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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, 2008            | 
|                                   | 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 o          No
x

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 o          No
x

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 x          No
o

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, a non-accelerated filer, or a smaller reporting company (as
defined in Rule 12b-2 of the Act). 
Large Accelerated Filer o          Accelerated
Filerx          Non-accelerated
Filero          Smaller
reporting Company o

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

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
June 30, 2008 was $250,355,984.

The
number of outstanding shares of the Registrants Common Stock as of February
27, 2009 was 10,137,189.

Documents Incorporated by Reference:


Portions
of the Registrants definitive Proxy Statement for the Annual Meeting of
Stockholders to be held on May 14, 2009, 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 has no
independent operations and, therefore, is dependent upon cash flow from its
subsidiaries to meet its obligations. GenTeks subsidiaries operate through two
primary business segments: valve actuation systems and performance chemicals.
The valve actuation systems segment provides precision engineered valve
actuation systems and components for gasoline and diesel engines. The
performance chemicals segment provides value-added chemical products to four
principal markets: water treatment, chemical processing, pharmaceutical and
food additives, 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.

Acquisitions

On
December 31, 2007, the Company acquired Bay Chemical and Supply Company. The
acquisition included the manufacturing facility in Odem, Texas. Bay Chemical
and Supply Company produces and distributes aluminum sulfate and other water
treatment chemicals for the south Texas municipal water treatment market. The
purchase price was $7 million.

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.

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.

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Divestitures

On
February 29, 2008, the Company completed the sale of its Reheis antiperspirant
actives product line to Summit Research Labs, Inc. As part of this transaction,
    the Company continued to operate the antiperspirant actives manufacturing
    unit through September 30, 2008 under a transition services contract. This
    business continues to be classified as continuing operations.

On
November 14, 2008, the Company completed the sale of its wire and cable manufacturing
business in Mineral Wells, TX. On July 17, 2007, the Company completed the sale
of its wholly-owned subsidiary, Defiance Testing and Engineering Services, Inc.
On February 16, 2007, the Company completed the sale of its Noma wire and cable
harness assembly business. During April 2006, the Company completed the sale of
its cable and wire manufacturing business in Stouffville, Canada. Accordingly,
all financial information included herein has been reclassified to reflect
these businesses as discontinued operations.

Products and Services by Segment

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

|                         |  |                          |       |      |   |       |  |   |       | 
|------------------------ |  | ------------------------ | ----- | ---- | - | ----- |  | - | ----- | 
|                         |  | Years Ended December 31, |      
|                         |  |                          |      
|                         |  | 2008                     |       | 2007 |   | 2006  | 
|                         |  |                          |       |      |   |       | 
|                         |  | (In millions)            |      
|Valve
 actuation systems |  | $                        | 115.4 |      | $ | 152.1 |  | $ | 146.1 | 
|Performance
 chemicals   |  |                          | 482.2 |      |   | 396.7 |  |   | 373.3 | 
|Corporate
 and other     |  |                          | 10.5  |      |   | 11.5  |  |   | 12.1  | 
|                         |  |                          |       |      |   |       |  |   |       | 
|Consolidated             |  | $                        | 608.0 |      | $ | 560.3 |  | $ | 531.6 | 
|                         |  |                          |       |      |   |       |  |   |       | 

Valve Actuation Systems Segment

The
valve actuations systems segment provides precision engineered valve actuation
systems and components for gasoline and diesel engines used in automotive and
light trucks as well as a range of heavy duty and commercial applications. The
Companys product offering includes complete valve actuation sub-assemblies
as well as components such as 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.

The
Companys precision-engineered stamped and machined engine components for valve
actuation systems improve engine efficiency by reducing engine friction and
component mass. These components are used both in traditional overhead valve
and in 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 actuation system production is sold to U.S. automobile engine
manufacturers and their Tier 1 suppliers.

Automotive
and heavy duty/commercial 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, the continuing economic downturn in the automotive and the heavy
duty/commercial industry as a whole, or other events (e.g., labor disruptions)
resulting in

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significantly
reduced operations of Chrysler or Ford could have a material adverse impact on
the results of the Companys valve actuation systems segment. Neither of these
customers accounted for 10 percent or more of the Companys revenues in 2008.

Performance Chemicals Segment

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

Water
Treatment.With a network of 38 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 flocculants
(polymer-based materials used for settling and/or separating solids from
liquids), and sodium nitrite. The Companys water treatment products are
designed to address 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 used in the
manufacture of fertilizers, synthetic fibers, petroleum and paper, as well as
many other products. In addition, the Company provides sulfuric acid regeneration
services to the refining industry, 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.

Pharmaceutical
and Food Additives. The Company supplies ingredients
used in prescription pharmaceuticals, nutritional supplements, veterinary
health products and food additive applications.

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.

Corporate and Other

The
corporate and other segment provides fluid handling equipment sold primarily
for automotive service applications.

Competition

Competition in
the valve actuation systems segments markets is based upon a number of factors
including design and engineering capabilities, quality, price and the ability
to meet customer delivery

-3-

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requirements.
The Company competes with, among others, Delphi, Eaton, INA, Timken, Mahle, and
captive OEMs.

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 water treatment, the Company competes with
Geo Specialty Chemicals, Kemira Water Solutions, U.S. Aluminates and other
regional players. 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 the pharmaceutical and food additives market, the Companys
major competitors include K+S Kali GmbH, and Brenntag Biosector. Competitors in
the technology market include KMG Chemicals, Honeywell Electronic Materials and
Mallinckrodt-Baker.

Suppliers; Availability of Raw Materials

The
Company purchases a variety of raw materials for its businesses. The primary
raw material used by the valve actuation systems segment is 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. Major raw material purchases
include 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), sulfur (for the manufacture of sulfuric acid), muriate of
potash (for the manufacture of potassium chloride), ammonia (for the
manufacture of sodium nitrite), iron ore (for the manufacture of ferric
sulfate) 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 purchases 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. In the valve actuation systems segment, the Company has been successful
in passing steel cost increases, in a similar fashion, to its automotive market
customers. 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.

Sales and Distribution

The
Companys valve actuation systems segment has approximately 35 sales,
marketing, engineering and customer service personnel. Generally, the Company
markets its products directly to its customers, but in certain markets a
distribution network is used. The valve actuation systems 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
66 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.

-4-

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Seasonality; Backlog

The
business of the valve actuation systems 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 2008 approximated $8
million (of which approximately $2 million represented capital expenditures and
approximately $6 million related to ongoing operations and the management of
potential environmental contamination from prior operations). Expenditures for
2007 approximated $13 million (of which approximately $4 million represented
capital expenditures and approximately $9 million related to ongoing operations
and the management of potential environmental contamination from prior
operations). The Company expects expenditures similar to 2008 levels in 2009.
In addition, if environmental laws and regulations affecting 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 a
third-party site. The Company does not believe that its liability, if any, for
this site will be material to its results of operations, cash flows or
financial condition.

-5-

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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.

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 eight years, 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 in 2002, 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, 2008, the Company had approximately 1,110 employees, of whom
approximately 460 were full-time salaried employees, approximately 370 were
full-time hourly employees (represented by 6 different unions) and
approximately 280 were hourly employees working in nonunion facilities.

The
Companys union contracts have durations which vary from three 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.

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William
E. Redmond, Jr., 49, President and Chief Executive Officer of the Company since
May, 2005 and a Director of the Company since November 2003. Mr. Redmond is also a Director of Eddie Bauer
Inc. From 1996 until 2003, Mr. Redmond held the position of Chairman,
President and Chief Executive Officer of Garden Way Incorporated.

Douglas
J. Grierson, 44, Vice President and Controller since April 2005. Mr. Grierson
served as Director of Accounting and Assistant Controller from June 1999 to
April 2005.

James
Imbriaco, 56, 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, 51, 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, 46, 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 business
group from January 2000 to July 2005.

Thomas
B. Testa, 47, Vice President and Chief Financial Officer since September 2006.
Mr. Testa served as Vice President and General Manager  Performance Chemicals
Group from August 2004 to September 2006. 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. We will also furnish a paper copy of such
filings free of charge upon request. 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.

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|         |              
|-------- | -------------
|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

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 $16
million to $18 million in 2009, including approximately $3 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 in excess of its current
 financing may be limited.                                                                                                                                                                      

Disruptions
in the financial markets are adversely impacting the availability and cost of
credit which could negatively affect the Company.

Lending
institutions have suffered and may continue to suffer losses due to their
lending and other financial relationships, especially because of the general
weakening of the global economy. As a result, changes in the financial markets
may impact the Companys ability to obtain financing on commercially reasonable
terms and in adequate amounts, if at all. The Company can provide no assurance

-8-

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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.

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:

| |   |                                                                                      
| | - | -------------------------------------------------------------------------------------
| |  | incur
 additional debt;                                                              
| |   |                                                                                      
| |  | create or
 incur liens;                                                              
| |   |                                                                                      
| |  | pay
 dividends or make other equity distributions to the Companys shareholders;     
| |   |                                                                                      
| |  | make
 investments;                                                                   
| |   |                                                                                      
| |  | sell assets;                                                                         
| |   |                                                                                      
| |  | issue or
 sell share capital of certain subsidiaries;                                
| |   |                                                                                      
| |  | engage in
 transactions with affiliates;                                             
| |   |                                                                                      
| |  | issue or
 become liable on a guarantee;                                              
| |   |                                                                                      
| |  | 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 were 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 a maximum
leverage ratio of 3.5, a minimum interest coverage ratio of 3.00, and a maximum
amount of capital expenditures of $48 million in 2009.

The
covenants governing 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, certain non-recurring cash inflows such as proceeds from
asset sales, insurance recoveries, and equity offerings may have to be

-9-

---



used to pay
down indebtedness and may not be reborrowed. These prepayment provisions may
limit the Companys ability to utilize this cash flow to pursue business
opportunities.

The Companys
business is capital intensive. The Company 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
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 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
valve actuation systems 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 valve actuation systems segments markets is
based on a number of factors, including design and engineering capabilities,
price, quality and the ability

-10-

---



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. 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.

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

An
economic downturn in the areas in which the Company sells its products has and
could continue to reduce demand for these products and result in a decrease in
sales volume that could have a negative impact on the Companys results of
operations. Volatility and disruption of financial markets could limit
customers ability to obtain adequate financing to maintain operations and
result in a decrease in sales volume that could have a negative impact on the
Companys results of operations. In addition, these conditions may negatively
impact the Companys suppliers. This may make it difficult for the Company to
obtain necessary raw materials from its suppliers or in order to obtain them,
the Company may incur greater cost and this may negatively impact 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.

-11-

---



A
significant portion of the Companys revenue and operating results from its
valve actuation systems segment has been, and is expected to continue to be,
dependent on the automotive industry and concentrated in a small number of
customers.

The
Company derives and is expected to continue to derive significant portions of
its revenues and operating results in its valve actuation systems segment from
sales of products to the automotive industry and specifically to Ford and
Chrysler. Both of these customers have experienced declining market shares and
are burdened with significant structural costs that have affected their
profitability and may ultimately result in severe financial difficulty, including
possible bankruptcy. As a result, the loss of, or reduced demand from these
customers could cause us to incur significant write-offs of accounts
receivable, require additional restructuring actions beyond those already taken
and adversely effect the Companys revenues and operating income.

Material changes in
pension and other postretirement 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 the Company.

The Company
maintains several defined benefit pension plans covering certain employees in
Canada and the United States. It records pension and postretirement 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
postretirement 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. 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 2010 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.

-12-

---



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 the Company 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.

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
the Companys 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

-13-

---



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.

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 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 that have been completed.

The
Company has 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.

-14-

---



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, and announcements
of technological innovations that impact its products, customers, competitors
or markets. Other factors include, changes in financial estimates by securities
analysts, business conditions in its markets and the general state of the
securities markets and the market 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. As of December 31,
2008, the Company had approximately 10 million shares of common stock
outstanding. 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 C warrants could create substantial dilution, or there may be
other events which could have a dilutive effect on its common stock.

The
Company currently has options and warrants outstanding covering the purchase of
approximately 1 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.

-15-

---



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

| |                                  |  |                                 
| | -------------------------------- |  | --------------------------------
| | Location                         |  | Use                             
| |                                  |  |                                 
| | Valve Actuation Systems Segment  |  |                                 
| | Tallahassee,
 Florida            |  | Production
 Facility            
| | Westland,
 Michigan(1)           |  | R&D
 Center and Offices         
| | Toledo, Ohio                     |  | Production
 Facility            
| | Defiance,
 Ohio(2)               |  | Production
 Facility            
| | Curitiba,
 Brazil(1)             |  | 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            
| | East St.
 Louis, Illinois        |  | Production
 Facility            
| | Berkeley
 Heights, New Jersey(2) |  | Production
 Facility            
| | Solvay, New
 York                |  | Production
 Facility            
| | Celina,
 Texas                   |  | Production
 Facility            
| | Midlothian,
 Texas               |  | Production
 Facility            
| | Odem, Texas                      |  | Production
 Facility            
| | Anacortes,
 Washington           |  | Production
 Facility            
| | Thorold,
 Ontario                |  | Production
 Facility            
| | Valleyfield,
 Quebec             |  | Production
 Facility            
| |                                  |  |                                 
| | Corporate and Other              |  |                                 
| | Weaverville,
 North Carolina(2)  |  | Production
 Facility and 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 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.

|        |                                                      
|------- | -----------------------------------------------------
|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 2008.

-16-

---



PART II

|        |                                                                                                               
|------- | --------------------------------------------------------------------------------------------------------------
|Item 5. | Market for Registrants Common Equity,
 Related Stockholder Matters and Issuer Purchases of Equity Securities.

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 |  
|                |  |      |       |     |  
|2008            |  |      |       |     |   |       | 
|First
 Quarter  |  | $    | 30.08 |     | $ | 25.62 | 
|Second
 Quarter |  | $    | 33.15 |     | $ | 26.89 | 
|Third
 Quarter  |  | $    | 29.56 |     | $ | 25.71 | 
|Fourth Quarter  |  | $    | 25.56 |     | $ | 14.35 | 
|                |  |      |       |     |   |       | 
|2007            |  |      |       |     |   |       | 
|First
 Quarter  |  | $    | 38.00 |     | $ | 31.25 | 
|Second
 Quarter |  | $    | 36.39 |     | $ | 32.76 | 
|Third
 Quarter  |  | $    | 36.53 |     | $ | 28.14 | 
|Fourth
 Quarter |  | $    | 36.09 |     | $ | 27.96 | 

As
of March 4, 2009, there were 2,850 stockholders of record of the Companys
common stock.

Dividends

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.

-17-

---



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 Amended and
Restated 2003 Management and Directors Incentive Plan as of December 31, 2008.

|                                                            |  |                                      |                                                                                                      |         |  |  |                                                                                     |   |       | 
|----------------------------------------------------------- |  | ------------------------------------ | ---------------------------------------------------------------------------------------------------- | ------- |  |  | ----------------------------------------------------------------------------------- | - | ----- | 
|                                                            |  | 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) |   |       | 
|                                                            |  |                                      |                                                                                                      |         |  |  |                                                                                     |   |       | 
|Equity compensation plans approved by security
 holders     |  |                                      |                                                                                                      | 413,430 |  |  |                                                                                     | $ | 21.50 | 
|Equity compensation plans not approved by security
 holders |  |                                      |                                                                                                      | 0       |  |  |                                                                                     |   | N/A   | 
|                                                            |  |                                      |                                                                                                      |         |  |  |                                                                                     |   |       | 
|Total                                                       |  |                                      |                                                                                                      | 413,430 |  |  |                                                                                     | $ | 21.50 | 
|                                                            |  |                                      |                                                                                                      |         |  |  |                                                                                     |   |       | 

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 of 1933, as amended, or Securities Act, or the Securities
Exchange Act of 1934, as amended, or Exchange Act, and shall not be deemed to
be soliciting material or to be filed under the Securities Act or the Exchange
Act.

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 December 31, 2003 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.

-18-

---



(LINE GRAPH)

|                                  |  |            |  |            |        |            |  |            |  |            |        |            |  |        |  |  |        |  | 
|--------------------------------- |  | ---------- |  | ---------- | ------ | ---------- |  | ---------- |  | ---------- | ------ | ---------- |  | ------ |  |  | ------ |  | 
|Indexed
 Performance              |  |            |  |            |        |            |  |            |  |            |        |            | 
|                                  |  |            |  |            |        |            |  |            |  |            |        |            | 
|                                  |  | 12/31/2003 |  | 12/31/2004 |        | 12/31/2005 |  | 12/31/2006 |  | 12/31/2007 |        | 12/31/2008 | 
|                                  |  |            |  |            |        |            |  |            |  |            |        |            | 
|GenTek (GETI)                     |  | 100.00     |  |            | 147.44 |            |  | 160.39     |  |            | 310.29 |            |  | 262.56 |  |  | 135.00 |  | 
|Russell 2000 Index                |  | 100.00     |  |            | 118.33 |            |  | 123.72     |  |            | 146.44 |            |  | 144.15 |  |  | 95.44  |  | 
|S&P MidCap Auto
 Components Index |  | 100.00     |  |            | 102.99 |            |  | 86.64      |  |            | 82.95  |            |  | 98.02  |  |  | 36.55  |  | 
|S&P SmallCap Chemicals
 Index     |  | 100.00     |  |            | 126.00 |            |  | 101.66     |  |            | 126.80 |            |  | 119.71 |  |  | 69.00  |  | 

Issuer Purchases of Equity Securities

|                     |  |                                          |         |                                     |   |                                                                                    |  |                                                                                           |         |  |   |            | 
|-------------------- |  | ---------------------------------------- | ------- | ----------------------------------- | - | ---------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------- | ------- |  | - | ---------- | 
|                     |  | (a)
 Total
 Number of
 Shares
 Purchased |         | (b)
 Average
 Price Paid per
 Share |   | (c)
 Total
 Number of
 Shares
 Purchased as
 Part of
 Publicly
 Announced
 Program |  | (d)
 Approximate
 Dollar Value
 Of Shares
 That May Yet
 Be Purchased
 Under the
 Program |        
|                     |  |                                          |         |                                     |   |                                                                                    |  |                                                                                           |        
|October
 1-31, 2008  |  |                                          | 132,800 |                                     | $ | 23.20                                                                              |  |                                                                                           | 132,800 |  | $ | 13,226,467 | 
|November
 1-30, 2008 |  |                                          | 17,150  |                                     |   | 18.25                                                                              |  |                                                                                           | 17,150  |  |   | 12,913,480 | 
|December
 1-31, 2008 |  |                                          | 142,560 |                                     |   | 14.45                                                                              |  |                                                                                           | 142,560 |  |   | 10,853,488 | 
|                     |  |                                          |         |                                     |   |                                                                                    |  |                                                                                           |         |  |   |            | 
|Total                |  |                                          | 292,510 |                                     | $ | 18.64                                                                              |  |                                                                                           | 292,510 |  |   |            | 
|                     |  |                                          |         |                                     |   |                                                                                    |  |                                                                                           |         |  |   |            | 

On
August 7, 2007, the Company announced a stock repurchase program pursuant to
which the Company may purchase in the aggregate up to $30 million of its common
stock. The program expires on August 7, 2010.

