Net income (loss) as reported                                                                                                                   |  | $                        | (822   | )    | $ | 195,318 |  
|Add: Stock-based employee compensation
  expense included in net income determined under intrinsic value method, net
  of related tax effects   |  |                          | 1,176  |      |   | 1,483   |  
|Deduct: Total stock-based employee
  compensation expense determined under fair value based method for all awards,
  net of related tax effects |  |                          | (1,430 | )    |   | (1,776  | )
|                                                                                                                                                |  |                          |        |      |   |         |  
|Pro forma net income (loss)                                                                                                                     |  | $                        | (1,076 | )    | $ | 195,025 |  
|                                                                                                                                                |  |                          |        |      |   |         |  
|Earnings (loss) per share:                                                                                                                      |  |                          |        |      |   |         |  
|Basic  as reported                                                                                                                             |  | $                        | (0.08  | )    | $ | 19.53   |  
|                                                                                                                                                |  |                          |        |      |   |         |  
|Basic  pro forma                                                                                                                               |  | $                        | (0.11  | )    | $ | 19.50   |  
|                                                                                                                                                |  |                          |        |      |   |         |  
|Diluted  as reported                                                                                                                           |  | $                        | (0.08  | )    | $ | 19.48   |  
|                                                                                                                                                |  |                          |        |      |   |         |  
|Diluted  pro forma                                                                                                                             |  | $                        | (0.11  | )    | $ | 19.45   |  
|                                                                                                                                                |  |                          |        |      |   |         |  

For
purposes of this calculation, the fair value of each option grant was estimated
on the grant date using the Black-Scholes option-pricing model with the
following assumptions:

|                                     |  |      |      |      |  |   |       |   | 
|------------------------------------ |  | ---- | ---- | ---- |  | - | ----- | - | 
|                                     |  | 2005 |      | 2004 | 
|                                     |  |      |      |      | 
|Dividend
  yield                     |  |      |     |      |  |   |      |   | 
|Expected
  volatility                |  |      | 22   | %    |  |   | 50    | % | 
|Risk-free
  interest rate            |  |      | 3.97 | %    |  |   | 2.32  | % | 
|Expected
  holding period (in years) |  |      | 4    |      |  |   | 4     |   | 
|Weighted
  average fair value        |  | $    | 2.94 |      |  | $ | 14.82 |   | 

Income
taxes are accounted for under the asset and liability method. Under this
method, deferred tax assets and liabilities are recognized for the estimated
future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases, and operating loss and tax credit carryforwards. Deferred
tax assets and liabilities are measured using enacted tax rates in effect for
the year in which those temporary differences are expected to be recovered or
settled. A valuation allowance is recorded to reduce the carrying amounts of
deferred tax assets if it is more likely than not that such assets will not be
realized.

The
Company does not hold or issue financial instruments for trading purposes. The
Company uses derivative financial instruments primarily for purposes of hedging
exposures to fluctuations in

-46-

---



GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)(Dollars in thousands, except per share data)

interest rates
and commodity prices. Gains and losses related to qualifying hedges of firm
commitments or anticipated transactions are deferred and are recognized in
earnings or as adjustments of carrying amounts when the hedged transaction
occurs.

The
components of accumulated other comprehensive income (loss) are as follows:

|                                                           |  |              |       |      |   |        |  
|---------------------------------------------------------- |  | ------------ | ----- | ---- | - | ------ | -
|                                                           |  | December 31, |      
|                                                           |  |              |      
|                                                           |  | 2006         |       | 2005 |  
|                                                           |  |              |       |      |  
|Foreign
  currency translation                             |  | $            | 552   |      | $ | 460    |  
|Minimum
  pension liability adjustments                    |  |              |      |      |   | (4,900 | )
|Unrecognized
  pension and post retirement (costs) credits |  |              | 4,634 |      |   |       |  
|Net
  unrealized gain on derivative instruments            |  |              | 818   |      |   | 579    |  
|                                                           |  |              |       |      |   |        |  
|Accumulated
  other comprehensive income (loss)            |  | $            | 6,004 |      | $ | (3,861 | )
|                                                           |  |              |       |      |   |        |  

In
June 2006, the Financial Accounting Standards Board (FASB) issued FASB
Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an
Interpretation of FASB Statement No. 109 (FIN 48). FIN 48
clarifies the accounting for uncertainty in income taxes recognized in a
companys financial statements and prescribes a recognition threshold and
measurement attribute for the financial statement recognition and measurement
of tax positions taken or expected to be taken in a tax return. The
interpretation also provides guidance on derecognition, classification,
interest and penalties, accounting in interim periods, disclosure and
transition. FIN 48 will be effective for the Company beginning in the first
quarter of 2007. The Company is currently evaluating the impact of adopting FIN
48.

In
September 2006, the FASB issued SFAS No. 157, Fair Value Measurements,
(SFAS 157), to define fair value, establish a framework for measuring fair value
in accordance with generally accepted accounting principles and expand
disclosures about fair value measurements. SFAS 157 requires quantitative
disclosures using a tabular format in all periods (interim and annual) and
qualitative disclosures about the valuation techniques used to measure fair
value in all annual periods. The provisions of this Statement shall be
effective for financial statements issued for fiscal years beginning after
November 15, 2007 and interim periods within those fiscal years. The Company
will be required to adopt the provisions of this statement as of January 1,
2008. The Company is currently evaluating the impact of adopting SFAS 157.

In
September 2006, the FASB issued SFAS No. 158, Employers Accounting for
Defined Benefit Pensions and Other Postretirement Plans, (SFAS 158).
SFAS 158 requires an employer to recognize the overfunded or underfunded status
of a defined benefit postretirement plan (other than a multiemployer plan) as
an asset or liability in its statement of financial position and to recognize
changes in that funded status in the year in which the changes occur through
comprehensive income. Employers are required to initially recognize the funded
status and provide the required disclosures beginning for fiscal year ends
after December 15, 2006. The net impact on the December 31, 2006 balance sheet
is to decrease prepaid pension costs by $1,749, decrease other current
liabilities by $862, reduce accrued pension and postretirement benefit costs
by $15,947 and increase deferred tax liabilities by $5,956, with the offset
 increasing stockholders equity by $9,102. Additionally, for fiscal
years ending after December 15, 2008, SFAS 158 will require employers to measure
the plan assets and obligations as of the date of the employers fiscal
year end. The Company currently utilizes a measurement date of October 31. The
Company does not anticipate the change in the fiscal year end measurement date
to have a material

-47-

---



GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)(Dollars in thousands, except per share data)

impact on the
Companys results of operations or financial condition.

In
September 2006, the Securities and Exchange Commission (SEC) issued Staff
Accounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements
when Quantifying Misstatements in Current Year Financial Statements
(SAB 108). SAB 108 requires the use of two alternative approaches in
quantitatively evaluating materiality of misstatements. If the misstatement as
quantified under either approach is material to the current year financial
statements, the misstatement must be corrected. If the effect of correcting the
prior year misstatements, if any, in the current year income statement is
material, the prior year financial statements should be corrected. In the year
of adoption, the misstatements may be corrected as an accounting change by adjusting
the opening retained earnings rather than including the adjustment in the
current year income statement. The Company has adopted the provisions of SAB
108 and there was no effect on its consolidated financial statements.

In
February 2007, the FASB issued SFAS No. 159 The Fair Value Option for Financial Assets and
Financial Liabilities  including an Amendment of SFAS No. 115,
(SFAS No. 159), which permits an entity to measure many financial assets and
financial liabilities at fair value that are not currently required to be
measured at fair value. Entities that elect the fair value option will report
unrealized gains and losses in earnings at each subsequent reporting date. The
fair value option may be elected on an instrument-by-instrument basis, with few
exceptions. SFAS No. 159 amends previous guidance to extend the use of the fair
value option to available-for-sale and held-to-maturity securities. The
Statement also establishes presentation and disclosure requirements to help
financial statement users understand the effect of the election. SFAS No. 159
is effective as of the beginning of the first fiscal year beginning after
November 15, 2007. The Company is currently evaluating the impact of adopting
SFAS No. 159.

Note 3  Acquisitions

On
September 21, 2006, the Company acquired the assets of GAC MidAmerica, Inc.
(GAC). The acquisition included manufacturing facilities in Toledo, Ohio,
Indianapolis, Indiana, and Saukville, Wisconsin. GAC produces aluminum sulfate
and bleach, as well as distributing specialty water treatment chemicals,
sulfuric acid and caustic soda. The total cost of the acquisition was $8,266.

On
July 31, 2006, the Company acquired the assets of Precision Engine Products
Corp., a wholly owned subsidiary of Stanadyne Corporation. Precision Engine
Products is dedicated principally to the manufacturing of hydraulic lash
adjusters and die cast aluminum rocker arm assemblies utilized in valve train
systems for both OEM and after market applications to the global automotive and
light truck markets. Precision Engine Products has manufacturing facilities in
Tallahassee, Florida and Curitiba, Brazil. The total cost of the acquisition
was $26,262, plus the potential of an earn out for Stanadyne of up to $10,000,
payable, if at all based on certain performance metrics being achieved during
the twelve months following the closing date. Because of this contingent
payment, the purchase price allocation includes a liability of $4,090,
representing the excess of the values assigned to the assets purchased over the
preliminary purchase price, which is subject to change based on the
determination of the contingent consideration, if any. This determination is
expected to be completed during the third quarter of 2007.

On
July 27, 2006, the Company acquired the assets of Repauno Products, LLC. The
acquisition included the manufacturing facility in Gibbstown, New Jersey.
Repauno Products manufactures sodium

-48-

---



GENTEK
INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(Dollars in thousands, except per share data)

nitrite which is used in a wide range of industries including metal finishing,
heat transfer salts, rubber processing, meat curing, odor control and inks and dyes.
The total cost of the acquisition was $6,057.

The
allocation of the purchase price of the acquisitions is based on valuation
information available to the Company which is subject to change as such
information is finalized.    The Company
expects to finalize the purchase price allocations for these acquisitions by
the third quarter of 2007.  The following
table summarizes the estimated fair values of the assets acquired and liabilities
assumed at the date of acquisition:

|                               |  |                                                      |        |                                                                 |   |                                                       |  |   |       | 
|------------------------------ |  | ---------------------------------------------------- | ------ | --------------------------------------------------------------- | - | ----------------------------------------------------- |  | - | ----- | 
|                               |  | GAC
  MidAmerica, Inc.
  Purchase Price
  Allocation |        | Precision Engine
  Products Corp.
  Purchase Price
  Allocation |   | Repauno
  Products, LLC
  Purchase Price
  Allocation | 
|                               |  |                                                      |        |                                                                 |   |                                                       | 
|                              
|Current assets                 |  | $                                                    | 2,400  |                                                                 | $ | 16,219                                                |  | $ | 1,736 | 
|Propery, plant
  and equipment |  |                                                      | 4,407  |                                                                 |   | 15,990                                                |  |   | 1,250 | 
|Intangible
  assets            |  |                                                      | 750    |                                                                 |   | 4,100                                                 |  |   | 4,191 | 
|Goodwill                       |  |                                                      | 2,879  |                                                                 |   |                                                      |  |   |      | 
|Other                          |  |                                                      |       |                                                                 |   | 1,518                                                 |  |   |      | 
|                               |  |                                                      |        |                                                                 |   |                                                       |  |   |       | 
|Total assets
  acquired        |  |                                                      | 10,436 |                                                                 |   | 37,827                                                |  |   | 7,177 | 
|                              
|Current
  liabilities          |  |                                                      | 2,170  |                                                                 |   | 6,078                                                 |  |   | 1,120 | 
|Other                          |  |                                                      |       |                                                                 |   | 5,487                                                 |  |   |      | 
|                               |  |                                                      |        |                                                                 |   |                                                       |  |   |       | 
|Total
  liabilities assumed    |  |                                                      | 2,170  |                                                                 |   | 11,565                                                |  |   | 1,120 | 
|                              
|Net assets
  acquired          |  | $                                                    | 8,266  |                                                                 | $ | 26,262                                                |  | $ | 6,057 | 
|                               |  |                                                      |        |                                                                 |   |                                                       |  |   |       | 

The
acquired intangibles for GAC and Repauno Products were assigned to covenant
not-to-compete and have a weighted-average useful life of 5 years.  The acquired intangible in the Precision
Engine Products acquisition was assigned to technology and has a useful life of
7 years.

The
$2,879 of goodwill was assigned to the performance chemicals segment, all of
which is expected to be deductible for tax purposes.  The GAC acquisition resulted in goodwill due to the synergies and
cost reductions expected to be realized as GACs facilities and business are
assimilated into the Companys network of water treatment chemical production
facilities.

Operating
results for the acquired entities have been reflected in the Companys
consolidated financial statements from date of acquisition.  The following unaudited pro forma
consolidated financial information has been prepared as if the acquisitions had
taken place at the beginning of each fiscal year presented.  The following unaudited pro forma
information is not necessarily indicative of the results of operations in
future periods or results that would have been achieved had the acquisitions
taken place at the beginning of the periods presented.

-49-

---



GENTEK
INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(Dollars in thousands, except per share data)

|                               |  |                          |         |      |   |         |  
|------------------------------ |  | ------------------------ | ------- | ---- | - | ------- | -
|                               |  | Years Ended December 31, |        
|                               |  |                          |        
|                               |  | 2006                     |         | 2005 |  
|                               |  |                          |         |      |  
|                              
|Net revenues                   |  | $                        | 665,771 |      | $ | 649,780 |  
|Net (loss)
  income            |  |                          | (4,077  | )    |   | (8,227  | )
|Net (loss)
  income per share: |  |                          |         |      |   |         |  
|Basic                          |  | $                        | (0.40   | )    | $ | (0.82   | )
|Diluted                        |  |                          | (0.37   | )    |   | (0.81   | )

Note 4 
Restructuring and Impairment Charges

Restructuring Actions  2006

During
2006, the Company initiated actions to close two manufacturing facilities in
its performance chemicals segment.  The
Company expects to substantially complete implementation of these restructuring
actions during 2007.  The following
tables summarize the Companys expected costs and accruals for these
restructuring actions:

|                                               |  |               |   |                         |   |           |  |       |   |  |   |       | 
|---------------------------------------------- |  | ------------- | - | ----------------------- | - | --------- |  | ----- | - |  | - | ----- | 
|                                               |  | Manufacturing |   | Performance
  Chemicals |   | Corporate |  | Total |  
|                                               |  |               |   |                         |   |           |  |       |  
|Employee Termination Costs                     |  |               |   |                         |   |           |  |       |   |  |   |       | 
|Costs incurred in current period               |  | $             |  |                         | $ | 390       |  | $     |  |  | $ | 390   | 
|Costs anticipated to be incurred in the future |  |               |  |                         |   | 208       |  |       |  |  |   | 208   | 
|                                               |  |               |   |                         |   |           |  |       |   |  |   |       | 
|Total costs expected to be incurred            |  | $             |  |                         | $ | 598       |  | $     |  |  | $ | 598   | 
|                                               |  |               |   |                         |   |           |  |       |   |  |   |       | 
|                                               |  |               |   |                         |   |           |  |       |   |  |   |       | 
|Provisions                                     |  | $             |  |                         | $ | 390       |  | $     |  |  | $ | 390   | 
|Amounts paid                                   |  |               |  |                         |   |          |  |       |  |  |   |      | 
|                                               |  |               |   |                         |   |           |  |       |   |  |   |       | 
|Accrual balance at December 31, 2006           |  | $             |  |                         | $ | 390       |  | $     |  |  | $ | 390   | 
|                                               |  |               |   |                         |   |           |  |       |   |  |   |       | 
|                                               |  |               |   |                         |   |           |  |       |   |  |   |       | 
|                                               |  | Manufacturing |   | Performance
  Chemicals |   | Corporate |  | Total |  
|                                               |  |               |   |                         |   |           |  |       |  
|Facility Exit Costs                            |  |               |   |                         |   |           |  |       |   |  |   |       | 
|Costs incurred in current period               |  | $             |  |                         | $ | 212       |  | $     |  |  | $ | 212   | 
|Costs anticipated to be incurred in the future |  |               |  |                         |   | 1,219     |  |       |  |  |   | 1,219 | 
|                                               |  |               |   |                         |   |           |  |       |   |  |   |       | 
|Total costs expected to be incurred            |  | $             |  |                         | $ | 1,431     |  | $     |  |  | $ | 1,431 | 
|                                               |  |               |   |                         |   |           |  |       |   |  |   |       | 
|                                               |  |               |   |                         |   |           |  |       |   |  |   |       | 
|Provisions                                     |  | $             |  |                         | $ | 212       |  | $     |  |  | $ | 212   | 
|Amounts paid                                   |  |               |  |                         |   |          |  |       |  |  |   |      | 
|                                               |  |               |   |                         |   |           |  |       |   |  |   |       | 
|Accrual balance at December 31, 2006           |  | $             |  |                         | $ | 212       |  | $     |  |  | $ | 212   | 
|                                               |  |               |   |                         |   |           |  |       |   |  |   |       | 

Restructuring Actions  Prior to 2006

During
2005, the Company initiated actions to close three manufacturing facilities in
its manufacturing segment.  In addition,
the Company initiated a workforce reduction affecting corporate and performance
chemicals employees.  During 2004, the
Company initiated actions to close two facilities in its performance chemicals
segment.  In addition, the Company
initiated a workforce reduction affecting

-50-

---



GENTEK
INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(Dollars in thousands, except per share data)

corporate employees.
The Companys restructuring actions during 2003 consist of two plant
closures in its performance chemicals segment. These restructuring actions have
been completed.  The following tables
summarize the Companys costs and accruals for these restructuring actions:

|                                                 |  |               |      |                         |   |           |   |       |        |   |   |        |  
|------------------------------------------------ |  | ------------- | ---- | ----------------------- | - | --------- | - | ----- | ------ | - | - | ------ | -
|                                                 |  | Manufacturing |      | Performance
  Chemicals |   | Corporate |   | Total |       
|                                                 |  |               |      |                         |   |           |   |       |       
|Employee
  Termination Costs                     |  |               |      |                         |   |           |   |       |        |   |   |        |  
|Cumulative costs
  incurred                      |  | $             | 675  |                         | $ | 8,584     |   | $     | 2,145  |   | $ | 11,404 |  
|Costs
  anticipated to be incurred in the future |  |               |     |                         |   |          |   |       |       |   |   |       |  
|                                                 |  |               |      |                         |   |           |   |       |        |   |   |        |  
|Total costs
  incurred                           |  | $             | 675  |                         | $ | 8,584     |   | $     | 2,145  |   | $ | 11,404 |  
|                                                 |  |               |      |                         |   |           |   |       |        |   |   |        |  
|                                                 |  |               |      |                         |   |           |   |       |        |   |   |        |  
|Accrual balance
  at December 31, 2003           |  | $             |     |                         | $ | 2,697     |   | $     |       |   | $ | 2,697  |  
|Provisions                                       |  |               |     |                         |   | 1,381     |   |       | 132    |   |   | 1,513  |  
|Amounts paid                                     |  |               |     |                         |   | (3,134    | ) |       | (132   | ) |   | (3,266 | )
|                                                 |  |               |      |                         |   |           |   |       |        |   |   |        |  
|Accrual balance
  at December 31, 2004           |  |               |     |                         |   | 944       |   |       |       |   |   | 944    |  
|Provisions                                       |  |               | 338  |                         |   | 219       |   |       | 2,013  |   |   | 2,570  |  
|Amounts paid                                     |  |               | (249 | )                       |   | (1,114    | ) |       | (2,013 | ) |   | (3,376 | )
|                                                 |  |               |      |                         |   |           |   |       |        |   |   |        |  
|Accrual balance
  at December 31, 2005           |  |               | 89   |                         |   | 49        |   |       |       |   |   | 138    |  
|Provisions                                       |  |               | 337  |                         |   |          |   |       |       |   |   | 337    |  
|Amounts paid                                     |  |               | (426 | )                       |   | (49       | ) |       |       |   |   | (475   | )
|                                                 |  |               |      |                         |   |           |   |       |        |   |   |        |  
|Accrual balance
  of December 31, 2006           |  | $             |     |                         | $ |          |   | $     |       |   | $ |       |  
|                                                 |  |               |      |                         |   |           |   |       |        |   |   |        |  

In
the performance chemicals segment, included in costs incurred during 2004, but
not in provisions in the accrual roll forward, is $1,130 of contractual
termination pension benefits, which have been recorded in the pension
liability.

|                                                 |  |               |        |                         |   |           |   |       |   |  |   |         |  
|------------------------------------------------ |  | ------------- | ------ | ----------------------- | - | --------- | - | ----- | - |  | - | ------- | -
|                                                 |  | Manufacturing |        | Performance
  Chemicals |   | Corporate |   | Total |  
|                                                 |  |               |        |                         |   |           |   |       |  
|Facility
  Exit Costs                            |  |               |        |                         |   |           |   |       |   |  |   |         |  
|Cumulative costs
  incurred                      |  | $             | 1,671  |                         | $ | 15,952    |   | $     |  |  | $ | 17,623  |  
|Costs
  anticipated to be incurred in the future |  |               |       |                         |   |          |   |       |  |  |   |        |  
|                                                 |  |               |        |                         |   |           |   |       |   |  |   |         |  
|Total costs
  incurred                           |  | $             | 1,671  |                         | $ | 15,952    |   | $     |  |  | $ | 17,623  |  
|                                                 |  |               |        |                         |   |           |   |       |   |  |   |         |  
|                                                 |  |               |        |                         |   |           |   |       |   |  |   |         |  
|Accrual balance
  at December 31, 2003           |  | $             |       |                         | $ | 5,651     |   | $     |  |  | $ | 5,651   |  
|Provisions                                       |  |               |       |                         |   | 6,113     |   |       |  |  |   | 6,113   |  
|Amounts paid                                     |  |               |       |                         |   | (10,921   | ) |       |  |  |   | (10,921 | )
|                                                 |  |               |        |                         |   |           |   |       |   |  |   |         |  
|Accrual balance
  at December 31, 2004           |  |               |       |                         |   | 843       |   |       |  |  |   | 843     |  
|Provisions                                       |  |               | 1,169  |                         |   | 1,397     |   |       |  |  |   | 2,566   |  
|Amounts paid                                     |  |               | (1,035 | )                       |   | (2,240    | ) |       |  |  |   | (3,275  | )
|                                                 |  |               |        |                         |   |           |   |       |   |  |   |         |  
|Accrual balance
  at December 31, 2005           |  |               | 134    |                         |   |          |   |       |  |  |   | 134     |  
|Provisions                                       |  |               | 502    |                         |   | 302       |   |       |  |  |   | 804     |  
|Amounts paid                                     |  |               | (636   | )                       |   | (302      | ) |       |  |  |   | (938    | )
|                                                 |  |               |        |                         |   |           |   |       |   |  |   |         |  
|Accrual balance
  at December 31, 2006           |  | $             |       |                         | $ |          |   | $     |  |  | $ |        |  
|                                                 |  |               |        |                         |   |           |   |       |   |  |   |         |  

Impairment Charges

-51-

---



GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(Dollars in thousands, except per
share data)

During
the fourth quarter of 2006, the Company recorded an impairment charge of $728
to reflect revised fair values of machinery and equipment used for a
discontinued product line in the manufacturing segment, based on its estimated
salvage value.

During
the second quarter of 2006, the Company recorded an impairment charge of $503
to reflect revised estimated fair values of fixed assets at its facilities in
Waterdown, Ontario, Canada and Guelph, Ontario, Canada, which were included in
the manufacturing segment and had previously been closed. The revised estimates
of fair values were determined based upon sales of and offers to purchase these
assets.

During
December 2005, the Company announced its intention to close a facility in
Waterdown, Ontario, Canada, which is included in the manufacturing segment.
Accordingly, the long-lived assets at this facility were assessed for
impairment. Based on the results of this assessment, the Company recorded a
non-cash impairment charge of $453 to reduce the fixed assets at this facility
to fair value, which was determined based upon market prices for similar
assets.

During
August 2005, the Company closed a facility in Guelph, Ontario, Canada, which is
included in the manufacturing segment. Accordingly, the long-lived assets at
the facility were assessed for impairment. Based on the results of the
assessment, the Company recorded a non-cash impairment charge of $642 to reduce
the fixed assets at this facility to fair value, which was determined based
upon market prices for similar assets.

During
July 2005, the Company closed a facility in Cleveland, Ohio, which is included
in the performance chemicals segment. Accordingly, the long-lived assets at the
facility were assessed for impairment. Based on the results of this assessment,
the Company recorded a non-cash impairment charge of $758 to reduce the fixed
assets at this facility to fair value, which was determined based on market
transactions for similar assets.

During
December 2004, the Company closed a facility in Klamath Falls, Oregon, which is
included in the performance chemicals segment. Accordingly, the Company
assessed the long-lived assets at this facility for impairment. Based on the
results of this assessment, the Company recorded a non-cash impairment charge
of $178 to reduce the fixed assets to fair value, which was determined based on
market transactions for similar assets.

Note 5  Earnings Per Share

The
computation of basic earnings per share is based on the weighted average number
of common shares outstanding during the period. The computation of diluted
earnings per share assumes the foregoing and, in addition, the exercise of all
warrants, stock options and restricted units, using the treasury stock method.

The
components of the denominator for basic earnings per common share and diluted
earnings per common share are reconciled as follows:

-52-

---



GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(Dollars in thousands, except per
share data)

|                                           |  |                          |            |      |  |            |  |  |            | 
|------------------------------------------ |  | ------------------------ | ---------- | ---- |  | ---------- |  |  | ---------- | 
|                                           |  | Years Ended December 31, |           
|                                           |  |                          |           
|                                           |  | 2006                     |            | 2005 |  | 2004       | 
|                                           |  |                          |            |      |  |            | 
|Basic earnings per common share:           |  |                          |            |      |  |            |  |  |            | 
|Weighted average common shares
outstanding |  |                          | 10,166,614 |      |  | 10,040,709 |  |  | 10,000,000 | 
|                                           |  |                          |            |      |  |            |  |  |            | 
|Diluted earnings per common share:         |  |                          |            |      |  |            |  |  |            | 
|Weighted average common shares
outstanding |  |                          | 10,166,614 |      |  | 10,040,709 |  |  | 10,000,000 | 
|Options and restricted stock               |  |                          | 808,566    |      |  | 72,243     |  |  | 27,500     | 
|                                           |  |                          |            |      |  |            |  |  |            | 
|Total                                      |  |                          | 10,975,180 |      |  | 10,112,952 |  |  | 10,027,500 | 
|                                           |  |                          |            |      |  |            |  |  |            | 

For
the year ended December 31, 2006, 2005 and 2004, there were potentially
dilutive securities totaling 819,615, 3,035,877 and 1,067,973, respectively,
which were not included in the computation of diluted earnings per common share
due to their anti-dilutive effect.

Note 6  Income Taxes

Income
from continuing operations before income taxes is as follows:

|                |  |                            |        |      |   |        |  |   |        | 
|--------------- |  | -------------------------- | ------ | ---- | - | ------ |  | - | ------ | 
|                |  | Years
  Ended December 31, |       
|                |  |                            |       
|                |  | 2006                       |        | 2005 |   | 2004   | 
|                |  |                            |        |      |   |        | 
|United
  States |  | $                          | 22,217 |      | $ | 13,874 |  | $ | 16,975 | 
|Foreign         |  |                            | 2,657  |      |   | 3,474  |  |   | 10,858 | 
|                |  |                            |        |      |   |        |  |   |        | 
|Total           |  | $                          | 24,874 |      | $ | 17,348 |  | $ | 27,833 | 
|                |  |                            |        |      |   |        |  |   |        | 

The
components of the income tax provision (benefit) are as follows:

|                 |  |                            |        |      |   |       |   |   |        |  
|---------------- |  | -------------------------- | ------ | ---- | - | ----- | - | - | ------ | -
|                 |  | Years
  Ended December 31, |       
|                 |  |                            |       
|                 |  | 2006                       |        | 2005 |   | 2004  |  
|                 |  |                            |        |      |   |       |  
|United
  States: |  |                            |        |      |   |       |   |   |        |  
|Current          |  | $                          | 689    |      | $ | 1,461 |   | $ | (163   | )
|Deferred         |  |                            | 7,016  |      |   | 5,395 |   |   | 9,940  |  
|Foreign:         |  |                            |        |      |   |       |   |   |        |  
|Current          |  |                            | 771    |      |   | (7    | ) |   | 858    |  
|Deferred         |  |                            | (461   | )    |   | 357   |   |   | (70    | )
|State:           |  |                            |        |      |   |       |   |   |        |  
|Current          |  |                            | 2,418  |      |   | 1,741 |   |   | (797   | )
|Deferred         |  |                            | (1,008 | )    |   | (718  | ) |   | 1,968  |  
|                 |  |                            |        |      |   |       |   |   |        |  
|Total            |  | $                          | 9,425  |      | $ | 8,229 |   | $ | 11,736 |  
|                 |  |                            |        |      |   |       |   |   |        |  

A
summary of the components of deferred tax assets and liabilities is as follows:

|                                        |  |                |        |      |   |        | 
|--------------------------------------- |  | -------------- | ------ | ---- | - | ------ | 
|                                        |  | December
  31, |       
|                                        |  |                |       
|                                        |  | 2006           |        | 2005 |  
|                                        |  |                |        |      |  
|Net operating loss carry forwards       |  | $              | 19,149 |      | $ | 23,589 | 
|Postretirement benefits                 |  |                | 37,161 |      |   | 35,983 | 
|Other accruals not currently deductible |  |                | 33,018 |      |   | 30,199 | 
|Goodwill                                |  |                | 19,291 |      |   | 21,956 | 

-53-

---



GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(Dollars in thousands, except per
share data)

|                                             |  |   |         |  |   |         | 
|-------------------------------------------- |  | - | ------- |  | - | ------- | 
|Foreign tax credits                          |  |   | 19,705  |  |   | 19,705  | 
|                                             |  |   |         |  |   |         | 
|Deferred tax assets                          |  |   | 128,324 |  |   | 131,432 | 
|                                             |  |   |         |  |   |         | 
|Intangibles                                  |  |   | 20,056  |  |   | 22,599  | 
|Property, plant and equipment                |  |   | 61,439  |  |   | 70,801  | 
|Basis differences
    in partnerships        |  |   | 8,592   |  |   | 8,592   | 
|Taxes on
        unremitted foreign earnings |  |   | 5,657   |  |   | 3,178   | 
|Other                                        |  |   | 6,082   |  |   | 524     | 
|                                             |  |   |         |  |   |         | 
|Deferred tax liabilities                     |  |   | 101,826 |  |   | 105,694 | 
|Valuation allowance                          |  |   | 20,694  |  |   | 20,112  | 
|                                             |  |   |         |  |   |         | 
|Net deferred tax assets (liabilities)        |  | $ | 5,804   |  | $ | 5,626   | 
|                                             |  |   |         |  |   |         | 

At
December 31, 2006 and 2005, the Company had deferred tax assets of $19,705 and
$19,705 related to foreign tax credits, for which a full valuation allowance
had been provided. The increase to the valuation allowance during 2006 is primarily
due to certain foreign operating loss carry forwards generated during the year for
which the Company has concluded that it is more likely than not that the carry
forwards will not be realized. Net operating loss carryforwards in the United States will
expire in future years through 2025 and carryforwards in foreign countries
expire in future years through 2015. The Company has an unrecognized deferred
tax liability for a temporary difference related to an investment in a foreign
subsidiary that is essentially permanent in duration. It is not currently
practicable to determine the tax effect of this temporary difference. The
Company will continue to monitor the likelihood of realizing its net deferred
tax assets and future adjustments to the deferred tax asset valuation
allowances will be recorded as necessary. The Company took advantage of the
foreign earnings repatriation provision of the American Jobs Creation Act of
2004 for certain foreign earnings repatriated during 2004. The effect on tax
expense of applying this provision to eligible dividends is approximately $771.