-19-

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|        |                         
|------- | ------------------------
|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.

|                                                   |  |                                        |          |      |   |         |   |      |         |      |   |         |   |   |         | 
|-------------------------------------------------- |  | -------------------------------------- | -------- | ---- | - | ------- | - | ---- | ------- | ---- | - | ------- | - | - | ------- | 
|                                                   |  | Years
 Ended December 31,              |         
|                                                   |  |                                        |         
|                                                   |  |                                        |          |      |   |         |   |      |         |      |  
|                                                   |  | 2008                                   |          | 2007 |   | 2006    |   | 2005 |         | 2004 |  
|                                                   |  |                                        |          |      |   |         |   |      |         |      |  
|                                                   |  | (In
 thousands, except per share data) |         
|                                                   |  |                                        |          |      |   |         |   |      |         |      |   |         |   |   |         | 
|Statement of Operations Data:                      |  |                                        |          |      |   |         |   |      |         |      |   |         |   |   |         | 
|Net revenues                                       |  | $                                      | 608,039  |      | $ | 560,267 |   | $    | 531,599 |      | $ | 488,588 |   | $ | 470,111 | 
|Restructuring and impairment charges               |  |                                        | 158,941  |      |   | 4,964   |   |      | 2,974   |      |   | 6,989   |   |   | 8,934   | 
|Operating profit (loss)                            |  |                                        | (104,947 | )    |   | 60,382  |   |      | 48,610  |      |   | 35,445  |   |   | 29,182  | 
|Interest expense                                   |  |                                        | 12,803   |      |   | 22,685  |   |      | 29,137  |      |   | 24,733  |   |   | 7,930   | 
|Income (loss) from continuing operations           |  |                                        | (110,065 | )    |   | 37,037  |   |      | 12,339  |      |   | 6,920   |   |   | 14,745  | 
|Income (loss) from discontinued operations         |  |                                        | 1,035    |      |   | (7,270  | ) |      | (14,442 | )    |   | (7,742  | ) |   | 180,573 | 
|Net income (loss)                                  |  | $                                      | (109,030 | )    | $ | 29,767  |   | $    | (2,103  | )    | $ | (822    | ) | $ | 195,318 | 
|                                                   |  |                                        |          |      |   |         |   |      |         |      |   |         |   |   |         | 
|Per Share:                                         |  |                                        |          |      |   |         |   |      |         |      |   |         |   |   |         | 
|Income (loss) from continuing operationsbasic     |  | $                                      | (10.93   | )    | $ | 3.59    |   | $    | 1.21    |      | $ | 0.69    |   | $ | 1.47    | 
|Income (loss) from continuing operationsdiluted   |  |                                        | (10.93   | )    |   | 3.20    |   |      | 1.12    |      |   | 0.68    |   |   | 1.47    | 
|Income (loss) from discontinued operationsbasic   |  |                                        | 0.10     |      |   | (0.70   | ) |      | (1.42   | )    |   | (0.77   | ) |   | 18.06   | 
|Income (loss) from discontinued operationsdiluted |  |                                        | 0.10     |      |   | (0.63   | ) |      | (1.32   | )    |   | (0.77   | ) |   | 18.01   | 
|Net income (loss)basic                            |  |                                        | (10.83   | )    |   | 2.89    |   |      | (0.21   | )    |   | (0.08   | ) |   | 19.53   | 
|Net income (loss)diluted                          |  |                                        | (10.83   | )    |   | 2.57    |   |      | (0.19   | )    |   | (0.08   | ) |   | 19.48   | 
|Dividends(1)                                       |  |                                        |         |      |   |        |   |      |        |      |   | 31.00   |   |   | 7.00    | 
|                                                   |  |                                        |          |      |   |         |   |      |         |      |   |         |   |   |         | 
|Balance Sheet Data (at end of period):             |  |                                        |          |      |   |         |   |      |         |      |   |         |   |   |         | 
|Total assets                                       |  | $                                      | 425,312  |      | $ | 613,979 |   | $    | 730,206 |      | $ | 761,075 |   | $ | 755,519 | 
|Long-term debt (including current portion)         |  |                                        | 213,388  |      |   | 239,869 |   |      | 345,013 |      |   | 359,958 |   |   | 11,458  | 
|Total equity (deficit)                             |  |                                        | (21,639  | )    |   | 145,609 |   |      | 98,479  |      |   | 85,375  |   |   | 400,427 | 

| |     |                                                                                                       
| | --- | ------------------------------------------------------------------------------------------------------
| |    
| |     |                                                                                                       
| | (1) | During 2005 and 2004, the
 Company paid special dividends of $31.00 and $7.00 per share, respectively.

-20-

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|        |                                                                                        
|------- | ---------------------------------------------------------------------------------------
|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 Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. 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 Item 1A.  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
December 31, 2007, the Company acquired Bay Chemical and Supply Company. The
acquisition included the manufacturing facility in Odem, Texas. Bay Chemical
and Supply Company produces and distributes aluminum sulfate and other water
treatment chemicals for the south Texas municipal water treatment market. The
purchase price was $7 million.

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.

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.

-21-

---



Divestitures

On
February 29, 2008, the Company completed the sale of its Reheis antiperspirant
actives product line to Summit Research Labs, Inc. As part of this transaction,
    the Company continued to operate the antiperspirant actives manufacturing
    unit through September 30, 2008 under a transition services contract. This
    business continues to be classified as continuing operations.

On
November 14, 2008, the Company completed the sale of its wire and cable
manufacturing business in Mineral Wells, TX. On July 17, 2007, the Company
completed the sale of its wholly-owned subsidiary Defiance Testing and
Engineering Services, Inc. On February 16, 2007, the Company completed the sale
of its Noma wire and cable harness assembly business. During April 2006, the
Company completed the sale of its cable and wire manufacturing business in Stouffville,
Canada. Accordingly, all financial information included herein has been
reclassified to reflect these businesses as discontinued operations.

Overview

The
Company is a holding company whose subsidiaries manufacture industrial
components and performance chemicals. GenTek has no independent operations and,
therefore, is dependent upon cash flow from its subsidiaries to meet its
obligations. It operates through two primary business segments: valve actuation
systems 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.

Valve Actuation Systems

The
valve actuation systems segment provides precision engineered valve actuation
systems and components for gasoline and diesel engines. 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. The Company expects
that revenues for 2009 will continue to decline due to reduced demand in both
the automotive and heavy duty/commercial markets. In response to competitive
pressures within the automotive market, the valve actuation systems segment has
taken aggressive action to improve its cost position. The Company has closed
certain facilities, reduced headcount and other operating expenses, and
expanded production in its lower cost, non-union facility in Tallahassee, FL.

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

-22-

---



Profitability
in the Companys valve actuation systems 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 to four principal markets: water treatment, chemical processing,
pharmaceutical and food additives, and technology. In the water treatment
market its revenues are primarily derived from the sale of water treatment
chemicals to large municipal treatment facilities and pulp and paper
operations. Sales to the water treatment market, which accounts for
approximately 56 percent of the performance chemicals segments revenues, have
increased approximately 34 percent over the last year. This increase is
principally due to price increases as well as the impact of the acquisitions
made over the course of the last two years. The Company anticipates that sales
to the water treatment market will continue to grow in 2009 primarily due to
the full year impact of price increases implemented in 2008. 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. Sales to the chemical processing market, which account for
approximately 22 percent of the performance chemicals segments revenues, have
increased by approximately 50 percent over the last year. This increase is
primarily due to increased prices driven by the pass-through of higher raw
material costs. The Company anticipates that sales to the chemical processing
market will decline in 2009 driven by reduced selling prices. In the
pharmaceutical and food additives market, GenTeks revenues are driven by sales
of high purity potassium chloride to manufacturers of pharmaceutical and food
additives. Sales to the pharmaceutical and food additives market, which account
for approximately 10 percent of the performance chemicals segments revenue,
decreased by approximately 35 percent over the last year. The reduction was due
to the sale of the Reheis antiperspirant actives product line. The Company
anticipates that sales into the pharmaceutical and food additives market will
continue to decline in 2009 driven by the full year impact of the sale of the
Reheis antiperspirant actives product line. In the technology market, GenTeks
revenues are derived primarily from the sale of high purity chemicals to
producers of semiconductor devices. Sales to the technology market, which
account for approximately 12 percent of the performance chemicals segments
revenues, have increased 14 percent over the last year. This increase was
primarily due to increased prices driven by the pass-through of higher raw
material costs. The Company anticipates that sales into this market will decrease
as a result of reduced customer demand driven by current economic conditions.
Operating efficiency and price improvements offsetting raw material and other
cost increases are expected to maintain the performance chemicals segments
profitability in 2009.

Profitability
in its performance chemicals segment can be influenced by a number of factors,
including: competitive market conditions; the volume and consistency of
production levels at its customers consuming locations, production levels at its
individual manufacturing facilities; the prices it pays for its key raw
materials, including sulfur, sulfuric acid, bauxite, aluminum tri-hydrate and
muriate of potash; and transportation costs.

-23-

---



Corporate and Other

The
corporate and other segment provides fluid handling equipment sold primarily
for automotive service applications. Sales to the fluid handling market
decreased by approximately 9 percent over the last year. The Company expects
fluid handling equipment sales in 2009 to continue to decline driven by general
North American economic conditions and the associated impact on customer
demand.

Profitability
in the corporate and other segment can be influenced by a number of factors:
production levels at its manufacturing facility, as well as the volume and
consistency of investment in new equipment installations at its customers
facilities; demands from its customers to reduce the prices of its products;
the prices it pays for key raw materials and transportation costs.

Results of Operations

The
following table sets forth certain line items from the Companys Consolidated
Statements of Operations for the three years ended December 31, 2008 and the
corresponding percentage of net revenues for the relevant periods presented as
a percentage of revenue for the periods indicated.

|                                                    |  |                          |        |      |  |      |    |   |       |   |  |     |   |   |       |   |  |     |  
|--------------------------------------------------- |  | ------------------------ | ------ | ---- |  | ---- | -- | - | ----- | - |  | --- | - | - | ----- | - |  | --- | -
|                                                    |  | Years Ended December 31, |       
|                                                    |  |                          |       
|                                                    |  | 2008                     |        | 2007 |  | 2006 |   
|                                                    |  |                          |        |      |  |      |   
|                                                    |  | (In millions)            |       
|Net revenues                                        |  | $                        | 608.0  |      |  | 100  | %  | $ | 560.3 |   |  | 100 | % | $ | 531.6 |   |  | 100 | %
|Cost of sales                                       |  |                          | 501.5  |      |  | 82   |    |   | 457.1 |   |  | 82  |   |   | 430.7 |   |  | 81  |  
|Selling, general and administrative expense         |  |                          | 50.8   |      |  | 8    |    |   | 51.1  |   |  | 9   |   |   | 49.5  |   |  | 9   |  
|Net (gain) loss on disposition of long-term
 assets |  |                          | 1.8    |      |  |     |    |   | (10.0 | ) |  | (2  | ) |   | 0.5   |   |  |    |  
|Restructuring and impairment charges                |  |                          | 158.9  |      |  | 26   |    |   | 5.0   |   |  | 1   |   |   | 3.0   |   |  | 1   |  
|Pension curtailment and settlement (gains)
 losses  |  |                          |       |      |  |     |    |   | (3.3  | ) |  | (1  | ) |   | (0.6  | ) |  |    |  
|                                                    |  |                          |        |      |  |      |    |   |       |   |  |     |   |   |       |   |  |     |  
|Operating profit (loss)                             |  |                          | (104.9 | )    |  | (17  | )  |   | 60.4  |   |  | 11  |   |   | 48.6  |   |  | 9   |  
|Interest expense                                    |  |                          | 12.8   |      |  | 2    |    |   | 22.7  |   |  | 4   |   |   | 29.1  |   |  | 5   |  
|Interest income                                     |  |                          | 0.2    |      |  |     |    |   | 0.6   |   |  |    |   |   | 0.6   |   |  |    |  
|Other (income) expense, net                         |  |                          | 1.0    |      |  |     |    |   | (0.9  | ) |  |    |   |   | 0.3   |   |  |    |  
|Income tax provision (benefit)                      |  |                          | (8.4   | )    |  | (1   | )  |   | 2.2   |   |  |    |   |   | 7.4   |   |  | 1   |  
|                                                    |  |                          |        |      |  |      |    |   |       |   |  |     |   |   |       |   |  |     |  
|Income (loss) from continuing
operations            |  | $                        | (110.1 | )    |  | (18  | )% | $ | 37.0  |   |  | 7   | % | $ | 12.3  |   |  | 2   | %
|                                                    |  |                          |        |      |  |      |    |   |       |   |  |     |   |   |       |   |  |     |  

2008 Compared with
2007

Net
revenues were $608 million for the year 2008 compared with $560 million for the
prior year. The increase was due to higher sales of $85 million in the
performance chemicals segment partly offset by reduced sales of $37 million in
the valve actuation systems segment and $1 million in the corporate and other
segment. The
increase in the performance chemicals segment is due primarily to broad based
strength across all markets resulting from the impact of the acquisitions made
in the water treatment market in 2007 coupled with higher average selling
prices necessary to offset increased raw material costs, partly offset by the
sale of the Reheis antiperspirant actives product line. The reduced sales in
the valve actuation systems segment was the result of lower volumes resulting
from reduced demand across the entire customer base. Lower sales in the
corporate and other segment were the result of reduced volumes in the fluid
handling equipment market.

-24-

---



Gross
profit (net revenues less cost of sales) was $107 million for the year 2008
compared with $103 million for the prior year. The increase in gross profit was
the result of higher gross profit of $14 million in the performance chemicals
segment partly offset by lower gross profit of $10 million in the valve
actuation systems segment. The improvement in the performance chemicals segment
was the result of price increases which more than offset higher raw material
costs combined with the full year impact of the acquisitions made in the water
treatment market in 2007, partly offset by a reduction resulting from the sale
of the Reheis antiperspirant actives product line. The shortfall in the valve actuation
systems segment was due primarily to reduced sales volumes and higher material
costs.

Net
loss on disposition of long-term assets for the year 2008 was $2 million as
compared to a net gain on disposition of long-term assets of $10 million in the
prior year. The loss on disposition of long-term assets in 2008 was the result
of the sale of the Companys Reheis antiperspirant actives product line on
February 29, 2008. The gain in 2007 was the result of the sale of surplus real
estate.

Selling,
general and administrative expense was $51 million for the year 2008 which was
flat with the prior year.

Restructuring
and impairment charges were $159 million for the year 2008 as compared with
charges of $5 million for the prior year. During 2008, the Company recorded
impairment charges of $157 million related to the goodwill and intangible
assets within the valve actuation systems segment. Upon conducting its annual
test of goodwill impairment, the Company determined that the carrying value,
including goodwill, of the valve actuation systems segment exceeded its fair
value. In addition, driven by the continued downturn in the business the
Company performed a recoverability test for the long-lived assets of the valve
actuation systems segment. As a result of this
testing the Company has recorded an impairment charge of $123 million to reduce
the goodwill balance to $0 and an impairment charge of $22 million against
certain intangible assets. Finally, the Company has made a decision to cease
using certain trademarks in the valve actuation systems business and has
recorded a corresponding charge of $12 million to write-down the value of these
trademarks to $0.

Operating
loss was $105 million for the year 2008 as compared with an operating profit of
$60 million for the prior year. The unfavorable operating performance was the
result of the restructuring and impairment charge recorded in 2008 combined
with the gains from disposition of long-term assets and pension curtailments in
2007 partly offset by the improved gross profit as compared to 2007.

Interest
expense was $13 million for the year 2008 as compared to $23 million for the
prior year. The reduction in interest expense was the result of lower average
principal balances and lower interest rates during 2008 as compared to the
prior year. In addition, 2008 interest expense benefitted from a $4 million net
gain on debt repurchases.

Income
tax benefit for the year 2008 was $8 million as compared to income tax expense
of $2 million for the year 2007. Income tax benefit for the year 2008 was
reduced by $49 million due to the non-deductible goodwill write-down included
in the operating loss.

Income
from discontinued operations was $1 million for the year 2008 as compared to a
loss from discontinued operations of $7 million in 2007.

2007 Compared with
2006

Net
revenues were $560 million for the year 2007 compared with $532 million for the
prior year. This increase was due to higher sales of $23 million in the
performance chemicals segment and $6 million

-25-

---



in the valve
actuation systems segment partly offset by reduced sales of $1 million in the
corporate and other segment. The increase in the performance chemicals segment
was due to increased sales into the water treatment market driven in part by
the impact of the acquisitions of GAC, Repauno and Chalum. The increase in the
valve actuation systems segment was primarily the result of the full year
impact of the acquisition of Precision Engine Products. Lower sales in the
corporate and other segment were due to reduced sales into the fluid handling
market.

Gross
profit was $103 million for the year 2007 compared with $101 million for the
prior year. Gross profit performance was the result of increased gross profit
of $15 million in the performance chemicals segment partly offset by reduced
gross profit in the valve actuation systems segment of $12 million. The
increase in the performance chemicals segment gross profit was driven by the
strong revenue performance primarily in the water treatment market resulting
from the impact of the acquisitions combined with increased prices and higher
volumes which more than offset the impact of increased raw material costs. The
decrease in gross profit in the valve actuation systems segment was principally
due to unfavorable product mix and increased cost related to operational
issues.

Net
gains on disposition of long-term assets of $10 million for the year 2007 were
the result of the sale of surplus real estate in the performance chemicals
segment located in Denver, CO, El Segundo, CA, and Atlanta, GA.

Selling,
general and administrative expense was $51 million for the year 2007 as
compared with $49 million in the prior year. This increase is primarily
attributable to increased compensation costs of $2 million and increased IT
systems costs in the performance chemicals segment of $1 million partly offset
by a one-time $1 million insurance settlement realized in the first quarter of
2007.

Restructuring
and impairment charges were $5 million for the year 2007 as compared with
charges of $3 million for the prior year. During 2007, impairment charges of $1
million were recorded to reflect estimated fair values of two closed facilities
that were held for sale. Restructuring charges recorded in 2007 included $2
million associated with the closure of a production facility and $2 million for
continuing costs from activities initiated during prior years. These
restructuring actions have been completed.