Included
in other liabilities on the balance sheet are deferred tax liabilities of $26,480 and 27,217 as of
December 31, 2006 and 2005, respectively.

The
difference between the Companys effective income tax rate and the United
States statutory rate is reconciled below:

|                                               |  |                            |      |      |  |      |   |  |      |  
|---------------------------------------------- |  | -------------------------- | ---- | ---- |  | ---- | - |  | ---- | -
|                                               |  | Years
  Ended December 31, |     
|                                               |  |                            |     
|                                               |  | 2006                       |      | 2005 |  | 2004 |  
|                                               |  |                            |      |      |  |      |  
|U.S. federal
  statutory rate                  |  |                            | 35.0 | %    |  | 35.0 | % |  | 35.0 | %
|State income
  taxes, net of federal benefit   |  |                            | 3.7  |      |  | 3.8  |   |  | 2.7  |  
|Tax effect
  of foreign operations             |  |                            | 3.2  |      |  | 5.4  |   |  | 5.8  |  
|Benefit on
  restricted stock dividend payment |  |                            | (3.2 | )    |  |     |   |  |     |  
|Other                                          |  |                            | (0.8 | )    |  | 3.2  |   |  | (1.3 | )
|                                               |  |                            |      |      |  |      |   |  |      |  
|Total                                          |  |                            | 37.9 | %    |  | 47.4 | % |  | 42.2 | %
|                                               |  |                            |      |      |  |      |   |  |      |  

Note 7  Pension Plans and Other
Postretirement Benefits

The
Company maintains several defined benefit pension plans covering certain
employees in Canada and the United States. A participating employees annual
postretirement pension benefit is determined by the employees credited service
and, in most plans, final average annual earnings with the Company. Vesting
requirements are from two to five years.

The
Company also sponsors several defined contribution pension plans covering
certain employees in the United States. The Companys contributions are based
upon a formula utilizing an employees credited service and annual salary.
Vesting requirements are from two to five years. The Companys cost to provide
this benefit was $0, $1,108 and $1,307 for the years ended December 31, 2006,
2005 and 2004, respectively.

-54-

---



GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(Dollars in thousands, except per
share data)

The
Company also maintains several plans providing postretirement benefits other
than pensions covering certain hourly and salaried employees in Canada and the
United States. The Company funds these benefits on a pay-as-you-go basis.

Accruals
for pension and other post-retirement benefit costs utilize a number of
accounting mechanisms that reduce the volatility of reported costs. Differences
between actuarial assumptions and actual plan results are deferred and are
amortized into expense only when the accumulated differences exceed 10 percent
of the greater of the projected benefit obligation or the market-related value of
plan assets. If necessary, the excess is amortized over the average remaining
service period of active employees. Additionally, the impact of asset
performance on pension expense is recognized over a five-year phase-in period
though a market-related value of assets calculation. Since the market-related
value of assets recognizes investment gains or losses over a five-year period,
the future value of assets will be impacted as previously deferred gains or
losses are recognized.

|                                           |  |                            |         |                                 |   |         |   |      |         |      |   |        |   |   |        |   |   |        |  
|------------------------------------------ |  | -------------------------- | ------- | ------------------------------- | - | ------- | - | ---- | ------- | ---- | - | ------ | - | - | ------ | - | - | ------ | -
|                                           |  | Pension
  Benefits         |         | Other
  Postretirement Benefits |  
|                                           |  |                            |         |                                 |  
|                                           |  | Years
  Ended December 31, |         | Years
  Ended December 31,      |  
|                                           |  |                            |         |                                 |  
|                                           |  | 2006                       |         | 2005                            |   | 2004    |   | 2006 |         | 2005 |   | 2004   |  
|                                           |  |                            |         |                                 |   |         |   |      |         |      |   |        |  
|Components of net periodic
  benefit cost: |  |                            |         |                                 |   |         |   |      |         |      |   |        |   |   |        |   |   |        |  
|Service cost                               |  | $                          | 1,613   |                                 | $ | 1,540   |   | $    | 2,636   |      | $ | 1,343  |   | $ | 1,164  |   | $ | 1,189  |  
|Interest cost                              |  |                            | 13,417  |                                 |   | 13,094  |   |      | 13,869  |      |   | 2,674  |   |   | 2,551  |   |   | 3,587  |  
|Expected return on plan assets             |  |                            | (14,867 | )                               |   | (14,226 | ) |      | (12,375 | )    |   |       |   |   |       |   |   |       |  
|Amortization of net:                       |  |                            |         |                                 |   |         |   |      |         |      |   |        |   |   |        |   |   |        |  
|Prior service cost                         |  |                            | 135     |                                 |   | 74      |   |      | 56      |      |   | (4,342 | ) |   | (3,672 | ) |   | (1,366 | )
|(Gain)/loss                                |  |                            | 92      |                                 |   | 5       |   |      |        |      |   | 105    |   |   | (68    | ) |   | (163   | )
|                                           |  |                            |         |                                 |   |         |   |      |         |      |   |        |   |   |        |   |   |        |  
|Net periodic benefit cost
  (income)       |  | $                          | 390     |                                 | $ | 487     |   | $    | 4,186   |      | $ | (220   | ) | $ | (25    | ) | $ | 3,247  |  
|                                           |  |                            |         |                                 |   |         |   |      |         |      |   |        |   |   |        |   |   |        |  

During
2006, the Company adopted plan amendments that froze pension plan benefit
accruals for hourly employees covered by certain collective bargaining
agreements, and announced the closure of one of its manufacturing facilities.
These actions resulted in a net curtailment gain of $644.

On
August 31, 2005, the Company terminated and settled its two pension plans in
Ireland, which resulted in a settlement loss of $626.

During
the first quarter of 2004, the Company notified its employees that benefit
accruals in defined benefit pension plans covering domestic salaried and
certain hourly employees would be frozen effective April 1, 2004. This action
resulted in a curtailment gain of $13,414. During the second quarter of 2004,
the Company accrued $1,130 of contractual termination pension benefits, related
to the closure of a plant, which was recorded as a component of restructuring
and impairment charges.

|                                               |  |                                   |         |                                                |   |         |  |      |        |  |   |        | 
|---------------------------------------------- |  | --------------------------------- | ------- | ---------------------------------------------- | - | ------- |  | ---- | ------ |  | - | ------ | 
|                                               |  | Pension
  Benefits
  December 31, |         | Other
  Postretirement Benefits
  December 31, |  
|                                               |  |                                   |         |                                                |  
|                                               |  | 2006                              |         | 2005                                           |   | 2006    |  | 2005 |       
|                                               |  |                                   |         |                                                |   |         |  |      |       
|Change in
  benefit obligation:                |  |                                   |         |                                                |   |         |  |      |        |  |   |        | 
|Benefit obligation at prior measurement
  date |  | $                                 | 240,045 |                                                | $ | 240,609 |  | $    | 48,281 |  | $ | 50,916 | 
|Service cost                                   |  |                                   | 1,613   |                                                |   | 1,540   |  |      | 1,343  |  |   | 1,164  | 
|Interest cost                                  |  |                                   | 13,417  |                                                |   | 13,094  |  |      | 2,674  |  |   | 2,551  | 
|Actuarial (gain)/loss                          |  |                                   | 418     |                                                |   | 10,947  |  |      | 3,552  |  |   | 6,179  | 

-55-

---



GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(Dollars in thousands, except per share
data)

|                                                                 |  |   |         |   |   |         |   |   |         |   |   |         |  
|---------------------------------------------------------------- |  | - | ------- | - | - | ------- | - | - | ------- | - | - | ------- | -
|Foreign currency translation                                     |  |   | 17      |   |   | (776    | ) |   | 10      |   |   | 160     |  
|Benefits paid                                                    |  |   | (15,754 | ) |   | (15,053 | ) |   | (5,239  | ) |   | (4,959  | )
|Plan amendments                                                  |  |   | 949     |   |   | (102    | ) |   |        |   |   | (7,730  | )
|Settlements and curtailments                                     |  |   | (466    | ) |   | (10,214 | ) |   |        |   |   |        |  
|                                                                 |  |   |         |   |   |         |   |   |         |   |   |         |  
|Benefit obligation at measurement date                           |  | $ | 240,239 |   | $ | 240,045 |   | $ | 50,621  |   | $ | 48,281  |  
|                                                                 |  |   |         |   |   |         |   |   |         |   |   |         |  
|Change in
  plan assets:                                         |  |   |         |   |   |         |   |   |         |   |   |         |  
|Fair value of assets at prior measurement
  date                 |  | $ | 191,608 |   | $ | 168,108 |   | $ |        |   | $ |        |  
|Actual return on plan assets                                     |  |   | 25,260  |   |   | 11,764  |   |   |        |   |   |        |  
|Employer contributions                                           |  |   | 355     |   |   | 37,522  |   |   | 5,239   |   |   | 4,959   |  
|Foreign currency translation                                     |  |   | 88      |   |   | (519    | ) |   |        |   |   |        |  
|Benefits paid                                                    |  |   | (15,754 | ) |   | (15,053 | ) |   | (5,239  | ) |   | (4,959  | )
|Settlements                                                      |  |   |        |   |   | (10,214 | ) |   |        |   |   |        |  
|                                                                 |  |   |         |   |   |         |   |   |         |   |   |         |  
|Fair value of assets at measurement date                         |  | $ | 201,557 |   | $ | 191,608 |   | $ |        |   | $ |        |  
|                                                                 |  |   |         |   |   |         |   |   |         |   |   |         |  
|Funded
  status:                                                 |  |   |         |   |   |         |   |   |         |   |   |         |  
|Funded status                                                    |  | $ | (38,682 | ) | $ | (48,437 | ) | $ | (50,621 | ) | $ | (48,281 | )
|Amounts
  recognized in the balance sheet:                       |  |   |         |   |   |         |   |   |         |   |   |         |  
|Noncurrent assets                                                |  | $ | 45      |   | $ | 1,417   |   | $ |        |   | $ |        |  
|Current liabilities                                              |  |   |        |   |   |        |   |   | (3,492  | ) |   | (4,338  | )
|Noncurrent liabilities                                           |  |   | (38,727 | ) |   | (45,013 | ) |   | (47,110 | ) |   | (63,176 | )
|                                                                 |  |   |         |   |   |         |   |   |         |   |   |         |  
|Net amount recognized                                            |  | $ | (38,682 | ) | $ | (43,596 | ) | $ | (50,602 | ) | $ | (67,514 | )
|                                                                 |  |   |         |   |   |         |   |   |         |   |   |         |  
|                                                                
|Amounts recognized in accumulated other
  comprehensive income:  |  |   |         |   |   |         |   |   |         |   |   |         |  
|Prior service cost (credit)                                      |  | $ | 1,584   |   |   | N/A     |   | $ | (16,515 | ) |   | N/A     |  
|Net actuarial loss                                               |  |   | 2,211   |   |   | N/A     |   |   | 5,055   |   |   | N/A     |  
|                                                                 |  |   |         |   |   |         |   |   |         |   |   |         |  
|Net amount recognized                                            |  | $ | 3,795   |   |   | N/A     |   | $ | (11,460 | ) |   | N/A     |  
|                                                                 |  |   |         |   |   |         |   |   |         |   |   |         |  
|                                                                
|Amounts expected to be recognized during
  the next fiscal year: |  |   |         |   |   |         |   |   |         |   |   |         |  
|Prior service cost (credit)                                      |  | $ | 137     |   |   | N/A     |   | $ | (4,342  | ) |   | N/A     |  
|Actuarial loss                                                   |  |   | 115     |   |   | N/A     |   |   | 127     |   |   | N/A     |  
|                                                                 |  |   |         |   |   |         |   |   |         |   |   |         |  
|Total                                                            |  | $ | 252     |   |   |         |   | $ | (4,215  | ) |   |         |  
|                                                                 |  |   |         |   |   |         |   |   |         |   |   |         |  

During
the third quarter of 2004, the Company adopted the provisions of FASB Staff
Position No. FAS 106-2, Accounting and
Disclosure Requirements Related to the Medicare Prescription Drug, Improvement
and Modernization Act of 2003 (FSP FAS 106-2). The effect of
adopting FSP FAS 106-2 was a reduction to the accumulated postretirement
benefit obligation of $8,220. This reduction will be amortized as a component
of net periodic postretirement benefit cost over the average remaining service periods
of active plan participants.

Effective
June 1, 2005, the Company implemented plan amendments to one of its
postretirement medical plans which cap the Companys cost for providing these
benefits at current levels. The effect of these changes was a reduction to the
accumulated postretirement benefit obligation of $7,730 which will be amortized
as a component of net periodic postretirement benefit cost over the average
remaining service period until full eligibility of active plan participants.

-56-

---



GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(Dollars in thousands, except per
share data)

Additionally,
effective July 1, 2004, the Company implemented plan amendments to certain
postretirement medical plans, which cap the Companys cost for providing these
benefits at current levels. The effect of these changes was a reduction to the
accumulated postretirement benefit obligation of $18,165 which will be
amortized as a component of net periodic postretirement benefit cost over the
average remaining service period until full eligibility of active plan
participants.

The
accumulated benefit obligations for the defined benefit pension plans were
$237,758 and $236,185 at December 31, 2006 and 2005, respectively. For pension
plans included above with aggregate benefit obligations and accumulated benefit
obligations in excess of plan assets, at December 31, 2006 and 2005, the
projected benefit obligations were $236,639 and $236,828, respectively, the
accumulated benefit obligations were $234,410 and $233,181, respectively, and
the fair values of plan assets for these plans were $197,912 and $188,057,
respectively.

Gross
benefits expected to be paid from the plans and Medicare Part D federal subsidy
payments expected to be received are as follows:

|          |  |                    |   |                                   |  |                     |  |   |        |  |  | 
|--------- |  | ------------------ | - | --------------------------------- |  | ------------------- |  | - | ------ |  |  | 
|          |  | Pension
  Benefits |   | Other
  Postretirement
  Benefits |  | Federal
  Subsidies | 
|          |  |                    |   |                                   |  |                     |  |   |        |  |  | 
|2007      |  |                    | $ | 15,900                            |  |                     |  | $ | 3,500  |  |  | 
|2008      |  |                    |   | 15,700                            |  |                     |  |   | 3,500  |  |  | 
|2009      |  |                    |   | 15,900                            |  |                     |  |   | 3,500  |  |  | 
|2010      |  |                    |   | 16,000                            |  |                     |  |   | 3,600  |  |  | 
|2011      |  |                    |   | 16,200                            |  |                     |  |   | 3,600  |  |  | 
|2012-2016 |  |                    |   | 84,500                            |  |                     |  |   | 18,700 |  |  | 

The
weighted-average assumptions used to determine benefit obligations for the
plans were:

|                                                    |  |      |    |      |  |      |    |   |  |  |    |   | 
|--------------------------------------------------- |  | ---- | -- | ---- |  | ---- | -- | - |  |  | -- | - | 
|                                                    |  | 2006 |    | 2005 |  | 2004 |   
|                                                    |  |      |    |      |  |      |   
|Discount
  rate                                     |  |      | 53⁄4 | %    |  |      | 53⁄4 | % |  |  | 53⁄4 | % | 
|Average rate
  of increase in employee compensation |  |      | 4  | %    |  |      | 4  | % |  |  | 4  | % | 

The
weighted-average assumptions used to determine net periodic benefit cost for
the plans were:

|                                                    |  |      |    |      |  |      |    |   |  |  |   |   | 
|--------------------------------------------------- |  | ---- | -- | ---- |  | ---- | -- | - |  |  | - | - | 
|                                                    |  | 2006 |    | 2005 |  | 2004 |   
|                                                    |  |      |    |      |  |      |   
|Discount
  rate                                     |  |      | 53⁄4 | %    |  |      | 53⁄4 | % |  |  | 6 | % | 
|Long-term
  rate of return on assets                |  |      | 8  | %    |  |      | 8  | % |  |  | 8 | % | 
|Average rate
  of increase in employee compensation |  |      | 4  | %    |  |      | 4  | % |  |  | 5 | % | 

The
health care cost trend rate used in accounting for the medical plans was eight
percent in 2006 (decreasing to six percent in the year 2009 and beyond) and
nine percent in 2005 (decreasing to six percent in the year 2009 and beyond). A
one percent increase in the health care trend rate would increase the
accumulated postretirement benefit obligation by $3,587 at year-end 2006 and
the net periodic cost by $428 for the year. A one percent decrease in the
health care trend rate would decrease the accumulated postretirement benefit
obligation by $2,963 at year-end 2006 and the net periodic cost by $371 for the
year.

-57-

---



GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(Dollars in thousands, except per
share data)

The
expected long-term rate of return on assets is developed based upon the
expected future return of asset classes the plans invest in, along with the
expected future mix of investments in the pension trusts. The Company considers
historical returns of the pension assets, independent market forecasts and
management estimates when developing the expected long-term rate of return on
assets.

The
dates used to measure plan assets and liabilities were October 31, 2006 and
2005 for all plans.

The
pension trusts weighted-average asset allocations at October 31, 2006 and 2005
were:

|                                |  |      |     |   |      |  |     |   | 
|------------------------------- |  | ---- | --- | - | ---- |  | --- | - | 
|                                |  | 2006 |     |   | 2005 |  |    
|                                |  |      |     |   |      |  |     |   | 
|Asset Category                  |  |      |     |   |      |  |    
|Cash and short-term investments |  |      | 4   | % |      |  | 1   | % | 
|Debt securities                 |  |      | 37  | % |      |  | 44  | % | 
|Equity securities               |  |      | 58  | % |      |  | 54  | % | 
|Real estate                     |  |      | 1   | % |      |  | 1   | % | 
|                                |  |      |     |   |      |  |     |   | 
|                                |  |      | 100 | % |      |  | 100 | % | 
|                                |  |      |     |   |      |  |     |   | 

The
Companys investment policy for its pension trusts is to balance risk and
return through a diversified portfolio of fixed income securities, equity
securities and private equity investments. Maturities for fixed income
securities are managed such that sufficient liquidity exists to meet near-term
benefit payment obligations. In 2007, the Company expects to contribute
approximately $1,312 to its pension plan trusts.

Note 8  Commitments and Contingencies

Future
minimum rental payments for operating leases (primarily for transportation
equipment, offices and warehouses) having initial or remaining noncancellable
lease terms in excess of one year as of December 31, 2006 are as follows:

|                          |  |   |        | 
|------------------------- |  | - | ------ | 
|Years Ending December 31, |  |   |        | 
|                          |  |   |        | 
|2007                      |  | $ | 3,882  | 
|2008                      |  |   | 3,317  | 
|2009                      |  |   | 2,400  | 
|2010                      |  |   | 2,206  | 
|2011                      |  |   | 609    | 
|thereafter                |  |   | 403    | 
|                          |  |   |        | 
|                          |  | $ | 12,817 | 
|                          |  |   |        | 

Rental
expense for the years ended December 31, 2006, 2005 and 2004 was $7,892, $7,703
and $8,334, respectively.

-58-

---



GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(Dollars in thousands, except per
share data)

Environmental Matters

Accruals
for environmental liabilities are recorded based on current interpretations of
applicable environmental laws and regulations when it is probable that a
liability has been incurred and the amount of such liability can be reasonably
estimated. Estimates are established based upon information available to
management to date, the nature and extent of the environmental liability, the
Companys experience with similar activities undertaken, estimates obtained
from outside consultants and the legal and regulatory framework in the
jurisdiction in which the liability arose. The potential costs related to
environmental matters and their estimated impact on future operations are
difficult to predict due to the uncertainties regarding the extent of any
required remediation, the complexity and interpretation of applicable laws and
regulations, possible modification of existing laws and regulations or the
adoption of new laws or regulations in the future, and the numerous alternative
remediation methods and their related varying costs. The material components of
the Companys environmental accruals include potential costs, as applicable,
for investigation, monitoring, remediation and ongoing maintenance activities
at any affected site. Accrued liabilities for environmental matters do not
include third-party recoveries nor have they been discounted. The time frame
over which these liabilities will be paid out is subject to significant
uncertainties, and is not presently determinable. Activity in the aggregate
accrued liability for environmental matters is summarized as follows:

|                                 |  |      |        |      |   |        |  
|-------------------------------- |  | ---- | ------ | ---- | - | ------ | -
|                                 |  | 2006 |        | 2005 |  
|                                 |  |      |        |      |  
|Balance at
  beginning of period |  | $    | 27,325 |      | $ | 34,532 |  
|Accruals,
  net                  |  |      | 495    |      |   | 2,117  |  
|Payments                         |  |      | (2,808 | )    |   | (6,570 | )
|Transfer of
  liability          |  |      |       |      |   | (2,765 | )
|Foreign
  exchange and other     |  |      | 2      |      |   | 11     |  
|                                 |  |      |        |      |   |        |  
|Balance at
  end of period       |  | $    | 25,014 |      | $ | 27,325 |  
|                                 |  |      |        |      |   |        |  

On
April 30, 2004, the Company and Honeywell International Inc. entered into a
settlement agreement relating to the Companys proposed rejection in the
Companys bankruptcy proceedings of certain executory contracts dealing with
environmental issues at sites formerly owned by Honeywells predecessor, along
with certain other claims made by Honeywell. The settlement agreement provides,
among other things, that the Company will transfer ownership of two sites to
Honeywell in exchange for Honeywell assuming all environmental liabilities at
these sites, along with any groundwater contamination at another site. In
addition, Honeywell agreed to share with the Company the costs of certain
environmental remediation at two other sites that will continue to be owned by
GenTek. Accordingly, the Company recorded a receivable of $6,000, which
represents amounts expected to be received over the next several years from
Honeywell in accordance with the cost sharing provisions of the agreement. The
balance remaining to be received at December 31, 2006 was $426.

Contingencies

The
Company is involved in various claims, litigation, administrative proceedings
and investigations. Although the amount of any ultimate liability which could
arise with respect to these matters cannot be accurately predicted, it is the
opinion of management, based upon currently available information, that any
such liability will have no material adverse effect on the Companys financial
condition, results of operations or cash flows.

-59-

---



GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(Dollars in
thousands, except per share data)

Note 9 
Additional Financial Information

|                                  |  |                |        |      |   |        |  
|--------------------------------- |  | -------------- | ------ | ---- | - | ------ | -
|                                  |  | December
  31, |       
|                                  |  |                |       
|                                  |  | 2006           |        | 2005 |  
|                                  |  |                |        |      |  
|Receivables                       |  |                |        |      |   |        |  
|Trade                             |  | $              | 82,430 |      | $ | 88,678 |  
|Other                             |  |                | 2,436  |      |   | 7,330  |  
|Allowance for
  doubtful accounts |  |                | (4,453 | )    |   | (4,048 | )
|                                  |  |                |        |      |   |        |  
|                                  |  | $              | 80,413 |      | $ | 91,960 |  
|                                  |  |                |        |      |   |        |  

|                          |  |                |        |      |   |        | 
|------------------------- |  | -------------- | ------ | ---- | - | ------ | 
|                          |  | December
  31, |       
|                          |  |                |       
|                          |  | 2006           |        | 2005 |  
|                          |  |                |        |      |  
|Inventories               |  |                |        |      |   |        | 
|Raw materials             |  | $              | 24,888 |      | $ | 14,832 | 
|Work in process           |  |                | 6,389  |      |   | 6,341  | 
|Finished
  products       |  |                | 14,430 |      |   | 12,923 | 
|Supplies and
  containers |  |                | 1,178  |      |   | 1,747  | 
|                          |  |                |        |      |   |        | 
|                          |  | $              | 46,885 |      | $ | 35,843 | 
|                          |  |                |        |      |   |        | 

Inventories
valued at LIFO amounted to $14,376 and $11,247 at December 31, 2006 and 2005, respectively,
which were below estimated replacement cost by $2,550 and $1,689, respectively.
The impact of LIFO liquidations in 2006, 2005 and 2004 was not significant.

|                                                 |  |                |         |      |   |         |  
|------------------------------------------------ |  | -------------- | ------- | ---- | - | ------- | -
|                                                 |  | December
  31, |        
|                                                 |  |                |        
|                                                 |  | 2006           |         | 2005 |  
|                                                 |  |                |         |      |  
|Property, Plant
  and Equipment                  |  |                |         |      |   |         |  
|Land and
  improvements                          |  | $              | 46,225  |      | $ | 44,167  |  
|Machinery and
  equipment                        |  |                | 217,303 |      |   | 189,361 |  
|Buildings and
  leasehold improvements           |  |                | 40,716  |      |   | 41,244  |  
|Construction in
  progress                       |  |                | 18,985  |      |   | 15,103  |  
|                                                 |  |                |         |      |   |         |  
|                                                 |  |                | 323,229 |      |   | 289,875 |  
|Less:  accumulated depreciation and amortization |  |                | (91,049 | )    |   | (68,529 | )
|                                                 |  |                |         |      |   |         |  
|                                                 |  | $              | 232,180 |      | $ | 221,346 |  
|                                                 |  |                |         |      |   |         |  

|                               |  |                         |        |               |   |         |  |   |         | 
|------------------------------ |  | ----------------------- | ------ | ------------- | - | ------- |  | - | ------- | 
|                               |  | Performance
  Chemicals |        | Manufacturing |   | Total   | 
|                               |  |                         |        |               |   |         | 
|Goodwill                       |  |                         |        |               |   |         |  |   |         | 
|Balance at
  January 1, 2005   |  |                         | 12,127 |               |   | 135,201 |  |   | 147,328 | 
|Foreign currency
  translation |  |                         |       |               |   | 41      |  |   | 41      | 
|                               |  |                         |        |               |   |         | 
|Balance at
  December 31, 2005 |  |                         | 12,127 |               |   | 135,242 |  |   | 147,369 | 
|Foreign currency
  translation |  |                         |       |               |   | 5       |  |   | 5       | 
|Acquisitions                   |  |                         | 2,879  |               |   |        |  |   | 2,879   | 
|                               |  |                         |        |               |   |         | 
|Balance at
  December 31, 2006 |  | $                       | 15,006 |               | $ | 135,247 |  | $ | 150,253 | 
|                               |  |                         |        |               |   |         | 

-60-

---



GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(Dollars in
thousands, except per share data)

|                                 |  | December 31, |         | Weighted Average Life |  
|-------------------------------- |  | ------------ | ------- | --------------------- | -
|                                 |  |              |         |                      
|                                 |  | 2006         |         | 2005                  |  
|                                 |  |              |         |                       |  
|Intangible Assets                |  |              |         |                       |  
|                                 |  |              |         |                       |  
|Patents  gross                  |  | $            | 12,997  |                       | $
|Accumulated
  amortization       |  |              | (3,003  | )                     |  
|                                 |  |              |         |                       |  
|Patents  net                    |  |              | 9,994   |                       |  
|                                 |  |              |         |                       |  
|Customer related
   gross       |  |              | 35,000  |                       |  
|Accumulated
  amortization       |  |              | (13,770 | )                     |  
|                                 |  |              |         |                       |  
|Customer related
   net         |  |              | 21,230  |                       |  
|                                 |  |              |         |                       |  
|Technology 
  gross             |  |              | 4,100   |                       |  
|Accumulated
  amortization       |  |              | (240    | )                     |  
|                                 |  |              |         |                       |  
|Technology  net                 |  |              | 3,860   |                       |  
|                                 |  |              |         |                       |  
|Non-compete
  agreements  gross |  |              | 4,941   |                       |  
|Accumulated
  amortization       |  |              | (322    | )                     |  
|                                 |  |              |         |                       |  
|Non-compete
  agreements  net   |  |              | 4,619   |                       |  
|                                 |  |              |         |                       |  
|Trademarks 
  indefinite life   |  |              | 17,000  |                       |  
|                                 |  |              |         |                       |  
|                                 |  | $            | 56,703  |                       | $
|                                 |  |              |         |                       |  

During
the years ended December 31, 2006, 2005 and 2004, the Company recognized
$5,942, $5,382 and $5,372 of amortization expense, respectively.  The estimated amortization expense for each
of the next 5 years is $6,935, $6,239, $5,967, $4,819 and $4,560.

|                                 |  |                |        |      |   |        | 
|-------------------------------- |  | -------------- | ------ | ---- | - | ------ | 
|                                 |  | December
  31, |       
|                                 |  |                |       
|                                 |  | 2006           |        | 2005 |  
|                                 |  |                |        |      |  
|Accrued
  Liabilities            |  |                |        |      |   |        | 
|Wages, salaries
  and benefits   |  | $              | 20,818 |      | $ | 21,058 | 
|Interest                         |  |                | 4,559  |      |   | 4,760  | 
|Environmental                    |  |                | 4,291  |      |   | 5,104  | 
|Dividends                        |  |                |       |      |   | 2,354  | 
|Taxes, other
  than income taxes |  |                | 3,558  |      |   | 4,433  | 
|Other                            |  |                | 23,795 |      |   | 16,966 | 
|                                 |  |                |        |      |  
|                                 |  | $              | 57,021 |      | $ | 54,675 | 
|                                 |  |                |        |      |  

Note 10  Long-Term Debt

|                                           |  |  |           |  |                |         |      |   |         | 
|------------------------------------------ |  |  | --------- |  | -------------- | ------- | ---- | - | ------- | 
|                                           |  |  |           |  | December
  31, |        
|                                           |  |  |           |  |                |        
|                                           |  |  |           |  | 2006           |         | 2005 |  
|                                           |  |  |           |  |                |         |      |  
|Revolving credit facility  floating rates |  |  | 2010      |  | $              | 10,000  |      | $ |        | 
|First lien term loan  floating rates      |  |  | 2011      |  |                | 219,053 |      |   | 221,283 | 
|Second lien term loan  floating rates     |  |  | 2012      |  |                | 113,000 |      |   | 135,000 | 
|Other debt  various rates                 |  |  | 2006-2018 |  |                | 3,246   |      |   | 3,986   | 
|                                           |  |  |           |  |                |         |      |   |         | 
|Total debt                                 |  |  |           |  |                | 345,299 |      |   | 360,269 | 
|Less:  current portion                     |  |  |           |  |                | 4,612   |      |   | 3,840   | 
|                                           |  |  |           |  |                |         |      |   |         | 
|Net long-term
  debt                       |  |  |           |  | $              | 340,687 |      | $ | 356,429 | 
|                                           |  |  |           |  |                |         |      |   |         | 

-61-

---



GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(Dollars in thousands, except per share data)

Aggregate
maturities of long-term debt are as follows: 2007, $4,612; 2008, $2,538; 2009,
$2,487; 2010, $169,483; 2011, $53,018; thereafter, $113,161.