During
2007, the Company adopted plan amendments that froze pension plan benefits for
hourly employees covered by certain collective bargaining agreements, and
closed one of its manufacturing facilities. These actions resulted in a net
curtailment gain of $3 million. During 2006, the Company adopted plan
amendments that froze pension plan benefits 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.

Operating
profit was $60 million for the year 2007 as compared with $49 million for the
prior year. The higher operating profit was the result of the increased gross
profit combined with the gain on disposition of long-term assets and pension
curtailments partly offset by increased selling, general and administrative
expense and increased restructuring costs as compared with 2006.

Interest
expense was $23 million for the year 2007 as compared to $29 million for the
prior year. The reduction in interest expense was the result of lower average
principal balances and lower interest rates during 2007 as compared to the
prior year.

-26-

---



Income
tax expense for the year 2007 was $2 million as compared to $7 million for the
year 2006. During 2007, income tax expense was reduced by the reversal of an
uncertain tax position of $8 million relating to a prior period and the recognition
of a net deferred tax asset for the difference between the tax basis in the
stock of a subsidiary and its book basis of $8 million, due to the expectation
that the difference will reverse in the foreseeable future, as a result of the
impending sale of the subsidiary.

Loss
from discontinued operations was $7 million for the year 2007 versus $14
million in 2006. Included in loss from discontinued operations in 2007 was an
impairment charge of $6 million related to the Defiance Testing and Engineering
Services business. Included in loss from discontinued operations in 2006 were
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.

Results of Operations by Segment

2008 Compared with
2007

|                         |  |                          |        |      |   |        |   |   |        |  
|------------------------ |  | ------------------------ | ------ | ---- | - | ------ | - | - | ------ | -
|                         |  | Years Ended December 31, |        |      |  
|                         |  |                          |        |      |  
|                         |  | 2008                     |        | 2007 |   | Change |  
|                         |  |                          |        |      |   |        |  
|                         |  | (In millions)            |        |      |  
|Net Revenues:            |  |                          |        |      |   |        |   |   |        |  
|Valve actuation systems  |  | $                        | 115.4  |      | $ | 152.1  |   | $ | (36.7  | )
|Performance chemicals    |  |                          | 482.2  |      |   | 396.7  |   |   | 85.5   |  
|Corporate and other      |  |                          | 10.5   |      |   | 11.5   |   |   | (1.0   | )
|                         |  |                          |        |      |   |        |   |   |        |  
|Total                    |  | $                        | 608.0  |      | $ | 560.3  |   | $ | 47.7   |  
|                         |  |                          |        |      |   |        |   |   |        |  
|Operating Profit (Loss): |  |                          |        |      |   |        |   |   |        |  
|Valve actuation systems  |  | $                        | (166.4 | )    | $ | (0.3   | ) | $ | (166.1 | )
|Performance chemicals    |  |                          | 65.3   |      |   | 64.8   |   |   | 0.5    |  
|Corporate and other      |  |                          | (3.9   | )    |   | (4.2   | ) |   | 0.3    |  
|                         |  |                          |        |      |   |        |   |   |        |  
|Total                    |  | $                        | (104.9 | )    | $ | 60.4   |   | $ | (165.3 | )
|                         |  |                          |        |      |   |        |   |   |        |  

Valve Actuation Systems Segment

Net
revenues for the valve actuation systems segment were $115 million for the year
2008 as compared to $152 million for the comparable prior year period. This
reduction was the result of reduced customer demand, the idling of a major
customers facility in Brazil, and the loss of engine component programs. Gross
profit was $5 million for the year 2008 as compared to $14 million for the
comparable prior year period. The decrease in gross profit was driven by $6
million from reduced sales volumes, $2 million from the idling of a major
customers facility in Brazil, $1 million from lost engine programs, $2 million
from higher raw material costs and $1 million from cost associated with the
cancellation of an engine program by a major customer, partly offset by $1
million from the settlement of outstanding warranty claims and $1 million from
reduced operating costs. Selling, general and administrative expense was $13
million for the year 2008 as compared to $14 million for the comparable prior
year period. Restructuring and impairment charges were $158 million for the
year 2008 as compared to $3 million in the comparable prior period. The charges
recorded in 2008 include a restructuring charge of $1 million associated with a
workforce reduction implemented in the second quarter, an impairment charge of
$123 million which represented the entire remaining goodwill balance associated
with this segment, an impairment charge of $22 million relating to certain
long-lived intangible assets and an additional impairment charge of $12 million
relating to the decision to cease using certain trademarks. There were no
curtailment gains for the year 2008 as compared to a $2 million gain in the
comparable prior period.

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Operating loss was $166
million for the year 2008 compared to a break-even operating profit for the
comparable prior year period. The operating results were driven by the
restructuring and impairment charge combined with the reduced sales volumes and
associated gross profit in the automotive market.

Performance Chemicals Segment

Net
revenues for the performance chemicals segment were $482 million for the year
2008 as compared to $397 million for the comparable prior year period. This was
due to broad based strength across all markets. Sales into the water treatment
market increased by $67 million driven by $59 million resulting from increases
in selling prices implemented to offset higher raw material costs, $15 million
from the acquisitions made in 2007 and $5 million from increased sales of
sodium nitrite partly offset by $11 million resulting from reduced sales
volumes. The reduction in sales volumes sold into the water treatment market
was driven by reduced demand from large pulp and paper customers, reduced
consumption rates at certain customers, and unfavorable regional weather
conditions. Increased revenues in the chemical processing market of $35 million
were the direct result of the pass through of higher raw material costs.
Increased revenues of $8 million in electronic chemicals and $7 million in the
pharmaceutical and food additives market were driven by higher selling prices.
These increases were partly offset by a $31 million reduction resulting from
the sale of the Reheis antiperspirant actives product line. Gross profit was
$99 million for the year 2008 as compared to $86 million for the comparable
prior year period. The improved gross profit is driven by $15 million resulting
from favorable timing in the pass through of higher production costs, $1
million from the impact of the acquisitions made in the water treatment market
in 2007, and $1 million from the adjustment relating to prior periods recorded
in the second quarter of 2008, partly offset by a reduction of $2 million
resulting from the sale of the Reheis antiperspirant actives product line and
$3 million from the income recorded in 2007 related to the recovery of expenses
associated with the previously settled Richmond lawsuit. Selling, general and
administrative expense was $31 million for the year 2008 as compared to $30
million in the comparable prior year period. The increase in selling, general
and administrative expense was primarily the result of higher incentive
compensation costs. The year 2008 included a loss on disposition of long-term
assets of $2 million while the comparable prior year period included a gain of
$10 million. The loss on disposition of long-term assets in 2008 is primarily
the result of the sale of the Reheis antiperspirant product line. The gain on
disposition of long-term assets in 2007 is the result of the sale of surplus
real estate. Restructuring and impairment charges were $1 million for the year
2008 related to the closure of a production facility resulting from the sale of
the antiperspirant product line. Operating profit was $65 million for the year
2008 which was flat with the comparable prior period. The stable operating profit
was due to the strong gross margin performance coupled with favorable
restructuring charges in the current year offset by the gain on disposition of
long-term assets in 2007.

Corporate and
Other Segment

Net
revenues were $10 million for the year 2008 as compared to $12 million in the
comparable prior year period. Gross profit for the year 2008 was $2 million as
compared to $3 million in the comparable prior year period. The reduction in
revenue and associated gross profit were the result of reduced volumes in the
fluid handling equipment market. Selling, general and administrative expense
was $6 million for 2008 as compared to $7 million in the comparable prior year
period. Operating loss for 2008 was $4 million which was unchanged from the comparable
prior year period.

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2007 Compared with 2006

|                         |  |                          |       |      |   |        |   |   |       |  
|------------------------ |  | ------------------------ | ----- | ---- | - | ------ | - | - | ----- | -
|                         |  | Years Ended December 31, |       |      |  
|                         |  |                          |       |      |  
|                         |  | 2007                     |       | 2006 |   | Change |  
|                         |  |                          |       |      |   |        |  
|                         |  | (In millions)            |       |      |  
|Net Revenues:            |  |                          |       |      |   |        |   |   |       |  
|Valve actuation systems  |  | $                        | 152.1 |      | $ | 146.1  |   | $ | 6.0   |  
|Performance chemicals    |  |                          | 396.7 |      |   | 373.3  |   |   | 23.4  |  
|Corporate and other      |  |                          | 11.5  |      |   | 12.1   |   |   | (0.6  | )
|                         |  |                          |       |      |   |        |   |   |       |  
|Total                    |  | $                        | 560.3 |      | $ | 531.6  |   | $ | 28.7  |  
|                         |  |                          |       |      |   |        |   |   |       |  
|Operating Profit (Loss): |  |                          |       |      |   |        |   |   |       |  
|Valve actuation systems  |  | $                        | (0.3  | )    | $ | 10.5   |   | $ | (10.8 | )
|Performance chemicals    |  |                          | 64.8  |      |   | 44.7   |   |   | 20.1  |  
|Corporate and other      |  |                          | (4.2  | )    |   | (6.6   | ) |   | 2.4   |  
|                         |  |                          |       |      |   |        |   |   |       |  
|Total                    |  | $                        | 60.4  |      | $ | 48.6   |   | $ | 11.8  |  
|                         |  |                          |       |      |   |        |   |   |       |  

Valve Actuation Systems Segment

Net
revenues for the valve actuation systems segment were $152 million for the year
2007 as compared to $146 million for 2006. This increase was primarily the
result the full year impact of the acquisition of Precision Engine Products.
Gross profit was $14 million for the year 2007 as compared to $27 million in
2006. The reduced gross profit was driven by unfavorable product mix as reduced
sales of higher margin products sold to the Companys historical OEM customer
base were directly offset by increased sales of lower margin products resulting
from the acquisition of Precision Engine Products. In addition, 2007 results
were adversely impacted by $6 million in operational issues; which included a
$3 million expense related to a warranty claim from a customer, $1 million in
inefficiencies incurred in the transition of operations from the Perrysburg, OH
facility into the lower cost Tallahassee, FL facility, and $1 million in higher
costs to support a new product launch in the Toledo, OH facility. Selling,
general and administrative expense was $14 million for 2007 which was flat to
the comparable prior year period as reduced spending offset the addition of $1
million in added technical resources required to support the new business
awards. Restructuring and impairment charges were $3 million for 2007 as
compared to $2 million for 2006. Postretirement liability curtailment gains
were $2 million for 2007 resulting from the closure of the Perrysburg, OH
facility which drove the accelerated recognition of unrecognized gains
resulting from previous amendments to the postretirement medical benefits
plans. The valve actuation systems segment was at break-even operating profit
for 2007 as compared with a $10 million operating profit for 2006. This
reduction in operating profit was primarily a result of the lower gross margin
performance in 2007 and higher restructuring and impairment charges partly
offset by the postretirement liability curtailment gains.

Performance Chemicals Segment

Net
revenues were $397 million for the year 2007 as compared with $373 million for
the prior year. This increase was principally the result of higher sales into
the water treatment, pharmaceutical and food additives and technology markets
of $29 million, $4 million and $1 million, respectively, partially offset by
lower sales into the chemical processing market of $11 million. The increase in
revenues was primarily the result of the pass through of higher raw material
prices and freight costs. In addition, the impact of acquisitions in the water
treatment market contributed increased revenues of $15 million as compared to
prior year. The reduced revenues in the chemical processing market were
primarily the result of the closure of the Newark, NJ sulfuric acid facility.
Gross profit for 2007 was $86 million as compared to $71 million for the prior
year. The increase was principally the result of the strong volumes and
increased prices in excess of previously incurred raw material cost increases.
The acquisitions made

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in the water
treatment market resulted in an increase in gross profit of $3 million as
compared to prior year. 2007 gross profit benefited by the recovery of $3
million in expenses associated with the previously settled Richmond lawsuit and
$2 million resulting from credits for the transfer of excess emission
allowances partly offset by a $3 million increase to the environmental
liability based on new information and regulatory requirements. Gains on
disposition of long term assets of $10 million were driven by the sale of
surplus real estate. Selling, general and administrative expense was $30
million for the year 2007 as compared with $26 million for 2006. The increase
was principally due to increased IT system operating costs of $1 million,
higher incentive compensation expenses of $1 million and increased allocations
of corporate overhead costs of $2 million reflective of the performance
chemicals segment comprising a larger portion of the Company. Restructuring and
impairment charges were $2 million for the year 2007 as compared with a $1
million charge recorded during 2006. The 2007 charges relate to the actions to
exit the Newark, NJ sulfuric acid production facility. Pension liability
curtailment gains were $1 million for 2007 which was flat with the prior year.
Operating income for 2007 was $65 million as compared with $45 million for
2006. The increase was principally due to the increased gross profit plus the
gain on disposition of long term assets partly offset by the increased selling,
general and administrative expense and restructuring charges in 2007.

Corporate and Other Segment

Net
revenues were $12 million for the year 2007 which was unchanged from the prior
year period. Gross profit for the year 2007 was $3 million which was unchanged
from the prior period. Selling, general and administrative expense was $7
million for 2007 as compared to $9 million in 2006. Selling, general and
administrative expense benefitted in 2007 from a one-time $1 million insurance
settlement. Operating loss for 2007 was $4 million, as compared to $7 million
in the prior year. The reduced operating loss was the result of favorable
selling, general and administrative expense.

Liquidity and Capital Resources

Cash
and cash equivalents were $10 million at December 31, 2008, compared with $16
million at December 31, 2007. Significant cash flows during 2008 included
common stock repurchases of $16 million, capital expenditures of $40 million,
and net debt payments of $22 million offset by proceeds from asset sales of $21
million, proceeds from the sale of discontinued operations of $9 million and
cash provided by operations of $45 million. The Company had working capital
(current assets minus current liabilities) of $88 million at December 31, 2008
as compared with working capital of $99 million at December 31, 2007.

Cash
payments for employee termination costs and facility exit costs totaled $2
million in the year ended December 31, 2008.

The
Companys primary credit facilities consist of a first lien term loan and a $60
million revolving credit facility (the Credit Facilities). The first lien
loan is due on February 28, 2011 and carries an interest rate of LIBOR plus 2
percent or base rate plus 1 percent. The $60 million revolving credit facility
matures on February 28, 2010 and currently carries an interest rate of LIBOR
plus 2.25 percent subject to rate changes under a pricing grid if the Companys
leverage ratio changes. 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, certain non-recurring cash inflows such as proceeds from asset
sales, insurance recoveries, and equity offerings may have to be used to pay
down indebtedness and may

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not be
reborrowed. The material financial covenants with which the Company must comply
include a maximum leverage ratio of 3.5, a minimum interest coverage ratio of
3.00, and a maximum amount of capital expenditures of $33 million in 2009 (plus
$15 million of available carryover from 2008). The maximum amount of capital
expenditures will be increased if the prior years maximum amount was not reached
by the amount of the shortfall up to a maximum increase of $15 million. At
December 31, 2008, the Company was in compliance with the covenants in the
Credit Facilities.

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
2008, the Company made $40 million
of capital expenditures. Capital expenditures are expected to be approximately
    $20 to $22 million in 2009. Contributions to pension plan trusts are expected
    to be approximately $4 million in
2009.

On
August 7, 2007, the Companys board of directors authorized a stock repurchase
program pursuant to which the Company will purchase in the aggregate up to $30
million of its common stock in open market and negotiated purchases over a
period of three years, dependent upon market conditions. This program does not
obligate the Company to acquire any particular amount of common stock and the
program may be suspended at any time at the Companys discretion. During 2008,
the Company repurchased 657,209 shares for a total of $16 million.

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
2009.

Off-Balance Sheet Agreements

The
Company has approximately $9 million of standby letters of credit outstanding
as of December 31, 2008.

-31-

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Contractual Obligations

|                                 |  |                           |        |           |   |           |  |                |       |       |   |     |  |   |         | 
|-------------------------------- |  | ------------------------- | ------ | --------- | - | --------- |  | -------------- | ----- | ----- | - | --- |  | - | ------- | 
|                                 |  | Payments Due by Period(1) |       
|                                 |  |                           |       
|                                 |  | (In thousands)            |       
|                                 |  | Less than
 1 Year         |        | 1-3 Years |   | 3-5 Years |  | After
 5 Years |       | Total |  
|                                 |  |                           |        |           |   |           |  |                |       |       |  
|Long-term debt                   |  | $                         | 2,534  |           | $ | 210,845   |  | $              | 9     |       | $ |    |  | $ | 213,388 | 
|Interest on outstanding
 debt(2) |  |                           | 12,892 |           |   | 10,914    |  |                |      |       |   |    |  |   | 23,806  | 
|Operating leases                 |  |                           | 3,561  |           |   | 5,485     |  |                | 2,636 |       |   | 462 |  |   | 12,144  | 
|                                 |  |                           |        |           |   |           |  |                |       |       |   |     |  |   |         | 
|Total contractual
 obligations   |  | $                         | 18,987 |           | $ | 227,244   |  | $              | 2,645 |       | $ | 462 |  | $ | 249,338 | 
|                                 |  |                           |        |           |   |           |  |                |       |       |   |     |  |   |         | 

|    |                                                                                                                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |                                                                                                                                                                                                                    
|(1) | Unrecognized tax benefits
 and interest thereon totaling $3,959 have not been included in these amounts
 as the Company is unable to make reasonably reliable estimates of the periods
 of potential settlement.   
|    |                                                                                                                                                                                                                    
|(2) | Reflects interest on debt
 balances outstanding at year end using interest rates in effect at December
 31, 2008. Interest is calculated based on contractual maturity dates and does
 not reflect any prepayments.

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, 2008, accruals for environmental matters were $24
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 2008 approximated $8
million (of which approximately $2 million represented capital expenditures and
approximately $6 million related to ongoing operations and the management of
potential environmental contamination from prior operations). Expenditures for
2007 approximated $13 million (of which approximately $4 million represented
capital expenditures and approximately $9 million related to ongoing operations
and the management of potential environmental contamination from prior
operations). The Company expects expenditures similar to 2008 levels in 2009.

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In addition,
if environmental laws and regulations affecting the Companys operations become
more stringent, costs for environmental compliance may increase above historical
levels.

Recent Accounting Pronouncements

In
June 2006, the Financial Accounting Standards Board, or 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. The Company adopted FIN 48 on January 1, 2007. The adoption, which
was accounted for as a cumulative effect adjustment, resulted in an increase to
the January 1, 2007 balance of retained earnings (deficit) of $2.8 million.

In
September 2006, the FASB issued Statement of Financial Accounting Standards, or
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. Certain
provisions of SFAS 157 were effective for financial statements issued for
fiscal years beginning after November 15, 2007 and interim periods within those
fiscal years. In February 2008, the FASB deferred the implementation of SFAS
157 for all non-financial assets and non-financial liabilities, except those
recognized or disclosed at fair value in the financial statements on a
recurring basis (at least annually). The implementation of SFAS 157 for
financial assets and financial liabilities, effective January 1, 2008, did not
have a material impact on our consolidated financial position and results of
operations. The Company is currently assessing the impact of adopting SFAS 157
for non-financial assets and non-financial liabilities on its consolidated
financial position and results of operations.