On
February 28, 2005, the Company closed on a secured financing consisting of
$370,000 of term loans and a $60,000 revolving credit facility (the Credit
Facilities).  In conjunction with
securing the Credit Facilities, all amounts outstanding under the Companys
then-outstanding revolving credit facility were repaid and the underlying
credit agreement was terminated, and the Company recorded a charge in interest
expense of $3,030 to write-off the related deferred financing costs.  The term
loans include a $235,000 first lien loan due on February 28, 2011 with an initial
interest rate of LIBOR plus 2.75 percent or base rate plus 1.75 percent, subject
to a rate reduction of 0.25 percent if such term loan is rated B1 or better by
Moodys Investor Services,
Inc. and a $135,000 second lien loan due on February 28, 2012 with an initial
interest rate of LIBOR plus 5.75 percent or base rate plus 4.75 percent.  On
April 26, 2006, the Company entered into amendments of its first and second lien
term loan agreements, which reduced the interest rate margins by 50 and 150 basis
points, respectively. In addition, the debt holders agreed to allow a redemption
of the second lien term loan. On May 1, 2006, the Company repaid $22,000 of its
second lien term loan. In connection with the
amendments, the Company recorded charges of $3,572 for certain costs related
to the amendment and to write-off certain deferred financing costs. In September,
2006, Moodys Investor
Services upgraded the first lien loan to B1, which resulted in a 0.25 percent
rate reduction.  The interest rates in
effect at December 31, 2005 were 7.1 percent and 9.9 percent on the first lien
and second lien loans, respectively.
The interest rates in effect at December 31, 2006 were 7.38 percent and
9.62 percent on the first and second lien loans, respectively.  The first lien
term loan is subject to amortization of $2,230 per year for five years, with
the remainder payable over the sixth year. There is no
amortization over the term of the second lien loan.  The $60,000 revolving credit
facility matures on February 28, 2010 and carried an initial interest rate of
LIBOR plus 2.75 percent or base rate plus 1.75 percent, subject to rate reductions
under a pricing grid if the Companys leverage ratio decreases.  In
October, 2006, the interest rate on the revolving credit facility decreased
0.25 percent as a result of the Companys improved leverage ratio.  The
interest rate in effect on the revolving credit facility at December 31, 2006
was 7.85 percent. There were no borrowings outstanding under the revolving credit
facility at December 31, 2005. The Credit Facilities are secured by liens on
substantially all of the personal property and certain real property of the Company
and its domestic subsidiaries. The Credit
Facilities contain covenants which impose certain restrictions on the Companys
ability to, among other things, incur additional debt, pay dividends, make
investments or sell assets.  Additionally, if certain tests are not met, a portion
of excess cash flow, as defined in the Credit Facilities, and certain
non-recurring cash inflows such as proceeds from asset sales, insurance
recoveries, and equity offerings must be used to pay down indebtedness and may
not be reborrowed.  In addition, the
Credit Facilities contain certain financial covenants which include a maximum
leverage ratio, minimum interest coverage ratio and maximum annual capital
expenditures.

Commitment
fees paid for the Companys credit facilities were $212, $249 and $319 for the
years ended December 31, 2006, 2005 and 2004, respectively.  The unused letter of credit balance
available under the Companys credit facilities was $29,634 and $23,672 at
December 31, 2006 and 2005, respectively.

Note 11  Warrants

-62-

---



GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(Dollars in thousands, except per share data)

The
Company has the following warrants outstanding:

|          |  |                 |                   |                            |                   |           |                   |   |                            |  |              |           |  |   |       | 
|--------- |  | --------------- | ----------------- | -------------------------- | ----------------- | --------- | ----------------- | - | -------------------------- |  | ------------ | --------- |  | - | ----- | 
|          |  |                 |                   |                            | December 31, 2006 |           | December 31, 2005 |  
|          |  |                 |                   |                            |                   |           |                   |  
|          |  | Expiration Date |                   | Number of
  shares covered |                   |           | Strike Price      |   | Number of
  shares covered |  | Strike Price |          
|          |  |                 |                   |                            |                   |           |                   |   |                            |  |              |          
|Tranche B |  |                 | November 10, 2008 |                            |                   | 1,996,735 |                   | $ | 19.98                      |  |              | 1,998,091 |  | $ | 19.98 | 
|Tranche C |  |                 | November 10, 2010 |                            |                   | 975,147   |                   | $ | 22.03                      |  |              | 975,831   |  | $ | 22.03 | 

The
terms of the warrants provide for the number of shares covered by the warrants
and the strike price to be adjusted in the case of certain events, including
dividends.  During March 2005 and
December 2004, the Company paid special dividends of $31.00 and $7.00 per
share, respectively, and the number of shares covered by the warrants and their
strike price was adjusted pursuant their terms.

In
addition, the Company formerly had 1,173,184 Tranche A warrants
outstanding.  The terms of the Tranche A
warrants contained a contingent redemption feature, which was triggered by a
sale of all or substantially all of the assets of the communications
business.  Accordingly, these warrants
were classified as temporary equity.
The sale of the KRONE communications business triggered the contingent
redemption feature.  The Company made
the required payment of $8,365 ($7.13 per warrant) on June 30, 2004 and the
Tranche A warrants expired.  The
difference between the amount paid and the carrying amount was treated as a
reduction in stockholders equity.

During
2006 and 2005, 2,037 and 91 shares of common stock were issued upon exercise of
warrants.

Note 12  Stock Incentive Plans

The
Company has an incentive plan under which stock options, restricted stock and
other stockbased awards may be granted to employees, officers and directors.
Grants under the plan generally vest over three years and options have a
maximum term of ten years.  Exercise prices
for stock option grants are set at market value on the grant date.  Compensation cost recorded for stock-based
compensation under this plan was $1,793, $1,176 and $1,483 for the years ended
December 31, 2006, 2005 and 2004, respectively.  As of December 31, 2006, the total number of shares authorized
for grant under this plan was 1,000,000 with 283,960 shares available for
future grant.

Information
with respect to restricted stock is summarized below:

|                                   |  |        |         |                                         |   |       | 
|---------------------------------- |  | ------ | ------- | --------------------------------------- | - | ----- | 
|                                   |  | Shares |         | Weighted
  Average
  Grant-Date
  Value |  
|                                   |  |        |         |                                         |  
|Outstanding
  at December 31, 2005 |  |        | 79,261  |                                         | $ | 21.20 | 
|Granted                            |  |        | 97,904  |                                         |   | 27.90 | 
|Vested                             |  |        | 39,758  |                                         |   | 26.76 | 
|Forfeited                          |  |        | 8,815   |                                         |   | 23.85 | 
|                                   |  |        |         |                                         |   |       | 
|Outstanding
  at December 31, 2006 |  |        | 128,592 |                                         | $ | 24.40 | 
|                                   |  |        |         |                                         |   |       | 

Information with respect to stock options is
summarized below:

-63-

---



GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(Dollars in
thousands, except per
share data)

| |                                                   |  |         |         |                                 |   |                                                   |  |                               |     |  |   |       | 
| | ------------------------------------------------- |  | ------- | ------- | ------------------------------- | - | ------------------------------------------------- |  | ----------------------------- | --- |  | - | ----- | 
| |                                                   |  | Options |         | Weighted Average Exercise Price |   | Weighted
  Average
  Remaining
  Contractual Life |  | Aggregate
  Intrinsic
  Value |    
| |                                                   |  |         |         |                                 |   |                                                   |  |                               |    
| | Outstanding
  at December 31, 2005                |  |         | 388,783 |                                 | $ | 11.52                                             |  |                               |     |  |   |       | 
| | Granted                                           |  |         | 97,728  |                                 |   | 26.92                                             |  |                               |     |  |   |       | 
| | Exercised                                         |  |         | 74,019  |                                 |   | 11.23                                             |  |                               |     |  |   |       | 
| | Forfeited                                         |  |         | 45,644  |                                 |   | 14.71                                             |  |                               |     |  |   |       | 
| |                                                   |  |         |         |                                 |   |                                                   |  |                               |     |  |   |       | 
| | Outstanding
  at December 31, 2006                |  |         | 366,848 |                                 | $ | 15.28                                             |  |                               | 8.3 |  | $ | 6,388 | 
| |                                                   |  |         |         |                                 |   |                                                   |  |                               |     |  |   |       | 
| | Vested or
  expected to vest at December 31, 2006 |  |         | 329,193 |                                 | $ | 15.04                                             |  |                               | 8.3 |  | $ | 5,842 | 
| |                                                   |  |         |         |                                 |   |                                                   |  |                               |     |  |   |       | 
| | Exercisable
  at December 31, 2006                |  |         | 110,252 |                                 | $ | 11.31                                             |  |                               | 7.8 |  | $ | 2,566 | 
| |                                                   |  |         |         |                                 |   |                                                   |  |                               |     |  |   |       | 

The
fair value of each option grant was estimated using the Black-Scholes option pricing
model that uses the assumptions noted in the following table.  The expected term of the options was based
on the contractual term of the option and expected employee exercise and
post-vesting employment termination behavior.
Expected volatility was calculated based on the historic volatility of
the Companys stock.  The risk-free rate
was based on U.S. Treasury issues with a remaining term equal to the expected
term of the options at the grant date.

| |                                      |  |      |      |   | 
| | ------------------------------------ |  | ---- | ---- | - | 
| |                                      |  | 2006 |      |  
| |                                      |  |      |      |  
| | Dividend
  yield                     |  |      |     |   | 
| | Expected
  volatility                |  |      | 31   | % | 
| | Risk-free
  interest rate            |  |      | 5.02 | % | 
| | Expected
  holding period (in years) |  |      | 4    |   | 
| | Weighted
  average fair value        |  | $    | 8.74 |   | 

As
a result of the special dividends of $31.00 per share and $7.00 per share in
March 2005 and December 2004, respectively, outstanding stock options were
modified pursuant to equitable adjustment calculations to maintain the
aggregate amount of intrinsic value for the options and to ensure that the
ratio of the exercise price per share to the market value per share was not
reduced.  The effect of this
modification was to increase the number of options outstanding by 223,605
and  20,589 and reduce the exercise
price of the options from $31.14 to $11.03 and from $36.00 to $31.14 in 2005
and 2004, respectively.

The
total intrinsic value of options exercised was $1,126, $241 and $0 during the
years ended December 31, 2006, 2005 and 2004, respectively.  The Company generally issues new shares upon
the exercise of stock options.  The
total tax benefit realized as a result of stock option exercises was $445, $95
and $0 during the years ended December 31, 2006, 2005 and 2004, respectively.

As
of December 31, 2006, there was $2,061 of total unrecognized compensation cost
that is expected to be recognized over a weighted average period of 1.9 years.

Note 13  Financial Instruments

Interest
Rate Collar Agreements

-64-

---



GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(Dollars in thousands,
except per
share data)

The
Company periodically enters into derivative financial instruments to reduce the
Companys exposure to investments in variable interest rates on its outstanding
debt.  Derivative financial instruments
are only entered into with strong creditworthy counterparties.  In April, 2005, the Company entered into two
no-cost interest rate collar agreements, effectively hedging $185 million of
its LIBOR-based floating rate debt for five years.  In September 2005, the Company designated these agreements as
cash flow hedges.  These instruments are
100 percent effective, and therefore there is no impact on earnings due to
hedge ineffectiveness.  As a result of
entering into the agreements, the interest rate to be paid by the Company
relating to the hedged portion of its debt will be based on a minimum
three-month LIBOR rate of 4.05 percent on average and a maximum three-month
LIBOR rate of 5.00 percent.

Fair
Value of Financial Instruments

| |                               |  |                   |         |            |   |                   |  |            |         |  |   |         | 
| | ----------------------------- |  | ----------------- | ------- | ---------- | - | ----------------- |  | ---------- | ------- |  | - | ------- | 
| |                               |  | December 31,      |        
| |                               |  |                   |        
| |                               |  | 2006              |         | 2005       |  
| |                               |  |                   |         |            |  
| |                               |  | Carrying
  Amount |         | Fair Value |   | Carrying
  Amount |  | Fair Value |        
| |                               |  |                   |         |            |   |                   |  |            |        
| | Held to
  maturity securities |  | $                 |        |            | $ |                  |  | $          | 2,254   |  | $ | 2,252   | 
| | Long-term
  debt              |  | $                 | 345,299 |            | $ | 348,236           |  | $          | 360,269 |  | $ | 361,810 | 
| | Derivative
  instruments      |  | $                 | 1,614   |            | $ | 1,614             |  | $          | 1,160   |  | $ | 1,160   | 

The
fair values of cash and cash equivalents, receivables and payables approximate
their carrying values due to the short-term nature of the instruments.  Held to maturity securities represents
U.S.
Treasury securities maturing on February 28, 2006, whose fair value was based
on quoted market prices. The fair value of the Companys long-term debt was
based on quoted market prices for traded debt and discounted cash flow analyses
on its nontraded debt.  The fair value
of the Companys interest rate collar agreements is the estimated amount the
Company would pay or receive to terminate the collar agreements based upon
quoted market prices as provided by financial institutions which are
counterparties to the collar agreements.

Note 14  Geographic and Industry Segment
Information

GenTek
operates through two primary business segments: manufacturing and performance
chemicals.  The business segments were
determined based on several factors including products and services provided
and markets served.  The manufacturing
segment provides a broad range of engineered components and services to the
automotive and industrial markets.  The
performance chemicals segment provides products and services to four principal
markets: water treatment, chemical processing, pharmaceutical and personal care
and technology. The accounting policies of the segments are the same as those
described in the summary of significant accounting policies.

-65-

---



GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(Dollars in thousands,
except per
share data)

Industry
segment information is summarized as follows:

|                                                                            |                            |                          |         |                               |   |         |  |      |         |      |   |        |   |                     |              |         |      |         |         | 
|--------------------------------------------------------------------------- | -------------------------- | ------------------------ | ------- | ----------------------------- | - | ------- |  | ---- | ------- | ---- | - | ------ | - | ------------------- | ------------ | ------- | ---- | ------- | ------- | 
|                                                                            |                            | Net Revenues             |         | Operating Profit (Loss)       |  
|                                                                            |                            |                          |         |                               |  
|                                                                            |                            | Years Ended December 31, |         | Years Ended December 31,      |  
|                                                                            |                            |                          |         |                               |  
|                                                                            |                            | 2006                     |         | 2005                          |   | 2004    |  | 2006 |         | 2005 |   | 2004   |  
|                                                                            |                            |                          |         |                               |   |         |  |      |         |      |   |        |  
|Manufacturing                                                               |                            | $                        | 238,021 |                               | $ | 222,384 |  | $    | 214,550 |      | $ | 15,112 |   | $                   | 20,693       |         | $    | 22,214  |        
|Performance
  chemicals                                                     |                            |                          | 373,347 |                               |   | 334,113 |  |      | 316,573 |      |   | 44,710 |   |                     | 29,377       |         |      | 21,257  |        
|Corporate                                                                   |                            |                          |        |                               |   |        |  |      |        |      |   | (6,113 | ) |                     | (10,839      | )       |      | (11,413 | )      
|                                                                            |                            |                          |         |                               |   |         |  |      |         |      |   |        |   |                     |              |         |      |         |        
|Consolidated                                                                |                            | $                        | 611,368 |                               | $ | 556,497 |  | $    | 531,123 |      |   | 53,709 |   |                     | 39,231       |         |      | 32,058  |        
|                                                                            |                            |                          |         |                               |   |         |  |      |         |      |   |        |   |                     |              |         |      |         |        
|Interest
  expense                                                          |                            |                          |         |                               |   |         |  |      |         |      |   | 29,137 |   |                     | 24,736       |         |      | 7,938   |        
|Other
  (income), expense net                                               |                            |                          |         |                               |   |         |  |      |         |      |   | (302   | ) |                     | (2,853       | )       |      | (3,712  | )      
|                                                                            |                            |                          |         |                               |   |         |  |      |         |      |   |        |   |                     |              |         |      |         |        
|Consolidated income (loss) from
continuing
  operations before income taxes |                            |                          |         |                               |   |         |  |      |         |      | $ | 24,874 |   | $                   | 17,348       |         | $    | 27,832  |        
|                                                                            |                            |                          |         |                               |   |         |  |      |         |      |   |        |   |                     |              |         |      |         |        
|                                                                            |                            |                          |         |                               |   |         |  |      |         |      |   |        |   |                     |              |         |      |         |        
|                                                                            |                            | Capital Expenditures     |         | Depreciation and Amortization |  
|                                                                            |                            |                          |         |                               |  
|                                                                            |                            | Years Ended December 31, |         | Years Ended December 31,      |  
|                                                                            |                            |                          |         |                               |  
|                                                                            |                            | 2006                     |         | 2005                          |   | 2004    |  | 2006 |         | 2005 |   | 2004   |  
|                                                                            |                            |                          |         |                               |   |         |  |      |         |      |   |        |  
|Manufacturing                                                               |                            | $                        | 4,606   |                               | $ | 4,696   |  | $    | 4,984   |      | $ | 16,240 |   | $                   | 17,774       |         | $    | 20,165  |        
|Performance
  chemicals                                                     |                            |                          | 17,684  |                               |   | 16,909  |  |      | 20,056  |      |   | 18,466 |   |                     | 17,648       |         |      | 19,292  |        
|Corporate                                                                   |                            |                          | 119     |                               |   |        |  |      |        |      |   | 1,608  |   |                     | 1,802        |         |      | 718     |        
|                                                                            |                            |                          |         |                               |   |         |  |      |         |      |   |        |   |                     |              |         |      |         |        
|Consolidated                                                                |                            | $                        | 22,409  |                               | $ | 21,605  |  | $    | 25,040  |      | $ | 36,314 |   | $                   | 37,224       |         | $    | 40,175  |        
|                                                                            |                            |                          |         |                               |   |         |  |      |         |      |   |        |   |                     |              |         |      |         |        
|                                                                            |                            |                          |         |                               |   |         |  |      |         |      |   |        |   |                     |              |         |      |         |        
|                                                                            |                            |                          |         |                               |   |         |  |      |         |      |   |        |   | Identifiable Assets |             
|                                                                            |                            |                          |         |                               |   |         |  |      |         |      |   |        |   |                     |             
|                                                                            |                            |                          |         |                               |   |         |  |      |         |      |   |        |   |                     | December 31, |        
|                                                                            |                            |                          |         |                               |   |         |  |      |         |      |   |        |   |                     |              |        
|                                                                            |                            |                          |         |                               |   |         |  |      |         |      |   |        |   |                     | 2006         |         | 2005 |        
|                                                                            |                            |                          |         |                               |   |         |  |      |         |      |   |        |   |                     |              |         |      |        
|                                                                            | Manufacturing              |                          |         |                               |   |         |  |      |         |      |   |        |   |                     | $            | 315,428 |      | $       | 313,550 | 
|                                                                            | Performance
  chemicals(1) |                          |         |                               |   |         |  |      |         |      |   |        |   |                     |              | 289,978 |      |         | 268,428 | 
|                                                                            | Corporate                  |                          |         |                               |   |         |  |      |         |      |   |        |   |                     |              | 13,256  |      |         | 35,318  | 
|                                                                            | Assets held
  for sale     |                          |         |                               |   |         |  |      |         |      |   |        |   |                     |              | 111,544 |      |         | 143,779 | 
|                                                                            |                            |                          |         |                               |   |         |  |      |         |      |   |        |   |                     |              |         |      |         |         | 
|                                                                            | Consolidated               |                          |         |                               |   |         |  |      |         |      |   |        |   |                     | $            | 730,206 |      | $       | 761,075 | 
|                                                                            |                            |                          |         |                               |   |         |  |      |         |      |   |        |   |                     |              |         |      |         |         | 

|    |                                                                     
|--- | --------------------------------------------------------------------
|   
|(1) | Includes equity method
  investments of $288 and $273, respectively.
|    |                                                                     
|    | Geographic
  area information is summarized as follows:             

|                |  |  |  |  |                         |         |                      |   |         |  |      |         |      |   |         |  |   |         |  | 
|--------------- |  |  |  |  | ----------------------- | ------- | -------------------- | - | ------- |  | ---- | ------- | ---- | - | ------- |  | - | ------- |  | 
|                |  |  |  |  |                         |         |                      |  
|                |  |  |  |  | External Revenues(1)    |         | Long-Lived Assets(2) |  
|                |  |  |  |  |                         |         |                      |  
|                |  |  |  |  | Year Ended December 31, |         | December 31,         |  
|                |  |  |  |  |                         |         |                      |  
|                |  |  |  |  | 2006                    |         | 2005                 |   | 2004    |  | 2006 |         | 2005 |  
|                |  |  |  |  |                         |         |                      |   |         |  |      |         |      |  
|United
  States |  |  |  |  | $                       | 505,648 |                      | $ | 456,590 |  | $    | 438,831 |      | $ | 231,203 |  | $ | 223,568 | 
|Canada          |  |  |  |  |                         | 50,240  |                      |   | 55,296  |  |      | 51,713  |      |   | 6,603   |  |   | 10,299  | 
|Other
  foreign |  |  |  |  |                         | 55,480  |                      |   | 44,611  |  |      | 40,579  |      |   | 1,887   |  |   | 433     | 
|                |  |  |  |  |                         |         |                      |   |         |  |      |         |      |   |         |  |   |         | 
|Consolidated    |  |  |  |  | $                       | 611,368 |                      | $ | 556,497 |  | $    | 531,123 |      | $ | 239,693 |  | $ | 234,300 | 
|                |  |  |  |  |                         |         |                      |   |         |  |      |         |      |   |         |  |   |         | 

|    |                                                                                                      
|--- | -----------------------------------------------------------------------------------------------------
|   
|(1) | Revenues are attributed to
  geographic areas based on the locations of customers.                   
|    |                                                                                                      
|(2) | Represents all non-current
  assets except deferred tax assets, goodwill and other intangible assets.

Note 15  Related Party Transactions

Management Agreement

-66-

---



GENTEK INC.NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)(Dollars in thousands, except per share data)

The
Company was party to a management agreement with Latona Associates Inc., which
is controlled by a former stockholder of the Company, under which the Company
received corporate supervisory and administrative services and strategic
guidance. The management agreement expired in November 2004. Pursuant to this
agreement, the Company was charged $3,000 for the year ended December 31, 2004.

Other
Transactions

GenTek
provides The General Chemical Group Inc. (GCG) with certain administrative
services pursuant to a transition support agreement entered into in connection
with the spinoff of GenTek from GCG in 1999. For the years ended December 31,
2006, 2005 and 2004, GenTek charged GCG $561, $842 and $1,214, respectively,
related to this agreement. GCG supplies soda ash to GenTek. For the years ended
December 31, 2006, 2005 and 2004, purchases from GCG amounted to $2,934, $2,386,
and $2,675, respectively.

Note 16  Discontinued Operations

On
March 25, 2004, the Company signed a definitive agreement to sell its KRONE
communications business. The transaction was completed on May 18, 2004 and
resulted in a gain of $185,044, net of a tax provision of $81,115 of which
$5,560 represents the current or cash portion and $75,555 represents the
deferred portion. The net gain is included in income from discontinued
operations. This business was formerly reported as part of the communications
segment, which is no longer a reportable segment.

During
the second quarter of 2005, the Company ceased operations of its printing plate
business. The business had become unprofitable as it has experienced severe
competitive pressures over the last several years and has been hurt by a
continued shift in technology in the printing plate market. This business was
formerly reported as part of the communications segment, which is no longer a
reportable segment.

During
April 2006, the Company completed the sale of its cable and wire manufacturing
business in Stouffville, Canada. All requirements for classifying this business
as held for sale were met during the first quarter of 2006. Accordingly, the
Company recorded an impairment charge of $2,458 in order to reflect assets to
be sold at net realizable value, which has been included in income (loss) from
discontinued operations, related to property, plant and equipment and goodwill
allocated to the business. This business was formerly reported as part of the
manufacturing segment.

On December 22, 2006, the
Company announced that it had signed a definitive agreement to sell its Noma
wire and cable assembly business to Electrical Components International, Inc.
Accordingly, the Company recorded an impairment charge of $11,907 in order to
reflect the net assets to be sold at net realizable value, which has been
included in income (loss) from discontinued operations, related to property,
plant and equipment, goodwill and other intangible assets. This business was
formerly reported as part of the manufacturing segment. GenTeks wire and cable
manufacturing business has and will continue to supply the Noma wire and cable
assembly business with wire used as a raw material. These sales are expected to
continue through 2007, after which time any future sales will be subject to
open market bidding. The principal factors used to conclude that the expected
continuing cash flows are not direct cash flows were the length of time the
transactions are expected to continue and the magnitude of

-67-

---



GENTEK INC.NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)(Dollars in thousands, except per share data)

the expected transactions
versus the expected amount of revenue for the Noma wire and cable assembly
business. Based on the factors, the expected continuing cash flows are not
expected to be significant. Revenues between the wire and cable manufacturing
business and the Noma wire and cable assembly business that were previously
eliminated in consolidation were $37,578, $28,886 and $16,282 for the years
ended December 31, 2006, 2005 and 2004, respectively.

Because
the net proceeds of the Noma wire and cable assembly business sale are required
to be used to repay certain outstanding indebtedness, interest expense of
$5,380 and $3,660 for the years ending December 31, 2006 and 2005,
respectively, has been allocated to discontinued operations. This allocation
was performed using the estimated net proceeds of the sale and the interest
costs incurred in the periods on the debt that requires the repayment.

The
components of assets held for sale were as follows:

|                                |  |              |         |      |   |         | 
|------------------------------- |  | ------------ | ------- | ---- | - | ------- | 
|                                |  | December 31, |        
|                                |  |              |        
|                                |  | 2006         |         | 2005 |  
|                                |  |              |         |      |  
|Accounts
  receivable           |  | $            | 37,965  |      | $ | 36,151  | 
|Inventories                     |  |              | 40,686  |      |   | 41,520  | 
|Other
  current assets          |  |              | 2,389   |      |   | 1,699   | 
|Property,
  plant and equipment |  |              | 23,008  |      |   | 47,103  | 
|Other assets                    |  |              | 7,496   |      |   | 17,306  | 
|                                |  |              |         |      |   |         | 
|                                |  | $            | 111,544 |      | $ | 143,779 | 
|                                |  |              |         |      |   |         | 

The
components of liabilities of businesses held for sale were as follows:

|                                    |  |                |        |      |   |        | 
|----------------------------------- |  | -------------- | ------ | ---- | - | ------ | 
|                                    |  | December
  31, |       
|                                    |  |                |       
|                                    |  | 2006           |        | 2005 |  
|                                    |  |                |        |      |  
|Accounts
  payable                  |  | $              | 20,002 |      | $ | 26,893 | 
|Accrued
  liabilities               |  |                | 9,468  |      |   | 9,863  | 
|Current
  portion of long-term debt |  |                | 457    |      |   | 417    | 
|Long-term
  debt                    |  |                | 589    |      |   | 1,047  | 
|                                    |  |                |        |      |   |        | 
|                                    |  | $              | 30,516 |      | $ | 38,220 | 
|                                    |  |                |        |      |   |        | 

The
businesses included in discontinued operations had revenues of $299,164,
$367,471 and $443,754 and pretax profit (loss) of $(25,672), $(15,301) and
$2,807 for the years ended December 31, 2006, 2005 and 2004, respectively.