In
September 2006, the FASB issued SFAS No. 158, Employers Accounting for
Defined Benefit Pensions and Other Postretirement Plans-an Amendment of FASB
Statements No. 87, 88, 106 and 132(R), (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 was to decrease prepaid
pension costs by $1.7 million, decrease other current liabilities by $0.9
million, reduce accrued pension and postretirement benefit costs by $10.4
million and increase deferred tax liabilities by $1.2 million, with the offset
increasing stockholders equity by $8.3 million. Additionally, in accordance
with SFAS 158, the Company changed its measurement date for plan assets and
obligations to coincide with its fiscal year end in 2008. The Company
previously utilized a measurement date of October 31. The adoption of the
measurement date provisions of SFAS 158 resulted in an increase of $0.3 million,
net of taxes, to the Companys retained earnings and a decrease of $0.5
million, net of tax, to accumulated other comprehensive income (loss).

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 159), which permits an

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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 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 159 is effective as of the beginning of the first fiscal
year beginning after November 15, 2007. The adoption of this statement did not have a material impact on
the Companys results of operation or financial condition. The Company did not
elect the fair value option for any assets or liabilities.

In
December 2007, the FASB issued SFAS No. 141 (revised 2007), Business
Combinations (SFAS 141R). SFAS 141R establishes principles and
requirements for how an acquirer recognizes and measures the identifiable
assets acquired, the liabilities assumed, any noncontrolling interest in the
acquiree and the goodwill acquired. SFAS 141R also establishes disclosure
requirements to enable the evaluation of the nature and financial effects of
the business combination. FAS 141(R) is to be applied prospectively to
business combinations for which the acquisition date is on or after an entitys
fiscal year that begins after December 15, 2008. The Company will assess
the impact of SFAS 141R if and when a future acquisition occurs.

In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests
in Consolidated Financial Statementsan amendment of ARB No. 51 (SFAS
160). SFAS 160 establishes accounting and reporting standards for the
noncontrolling interest in a subsidiary and for the deconsolidation of a
subsidiary. SFAS 160 is effective for fiscal years beginning on or after
December 15, 2008. Earlier adoption is prohibited. The Company does not
anticipate that the adoption of this statement will have a material impact on
the Companys results of operation or financial condition.

In
March 2008, the FASB issued SFAS No. 161, Disclosures About Derivative Instruments and Hedging Activities
 an amendment of FASB Statement No. 133 (SFAS 161). SFAS 161
expands quarterly disclosure requirements in SFAS 133 about an entitys
derivative instruments and hedging activities. SFAS 161 is effective for fiscal
years beginning after November 15, 2008. The Company is currently assessing the
impact of adopting SFAS 161 on its financial statements.

In
April 2008, the FASB issued FSP FAS 142-3, Determination of the Useful Life of Intangible Assets
(FSP FAS 142-3). FSP FAS 142-3 amends the factors that should be considered
in developing renewal or extension assumptions used to determine the useful
life of a recognized intangible asset under SFAS No. 142, Goodwill and Other
Intangible Assets (SFAS 142). The intent of FSP FAS 142-3 is to improve the
consistency between the useful life of a recognized intangible asset under SFAS
142 and the period of expected cash flows used to measure the fair value of the
asset under SFAS 141(R) and other applicable accounting literature. FSP FAS 142-3
is effective for financial statements issued for fiscal years beginning after
December 15, 2008. The Company does not anticipate that the adoption of FSP FAS
142-3 will have a material impact on its results of operations or financial
condition.

In
May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting
Principles, (SFAS 162). SFAS 162 identifies the sources of
accounting principles and the framework for selecting the principles used in
the preparation of financial statements. SFAS 162 is effective 60 days
following the SECs approval of the Public Company Accounting Oversight Board
amendments to AU Section 411, The Meaning of Present Fairly in Conformity with
Generally Accepted Accounting Principles. The Company does not expect that this
standard will have a material impact on its results of operations, financial
position or cash flow.

-34-

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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 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.

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 affect its estimates.

Unrecognized
tax benefits  In accordance with FIN 48, Accounting
for Uncertainty in Income Taxesan interpretation of FASB Statement No. 109,
the Company evaluates a tax position to determine whether it is more likely
than not that the tax position will be sustained upon examination, based on the
technical merits of the position. A tax position that meets the
more-likely-than-not recognition threshold is subject to a measurement assessment
to determine the amount of benefit to recognize in the consolidated statement
of operations and the appropriate reserve to establish, if any. If a tax
position does not meet the more-likely-than-not recognition threshold a tax
reserve is established and no benefit is recognized. While it is often
difficult to predict the final outcome or the timing of resolution of any
particular tax matter, the Company believes that its reserve for uncertain tax
positions is properly recorded pursuant to the recognition and measurement
provisions of FIN 48.

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 determination of fair values of such
assets and liabilities 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
preliminary 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.

-35-

---



Impairment
of Goodwill and Indefinite Lived 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. The Company performs its goodwill impairment
testing utilizing a two-step process. In the first step, the fair value of the
reporting units are compared with their carrying amounts, including goodwill.
Estimates of fair value are based on a number of factors, including independent
appraisals and current operating forecasts. If required, the second step of the
goodwill impairment test compares the implied fair value of the goodwill with
its carrying amount. The implied fair value of the goodwill is determined by
allocating the fair value determined in the first step to all of the assets and
liabilities included in the reporting unit as if the unit had been acquired in
a business combination, then comparing the fair value of the unit to the amounts
assigned to the assets and liabilities, with any excess becoming the implied
fair value of goodwill. Impairment testing for indefinite lived intangible
assets is performed separately from goodwill impairment testing. 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 Postretirement Benefits  GenTek records pension and other
postretirement benefit costs based on 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. For
example, holding all other components of the calculations constant, a change in
the assumed discount rate by 0.25 percent would change 2008 pension and other
postretirement benefit costs by approximately $0.1 million and the projected
pension and other postretirement benefit obligations by approximately $7
million. A change in the expected long-term rate of return on plan assets of
one percent would change 2008 pension cost by approximately $2 million.
Material changes in pension and other postretirement 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.

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

-36-

---



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.

|         |                                                             
|-------- | ------------------------------------------------------------
|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, 2008, the Companys debt financing consisted primarily of amounts
outstanding under the Companys Credit Facilities. The borrowings outstanding
under the Companys Credit Facilities 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 Facilities are
sensitive to changes in interest rates. Given the existing level of borrowings
under the credit facility of $213 million as of December 31, 2008, a one
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, 2008 |  | Scheduled Maturity
|                  |  |              |  |                                                      |  |                   
|$213 million      |  | $172 million |  | 6.07%                                                |  | February 28, 2011 

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 $(7.4) million at December 31, 2008.

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, 2008, 2007 and 2006       |  | 40      
|                                                                                            |  |         
|Consolidated Balance Sheets  As of
 December 31, 2008 and 2007                             |  | 41      
|                                                                                            |  |         
|Consolidated Statements of Cash Flows 
 Years Ended December 31, 2008, 2007 and 2006       |  | 42      
|                                                                                            |  |         
|Consolidated Statement of Changes in Equity
  Years Ended December 31, 2008, 2007 and 2006 |  | 43      
|                                                                                            |  |         
|Notes to the Consolidated Financial
 Statements                                             |  | 44-70   

-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, 2008 and 2007, and the related consolidated
statements of operations, changes in equity (deficit), and cash flows for each
of the three years in the period ended December 31, 2008. 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 as of December 31, 2008 and
2007, and the results of their operations and their cash flows for each of the
three years in the period ended December 31, 2008, 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 (1) Financial
Accounting Standards Boards Interpretation No. 48, Accounting for Uncertainty
in Income Taxes- an interpretation of FASB Statement No. 109 as of January 1,
2007 which changed the accounting for uncertain tax positions; and (2) the
recognition, disclosure and measurement date provisions of Statement of
Financial Accounting Standards (SFAS) No. 158, Employers Accounting for
Defined Benefit Pension and Other Postretirement Plans  an Amendment of FASB
Statements No. 87, 88, 106 and 132(R), which changed its method of accounting
for pension and postretirement benefits.

We have also audited, in
accordance with the standards of the Public Company Accounting Oversight Board
(United States), the Companys internal control over financial reporting as of
December 31, 2008, 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 13, 2009
expressed an unqualified opinion on the Companys internal control over financial
reporting.

/s/ Deloitte
& Touche LLPParsippany, New JerseyMarch 13, 2009

-39-

---



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

|                                                                                                    |  |                           |          |      |   |         |   |   |         |  
|--------------------------------------------------------------------------------------------------- |  | ------------------------- | -------- | ---- | - | ------- | - | - | ------- | -
|                                                                                                    |  | Years
 Ended December 31, |         
|                                                                                                    |  |                           |         
|                                                                                                    |  | 2008                      |          | 2007 |   | 2006    |  
|                                                                                                    |  |                           |          |      |   |         |  
|Net revenues                                                                                        |  | $                         | 608,039  |      | $ | 560,267 |   | $ | 531,599 |  
|Cost of sales                                                                                       |  |                           | 501,458  |      |   | 457,134 |   |   | 430,675 |  
|Selling, general and administrative expense                                                         |  |                           | 50,821   |      |   | 51,078  |   |   | 49,496  |  
|Net (gain) loss on disposition of long-term assets                                                  |  |                           | 1,802    |      |   | (10,031 | ) |   | 488     |  
|Restructuring and impairment charges                                                                |  |                           | 158,941  |      |   | 4,964   |   |   | 2,974   |  
|Pension and postretirement liability curtailment and settlement
 (gains) losses                     |  |                           | (36      | )    |   | (3,260  | ) |   | (644    | )
|                                                                                                    |  |                           |          |      |   |         |   |   |         |  
|Operating profit (loss)                                                                             |  |                           | (104,947 | )    |   | 60,382  |   |   | 48,610  |  
|Interest expense                                                                                    |  |                           | 12,803   |      |   | 22,685  |   |   | 29,137  |  
|Interest income                                                                                     |  |                           | 236      |      |   | 646     |   |   | 604     |  
|Other (income) expense, net                                                                         |  |                           | 970      |      |   | (854    | ) |   | 347     |  
|                                                                                                    |  |                           |          |      |   |         |   |   |         |  
|Income (loss) from continuing operations before
income taxes                                        |  |                           | (118,484 | )    |   | 39,197  |   |   | 19,730  |  
|Income tax provision (benefit)                                                                      |  |                           | (8,419   | )    |   | 2,160   |   |   | 7,391   |  
|                                                                                                    |  |                           |          |      |   |         |   |   |         |  
|Income (loss) from continuing operations                                                            |  |                           | (110,065 | )    |   | 37,037  |   |   | 12,339  |  
|Income (loss) from discontinued operations (net of
tax of $678,
 $1,335 and $(5,987), respectively) |  |                           | 1,035    |      |   | (7,270  | ) |   | (14,442 | )
|                                                                                                    |  |                           |          |      |   |         |   |   |         |  
|Net income (loss)                                                                                   |  | $                         | (109,030 | )    | $ | 29,767  |   | $ | (2,103  | )
|                                                                                                    |  |                           |          |      |   |         |   |   |         |  
|                                                                                                    |  |                           |          |      |   |         |   |   |         |  
|Earnings per common share  basic:                                                                  |  |                           |          |      |   |         |   |   |         |  
|Income (loss) from continuing operations                                                            |  | $                         | (10.93   | )    | $ | 3.59    |   | $ | 1.21    |  
|Income (loss) from discontinued operations                                                          |  |                           | 0.10     |      |   | (0.70   | ) |   | (1.42   | )
|                                                                                                    |  |                           |          |      |   |         |   |   |         |  
|Net income (loss)                                                                                   |  | $                         | (10.83   | )    | $ | 2.89    |   | $ | (0.21   | )
|                                                                                                    |  |                           |          |      |   |         |   |   |         |  
|                                                                                                    |  |                           |          |      |   |         |   |   |         |  
|Earnings per common share  assuming dilution:                                                      |  |                           |          |      |   |         |   |   |         |  
|Income (loss) from continuing operations                                                            |  | $                         | (10.93   | )    | $ | 3.20    |   | $ | 1.12    |  
|Income (loss) from discontinued operations                                                          |  |                           | 0.10     |      |   | (0.63   | ) |   | (1.32   | )
|                                                                                                    |  |                           |          |      |   |         |   |   |         |  
|Net income (loss)                                                                                   |  | $                         | (10.83   | )    | $ | 2.57    |   | $ | (0.19   | )
|                                                                                                    |  |                           |          |      |   |         |   |   |         |  

See the accompanying notes to the consolidated financial statements.

-40-

---



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

|                                                                                                                                                  |  |               |         |      |   |         |  
|------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ------- | ---- | - | ------- | -
|                                                                                                                                                  |  | December
 31, |        
|                                                                                                                                                  |  |               |        
|                                                                                                                                                  |  | 2008          |         | 2007 |  
|                                                                                                                                                  |  |               |         |      |  
|                                                                                                                                                  |  |               |         |      |   |         |  
|ASSETS                                                                                                                                            |  |               |         |      |   |         |  
|Current assets:                                                                                                                                   |  |               |         |      |   |         |  
|Cash and cash equivalents                                                                                                                         |  | $             | 9,787   |      | $ | 16,089  |  
|Receivables, net                                                                                                                                  |  |               | 70,564  |      |   | 73,892  |  
|Inventories                                                                                                                                       |  |               | 44,662  |      |   | 48,837  |  
|Deferred income taxes                                                                                                                             |  |               | 33,556  |      |   | 39,675  |  
|Assets held for sale                                                                                                                              |  |               |        |      |   | 14,346  |  
|Other current assets                                                                                                                              |  |               | 9,378   |      |   | 6,319   |  
|                                                                                                                                                  |  |               |         |      |   |         |  
|Total current assets                                                                                                                              |  |               | 167,947 |      |   | 199,158 |  
|Property,
 plant and equipment, net                                                                                                               |  |               | 219,444 |      |   | 213,900 |  
|Goodwill                                                                                                                                          |  |               | 22,991  |      |   | 145,514 |  
|Intangible
 assets, net                                                                                                                           |  |               | 8,082   |      |   | 48,488  |  
|Other
 assets                                                                                                                                     |  |               | 6,848   |      |   | 6,919   |  
|                                                                                                                                                  |  |               |         |      |   |         |  
|Total assets                                                                                                                                      |  | $             | 425,312 |      | $ | 613,979 |  
|                                                                                                                                                  |  |               |         |      |   |         |  
|                                                                                                                                                  |  |               |         |      |   |         |  
|LIABILITIES
 AND EQUITY (DEFICIT)                                                                                                                 |  |               |         |      |   |         |  
|Current liabilities:                                                                                                                              |  |               |         |      |   |         |  
|Accounts payable                                                                                                                                  |  | $             | 36,145  |      | $ | 44,707  |  
|Accrued liabilities                                                                                                                               |  |               | 41,214  |      |   | 52,229  |  
|Current portion of long-term debt                                                                                                                 |  |               | 2,534   |      |   | 2,826   |  
|Liabilities of businesses held for sale                                                                                                           |  |               |        |      |   | 294     |  
|                                                                                                                                                  |  |               |         |      |   |         |  
|Total current liabilities                                                                                                                         |  |               | 79,893  |      |   | 100,056 |  
|Long-term debt                                                                                                                                    |  |               | 210,854 |      |   | 237,043 |  
|Pension and postretirement obligations                                                                                                            |  |               | 110,176 |      |   | 51,270  |  
|Other liabilities                                                                                                                                 |  |               | 46,028  |      |   | 80,001  |  
|                                                                                                                                                  |  |               |         |      |   |         |  
|Total liabilities                                                                                                                                 |  |               | 446,951 |      |   | 468,370 |  
|                                                                                                                                                  |  |               |         |      |   |         |  
|Equity (Deficit):                                                                                                                                 |  |               |         |      |   |         |  
|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:
 10,187,678 and 10,605,265 shares at December 31, 2008 and 2007, respectively |  |               | 79,498  |      |   | 86,444  |  
|Warrants                                                                                                                                          |  |               | 3,190   |      |   | 7,776   |  
|Accumulated other comprehensive income
(loss)                                                                                                     |  |               | (24,839 | )    |   | 21,510  |  
|Retained earnings (deficit)                                                                                                                       |  |               | (77,881 | )    |   | 30,890  |  
|Treasury
    stock, at cost: 55,990 and 35,081 shares at December 31,
 2008 and 2007, respectively                                                |  |               | (1,607  | )    |   | (1,011  | )
|                                                                                                                                                  |  |               |         |      |   |         |  
|Total equity (deficit)                                                                                                                            |  |               | (21,639 | )    |   | 145,609 |  
|                                                                                                                                                  |  |               |         |      |   |         |  
|Total liabilities and equity (deficit)                                                                                                            |  | $             | 425,312 |      | $ | 613,979 |  
|                                                                                                                                                  |  |               |         |      |   |         |  

See the accompanying notes to the consolidated financial statements.