-68-

---



GENTEK
INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Concluded)(Dollars in thousands, except per share data)

Note 17
 Unaudited Quarterly Information

|                                            |  |       |         |        |   |         |     |        |         |     |   |         |     
|------------------------------------------- |  | ----- | ------- | ------ | - | ------- | --- | ------ | ------- | --- | - | ------- | ----
|                                            |  | 2006  |        
|                                            |  |       |        
|                                            |  | First |         | Second |   | Third   |     | Fourth |        
|                                            |  |       |         |        |   |         |     |        |        
|Net revenues(1)                             |  | $     | 143,413 |        | $ | 153,434 |     | $      | 163,122 |     | $ | 151,399 |     
|Gross profit                                |  |       | 26,874  |        |   | 29,887  |     |        | 28,425  |     |   | 22,376  |     
|Net income (loss)                           |  |       | 3,387   | (2)    |   | 4,153   | (3) |        | 2,882   | (4) |   | (12,525 | )(5)
|                                            |  |       |         |        |   |         |     |        |         |     |   |         |     
|Earnings (loss) per common share  basic:   |  |       |         |        |   |         |     |        |         |     |   |         |     
|Net income (loss)                           |  | $     | 0.33    |        | $ | 0.41    |     | $      | 0.28    |     | $ | (1.23   | )   
|                                            |  |       |         |        |   |         |     |        |         |     |   |         |     
|Earnings (loss) per common share  diluted: |  |       |         |        |   |         |     |        |         |     |   |         |     
|Net income (loss)                           |  | $     | 0.33    |        | $ | 0.38    |     | $      | 0.26    |     | $ | (1.09   | )   
|                                            |  |       |         |        |   |         |     |        |         |     |   |         |     

|    |                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------
|   
|(1) | Excludes revenues relating
  to discontinued operations of $107,274, $70,323, $61,822, and $59,745,
  respectively.
|    |                                                                                                                    
|(2) | Includes restructuring
  charges of $501.                                                                          
|    |                                                                                                                    
|(3) | Includes restructuring
  charges of $851 and a pension curtailment gain of $635.                                   
|    |                                                                                                                    
|(4) | Includes restructuring
  charges of $246.                                                                          
|    |                                                                                                                    
|(5) | Includes restructuring and
  impairment charges of $1,376 and a pension curtailment gain of $9.                    

|                                            |  |       |         |        |   |         |     |        |         |     |   |         |     
|------------------------------------------- |  | ----- | ------- | ------ | - | ------- | --- | ------ | ------- | --- | - | ------- | ----
|                                            |  | 2005  |        
|                                            |  |       |        
|                                            |  | First |         | Second |   | Third   |     | Fourth |        
|                                            |  |       |         |        |   |         |     |        |        
|Net revenues(1)                             |  | $     | 133,873 |        | $ | 141,864 |     | $      | 143,540 |     | $ | 137,220 |     
|Gross profit                                |  |       | 23,351  |        |   | 29,320  |     |        | 25,621  |     |   | 25,370  |     
|Net income (loss)                           |  |       | (1,027  | )(2)   |   | 976     | (3) |        | 1,335   | (4) |   | (2,106  | )(5)
|                                            |  |       |         |        |   |         |     |        |         |     |   |         |     
|Earnings (loss) per common share  basic:   |  |       |         |        |   |         |     |        |         |     |   |         |     
|Net income (loss)                           |  | $     | (0.10   | )      | $ | 0.10    |     | $      | 0.13    |     | $ | (0.21   | )   
|                                            |  |       |         |        |   |         |     |        |         |     |   |         |     
|Earnings (loss) per common share  diluted: |  |       |         |        |   |         |     |        |         |     |   |         |     
|Net income (loss)                           |  | $     | (0.10   | )      | $ | 0.10    |     | $      | 0.13    |     | $ | (0.21   | )   
|                                            |  |       |         |        |   |         |     |        |         |     |   |         |     

|    |                                                                                                                  
|--- | -----------------------------------------------------------------------------------------------------------------
|   
|(1) | Excludes revenues relating
  to discontinued operations of $92,402, $84,716, $93,980 and $96,373,
  respectively.
|    |                                                                                                                  
|(2) | Includes restructuring
  charges of $2,901.                                                                      
|    |                                                                                                                  
|(3) | Includes restructuring
  charges of $914.                                                                        
|    |                                                                                                                  
|(4) | Includes restructuring and
  impairment charges of $2,433 and a pension settlement loss of $626.                 
|    |                                                                                                                  
|(5) | Includes restructuring and
  impairment charges of $741.                                                         

Note 18  Subsequent Events

On
February 6, 2007, the Company acquired the assets of Chalum, Inc. for
approximately $3,200.  The acquisition
included the manufacturing facility in Sacaton, Arizona.  Chalum produces aluminum sulfate for the
greater Phoenix, Arizona municipal water treatment market.

On
    February 16, 2007, the Company completed the sale of its Noma wire and cable
    harness assembly business for $75,000, plus a working capital adjustment.

On
    March 19, 2007, the Company completed an amendment to its credit facilities
    which enabled it to increase borrowings under the first lien term loan by
    $50,000 and to use these borrowings and the net proceeds from the Noma wire
    and cable harness assembly business sale to redeem the entire second lien
term loan.

-69-

---



Item 9.  Changes
in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A.  Controls
and Procedures

Disclosure Controls and Procedures

The
Companys management, with the participation of the Companys Chief Executive
Officer and Chief Financial Officer, has evaluated the effectiveness of the
Companys disclosure controls and procedures (as such term is defined in Rules
13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended
(the Exchange Act)) as of the end of the period covered by this report. Based
on such evaluation, the Companys Chief Executive Officer and Chief Financial
Officer have concluded that, as of the end of such period, the Companys
disclosure controls and procedures are effective at the reasonable assurance
level in recording, processing, summarizing and reporting, on a timely basis,
information required to be disclosed by the Company in the reports that it
files or submits under the Exchange Act.

Managements Report
On Internal Control Over Financial Reporting

The
management of GenTek Inc is responsible for establishing and maintaining
adequate internal control over financial reporting for the Company, as such
term is defined in Exchange Act Rules 13a-15(f). The Companys internal control
over financial reporting is designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with U.S. generally accepted
accounting principles.

Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Projections of any evaluation of effectiveness
to future periods are subject to risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.

Under
the supervision of its principal executive and principal financial officer and
with the participation of its management, we conducted an evaluation of the
effectiveness of its internal control over financial reporting based on the
framework in the Internal Control 
Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). Based on its evaluation under
the framework in the Internal Control 
Integrated Framework issued by COSO, its management concluded that
the Companys internal control over financial reporting was effective at a
reasonable assurance level as of December 31, 2006.

GenTek
Inc. acquired the assets of Precision Engine Products Corp. on July 31, 2006,
and managements conclusions about the effectiveness of its internal control
over financial reporting does not extend to the internal controls of this
business. This business had total assets of $37 million as of December 31, 2006
and total revenues of approximately $20 million for the five months ended
December 31, 2006, which are included in our consolidated financial statements.

GenTeks
independent registered public accounting firm, Deloitte & Touche LLP, has
audited GenTeks financial statements for the year ended December 31, 2006
included in this annual report on Form 10-K and, as part of that audit, have
issued a report on managements assessment of internal control over financial
reporting, a copy of which is included in this annual report on Form 10-K.

-70-

---



REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM

To the Board
of Directors and Stockholders of
GenTek Inc.
Parsippany, New Jersey

We
have audited managements assessment, included in the accompanying Managements
Report On Internal Control Over Financial Reporting, that GenTek Inc. and
subsidiaries (the Company) maintained effective internal control over
financial reporting as of December 31,
2006, based on criteria established in Internal ControlIntegrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission. As described in
Managements Report On Internal Control Over Financial Reporting, management
excluded from its assessment the internal control over financial reporting at
Precision Engine Products, which was acquired on July 31, 2006 and whose
financial statements constitute 5 percent of total assets and 3 percent of
revenues of the consolidated financial statement amounts as of and for the year
ended December 31, 2006. Accordingly, our audit did not include the internal
control over financial reporting at Precision Engine Products. The Companys management
is responsible for maintaining effective internal control over financial
reporting and for its assessment of the effectiveness of internal control over
financial reporting. Our responsibility is to express an opinion on
managements assessment and an opinion on the effectiveness of the Companys
internal control over financial reporting based on our audit.

We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether
effective internal control over financial reporting was maintained in all
material respects. Our audit included obtaining an understanding of internal
control over financial reporting, evaluating managements assessment, testing
and evaluating the design and operating effectiveness of internal control, and
performing such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable basis for our
opinions.

A
companys internal control over financial reporting is a process designed by,
or under the supervision of, the companys principal executive and principal
financial officers, or persons performing similar functions, and effected by
the companys board of directors, management, and other personnel to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A companys internal control over
financial reporting includes those policies and procedures that (1) pertain to
the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2)
provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures of the
company are being made only in accordance with authorizations of management and
directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition
of the companys assets that could have a material effect on the financial
statements.

Because
of the inherent limitations of internal control over financial reporting,
including the possibility of collusion or improper management override of controls,
material misstatements due to error or fraud may not be prevented or detected
on a timely basis. Also, projections of any evaluation of the effectiveness of
the internal control over financial reporting to future periods are subject to
the risk that

-71-

---



the controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.

In
our opinion, managements assessment that the Company maintained effective
internal control over financial reporting as of December 31, 2006, is fairly
stated, in all material respects, based on the criteria established in Internal
ControlIntegrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission. Also in our opinion, the
Company maintained, in all material respects, effective internal control over
financial reporting as of December 31, 2006, based on the criteria established
in Internal
ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission.

We
have also audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the consolidated financial
statements and financial statement schedule as of and for the year ended
December 31, 2006 of the Company and our report dated March 20, 2007 expressed
an unqualified opinion on those financial statements and financial statement
schedule and included explanatory paragraphs which indicate that (1) the Company
changed its method of accounting for stock based compensations to adopt the
provisions of Statement of Financial Accounting Standard No. 123(R), Share-Based Payment, (2) changed its
method of accounting for pension and other postretirement benefits to adopt the
provisions of Statement of Financial Accounting Standard No. 158, Employers Accounting for Defined Benefit Pension and
Other Postretirement Plans and (3) classified the operations of the
Noma wire and cable assembly business as discontinued operations in accordance
with Statement of Financial Accounting Standard No. 144, Accounting for Impairment or Disposal of Long-Lived
Assets.

/s/ Deloitte & Touche
LLP
Parsippany, New Jersey
March 20, 2007

-72-

---



Changes in Internal Control Over Financial
Reporting

There
have not been any changes in the Companys internal control over financial
reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act) during the fiscal quarter to which this report relates that have
materially affected, or are reasonably likely to materially affect, the
Companys internal control over financial reporting.

PART III

Item 10. Directors
and Executive Officers of the Registrant.

Directors. For information relating to the
Companys Directors, see the information under the caption Election of
Directors in the Companys definitive 2006 Proxy Statement to be filed with
the Securities and Exchange Commission pursuant to Regulation 14A of the
Securities Exchange Act of 1934, as amended, within 120 days after the fiscal
year ended December 31, 2006 (the Proxy Statement), which is hereby
incorporated by reference.

Executive Officers. For information
relating to the Companys executive officers, see the information contained
under the caption Executive Officers and Key Employees in Part I of this
report.

Compliance with Section 16(a) of the Exchange Act.
For information relating to the compliance of the directors and officers of the
Company, as well as any holder of ten percent or more of any registered class
of the equity securities of the Company with Section 16(a) of the Exchange Act,
see the information under the caption Section 16(a) Beneficial Ownership
Reporting Compliance in the Companys Proxy Statement, which is hereby
incorporated by reference.

Item 11. Executive
Compensation.

Executive
Compensation. For information relating to the compensation of the Companys
executives, see the information under the caption Executive Compensation in
the Companys Proxy Statement, which is hereby incorporated by reference.

Item 12. Security
Ownership of Certain Beneficial Owners and Management.

Security
Ownership of Certain Beneficial Owners. For
information relating to the beneficial ownership of more than five percent of
the Companys Common Stock, see the information under the caption Security
Ownership of Management and Certain Beneficial Owners in the Companys Proxy
Statement, which is hereby incorporated by reference.

Security
Ownership of Management. For information relating to
the beneficial ownership of the Companys Common Stock by Management, see the
information under the caption Security Ownership of Management and Certain
Beneficial Owners in the Companys Proxy Statement, which is hereby
incorporated by reference.

Securities
Authorized for Issuance Under Equity Compensation Plans.
For certain information relating to equity compensation plans, see the
information under the caption Equity Compensation Plan Information in the
Companys Proxy Statement, which is hereby incorporated by reference.

-73-

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Item 13. Certain
Relationships and Related Transactions.

Certain
Relationships and Related Transactions. For
information relating to certain relationships and related transactions of the
Company, see the information under the caption Certain Relationships and
Related Transactions in the Companys Proxy Statement, which is hereby
incorporated by reference.

Item 14. Principal Accounting Fees and Services

Principal Accountant Fees and Services.
For information relating to the principal accountant fees and services, see the
information under the caption Principal Accountant Fees and Services in the
Companys Proxy Statement, which is hereby incorporated by reference.

PART
IV

Item 15. Exhibits and
Financial Statement Schedules.

Financial
Statements

See Item 8.

Financial
Statement Schedules

See Index to Financial Statement Schedule on
page 79.

List
of Exhibits

|              |  |                                                                                                                                                                                                                                                                                                                                                                                                                
|------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit
  No. |  | Description                                                                                                                                                                                                                                                                                                                                                                                                    
|              |  |                                                                                                                                                                                                                                                                                                                                                                                                                
|2.1           |  | Joint Plan
  of Reorganization Under Chapter 11, Title 11, United States Code of GenTek
  Inc., et al., and Noma Company, Debtors, dated August 28, 2003, as filed with
  the United States Bankruptcy Court for the District of Delaware on August 28,
  2003 (incorporated by reference to Exhibit 2.1 of the Registrants Form 8-K,
  filed with the Commission on October 21, 2003).                       
|              |  |                                                                                                                                                                                                                                                                                                                                                                                                                
|2.2           |  | First
  Modification to Joint Plan of Reorganization Under Chapter 11, Title 11,
  United States Code of GenTek Inc., et al., and Noma Company, Debtors, dated
  October 3, 2003 as filed with the United States Bankruptcy Court for the
  District of Delaware on October 3, 2003 (incorporated by reference to Exhibit
  2.2 of the Registrants Form 8-K, filed with the Commission on October 21,
  2003).
|              |  |                                                                                                                                                                                                                                                                                                                                                                                                                
|2.3           |  | Order
  confirming Joint Plan of Reorganization Under Chapter 11, Title 11, United
  States Code of GenTek Inc., et al., and Noma Company, Debtors, as Modified,
  as entered by the United States Bankruptcy Court for the District of Delaware
  on October 7, 2003 (incorporated by reference to Exhibit 2.3 of the
  Registrants Form 8-K, filed with the Commission on October 21, 2003).                
|              |  |                                                                                                                                                                                                                                                                                                                                                                                                                
|3.1           |  | Third
  Amended and Restated Certificate of Incorporation of GenTek Inc., effective
  as of May 9, 2006 (incorporated by reference to the Registrants Form 10-Q,
  dated March 31, 2006, as filed with the Securities and Exchange Commission).                                                                                                                                                               