-41-

---



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

|                                                                                          |  |                          |          |      |   |          |   |   |         |  
|----------------------------------------------------------------------------------------- |  | ------------------------ | -------- | ---- | - | -------- | - | - | ------- | -
|                                                                                          |  | Years Ended December 31, |         
|                                                                                          |  |                          |         
|                                                                                          |  | 2008                     |          | 2007 |   | 2006     |  
|                                                                                          |  |                          |          |      |   |          |  
|Cash flows from operating activities:                                                     |  |                          |          |      |   |          |   |   |         |  
|Net income (loss)                                                                         |  | $                        | (109,030 | )    | $ | 29,767   |   | $ | (2,103  | )
|Adjustments to reconcile net income (loss) to net
cash provided by
 operating activities: |  |                          |          |      |   |          |   |   |         |  
|(Income) loss from discontinued operations                                                |  |                          | (1,035   | )    |   | 7,270    |   |   | 14,442  |  
|Pension and postretirement liability curtailment
gains                                    |  |                          | (36      | )    |   | (3,260   | ) |   | (644    | )
|Depreciation and amortization                                                             |  |                          | 32,812   |      |   | 34,820   |   |   | 32,971  |  
|Asset impairment charges                                                                  |  |                          | 156,539  |      |   | 914      |   |   | 1,231   |  
|Gain on debt repurchases                                                                  |  |                          | (4,049   | )    |   | (105     | ) |   |        |  
|Net (gain) loss on disposition of long-term
assets                                        |  |                          | 1,802    |      |   | (10,031  | ) |   | 488     |  
|Long-term incentive plan costs, net                                                       |  |                          | 3,290    |      |   | 3,698    |   |   | 1,793   |  
|Excess tax benefit from long-term incentive
plan                                          |  |                          | (141     | )    |   | (703     | ) |   | (318    | )
|(Increase) decrease in receivables                                                        |  |                          | (8,215   | )    |   | 7,538    |   |   | 2,295   |  
|Increase in inventories                                                                   |  |                          | (2,545   | )    |   | (3,328   | ) |   | (2,650  | )
|(Increase) decrease in deferred tax assets                                                |  |                          | 2,881    |      |   | (12,158  | ) |   | (4,961  | )
|Increase (decrease) in accounts payable                                                   |  |                          | (224     | )    |   | (1,618   | ) |   | 4,478   |  
|Increase (decrease) in accrued liabilities                                                |  |                          | (11,558  | )    |   | (564     | ) |   | 5,614   |  
|Increase (decrease) in other liabilities and assets,
net                                  |  |                          | (16,177  | )    |   | (6,348   | ) |   | 2,078   |  
|                                                                                          |  |                          |          |      |   |          |   |   |         |  
|Net cash provided by continuing operations                                                |  |                          | 44,314   |      |   | 45,892   |   |   | 54,714  |  
|Net cash provided by (used for) discontinued
operations                                   |  |                          | 821      |      |   | (708     | ) |   | (14,344 | )
|                                                                                          |  |                          |          |      |   |          |   |   |         |  
|Net cash provided by operating activities                                                 |  |                          | 45,135   |      |   | 45,184   |   |   | 40,370  |  
|                                                                                          |  |                          |          |      |   |          |   |   |         |  
|Cash flows from investing activities:                                                     |  |                          |          |      |   |          |   |   |         |  
|Capital expenditures                                                                      |  |                          | (40,059  | )    |   | (28,585  | ) |   | (19,983 | )
|Proceeds from sales or disposals of long-term
assets                                      |  |                          | 20,570   |      |   | 14,997   |   |   | 789     |  
|Proceeds from (purchases of) short-term
investments                                       |  |                          | (2,419   | )    |   |         |   |   | 2,367   |  
|Acquisition of businesses net of cash
acquired*                                           |  |                          |         |      |   | (9,946   | ) |   | (40,119 | )
|                                                                                          |  |                          |          |      |   |          |   |   |         |  
|Net cash used for continuing operations                                                   |  |                          | (21,908  | )    |   | (23,534  | ) |   | (56,946 | )
|Net cash provided by discontinued
operations                                              |  |                          | 9,316    |      |   | 96,708   |   |   | 28,320  |  
|                                                                                          |  |                          |          |      |   |          |   |   |         |  
|Net cash provided by (used for) investing
activities                                      |  |                          | (12,592  | )    |   | 73,174   |   |   | (28,626 | )
|                                                                                          |  |                          |          |      |   |          |   |   |         |  
|Cash flows from financing activities:                                                     |  |                          |          |      |   |          |   |   |         |  
|Proceeds from revolving credit facility                                                   |  |                          | 73,250   |      |   | 77,750   |   |   | 17,750  |  
|Repayments of revolving credit facility                                                   |  |                          | (73,250  | )    |   | (87,750  | ) |   | (7,750  | )
|Issuance of long-term debt                                                                |  |                          |         |      |   | 50,000   |   |   | 929     |  
|Repayment of long-term debt                                                               |  |                          | (22,433  | )    |   | (143,308 | ) |   | (24,564 | )
|Deferred financing costs                                                                  |  |                          |         |      |   | (378     | ) |   | (396    | )
|Dividends                                                                                 |  |                          |         |      |   |         |   |   | (2,367  | )
|Exercise of stock options and warrants                                                    |  |                          | 728      |      |   | 887      |   |   | 872     |  
|Excess tax benefit from long-term incentive
plan                                          |  |                          | 141      |      |   | 703      |   |   | 318     |  
|Payments to acquire treasury stock                                                        |  |                          | (596     | )    |   | (747     | ) |   | (178    | )
|Repurchase and retirement of common stock                                                 |  |                          | (15,585  | )    |   | (3,560   | ) |   |        |  
|Other                                                                                     |  |                          | 3        |      |   | 382      |   |   |        |  
|                                                                                          |  |                          |          |      |   |          |   |   |         |  
|Net cash used for continuing operations                                                   |  |                          | (37,742  | )    |   | (106,021 | ) |   | (15,386 | )
|Net cash used for discontinued operations                                                 |  |                          | (19      | )    |   | (2,188   | ) |   | (1,763  | )
|                                                                                          |  |                          |          |      |   |          |   |   |         |  
|Net cash used for financing activities                                                    |  |                          | (37,761  | )    |   | (108,209 | ) |   | (17,149 | )
|                                                                                          |  |                          |          |      |   |          |   |   |         |  
|Effect of exchange rate changes on cash                                                   |  |                          | (1,084   | )    |   | 703      |   |   | 10      |  
|                                                                                          |  |                          |          |      |   |          |   |   |         |  
|Increase (decrease) in cash and cash equivalents                                          |  |                          | (6,302   | )    |   | 10,852   |   |   | (5,395  | )
|Cash and cash equivalents at beginning of period                                          |  |                          | 16,089   |      |   | 5,237    |   |   | 10,632  |  
|                                                                                          |  |                          |          |      |   |          |   |   |         |  
|Cash and cash equivalents at end of period                                                |  | $                        | 9,787    |      | $ | 16,089   |   | $ | 5,237   |  
|                                                                                          |  |                          |          |      |   |          |   |   |         |  
|Supplemental information:                                                                 |  |                          |          |      |   |          |   |   |         |  
|Cash paid (refunded) for income taxes                                                     |  | $                        | 3,624    |      | $ | 3,899    |   | $ | (287    | )
|                                                                                          |  |                          |          |      |   |          |   |   |         |  
|Cash paid for interest                                                                    |  | $                        | 14,960   |      | $ | 23,240   |   | $ | 29,730  |  
|                                                                                          |  |                          |          |      |   |          |   |   |         |  
|Capital expenditures incurred but not yet
paid                                            |  | $                        | 6,877    |      | $ | 9,155    |   | $ | 5,681   |  
|                                                                                          |  |                          |          |      |   |          |   |   |         |  
|*Acquisition of businesses,
 net of cash acquired:                                        |  |                          |          |      |   |          |   |   |         |  
|Working capital, other than cash                                                          |  | $                        |         |      | $ | (1,641   | ) | $ | (10,771 | )
|Property, plant and equipment                                                             |  |                          |         |      |   | (1,665   | ) |   | (21,647 | )
|Other assets                                                                              |  |                          |         |      |   | (7,642   | ) |   | (13,438 | )
|Current liabilities                                                                       |  |                          |         |      |   | 378      |   |   |        |  
|Non-current laibilities                                                                   |  |                          |         |      |   | 624      |   |   | 5,737   |  
|                                                                                          |  |                          |          |      |   |          |   |   |         |  
|Total cash used to acquire businesses                                                     |  | $                        |         |      | $ | (9,946   | ) | $ | (40,119 | )
|                                                                                          |  |                          |          |      |   |          |   |   |         |  

See the accompanying notes to the consolidated financial statements.

-42-

---



GENTEK INC.CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Deficit)For the
Three Years Ended December 31, 2008 
(In thousands, except per share data)

|                                                                                                                                 |  |               |         |                        |   |          |   |                 |        |                                                  |   |                               |   |       |         |   |   |          |   |   |          |  
|-------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ------- | ---------------------- | - | -------- | - | --------------- | ------ | ------------------------------------------------ | - | ----------------------------- | - | ----- | ------- | - | - | -------- | - | - | -------- | -
|                                                                                                                                 |  | Common
 Stock |         | Unearned
 Compensation |   | Warrants |   | Treasury
 Stock |        | Accumulated
 Other
 Comprehensive
 Income (Loss) |   | Retained
 Earnings
 (Deficit) |   | Total |        
|                                                                                                                                 |  |               |         |                        |   |          |   |                 |        |                                                  |   |                               |   |       |        
|                                                                                                                                
|Balance at January 1, 2006                                                                                                       |  | $             | 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 of $2,494)                                                                      |  |               |        |                        |   |         |   |                 |       |                                                  |   |                              |   |       | 3,811   |   |   |         |   |   | 3,811    |  
|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                                                                                                             |  |               |         |                        |   |          |   |                 |        |                                                  |   |                               |   |       |         |   |   |          |   |   | 2,039    |  
|Adjustment to initially apply FASB Statement No. 158 (net of tax of
 $1,198)                                                     |  |               |        |                        |   |         |   |                 |       |                                                  |   |                              |   |       | 8,269   |   |   |         |   |   | 8,269    |  
|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                          | ) |       | 8,550   |   |   | (1,678   | ) |   | 98,479   |  
|Cumulative effect of change in accounting for uncertain tax
positions                                                            |  |               |        |                        |   |         |   |                 |       |                                                  |   |                              |   |       |        |   |   | 2,801    |   |   | 2,801    |  
|Components of comprehensive income:                                                                                              |  |               |         |                        |   |          |   |                 |        |                                                  |   |                               |   |       |         |   |   |          |   |   |          |  
|Net income                                                                                                                       |  |               |        |                        |   |         |   |                 |       |                                                  |   |                              |   |       |        |   |   | 29,767   |   |   | 29,767   |  
|Pension and postretirement liability adjustments (net of tax
$12,722)                                                            |  |               |        |                        |   |         |   |                 |       |                                                  |   |                              |   |       | 15,271  |   |   |         |   |   | 15,271   |  
|Foreign currency translation adjustments (net of tax of
$41)                                                                     |  |               |        |                        |   |         |   |                 |       |                                                  |   |                              |   |       | 61      |   |   |         |   |   | 61       |  
|Change in unrealized gain/(loss) on derivative instruments (net of tax
 of $(1,552)                                              |  |               |        |                        |   |         |   |                 |       |                                                  |   |                              |   |       | (2,372  | ) |   |         |   |   | (2,372   | )
|                                                                                                                                 |  |               |         |                        |   |          |   |                 |        |                                                  |   |                               |   |       |         |   |   |          |   |   |          |  
|Comprehensive income                                                                                                             |  |               |         |                        |   |          |   |                 |        |                                                  |   |                               |   |       |         |   |   |          |   |   | 42,727   |  
|Long-term incentive plan grants, net                                                                                             |  |               | 4,640   |                        |   |         |   |                 |       |                                                  |   |                              |   |       |        |   |   |         |   |   | 4,640    |  
|Exercise and cancellation of warrants                                                                                            |  |               | 586     |                        |   |         |   |                 | (579   | )                                                |   |                              |   |       |        |   |   |         |   |   | 7        |  
|Exercise of stock options                                                                                                        |  |               | 880     |                        |   |         |   |                 |       |                                                  |   |                              |   |       |        |   |   |         |   |   | 880      |  
|Acquisition of treasury stock                                                                                                    |  |               |        |                        |   |         |   |                 |       |                                                  |   | (747                          | ) |       |        |   |   |         |   |   | (747     | )
|Repurchase and retirement of common stock                                                                                        |  |               | (3,560  | )                      |   |         |   |                 |       |                                                  |   |                              |   |       |        |   |   |         |   |   | (3,560   | )
|Other                                                                                                                            |  |               | 382     |                        |   |         |   |                 |       |                                                  |   |                              |   |       |        |   |   |         |   |   | 382      |  
|                                                                                                                                 |  |               |         |                        |   |          |   |                 |        |                                                  |   |                               |   |       |         |   |   |          |   |   |          |  
|Balance at December 31, 2007                                                                                                     |  |               | 86,444  |                        |   |         |   |                 | 7,776  |                                                  |   | (1,011                        | ) |       | 21,510  |   |   | 30,890   |   |   | 145,609  |  
|Effects of changing pension and postretirement plans measurement date
 pursuant to FASB Statement No. 158 (net of tax of $(150)) |  |               |        |                        |   |         |   |                 |       |                                                  |   |                              |   |       | (487    | ) |   | 259      |   |   | (228     | )
|Components of comprehensive income:                                                                                              |  |               |         |                        |   |          |   |                 |        |                                                  |   |                               |   |       |         |   |   |          |   |   |          |  
|Net loss                                                                                                                         |  |               |        |                        |   |         |   |                 |       |                                                  |   |                              |   |       |        |   |   | (109,030 | ) |   | (109,030 | )
|Pension and postretirement liability adjustments (net of tax
 $(27,722))                                                         |  |               |        |                        |   |         |   |                 |       |                                                  |   |                              |   |       | (42,499 | ) |   |         |   |   | (42,500  | )
|Foreign currency translation adjustments (net of tax of
$(269))                                                                  |  |               |        |                        |   |         |   |                 |       |                                                  |   |                              |   |       | (412    | ) |   |         |   |   | (410     | )
|Change in unrealized gain/(loss) on derivative instruments (net of tax
 of $(1,931))                                             |  |               |        |                        |   |         |   |                 |       |                                                  |   |                              |   |       | (2,951  | ) |   |         |   |   | (2,952   | )
|                                                                                                                                 |  |               |         |                        |   |          |   |                 |        |                                                  |   |                               |   |       |         |   |   |          |   |   |          |  
|Comprehensive loss                                                                                                               |  |               |         |                        |   |          |   |                 |        |                                                  |   |                               |   |       |         |   |   |          |   |   | (154,892 | )
|Long-term incentive plan grants, net                                                                                             |  |               | 3,322   |                        |   |         |   |                 |       |                                                  |   |                              |   |       |        |   |   |         |   |   | 3,322    |  
|Exercise and cancellation of warrants                                                                                            |  |               | 5,135   |                        |   |         |   |                 | (4,586 | )                                                |   |                              |   |       |        |   |   |         |   |   | 549      |  
|Exercise of stock options                                                                                                        |  |               | 179     |                        |   |         |   |                 |       |                                                  |   |                              |   |       |        |   |   |         |   |   | 179      |  
|Acquisition of treasury stock                                                                                                    |  |               |        |                        |   |         |   |                 |       |                                                  |   | (596                          | ) |       |        |   |   |         |   |   | (596     | )
|Repurchase and retirement of common stock                                                                                        |  |               | (15,585 | )                      |   |         |   |                 |       |                                                  |   |                              |   |       |        |   |   |         |   |   | (15,585  | )
|Other                                                                                                                            |  |               | 3       |                        |   |         |   |                 |       |                                                  |   |                              |   |       |        |   |   |         |   |   | 3        |  
|                                                                                                                                 |  |               |         |                        |   |          |   |                 |        |                                                  |   |                               |   |       |         |   |   |          |   |   |          |  
|Balance at December 31, 2008                                                                                                     |  | $             | 79,498  |                        | $ |         |   | $               | 3,190  |                                                  | $ | (1,607                        | ) | $     | (24,839 | ) | $ | (77,881  | ) | $ | (21,639  | )
|                                                                                                                                 |  |               |         |                        |   |          |   |                 |        |                                                  |   |                               |   |       |         |   |   |          |   |   |          |  

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: valve actuation systems and
performance chemicals. The valve actuation
systems segment provides precision engineered valve actuation systems and
components for gasoline and diesel engines.
The performance chemicals segment provides a broad range of value-added
chemical products to four principal markets:
water treatment, chemical processing, pharmaceutical and food additives
and technology. The Company operates
over 50 manufacturing and production facilities located primarily in the U.S.
and Canada.

During
April 2006, the Company completed the sale of its wire and cable manufacturing
business in Stouffville, Canada. On
February 16, 2007, the Company completed the sale of its Noma wire and cable
harness assembly business. On July 17,
2007, the Company completed the sale of its wholly owned subsidiary Defiance
Testing and Engineering Services, Inc.
On November 14, 2008, the Company completed the sale of its wire and
cable manufacturing business in Mineral Wells, Texas. Accordingly, these businesses have been classified as
discontinued operations. See Note 16.

On
February 29, 2008, the Company completed the sale of its Reheis antiperspirant
actives product line to Summit Research Labs, Inc. for $18,000. As part of this
    transaction, the Company continued to operate the antiperspirant actives
    manufacturing unit through September 30, 2008 under a transition services
    contract. This business continues to be classified as continuing operations.
    The Company recorded a loss on disposition of long-term assets as a result
    of this sale in the amount of $1,930.

Note 2  Summary of Significant Accounting
Policies

Use
of estimates  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.

Principles
of Consolidation  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.

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

Inventories
 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.

-44-

---



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

Property,
Plant and Equipment  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  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.

Impairment
of Long-Lived Assets  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 based on discounted cash flow analyses and/or
independent appraisals. Assets to be
disposed of are reported at the lower of their carrying amount or fair value
less costs to sell.

Goodwill
and Indefinite Lived Intangible Assets  The Company
reviews goodwill and indefinite lived intangible assets separately for
impairment annually (as of October 31) 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 market information and current operating
forecasts.

Product
Warranties Accruals for product warranties are
estimated based upon historical warranty experience and are recorded at the
time revenue is recognized or when a specific claim is both probable and can be
estimated.

Environmental
Liabilities 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.

Pension
and Other Postretirement Benefits  Accruals for
pension and other postretirement 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.

Foreign
Currency Translation and Transactions  Assets and
liabilities of foreign subsidiaries are translated into US dollars at the
year-end exchange rate while revenues and expenses are translated monthly at
the average exchange rate for each month. The resulting translation adjustments
are made directly to accumulated other comprehensive income. Gains and losses resulting from transactions
of the

-45-

---



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

Company and
its subsidiaries, which are made in currencies other than their functional
currency (different from their own), are included in earnings as they occur and
reflected within other income (expense).

Revenue
Recognition  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.

Shipping
and Handling  The Company records shipping and
handling costs in cost of sales.

Sale
of Emission Credits 
Certain locations within the Companys performance chemicals segment have
permitted allowances for air emissions.
These locations monitor their emissions and routinely invest funds to
maintain compliance levels or to improve performance. Costs for environmental maintenance and improvement projects are
recorded in cost of sales and the gains from sales or transfers of these
credits are likewise recorded in cost of sales. During December 2007, the
Company sold excess emission credits through an open market created
specifically to trade such emission credits, and recorded a gain from these
sales in the amount of $1,591.

Stock-based
Compensation  The Company recognizes expense for
stock-based compensation based on the fair value on the grant date of the
securities issued over the requisite vesting period.

Accounting
for Income Taxes  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.

Financial
Instruments  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 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.