-74-

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|     |  |                                                                                                                                                                                                                                                                                                                                                                                          
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.2  |  | Amended and
  Restated By-Laws of GenTek Inc., effective as of March 9, 2006 (incorporated
  by reference to the Registrants Form 8-K/A, dated March 9, 2006, as filed
  with the Securities and Exchange Commission).                                                                                                                                                                  
|     |  |                                                                                                                                                                                                                                                                                                                                                                                          
|4.1  |  | GenTek Inc.
  Tranche B Warrant Agreement, dated as of November 10, 2003 (incorporated by
  reference to the Registrants Form 8-A to amend its Form 10, dated November
  10, 2003, as filed with the Securities and Exchange Commission).                                                                                                                                               
|     |  |                                                                                                                                                                                                                                                                                                                                                                                          
|4.2  |  | GenTek Inc.
  Tranche C Warrant Agreement, dated as of November 10, 2003 (incorporated by
  reference to the Registrants Form 8-A to amend its Form 10, dated November
  10, 2003, as filed with the Securities and Exchange Commission).                                                                                                                                               
|     |  |                                                                                                                                                                                                                                                                                                                                                                                          
|10.1 |  | Form of
  Registration Rights Agreement by and among the Company and the holders named
  therein dated as of November 10, 2003 (incorporated by reference to the
  Registrants Form 8-A to amend its Form 10, dated November 10, 2003, as filed
  with the Securities and Exchange Commission).                                                                                         
|     |  |                                                                                                                                                                                                                                                                                                                                                                                          
|10.2 |  | GenTek Inc.
  2003 Management and Directors Incentive Plan (incorporated by reference to
  the Registrants Form 10-Q dated September 30, 2003, as filed with the
  Securities and Exchange Commission).                                                                                                                                                                                 
|     |  |                                                                                                                                                                                                                                                                                                                                                                                          
|10.3 |  | GenTek Key
  Employee Retention Plan (incorporated by reference to Exhibit 10.14 to the
  Registrants Form 10-K/A dated April 30, 2003, as filed with the Securities
  and Exchange Commission).                                                                                                                                                                                        
|     |  |                                                                                                                                                                                                                                                                                                                                                                                          
|10.4 |  | Form of
  Indemnification Agreement (incorporated by reference to the Registrants Form
  10-K dated December 31, 2003, as filed with the Securities and Exchange
  Commission).                                                                                                                                                                                                         
|     |  |                                                                                                                                                                                                                                                                                                                                                                                          
|10.5 |  | GenTek
  Performance Plan (incorporated by reference to the Exhibit 10.3 to the
  Registrants Amendment No. 2 to Form 10, dated April 8, 1999, as filed with
  the Securities and Exchange Commission).                                                                                                                                                                                 
|     |  |                                                                                                                                                                                                                                                                                                                                                                                          
|10.6 |  | Tax Sharing
  Agreement between GenTek Inc. and the General Chemical Group Inc.
  (incorporated by reference to the Exhibit 10.6 to the Registrants Amendment
  No. 2 to Form 10, dated April 8, 1999, as filed with the Securities and
  Exchange Commission).                                                                                                                         
|     |  |                                                                                                                                                                                                                                                                                                                                                                                          
|10.7 |  | Share
  Purchase Agreement by and among ADC Telecommunications Inc., Krone
  International Holding Inc., Krone Digital Communications Inc., GenTek Holding
  Corporation, and GenTek Inc., dated March 25, 2004 (incorporated by reference
  to Exhibit 10.14 of the Registrants Form 10-Q for the period ended March 31,
  2004, as filed with the Securities and Exchange Commission).
|     |  |                                                                                                                                                                                                                                                                                                                                                                                          
|10.8 |  | Form of
  Director Restricted Stock Agreement (incorporated by reference to the
  Registrants Form 10-Q dated June 30, 2004, as filed with the Securities and
  Exchange Commission).                                                                                                                                                                                                   
|     |  |                                                                                                                                                                                                                                                                                                                                                                                          
|10.9 |  | Form of
  Emergence Shares Restricted Stock Agreement (incorporated by reference to the
  Registrants Form 10-Q dated June 30, 2004, as filed with the Securities and
  Exchange Commission).                                                                                                                                                                                           

-75-

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|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.10 |  | Form of
  Restricted Stock Agreement (incorporated by reference to the Registrants
  Form 10-Q dated June 30, 2004, as filed with the Securities and Exchange
  Commission).                                                                                                                                                                                                                                                                                                                                                                                                                                           
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10.11 |  | Form of
  Stock Option Agreement (incorporated by reference to the Registrants Form
  10-Q dated June 30, 2004, as filed with the Securities and Exchange
  Commission).                                                                                                                                                                                                                                                                                                                                                                                                                                               
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10.12 |  | Form of
  Performance Cash Award Agreement (incorporated by reference to the
  Registrants Form 10-Q dated June 30, 2004, as filed with the Securities and
  Exchange Commission).                                                                                                                                                                                                                                                                                                                                                                                                                                     
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10.13 |  | Retention
  Agreement with Matthew R. Friel (incorporated by reference to the
  Registrants Form 10-Q dated September 30, 2004, as filed with the Securities
  and Exchange Commission).                                                                                                                                                                                                                                                                                                                                                                                                                               
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10.14 |  | Form of
  Letter Agreement and Term Sheet with Matthew R. Friel (incorporated by
  reference to the Registrants Form 10-Q dated September 30, 2004, as filed
  with the Securities and Exchange Commission).                                                                                                                                                                                                                                                                                                                                                                                                           
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10.15 |  | Master
  Settlement Agreement, dated April 30, 2004, among GenTek Holding Corporation,
  General Chemical LLC, and Honeywell International Inc. (incorporated by
  reference to the Registrants Form 10-Q dated September 30, 2004, as filed
  with the Securities and Exchange Commission).                                                                                                                                                                                                                                                                                                                           
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10.16 |  | First Lien
  Credit and Guaranty Agreement among GenTek, Inc., GenTek Holding LLC, as
  borrower, the other guarantors party thereto, the lenders party thereto from
  time to time, Goldman Sachs Credit Partners L.P., as joint lead arranger,
  General Electric Capital Corporation, as co-administrative agent, and Bank of
  America, N.A., as co-administrative agent and collateral agent, dated
  February 28, 2005 (incorporated by reference to the Registrants Form 10-K
  dated December 31, 2005, as filed with the Securities and Exchange
  Commission).                                               
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10.17 |  | Second Lien
  Credit and Guaranty Agreement among GenTek, Inc., GenTek Holding LLC, as
  borrower, the other guarantors party thereto, the lenders party thereto from
  time to time, Goldman Sachs Credit Partners L.P., as joint lead arranger,
  sole bookrunner, syndication agent, administrative agent and as collateral
  agent, Bank of America Securities LLC, as joint lead arranger and Bank of
  America, N.A., as documentation agent, dated February 28, 2005 (incorporated
  by reference to the Registrants Form 10-K dated December 31, 2005, as filed
  with the Securities and Exchange Commission).
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10.18 |  | Employment
  Agreement with William E. Redmond, Jr., dated May 23, 2005 (incorporated by
  reference to the Registrants Form 10-Q dated September 30, 2005, as filed
  with the Securities and Exchange Commission).                                                                                                                                                                                                                                                                                                                                                                                                   
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10.19 |  | Employment
  agreement with Andrew Hines, dated September 21, 2005 (incorporated by
  reference to the Registrants Form 10-Q dated September 30, 2005, as filed
  with the Securities and Exchange Commission).                                                                                                                                                                                                                                                                                                                                                                                                        
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10.20 |  | Employment
  agreement with Maximo Vargas, dated September 22, 2005 (incorporated by
  reference to the Registrants Form 10-Q dated September 30, 2005, as filed
  with the Securities and Exchange Commission).                                                                                                                                                                                                                                                                                                                                                                                                       

-76-

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|      |  |                                                                                                                                                                                                                                                                                      
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.21 |  | Asset
  Purchase Agreement dated April 3, 2006 between Noma Company and Southwire
  Canada Company (incorporated by reference to the Registrants Form 8-K dated
  April 3, 2006, as filed with the Securities and Exchange Commission).                                             
|      |  |                                                                                                                                                                                                                                                                                      
|10.22 |  | First
  Amendment to First Lien Credit and Guaranty Agreement and Pledge and Security
  Agreement dated April 26, 2006 (incorporated by reference to the Registrants
  Form 8-K dated April 26, 2006, as filed with the Securities and Exchange
  Commission).                      
|      |  |                                                                                                                                                                                                                                                                                      
|10.23 |  | First Amendment
  to Second Lien Credit and Guaranty Agreement dated April 26, 2006
  (incorporated by reference to the Registrants Form 8-K dated April 26, 2006,
  as filed with the Securities and Exchange Commission).                                                         
|      |  |                                                                                                                                                                                                                                                                                      
|10.24 |  | Asset
  Purchase Agreement dated June 30, 2006 between Defiance, Inc., Precision
  Engine Products Corp. and Stanadyne Corporation (incorporated by reference to
  the Registrants Form 8-K dated June 30, 2006, as filed with the Securities
  and Exchange Commission).           
|      |  |                                                                                                                                                                                                                                                                                      
|10.25 |  | Second
  Amendment to First Lien Credit and Guaranty Agreement dated July 14, 2006
  (incorporated by reference to the Registrants Form 10-Q dated June 30, 2006,
  as filed with the Securities and Exchange Commission).                                                          
|      |  |                                                                                                                                                                                                                                                                                      
|10.26 |  | Second
  Amendment to Second Lien Credit and Guaranty Agreement dated July 14, 2006
  (incorporated by reference to the Registrants Form 10-Q dated June 30, 2006,
  as filed with the Securities and Exchange Commission).                                                         
|      |  |                                                                                                                                                                                                                                                                                      
|10.27 |  | Letter
  Agreement with James Imbriaco, dated July 27, 2006 (incorporated by reference
  to the Registrants Form 8-K dated August 4, 2006, as filed with the
  Securities and Exchange Commission).                                                                                 
|      |  |                                                                                                                                                                                                                                                                                      
|10.28 |  | Asset
  Purchase Agreement dated December 22, 2006 between Electrical Components
  International, Inc., Noma Holding Inc. and GenTek Inc. (incorporated by
  reference to the Registrants Form 8-K dated December 22, 2006, as filed with
  the Securities and Exchange Commission).
|      |  |                                                                                                                                                                                                                                                                                      
|10.29 |  | Third Amendment to First Lien Credit and Guaranty Agreement
        and Waiver dated March 19, 2007.                                                                                                                                                                                 
|      |  |                                                                                                                                                                                                                                                                                      
|21    |  | Subsidiaries
  of the Registrant.                                                                                                                                                                                                                                                    
|      |  |                                                                                                                                                                                                                                                                                      
|23    |  | Consent of
  Independent Registered Public Accounting Firm.                                                                                                                                                                                                                          
|      |  |                                                                                                                                                                                                                                                                                      
|31.1  |  | GenTek
  Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a)
  as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                       
|      |  |                                                                                                                                                                                                                                                                                      
|31.2  |  | Certification
  of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) as adopted
  pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                              
|      |  |                                                                                                                                                                                                                                                                                      
|32    |  | Certification
  of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C.
  Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of
  2002.                                                                                                 

-77-

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SIGNATURES

Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized, on the 20th day of
March, 2006.

| |             |                                                                               
| | ----------- | ------------------------------------------------------------------------------
| | GENTEK INC.
|
| | By:         | /s/ William
  E. Redmond, Jr.                                                 
| |             |                                                                               
| |             | Name: William E. Redmond, Jr.
  Title:   President and Chief Executive Officer

Pursuant
to the requirements of the Securities Exchange Act of 1934, this Registration
Statement has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

|                                            |  |                                              |  |               
|------------------------------------------- |  | -------------------------------------------- |  | --------------
|Signature                                   |  | Title                                        |  | Date          
|                                            |  |                                              |  |               
|                                            |  |                                              |  |               
|Principal
  executive officer:              |  |                                              |  |               
|                                            |  |                                              |  |               
|/s/ William
  E. Redmond, Jr.               |  | President
  and Chief Executive Officer      |  | March 20, 2007
|                                            |  |                                              |  |               
|William E.
  Redmond, Jr.                   |  |                                              |  |               
|                                            |  |                                              |  |               
|Principal financial and accounting officer: |  |                                              |  |               
|                                            |  |                                              |  |               
|/s/ Thomas
  B. Testa                       |  | Vice
  President and Chief Financial Officer |  | March 20, 2007
|                                            |  |                                              |  |               
|Thomas B.
  Testa                           |  |                                              |  |               
|                                            |  |                                              |  |               
|Directors:                                  |  |                                              |  |               
|                                            |  |                                              |  |               
|/s/ John G.
  Johnson, Jr.                  |  | Chairman and
  Director                      |  | March 20, 2007
|                                            |  |                                              |  |               
|John G.
  Johnson, Jr.                      |  |                                              |  |               
|                                            |  |                                              |  |               
|/s/ Henry L.
  Druker                       |  | Director                                     |  | March 20, 2007
|                                            |  |                                              |  |               
|Henry L.
  Druker                           |  |                                              |  |               
|                                            |  |                                              |  |               
|/s/ Kathleen
  R. Flaherty                  |  | Director                                     |  | March 20, 2007
|                                            |  |                                              |  |               
|Kathleen
  R. Flaherty                      |  |                                              |  |               
|                                            |  |                                              |  |               
|/s/ John F.
  McGovern                      |  | Director                                     |  | March 20, 2007
|                                            |  |                                              |  |               
|John F.
  McGovern                          |  |                                              |  |               
|                                            |  |                                              |  |               
|/s/ William
  E. Redmond, Jr.               |  | Director                                     |  | March 20, 2007
|                                            |  |                                              |  |               
|William E.
  Redmond, Jr.                   |  |                                              |  |               
|                                            |  |                                              |  |               
|                                            |  | Director                                     |  |               
|                                            |  |                                              |  |               
|Richard A.
  Rubin                          |  |                                              |  |               

-78-

---



GENTEK
INC.
INDEX TO FINANCIAL STATEMENT SCHEDULE

|                                                  |   
|------------------------------------------------- | --
|Schedule II
   Valuation and Qualifying Accounts | 80

Schedules
required by Article 12 of Regulation S-X, other than those listed above, are
omitted because of the absence of the conditions under which they are required
or because the required information is included in the consolidated financial
statements or notes thereto.

-79-

---



GENTEK
INC.Valuation and Qualifying Accounts

|                                                               |  |                                |       |                             |   |                           |  |        |        |                           |   |      |   |   |       | 
|-------------------------------------------------------------- |  | ------------------------------ | ----- | --------------------------- | - | ------------------------- |  | ------ | ------ | ------------------------- | - | ---- | - | - | ----- | 
|                                                               |  | Balance atBeginning
  ofPeriod |       | AdditionsChargedTo
  Income |   | DeductionsFrom
  Reserves |  | Other* |        | Balance atEnd of
  Period |  
|                                                               |  |                                |       |                             |   |                           |  |        |        |                           |  
|                                                               |  | (In
  thousands)               |      
|Year ended December 31, 2006
  Allowance for doubtful accounts |  | $                              | 4,048 |                             | $ | 412                       |  | $      | (692   | )                         | $ | 685  |   | $ | 4,453 | 
|Year ended December 31, 2005
  Allowance for doubtful accounts |  | $                              | 6,109 |                             | $ | 720                       |  | $      | (2,505 | )                         | $ | (276 | ) | $ | 4,048 | 
|Year ended December 31, 2004
  Allowance for doubtful accounts |  | $                              | 6,550 |                             | $ | 1,244                     |  | $      | (1,829 | )                         | $ | 144  |   | $ | 6,109 | 

|  |                                              
|- | ---------------------------------------------
|* | Primarily
  foreign exchange and acquisitions

-80-

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