-46-

---



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

Comprehensive
Income (Loss)  The components of accumulated other
comprehensive income (loss) are as follows:

|                                                         |  |              |         |      |   |        |  
|-------------------------------------------------------- |  | ------------ | ------- | ---- | - | ------ | -
|                                                         |  | December 31, |        
|                                                         |  |              |        
|                                                         |  | 2008         |         | 2007 |  
|                                                         |  |              |         |      |  
|Foreign
 currency translation                            |  | $            | 201     |      | $ | 613    |  
|Unrecognized
 pension and postretirement (costs) credits |  |              | (20,535 | )    |   | 22,451 |  
|Net
 unrealized gain/(loss) on derivative instruments    |  |              | (4,505  | )    |   | (1,554 | )
|                                                         |  |              |         |      |   |        |  
|Accumulated
 other comprehensive income (loss)           |  | $            | (24,839 | )    | $ | 21,510 |  
|                                                         |  |              |         |      |   |        |  

Recent
Accounting Pronouncements 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.
Certain provisions of this Statement were effective for financial
statements issued for fiscal years beginning after November 15, 2007 and
interim periods within those fiscal years.
In February 2008, the FASB deferred the implementation of SFAS No. 157
for all non-financial assets and non-financial liabilities, except those
recognized or disclosed at fair value in the financial statements on a
recurring basis (at least annually).
The implementation of SFAS 157 for financial assets and financial
liabilities, effective January 1, 2008, did not have a material impact on our
consolidated financial position and results of operations. The Company is currently assessing the
impact of adopting SFAS 157 for non-financial assets and non-financial
liabilities on its consolidated financial position and results of operations.

In
September 2006, the FASB issued SFAS No. 158, Employers Accounting for Defined
Benefit Pensions and Other Postretirement Plans  Amendment of FASB Statements
No. 87, 88, 106 and 132(R), (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 was to decrease prepaid pension costs by
$1,749, decrease other current liabilities by $862, reduce accrued pension and
postretirement benefit costs by $10,354 and increase deferred tax liabilities
by $1,198, with the offset increasing stockholders equity by $8,269. Additionally, in accordance with SFAS 158,
the Company changed its measurement date for plan assets and obligations to
coincide with its fiscal year end in 2008.
The Company previously utilized a measurement date of October 31. The adoption of the measurement date
provisions of SFAS 158 resulted in an increase of $259, net of taxes, to the
Companys retained earnings and a decrease of $487, net of tax, to accumulated
other comprehensive income (loss).

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 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

-47-

---



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

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 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 159 is effective as of
the beginning of the first fiscal year beginning after November 15, 2007. The adoption of this statement did not have a material
impact on the
Companys results of operation or financial condition. The Company did not elect the fair value
option for any assets or liabilities.

In
December 2007, the FASB issued SFAS No. 141 (revised 2007), Business
Combinations (SFAS 141R). SFAS 141R establishes principles and
requirements for how an acquirer recognizes and measures the identifiable
assets acquired, the liabilities assumed, any noncontrolling interest in the
acquiree and the goodwill acquired.
SFAS 141R also establishes disclosure requirements to enable the evaluation
of the nature and financial effects of the business combination. FAS 141(R) is to be applied
prospectively to business combinations for which the acquisition date is on or
after an entitys fiscal year that begins after December 15, 2008. The Company will assess the impact of
SFAS 141R if and when a future acquisition occurs.

In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statementsan amendment of ARB No. 51 (SFAS
160). SFAS 160 establishes accounting and reporting standards for the
noncontrolling interest in a subsidiary and for the deconsolidation of a
subsidiary. SFAS 160 is effective for
fiscal years beginning on or after December 15, 2008. Earlier adoption is
prohibited. The Company does not
anticipate that the adoption of this statement will have a material impact on
the Companys results of operations or financial condition.

In
March 2008, the FASB issued SFAS No. 161, Disclosures About Derivative Instruments and Hedging
Activities  an amendment of FASB Statement No. 133 (SFAS
161). SFAS 161 expands quarterly
disclosure requirements in SFAS No. 133 about an entitys derivative
instruments and hedging activities.
SFAS 161 is effective for fiscal years beginning after November 15,
2008. The Company is currently
assessing the impact of adopting SFAS 161 on its financial statements.

In
April 2008, the FASB issued FSP FAS 142-3, Determination of the Useful Life of Intangible Assets
(FSP FAS 142-3). FSP FAS 142-3 amends
the factors that should be considered in developing renewal or extension
assumptions used to determine the useful life of a recognized intangible asset
under SFAS No. 142, Goodwill and Other Intangible Assets
(SFAS 142). The intent of FSP FAS
142-3 is to improve the consistency between the useful life of a recognized
intangible asset under SFAS 142 and the period of expected cash flows used to
measure the fair value of the asset under SFAS 141(R) and other applicable
accounting literature. FSP FAS 142-3 is
effective for financial statements issued for fiscal years beginning after
December 15, 2008. The Company does not
anticipate that the adoption of FSP FAS 142-3 will have a material impact on
its results of operations or financial condition.

In
May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting
Principles, (SFAS 162).
SFAS 162 identifies the sources of accounting principles and the
framework for selecting the principles used in the preparation of financial
statements. SFAS 162 is effective 60
days following the SECs approval of the Public Company Accounting Oversight
Board amendments to AU

-48-

---



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

Section 411, The Meaning
of Present Fairly in Conformity with Generally Accepted Accounting Principles. The Company does not expect that this
standard will have a material impact on its results of operations, financial
position or cash flow.

Note 3  Acquisitions

On
December 31, 2007, the Company acquired Bay Chemical and Supply Company. The acquisition included the manufacturing
facility in Odem, Texas. Bay Chemical
and Supply is a producer of water treatment chemicals. The total cost of the acquisition was
$7,000. As a result of the acquisition
of Bay Chemical and Supply, the Company recognized $5,065 of goodwill, which
will not be deductible for tax purposes.  The goodwill is the result of
synergies and cost reductions expected to be realized as the facility is
assimilated into the Companys network of water treatment chemical production
facilities in the performance chemicals segment.

On
February 6, 2007, the Company acquired the assets of Chalum, Inc. The total cost of the acquisition was $3,203. The acquisition
included the manufacturing
facility in Sacaton, Arizona. Chalum
produces aluminum sulfate for the greater Phoenix, Arizona municipal water
treatment market. As a result of the
acquisition of Chalum, the Company recognized $2,901 of goodwill, all of which
is expected to be deductible for tax purposes.
The goodwill is the result of synergies and cost reductions expected to
be realized as the facility is assimilated into the Companys network of water
treatment chemical production facilities in the performance chemicals segment.

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

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 actuation 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.
As part of the initial purchase price allocation, the Company recorded a
liability for the excess of the fair value of assets purchased over the
preliminary purchase price due to the potential for an earn-out payment. During the third quarter of 2007, it was
determined that these performance metrics had not been achieved, and that no
additional consideration was due.
Accordingly, the liability representing the excess of the values
assigned to the assets purchased over the preliminary purchase price was
reversed, and the values assigned to property, plant and equipment were
adjusted from $15,990 to $11,172 and the values assigned to intangible assets
were adjusted from $4,100 to $3,822.

-49-

---



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

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 total cost of the acquisition was
$6,057. During the second quarter of
2007, the Company increased the value assigned to intangible assets by $1,560.

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. Purchase
price allocations have been finalized for all acquisitions. Operating results for the acquired entities have been reflected in the
Companys consolidated financial statements from date of acquisition.

Note 4  Restructuring and Impairment Charges

Restructuring
Actions  2008

During the
second quarter of 2008, the Company initiated a workforce reduction affecting
valve actuation systems employees.
During the third quarter of 2008, the Company initiated actions to close
a production facility included in the performance chemicals segment. The Company substantially completed
implementation of these restructuring actions during 2008. The following tables summarize the Companys
costs and accruals for these restructuring actions:

|                                                |  |                          |       |                        |   |           |   |       |   |  |   |        |  
|----------------------------------------------- |  | ------------------------ | ----- | ---------------------- | - | --------- | - | ----- | - |  | - | ------ | -
|                                                |  | Valve Actuation
 Systems |       | Performance
 Chemicals |   | Corporate |   | Total |  
|                                                |  |                          |       |                        |   |           |   |       |  
|Employee Termination Costs                      |  |                          |       |                        |   |           |   |       |   |  |   |        |  
|Cumulative
 costs incurred                      |  | $                        | 1,206 |                        | $ | 691       |   | $     |  |  | $ | 1,897  |  
|Costs
 anticipated to be incurred in the future |  |                          |      |                        |   |          |   |       |  |  |   |       |  
|                                                |  |                          |       |                        |   |           |   |       |   |  |   |        |  
|Total costs
 expected to be incurred            |  | $                        | 1,206 |                        | $ | 691       |   | $     |  |  | $ | 1,897  |  
|                                                |  |                          |       |                        |   |           |   |       |   |  |   |        |  
|                                                |  |                          |       |                        |   |           |   |       |   |  |   |        |  
|Provisions                                      |  | $                        | 1,206 |                        | $ | 691       |   | $     |  |  | $ | 1,897  |  
|Amounts paid                                    |  |                          | (682  | )                      |   | (437      | ) |       |  |  |   | (1,119 | )
|                                                |  |                          |       |                        |   |           |   |       |   |  |   |        |  
|Accrual
 balance at December 31, 2008           |  | $                        | 524   |                        | $ | 254       |   | $     |  |  | $ | 778    |  
|                                                |  |                          |       |                        |   |           |   |       |   |  |   |        |  
|                                                |  |                          |       |                        |   |           |   |       |   |  |   |        |  
|                                                |  | Valve Actuation
 Systems |       | Performance
 Chemicals |   | Corporate |   | Total |  
|                                                |  |                          |       |                        |   |           |   |       |  
|Facility Exit Costs                             |  |                          |       |                        |   |           |   |       |   |  |   |        |  
|Cumulative
 costs incurred                      |  | $                        |      |                        | $ | 504       |   | $     |  |  | $ | 504    |  
|Costs
 anticipated to be incurred in the future |  |                          |      |                        |   | 18        |   |       |  |  |   | 18     |  
|                                                |  |                          |       |                        |   |           |   |       |   |  |   |        |  
|Total costs
 expected to be incurred            |  | $                        |      |                        | $ | 522       |   | $     |  |  | $ | 522    |  
|                                                |  |                          |       |                        |   |           |   |       |   |  |   |        |  
|                                                |  |                          |       |                        |   |           |   |       |   |  |   |        |  
|Provisions                                      |  | $                        |      |                        | $ | 504       |   | $     |  |  | $ | 504    |  
|Amounts paid                                    |  |                          |      |                        |   | (441      | ) |       |  |  |   | (441   | )
|                                                |  |                          |       |                        |   |           |   |       |   |  |   |        |  
|Accrual
 balance at December 31, 2008           |  | $                        |      |                        | $ | 63        |   | $     |  |  | $ | 63     |  
|                                                |  |                          |       |                        |   |           |   |       |   |  |   |        |  

-50-

---



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

Restructuring
Actions  Prior to 2008

During
2007, the Company initiated actions to close its Perrysburg, Ohio facility,
which is included in its valve actuation systems segment. During 2006, the Company initiated actions
to close two production facilities in its performance chemicals segment. As of December 31, 2007, these restructuring
actions were completed. The following
tables summarize the Companys costs and accruals for these restructuring actions:

|                                                |  |                          |        |                        |   |           |   |       |   |  |   |        |  
|----------------------------------------------- |  | ------------------------ | ------ | ---------------------- | - | --------- | - | ----- | - |  | - | ------ | -
|                                                |  | Valve Actuation
 Systems |        | Performance
 Chemicals |   | Corporate |   | Total |  
|                                                |  |                          |        |                        |   |           |   |       |  
|Employee Termination Costs                      |  |                          |        |                        |   |           |   |       |   |  |   |        |  
|Cumulative
 costs incurred                      |  | $                        | 758    |                        | $ | 564       |   | $     |  |  | $ | 1,322  |  
|Costs
 anticipated to be incurred in the future |  |                          |       |                        |   |          |   |       |  |  |   |       |  
|                                                |  |                          |        |                        |   |           |   |       |   |  |   |        |  
|Total costs
 incurred                           |  | $                        | 758    |                        | $ | 564       |   | $     |  |  | $ | 1,322  |  
|                                                |  |                          |        |                        |   |           |   |       |   |  |   |        |  
|                                                |  |                          |        |                        |   |           |   |       |   |  |   |        |  
|Accrual
 balance at December 31, 2005           |  | $                        | 89     |                        | $ | 49        |   | $     |  |  | $ | 138    |  
|Provisions                                      |  |                          | 337    |                        |   | 390       |   |       |  |  |   | 727    |  
|Amounts paid                                    |  |                          | (426   | )                      |   | (49       | ) |       |  |  |   | (475   | )
|                                                |  |                          |        |                        |   |           |   |       |   |  |   |        |  
|Accrual
 balance at December 31, 2006           |  |                          |       |                        |   | 390       |   |       |  |  |   | 390    |  
|Provisions                                      |  |                          | 421    |                        |   | 174       |   |       |  |  |   | 595    |  
|Amounts paid                                    |  |                          | (384   | )                      |   | (564      | ) |       |  |  |   | (948   | )
|                                                |  |                          |        |                        |   |           |   |       |   |  |   |        |  
|Accrual
 balance at December 31, 2007           |  |                          | 37     |                        |   |          |   |       |  |  |   | 37     |  
|Provisions                                      |  |                          |       |                        |   |          |   |       |  |  |   |       |  
|Amounts paid                                    |  |                          | (37    | )                      |   |          |   |       |  |  |   | (37    | )
|                                                |  |                          |        |                        |   |           |   |       |   |  |   |        |  
|Accrual
 balance at December 31, 2008           |  | $                        |       |                        | $ |          |   | $     |  |  | $ |       |  
|                                                |  |                          |        |                        |   |           |   |       |   |  |   |        |  
|                                                |  |                          |        |                        |   |           |   |       |   |  |   |        |  
|                                                |  | Valve Actuation
 Systems |        | Performance
 Chemicals |   | Corporate |   | Total |  
|                                                |  |                          |        |                        |   |           |   |       |  
|Facility Exit Costs                             |  |                          |        |                        |   |           |   |       |   |  |   |        |  
|Cumulative
 costs incurred                      |  | $                        | 2,509  |                        | $ | 1,962     |   | $     |  |  | $ | 4,471  |  
|Costs
 anticipated to be incurred in the future |  |                          |       |                        |   |          |   |       |  |  |   |       |  
|                                                |  |                          |        |                        |   |           |   |       |   |  |   |        |  
|Total costs
 incurred                           |  | $                        | 2,509  |                        | $ | 1,962     |   | $     |  |  | $ | 4,471  |  
|                                                |  |                          |        |                        |   |           |   |       |   |  |   |        |  
|                                                |  |                          |        |                        |   |           |   |       |   |  |   |        |  
|Accrual
 balance at December 31, 2005           |  | $                        | 134    |                        | $ |          |   | $     |  |  | $ | 134    |  
|Provisions                                      |  |                          | 502    |                        |   | 514       |   |       |  |  |   | 1,016  |  
|Amounts paid                                    |  |                          | (636   | )                      |   | (302      | ) |       |  |  |   | (938   | )
|                                                |  |                          |        |                        |   |           |   |       |   |  |   |        |  
|Accrual
 balance at December 31, 2006           |  |                          |       |                        |   | 212       |   |       |  |  |   | 212    |  
|Provisions                                      |  |                          | 2,007  |                        |   | 1,448     |   |       |  |  |   | 3,455  |  
|Amounts paid                                    |  |                          | (2,007 | )                      |   | (1,660    | ) |       |  |  |   | (3,667 | )
|                                                |  |                          |        |                        |   |           |   |       |   |  |   |        |  
|Accrual
 balance at December 31, 2007           |  | $                        |       |                        | $ |          |   | $     |  |  | $ |       |  
|                                                |  |                          |        |                        |   |           |   |       |   |  |   |        |  

Impairment
Charges

Upon
conducting its annual test of goodwill impairment, the Company determined that
the carrying amount, including goodwill, of valve actuation systems exceeded
the fair value of that reporting unit.
The fair value of the reporting unit was based on the present value of
estimated future cash flows. The
Company performed step two of the goodwill impairment test to determine the
implied fair value of

-51-

---



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

the goodwill
in the same manner as if the Company had acquired the reporting unit in a
business combination and the fair value was the price paid to acquire it. The
Company allocated the fair value of the reporting unit to all of the assets
(including any unrecognized intangible assets) of that unit, in a hypothetical
calculation to determine the implied fair value of the goodwill. As a result of
that calculation, a non-cash impairment charge of $122,847 was recorded, which
reduced the goodwill balance of that reporting unit to $0.

As
a result of the continued downturn in the valve actuation systems business,
prior to completing the assessment for impairment of goodwill, the Company
performed a recoverability test for the long-lived assets of valve actuation
systems. The Company compared the fair value, based on operating forecasts and
independent appraisals, to the carrying amount of the long-lived assets. As a
result, the Company concluded that certain intangible assets were impaired and
recorded a non-cash impairment charge of $21,692.

In
December 2008, the Company announced that it had ceased using certain
trademarks it currently utilizes within its valve actuation systems reporting
unit. This was done to facilitate global customer clarity and operating
efficiencies. Accordingly, the Company recorded a non-cash impairment charge of
$12,000 in order to write down the existing trademarks that will no longer be
used to a balance of $0.

During
2007, the Company recorded non-cash impairment charges of $914 to reflect
estimated fair values of closed facilities in Waterdown, Ontario, Canada, which
is included in the valve actuation systems segment, and Saukville, Wisconsin,
which is included in the performance chemicals segment. The estimated fair
values were determined based upon offers to purchase these facilities.

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

During
the second quarter of 2006, the Company recorded a non-cash impairment charge
of $503 to reflect revised estimated fair values of fixed assets at its
previously closed facilities in Waterdown, Ontario, Canada and Guelph, Ontario,
Canada, which were included in the valve actuation systems segment. The revised
estimates of fair values were determined based upon sales of and offers to
purchase these 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 stock, using the treasury stock method.

-52-

---



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

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

|                                           |  |                           |            |      |  |            |  |  |            | 
|------------------------------------------ |  | ------------------------- | ---------- | ---- |  | ---------- |  |  | ---------- | 
|                                           |  | Years
 Ended December 31, |           
|                                           |  |                           |           
|                                           |  | 2008                      |            | 2007 |  | 2006       | 
|                                           |  |                           |            |      |  |            | 
|Basic
 earnings per common share:          |  |                           |            |      |  |            |  |  |            | 
|Weighted average common shares outstanding |  |                           | 10,070,951 |      |  | 10,314,526 |  |  | 10,166,614 | 
|                                           |  |                           |            |      |  |            |  |  |            | 
|Diluted
 earnings per common share:        |  |                           |            |      |  |            |  |  |            | 
|Weighted average common shares outstanding |  |                           | 10,070,951 |      |  | 10,314,526 |  |  | 10,166,614 | 
|Warrants                                   |  |                           |           |      |  | 1,088,714  |  |  | 644,353    | 
|Options                                    |  |                           |           |      |  | 102,478    |  |  | 123,198    | 
|Restricted stock                           |  |                           |           |      |  | 57,339     |  |  | 41,015     | 
|                                           |  |                           |            |      |  |            |  |  |            | 
|Total                                      |  |                           | 10,070,951 |      |  | 11,563,057 |  |  | 10,975,180 | 
|                                           |  |                           |            |      |  |            |  |  |            | 

For
the year ended December 31, 2008, 2007 and 2006, there were potentially
dilutive securities totaling 1,654,048, 161,591 and 819,615, respectively,
which were not included in the computation of diluted earnings per common
share. These securities either had an antidilutive effect or were contingent
restricted stock for which all necessary conditions had not been satisfied.

Note 6  Income Taxes

Income
(loss) from continuing operations before income taxes is as follows:

|               |  |                           |          |      |   |        |  |   |        | 
|-------------- |  | ------------------------- | -------- | ---- | - | ------ |  | - | ------ | 
|               |  | Years
 Ended December 31, |         
|               |  |                           |         
|               |  | 2008                      |          | 2007 |   | 2006   | 
|               |  |                           |          |      |   |        | 
|United
 States |  | $                         | (116,340 | )    | $ | 36,236 |  | $ | 17,073 | 
|Foreign        |  |                           | (2,144   | )    |   | 2,961  |  |   | 2,657  | 
|               |  |                           |          |      |   |        |  |   |        | 
|Total          |  | $                         | (118,484 | )    | $ | 39,197 |  | $ | 19,730 | 
|               |  |                           |          |      |   |        |  |   |        | 

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

|                |  |                           |        |      |   |        |   |   |        |  
|--------------- |  | ------------------------- | ------ | ---- | - | ------ | - | - | ------ | -
|                |  | Years
 Ended December 31, |       
|                |  |                           |       
|                |  | 2008                      |        | 2007 |   | 2006   |  
|                |  |                           |        |      |   |        |  
|United
 States: |  |                           |        |      |   |        |   |   |        |  
|Current         |  | $                         | (4,564 | )    | $ | (2,834 | ) | $ | 591    |  
|Deferred        |  |                           | 1,922  |      |   | 2,914  |   |   | 5,441  |  
|Foreign:        |  |                           |        |      |   |        |   |   |        |  
|Current         |  |                           | (2,376 | )    |   | 1,435  |   |   | 771    |  
|Deferred        |  |                           | (2,595 | )    |   | (500   | ) |   | (461   | )
|State:          |  |                           |        |      |   |        |   |   |        |  
|Current         |  |                           | (166   | )    |   | 177    |   |   | 2,234  |  
|Deferred        |  |                           | (640   | )    |   | 968    |   |   | (1,185 | )
|                |  |                           |        |      |   |        |   |   |        |  
|Total           |  | $                         | (8,419 | )    | $ | 2,160  |   | $ | 7,391  |  
|                |  |                           |        |      |   |        |   |   |        |  

-53-

---



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

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

|                                         |  |               |         |      |   |         |  
|---------------------------------------- |  | ------------- | ------- | ---- | - | ------- | -
|                                         |  | December
 31, |        
|                                         |  |               |        
|                                         |  | 2008          |         | 2007 |  
|                                         |  |               |         |      |  
|Net
 operating loss carry forwards       |  | $             | 4,957   |      | $ | 9,925   |  
|Postretirement
 benefits                 |  |               | 39,935  |      |   | 14,376  |  
|Other
 accruals not currently deductible |  |               | 27,137  |      |   | 26,838  |  
|Goodwill                                 |  |               |        |      |   | 16,622  |  
|Capital loss
 carryforward               |  |               | 20,671  |      |   |        |  
|Stock basis
 difference in subsidiary    |  |               |        |      |   | 21,874  |  
|Foreign tax
 credits                     |  |               | 19,705  |      |   | 19,705  |  
|                                         |  |               |         |      |   |         |  
|Deferred tax assets                      |  |               | 112,405 |      |   | 109,340 |  
|                                         |  |               |         |      |   |         |  
|Intangibles                              |  |               | 48      |      |   | 18,103  |  
|Property,
 plant and equipment           |  |               | 37,686  |      |   | 46,422  |  
|Basis
 differences in partnerships       |  |               | 8,101   |      |   | 8,101   |  
|Taxes on
 unremitted foreign earnings    |  |               | 5,077   |      |   | 3,856   |  
|Other                                    |  |               | 2,873   |      |   | 995     |  
|                                         |  |               |         |      |   |         |  
|Deferred tax liabilities                 |  |               | 53,785  |      |   | 77,477  |  
|Valuation
 allowance                     |  |               | 26,748  |      |   | 34,965  |  
|                                         |  |               |         |      |   |         |  
|Net deferred tax assets (liabilities)    |  | $             | 31,872  |      | $ | (3,102  | )
|                                         |  |               |         |      |   |         |  

At
December 31, 2008 and 2007, 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 decrease to the valuation allowance during 2008 is
primarily due to the recognition of additional capital gains. Net operating
loss 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.

Included
in other assets on the balance sheet are deferred tax assets of $3,443 and $693
as of December 31, 2008 and 2007, respectively. Included in other liabilities
on the balance sheet are deferred tax liabilities of $5,127 and $43,470 as of
December 31, 2008 and 2007, respectively.

-54-

---



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

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

|                                                        |  |                           |    |      |       |      |  |      |  
|------------------------------------------------------- |  | ------------------------- | -- | ---- | ----- | ---- |  | ---- | -
|                                                        |  | Years
 Ended December 31,
|                                                        |  |                          
|                                                        |  | 2008                      |    | 2007 |       | 2006
|                                                        |  |                           |    |      |       |     
|U.S. federal
 statutory rate                            |  | (35.0                     | )% |      | 35.0  | %    |  | 35.0 | %
|State income
 taxes, net of federal benefit             |  | 0.1                       |    |      | 6.9   |      |  | 3.6  |  
|Tax effect
 of foreign operations                       |  | (1.5                      | )  |      | (0.6  | )    |  | 3.6  |  
|Goodwill
 writedown                                     |  | 36.2                      |    |      |      |      |  |     |  
|Benefit on
 restricted stock dividend payment           |  |                          |    |      |      |      |  | (3.5 | )
|Recognition
 of subsidiary tax basis difference         |  |                          |    |      | (53.4 | )    |  |     |  
|Valuation
 allowance on subsidiary tax basis difference |  |                          |    |      | 34.9  |      |  |     |  
|Change in
 valuation allowance                          |  | (6.5                      | )  |      |      |      |  | 2.3  |  
|Change in
 unrecognized tax benefits                    |  | (1.8                      | )  |      | (16.3 | )    |  |     |  
|Other                                                   |  | 1.4                       |    |      | (1.0  | )    |  | (3.5 | )
|                                                        |  |                           |    |      |       |      |  |      |  
|Total                                                   |  | (7.1                      | )% |      | 5.5   | %    |  | 37.5 | %
|                                                        |  |                           |    |      |       |      |  |      |  

The
Company adopted the provisions of FIN 48 on January 1, 2007. The adoption,
which was accounted for as a cumulative effect adjustment, resulted in an
increase to the January 1, 2007 balance of retained earnings (deficit) of
$2,801. A reconciliation of the beginning and ending amount of unrecognized tax
benefits is as follows:

|                                                              |  |               |        |      |   |        |  
|------------------------------------------------------------- |  | ------------- | ------ | ---- | - | ------ | -
|                                                              |  | December
 31, |       
|                                                              |  |               |       
|                                                              |  | 2008          |        | 2007 |  
|                                                              |  |               |        |      |  
|                                                             
|Beginning of period                                           |  | $             | 4,940  |      | $ | 11,863 |  
|Additions based on tax
 positions related to the current year |  |               | 148    |      |   | 505    |  
|Additions for tax
 positions of prior years                   |  |               | (115   | )    |   | 193    |  
|Expiration of statute of
 limitations                         |  |               | (2,229 | )    |   |       |  
|Settlements                                                   |  |               |       |      |   | (7,621 | )
|                                                              |  |               |        |      |   |        |  
|End of period                                                 |  | $             | 2,744  |      | $ | 4,940  |  
|                                                              |  |               |        |      |   |        |  

Included
in the balance at December 31, 2008 is $1,784 of unrecognized tax benefits that
would, if recognized, affect the effective tax rate. During the next twelve
months, it is reasonably possible that the total amount of unrecognized tax
benefits will significantly change by up to approximately $1,476 due to the
expiration of statute of limitations or the settlement of examinations. These
unrecognized tax benefits arose in conjunction with the Companys emergence
from bankruptcy.

The
Company recognizes interest and penalties related to uncertain tax positions as
a component of the provision for income taxes. During the year ended December
31, 2008 and 2007, the Company recognized/(reversed) $(1,187) and $719,
respectively, in interest. The Company had $1,215 and $2,402 accrued for
interest at December 31, 2008 and 2007, respectively.

The
Company and its affiliates are subject to tax in various jurisdictions,
including the United States, various states, Canada and several other foreign
jurisdictions. The Company, joined by its domestic subsidiaries, files a
consolidated income tax return for Federal income tax purposes. With few
exceptions, the Company is no longer subject to income tax examinations by tax
authorities for tax years before 2003.

-55-

---



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

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 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 postretirement 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,      |  
|                                         |  |                          |         |                               |  
|                                         |  | 2008                     |         | 2007                          |   | 2006    |   | 2008 |         | 2007 |   | 2006   |  
|                                         |  |                          |         |                               |   |         |   |      |         |      |   |        |  
|Components of net periodic benefit cost: |  |                          |         |                               |   |         |   |      |         |      |   |        |   |   |        |   |   |        |  
|Service cost                             |  | $                        | 992     |                               | $ | 1,191   |   | $    | 1,613   |      | $ | 688    |   | $ | 966    |   | $ | 1,343  |  
|Interest cost                            |  |                          | 13,798  |                               |   | 13,478  |   |      | 13,417  |      |   | 2,414  |   |   | 2,666  |   |   | 2,674  |  
|Expected return on plan assets           |  |                          | (15,552 | )                             |   | (15,168 | ) |      | (14,867 | )    |   |       |   |   |       |   |   |       |  
|Amortization of net:                     |  |                          |         |                               |   |         |   |      |         |      |   |        |   |   |        |   |   |        |  
|Prior service cost (credit)              |  |                          | 158     |                               |   | 128     |   |      | 135     |      |   | (4,930 | ) |   | (4,778 | ) |   | (4,342 | )
|(Gain)/loss                              |  |                          | (66     | )                             |   | 100     |   |      | 92      |      |   | 54     |   |   | 177    |   |   | 105    |  
|                                         |  |                          |         |                               |   |         |   |      |         |      |   |        |   |   |        |   |   |        |  
|Net periodic benefit cost (income)       |  | $                        | (670    | )                             | $ | (271    | ) | $    | 390     |      | $ | (1,774 | ) | $ | (969   | ) | $ | (220   | )
|                                         |  |                          |         |                               |   |         |   |      |         |      |   |        |   |   |        |   |   |        |  

During
2008, the Company adopted plan amendments that froze pension plan benefit
accruals for hourly employees covered by certain collective bargaining
agreements, which resulted in a pension curtailment gain of $36.

During
2008, the Company implemented plan amendments to several of its postretirement
medical plans which cap the Companys cost for providing these benefits. The
effect of these changes was a reduction to the accumulated postretirement
benefit obligation of $3,196 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.

During
2007, 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 net pension curtailment gains of $745.

-56-

---



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

During
2007, the Company implemented plan amendments to one of its postretirement
medical plans which cap the Companys cost for providing these benefits. The
effect of these changes was a reduction to the accumulated postretirement
benefit obligation of $7,247 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. In addition, the Company
completed the closure of one of its manufacturing facilities, resulting in a
postretirement liability curtailment gain of $2,515.

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.

The
Company utilized a measurement date of December 31 in 2008 for the
determination of the benefit obligation, plan assets and other assumptions
related to all of our pension and postretirement benefits as required by SFAS
158. The same plans utilized a measurement date of October 31 in 2007 and 2006.

|                                                |  |                                |         |                                              |   |         |   |      |         |   |   |         |  
|----------------------------------------------- |  | ------------------------------ | ------- | -------------------------------------------- | - | ------- | - | ---- | ------- | - | - | ------- | -
|                                                |  | Pension Benefits
 December 31, |         | Other
 Postretirement Benefits
 December 31, |  
|                                                |  |                                |         |                                              |  
|                                                |  | 2008                           |         | 2007                                         |   | 2008    |   | 2007 |        
|                                                |  |                                |         |                                              |   |         |   |      |        
|Change in benefit obligation:                   |  |                                |         |                                              |   |         |   |      |         |   |   |         |  
|Benefit obligation at prior measurement
 date   |  | $                              | 227,776 |                                              | $ | 240,239 |   | $    | 41,976  |   | $ | 50,621  |  
|Service cost                                    |  |                                | 1,159   |                                              |   | 1,191   |   |      | 801     |   |   | 966     |  
|Interest cost                                   |  |                                | 16,102  |                                              |   | 13,478  |   |      | 2,809   |   |   | 2,666   |  
|Actuarial (gain)/loss                           |  |                                | 2,289   |                                              |   | (10,993 | ) |      | (2,314  | ) |   | (1,681  | )
|Foreign currency translation                    |  |                                | (1,377  | )                                            |   | 1,311   |   |      | (674    | ) |   | 1,040   |  
|Benefits paid                                   |  |                                | (19,017 | )                                            |   | (16,526 | ) |      | (4,452  | ) |   | (3,748  | )
|Plan amendments                                 |  |                                | 477     |                                              |   | 31      |   |      | (3,196  | ) |   | (7,247  | )
|Settlements and curtailments                    |  |                                | (34     | )                                            |   | (955    | ) |      |        |   |   | (641    | )
|                                                |  |                                |         |                                              |   |         |   |      |         |   |   |         |  
|Benefit obligation at measurement date          |  | $                              | 227,375 |                                              | $ | 227,776 |   | $    | 34,950  |   | $ | 41,976  |  
|                                                |  |                                |         |                                              |   |         |   |      |         |   |   |         |  
|                                                |  |                                |         |                                              |   |         |   |      |         |   |   |         |  
|Change in plan assets:                          |  |                                |         |                                              |   |         |   |      |         |   |   |         |  
|Fair value of assets at prior measurement
 date |  | $                              | 217,027 |                                              | $ | 201,557 |   | $    |        |   | $ |        |  
|Actual return on plan assets                    |  |                                | (50,195 | )                                            |   | 29,087  |   |      |        |   |   |        |  
|Employer contributions                          |  |                                | 3,885   |                                              |   | 1,483   |   |      | 4,413   |   |   | 3,748   |  
|Foreign currency translation                    |  |                                | (1,617  | )                                            |   | 1,426   |   |      |        |   |   |        |  
|Benefits paid                                   |  |                                | (19,017 | )                                            |   | (16,526 | ) |      | (4,895  | ) |   | (4,326  | )
|Medicare subsidy                                |  |                                |        |                                              |   |        |   |      | 482     |   |   | 578     |  
|                                                |  |                                |         |                                              |   |         |   |      |         |   |   |         |  
|Fair value of assets at measurement date        |  | $                              | 150,083 |                                              | $ | 217,027 |   | $    |        |   | $ |        |  
|                                                |  |                                |         |                                              |   |         |   |      |         |   |   |         |  
|Funded status:                                  |  |                                |         |                                              |   |         |   |      |         |   |   |         |  
|Funded status                                   |  | $                              | (77,292 | )                                            | $ | (10,749 | ) | $    | (34,950 | ) | $ | (41,976 | )
|Amounts recognized in the balance sheet:        |  |                                |         |                                              |   |         |   |      |         |   |   |         |  
|Noncurrent assets                               |  | $                              | 884     |                                              | $ | 1,884   |   | $    |        |   | $ |        |  
|Current
 liabilities                            |  |                                |        |                                              |   |        |   |      | (3,268  | ) |   | (3,318  | )
|Noncurrent
 liabilities                         |  |                                | (78,176 | )                                            |   | (12,633 | ) |      | (31,682 | ) |   | (38,617 | )
|                                                |  |                                |         |                                              |   |         |   |      |         |   |   |         |  
|Net amount recognized                           |  | $                              | (77,292 | )                                            | $ | (10,749 | ) | $    | (34,950 | ) | $ | (41,935 | )
|                                                |  |                                |         |                                              |   |         |   |      |         |   |   |         |  

-57-

---



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

|                                                                |  |   |        |  |   |         |   |   |         |   |   |         |  
|--------------------------------------------------------------- |  | - | ------ |  | - | ------- | - | - | ------- | - | - | ------- | -
|Amounts recognized in accumulated other
 comprehensive income:  |  |   |        |  |   |         |   |   |         |   |   |         |  
|Prior service cost (credit)                                     |  | $ | 1,634  |  | $ | 1,340   |   | $ | (13,391 | ) | $ | (16,468 | )
|Net actuarial (gain) loss                                       |  |   | 47,655 |  |   | (22,920 | ) |   | (529    | ) |   | 2,390   |  
|                                                                |  |   |        |  |   |         |   |   |         |   |   |         |  
|Net amount recognized                                           |  | $ | 49,289 |  | $ | (21,580 | ) | $ | (13,920 | ) | $ | (14,078 | )
|                                                                |  |   |        |  |   |         |   |   |         |   |   |         |  
|                                                                |  |   |        |  |   |         |   |   |         |   |   |         |  
|Amounts expected to be recognized during
 the next fiscal year: |  |   |        |  |   |         |   |   |         |   |   |         |  
|Prior service cost (credit)                                     |  | $ | 163    |  |   |         |   | $ | (4,821  | ) |   |         |  
|Actuarial loss (gain)                                           |  |   | 360    |  |   |         |   |   | (87     | ) |   |         |  
|                                                                |  |   |        |  |   |         |   |   |         |   |   |         |  
|Total                                                           |  | $ | 523    |  |   |         |   | $ | (4,908  | ) |   |         |  
|                                                                |  |   |        |  |   |         |   |   |         |   |   |         |  

The
accumulated benefit obligations for the defined benefit pension plans were
$226,113 and $226,885 at December 31, 2008 and 2007, respectively. For pension
plans included above with aggregate benefit obligations and accumulated benefit
obligations in excess of plan assets, at December 31, 2008 and 2007, the
projected benefit obligations were $222,121 and $220,024, respectively, the
accumulated benefit obligations were $221,058 and $218,921, respectively, and
the fair values of plan assets for these plans were $143,945 and $207,860,
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 |      
|          |  |                   |  |                                 |  |                    |      
|2009      |  | 16,400            |  | 3,200                           |  |                    | 500   |  | 
|2010      |  | 16,800            |  | 3,200                           |  |                    | 500   |  | 
|2011      |  | 16,800            |  | 3,200                           |  |                    | 600   |  | 
|2012      |  | 16,900            |  | 3,000                           |  |                    | 600   |  | 
|2013      |  | 17,300            |  | 3,100                           |  |                    | 600   |  | 
|2014-2018 |  | 85,900            |  | 14,100                          |  |                    | 3,500 |  | 

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

|                                                   |  |      |   |      |    |   | 
|-------------------------------------------------- |  | ---- | - | ---- | -- | - | 
|                                                   |  | 2008 |   | 2007 |   
|                                                   |  |      |   |      |   
|Discount
 rate                                     |  | 61⁄2   | % |      | 61⁄4 | % | 
|Average rate
 of increase in employee compensation |  | 4    | % |      | 4  | % | 

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

|                                                   |  |      |   |      |    |      |  |    |   | 
|-------------------------------------------------- |  | ---- | - | ---- | -- | ---- |  | -- | - | 
|                                                   |  | 2008 |   | 2007 |    | 2006 | 
|                                                   |  |      |   |      |    |      | 
|Discount
 rate                                     |  | 61⁄4   | % |      | 51⁄4 | %    |  | 53⁄4 | % | 
|Long-term
 rate of return on assets                |  | 8    | % |      | 8  | %    |  | 8  | % | 
|Average rate
 of increase in employee compensation |  | 33⁄4   | % |      | 4  | %    |  | 4  | % | 

-58-

---



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

The
health care cost trend rate used in accounting for the medical plans in the
United States was 8-9% in 2008 (decreasing to 5.5% in the year 2011 and beyond)
and 9-10% in 2007 (decreasing to 5.5% in the year 2011 and beyond). The health
care cost trend rate used in accounting for the medical plans in Canada was
7.6% in 2008 (decreasing to 5% in the year 2016 and beyond) and 8% in 2007
(decreasing to 5% in the year 2016 and beyond). A one percent increase in the
health care trend rate would increase the accumulated postretirement benefit obligation
by $315 at year-end 2008 and the net periodic cost by $139 for the year. A one
percent decrease in the health care trend rate would decrease the accumulated
postretirement benefit obligation by $261 at year-end 2008 and the net periodic
cost by $106 for the year.

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
pension trusts weighted-average asset allocations at December 31, 2008 and October
31, 2007 were:

|                                |  |      |   |      |  
|------------------------------- |  | ---- | - | ---- | -
|                                |  | 2008 |   | 2007 |  
|                                |  |      |   |      |  
|Asset Category                  |  |      |   |      |  
|Cash and short-term investments |  | 1    | % | 5    | %
|Debt securities                 |  | 56   | % | 45   | %
|Equity securities               |  | 43   | % | 50   | %
|                                |  |      |   |      |  
|                                |  | 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 2009, the Company expects to contribute
approximately $4,000 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, 2008 are as follows:

|                          |  |   |        | 
|------------------------- |  | - | ------ | 
|Years Ending December 31, |  |   |        | 
|                          |  |   |        | 
|2009                      |  | $ | 3,561  | 
|2010                      |  |   | 3,511  | 
|2011                      |  |   | 1,974  | 
|2012                      |  |   | 1,522  | 
|2013                      |  |   | 1,114  | 
|thereafter                |  |   | 462    | 
|                          |  |   |        | 
|                          |  | $ | 12,144 | 
|                          |  |   |        | 

Rental
expense for the years ended December 31, 2008, 2007 and 2006 was $6,650, $6,624
and $7,068, respectively.

-59-

---



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
environmental studies 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:

|                                |  |      |        |      |   |        |  
|------------------------------- |  | ---- | ------ | ---- | - | ------ | -
|                                |  | 2008 |        | 2007 |  
|                                |  |      |        |      |  
|Balance at
 beginning of period |  | $    | 25,016 |      | $ | 25,014 |  
|Accruals,
 net                  |  |      | 964    |      |   | 3,126  |  
|Payments                        |  |      | (1,098 | )    |   | (1,192 | )
|Assumption
 by third parties    |  |      |       |      |   | (2,012 | )
|Foreign
 exchange and other     |  |      | (535   | )    |   | 80     |  
|                                |  |      |        |      |   |        |  
|Balance at
 end of period       |  | $    | 24,347 |      | $ | 25,016 |  
|                                |  |      |        |      |   |        |  

Product
Warranties

Accruals
for product warranties are estimated based upon historical warranty experience
and are recorded at the time revenue is recognized or when a specific claim is
both probable and can be estimated. Activity in the aggregate product warranty
liability is summarized as follows:

|                                       |  |              |       |      |   |        |  
|-------------------------------------- |  | ------------ | ----- | ---- | - | ------ | -
|                                       |  | December 31, |      
|                                       |  |              |      
|                                       |  | 2008         |       | 2007 |  
|                                       |  |              |       |      |  
|                                       |  |              |       |      |   |        |  
|Balance at
 beginning of period        |  | $            | 1,615 |      | $ | 165    |  
|Accruals for
 warranties issued        |  |              | 1,623 |      |   | 3,052  |  
|Adjustments
 to preexisting warranties |  |              | (859  | )    |   |       |  
|Payments                               |  |              | (635  | )    |   | (1,602 | )
|                                       |  |              |       |      |   |        |  
|Balance at
 end of period              |  | $            | 1,744 |      | $ | 1,615  |  
|                                       |  |              |       |      |   |        |  

-60-

---



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

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.

Note 9  Additional Financial Information

|                                |  |              |        |      |   |        |  
|------------------------------- |  | ------------ | ------ | ---- | - | ------ | -
|                                |  | December 31, |       
|                                |  |              |       
|                                |  | 2008         |        | 2007 |  
|                                |  |              |        |      |  
|Receivables                     |  |              |        |      |   |        |  
|Trade                           |  | $            | 72,446 |      | $ | 74,836 |  
|Other                           |  |              | 817    |      |   | 2,390  |  
|Allowance for doubtful accounts |  |              | (2,699 | )    |   | (3,334 | )
|                                |  |              |        |      |   |        |  
|                                |  | $            | 70,564 |      | $ | 73,892 |  
|                                |  |              |        |      |   |        |  

|                        |  |              |        |      |   |        | 
|----------------------- |  | ------------ | ------ | ---- | - | ------ | 
|                        |  | December 31, |       
|                        |  |              |       
|                        |  | 2008         |        | 2007 |  
|                        |  |              |        |      |  
|Inventories             |  |              |        |      |   |        | 
|Raw materials           |  | $            | 27,648 |      | $ | 29,268 | 
|Work in process         |  |              | 4,664  |      |   | 6,001  | 
|Finished products       |  |              | 11,179 |      |   | 12,242 | 
|Supplies and containers |  |              | 1,171  |      |   | 1,326  | 
|                        |  |              |        |      |   |        | 
|                        |  | $            | 44,662 |      | $ | 48,837 | 
|                        |  |              |        |      |   |        | 

Inventories
valued at LIFO amounted to $20,571 and $18,221 at December 31, 2008 and 2007,
respectively, which were below estimated replacement cost by $15,686 and
$3,240, respectively. The impact of LIFO liquidations in 2008, 2007 and 2006
was not significant.

|                                                 |  |              |          |      |   |          |  
|------------------------------------------------ |  | ------------ | -------- | ---- | - | -------- | -
|                                                 |  | December 31, |         
|                                                 |  |              |         
|                                                 |  | 2008         |          | 2007 |  
|                                                 |  |              |          |      |  
|Property, Plant
 and Equipment                   |  |              |          |      |   |          |  
|Land and improvements                            |  | $            | 41,208   |      | $ | 37,254   |  
|Machinery and equipment                          |  |              | 234,096  |      |   | 214,675  |  
|Buildings and leasehold improvements             |  |              | 47,642   |      |   | 34,391   |  
|Construction in progress                         |  |              | 22,195   |      |   | 34,040   |  
|                                                 |  |              |          |      |   |          |  
|                                                 |  |              | 345,141  |      |   | 320,360  |  
|Less: accumulated depreciation and
 amortization |  |              | (125,697 | )    |   | (106,460 | )
|                                                 |  |              |          |      |   |          |  
|                                                 |  | $            | 219,444  |      | $ | 213,900  |  
|                                                 |  |              |          |      |   |          |  

Depreciation
expense was $25,487, $25,726
and $25,647 for the years ended December 31, 2008, 2007
and 2006, respectively.

-61-

---



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

|                             |  |                          |          |                        |   |                      |  |       |   |  |   |          |  
|---------------------------- |  | ------------------------ | -------- | ---------------------- | - | -------------------- |  | ----- | - |  | - | -------- | -
|                             |  | Valve Actuation
 Systems |          | Performance
 Chemicals |   | Corporate and
 Other |  | Total |  
|                             |  |                          |          |                        |   |                      |  |       |  
|Goodwill                     |  |                          |          |                        |   |                      |  |       |   |  |   |          |  
|Balance at January 1, 2007   |  | $                        | 122,847  |                        | $ | 15,006               |  | $     |  |  | $ | 137,853  |  
|Purchase price finalization  |  |                          |         |                        |   | 19                   |  |       |  |  |   | 19       |  
|Acquisitions                 |  |                          |         |                        |   | 7,642                |  |       |  |  |   | 7,642    |  
|                             |  |                          |          |                        |   |                      |  |       |   |  |   |          |  
|Balance at December 31, 2007 |  |                          | 122,847  |                        |   | 22,667               |  |       |  |  |   | 145,514  |  
|Purchase price finalization  |  |                          |         |                        |   | 324                  |  |       |  |  |   | 324      |  
|Impairment (see Note 4)      |  |                          | (122,847 | )                      |   |                     |  |       |  |  |   | (122,847 | )
|                             |  |                          |          |                        |   |                      |  |       |   |  |   |          |  
|Balance at December 31, 2008 |  | $                        |         |                        | $ | 22,991               |  | $     |  |  | $ | 22,991   |  
|                             |  |                          |          |                        |   |                      |  |       |   |  |   |          |  

|                               |  |              |        |                        |   |         |   |  |         | 
|------------------------------ |  | ------------ | ------ | ---------------------- | - | ------- | - |  | ------- | 
|                               |  | December 31, |        | Weighted
 Average Life |  
|                               |  |              |        |                       
|                               |  | 2008         |        | 2007                   |   |        
|                               |  |              |        |                        |   |         |  
|Intangible Assets              |  |              |        |                        |   |         |   |  |         | 
|Patents and Technology  gross |  | $            | 821    |                        | $ | 16,465  |   |  | 7 years | 
|Accumulated amortization       |  |              | (33    | )                      |   | (4,859  | ) |  |         | 
|                               |  |              |        |                        |   |         |   |  |         | 
|Patents and Technology  net   |  |              | 788    |                        |   | 11,606  |   |  |         | 
|                               |  |              |        |                        |   |         |   |  |         | 
|Customer related  gross       |  |              | 7,000  |                        |   | 35,354  |   |  | 6 years | 
|Accumulated amortization       |  |              | (6,028 | )                      |   | (18,259 | ) |  |         | 
|                               |  |              |        |                        |   |         |   |  |         | 
|Customer related  net         |  |              | 972    |                        |   | 17,095  |   |  |         | 
|                               |  |              |        |                        |   |         |   |  |         | 
|Non-compete agreements  gross |  |              | 6,505  |                        |   | 6,505   |   |  | 5 years | 
|Accumulated amortization       |  |              | (3,183 | )                      |   | (1,718  | ) |  |         | 
|                               |  |              |        |                        |   |         |   |  |         | 
|Non-compete agreements  net   |  |              | 3,322  |                        |   | 4,787   |   |  |         | 
|                               |  |              |        |                        |   |         |   |  |         | 
|Trademarks  indefinite life   |  |              | 3,000  |                        |   | 15,000  |   |  |         | 
|                               |  |              |        |                        |   |         |   |  |         | 
|                               |  | $            | 8,082  |                        | $ | 48,488  |   |  |         | 
|                               |  |              |        |                        |   |         |   |  |         | 

During
the years ended December 31, 2008, 2007 and 2006, the Company recognized
$5,961, $7,501 and $5,942 of amortization expense, respectively. The Company
recorded significant impairment charges related to intangible assets in 2008
(See Note 4). The estimated amortization expense for each of the next 5 years
is $2,474, $1,336, $830, $123 and $93.

|                               |  |              |        |      |   |        | 
|------------------------------ |  | ------------ | ------ | ---- | - | ------ | 
|                               |  | December 31, |       
|                               |  |              |       
|                               |  | 2008         |        | 2007 |  
|                               |  |              |        |      |  
|Accrued
 Liabilities           |  |              |        |      |   |        | 
|Wages, salaries and benefits   |  | $            | 15,804 |      | $ | 16,993 | 
|Interest                       |  |              | 2,573  |      |   | 2,422  | 
|Environmental                  |  |              | 5,431  |      |   | 9,136  | 
|Taxes, other than income taxes |  |              | 2,259  |      |   | 2,191  | 
|Other                          |  |              | 15,147 |      |   | 21,487 | 
|                               |  |              |        |      |   |        | 
|                               |  | $            | 41,214 |      | $ | 52,229 | 
|                               |  |              |        |      |   |        | 

-62-

---



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

Note 10  Long-Term Debt

|                                              |      |            |  |               |         |         |   |         |  | 
|--------------------------------------------- | ---- | ---------- |  | ------------- | ------- | ------- | - | ------- |  | 
|                                              |      |            |  | December
 31, |        
|                                              |      |            |  |               |        
|                                              |      | Maturities |  | 2008          |         | 2007    |  
|                                              |      |            |  |               |         |         |  
|                                              |      |            |  |               |         |         |   |         | 
|Revolving
 credit facility  floating rates   |      | 2010       |  | $             |        |         | $ |        | 
|First lien
 term loan  floating rates        |      | 2011       |  |               | 212,846 |         |   | 238,928 | 
|Other debt 
 various rates                   |      | 2009-2012  |  |               | 542     |         |   | 941     | 
|                                              |      |            |  |               |         |         |   |         | 
|Total debt                                    |      |            |  |               | 213,388 |         |   | 239,869 | 
|Less: current portion                         |      |            |  |               | 2,534   |         |   | 2,826   | 
|                                              |      |            |  |               |         |         |   |         | 
|Net long-term debt                            |      |            |  | $             | 210,854 |         | $ | 237,043 | 
|                                              |      |            |  |               |         |         |   |         | 
|                                              |      |            |  |               |         |         |   |         |  | 
|Maturities
 of long-term debt are as follows: |      |            |  |               |         |         |   |         | 
|                                              |      |            |  |               |         |         |   |         |  | 
|                                              | 2009 |            |  |               | $       | 2,534   |   |         |  | 
|                                              | 2010 |            |  |               |         | 158,236 |   |         |  | 
|                                              | 2011 |            |  |               |         | 52,609  |   |         |  | 
|                                              | 2012 |            |  |               |         | 9       |   |         |  | 
|                                              |      |            |  |               |         |         |   |         |  | 
|                                              |      |            |  |               | $       | 213,388 |   |         |  | 
|                                              |      |            |  |               |         |         |   |         |  | 

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). The term loans included 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 in interest expense 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. 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. The weighted average
interest rate on the first lien loan in effect at December 31, 2008 and 2007
was 6.1 percent and 7.0 percent, respectively. 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 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, certain non-recurring cash
inflows such as proceeds from asset sales, insurance recoveries,

-63-

---



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

and equity
offerings may have to 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.

During
2008, the Company purchased $10,000 of its first lien loans on the open market
and completed a tender offer resulting in the purchase of an additional $13,715
of it first lien loans resulting in a gain on
debt repurchases of $4,049. During 2007, the Company purchased $7,622 of its
first lien loans on the open market resulting in a gain on debt repurchase
of $105. These gains are reflected as a reduction of interest expense on the
Companys consolidated statements of operations.

Commitment
fees paid for the Companys credit facilities were $261, $237 and $212 for the
years ended December 31, 2008, 2007 and 2006, respectively. The unused letter
of credit balance available under the Companys credit facilities was $33,084 and
$31,927 at December 31, 2008 and 2007, respectively.

Note 11  Warrants

The
Company has the following warrants outstanding:

|          |  |                   |  |                            |  |                    |       |                            |           |               |   |       | 
|--------- |  | ----------------- |  | -------------------------- |  | ------------------ | ----- | -------------------------- | --------- | ------------- | - | ----- | 
|          |  |                   |  | December
 31, 2008         |  | December
 31, 2007 |      
|          |  |                   |  |                            |  |                    |      
|          |  | Expiration
 Date  |  | Number
 of
 shares covered |  | Strike
 Price      |       | Number
 of
 shares covered |           | Strike
 Price |  
|          |  |                   |  |                            |  |                    |       |                            |           |               |  
|Tranche B |  | November 10, 2008 |  |                           |  | $                  | 19.98 |                            | 1,786,099 |               | $ | 19.98 | 
|Tranche C |  | November 10, 2010 |  | 955,074                    |  | $                  | 22.03 |                            | 963,013   |               | $ | 22.03 | 

The
warrants were issued on November 10, 2003. During 2008, 27,381 shares of common
stock were issued upon exercise of the warrants for cash proceeds of $549 and
113,812 shares of common stock were issued upon exercise of warrants utilizing
the cashless exercise feature of the warrants. During 2007, 340 shares of
common stock were issued upon exercise of the warrants for cash proceeds of $7
and 88,102 shares of common stock were issued upon exercise of warrants
utilizing the cashless exercise feature of the warrants. During 2006, 2,037
shares of common stock were issued upon the exercise of warrants for cash
proceeds of $42.

On
November 10, 2008, any unexercised Tranche B warrants expired. The expiring
warrants covered 1,352,525 shares.

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. Certain restricted stock grants vest based on the
achievement of performance based measures. 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 $3,290, $3,698 and $1,793 for
the years ended December 31, 2008, 2007 and 2006,

-64-

---



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

respectively.
As of December 31, 2008, the total number of shares authorized for grant under
this plan was 1,750,000 with 580,164 shares available for future grant.

Information
with respect to restricted stock is summarized below:

|                                  |  |        |         |                                            |   |       | 
|--------------------------------- |  | ------ | ------- | ------------------------------------------ | - | ----- | 
|                                  |  | Shares |         | Weighted
 Average Grant-
 Date
 Fair Value |  
|                                  |  |        |         |                                            |  
|Outstanding
 at December 31, 2007 |  |        | 256,574 |                                            | $ | 32.11 | 
|Granted                           |  |        | 156,719 |                                            |   | 28.88 | 
|Vested                            |  |        | 71,110  |                                            |   | 27.76 | 
|Forfeited                         |  |        | 56,639  |                                            |   | 34.93 | 
|                                  |  |        |         |                                            |   |       | 
|Outstanding
 at December 31, 2008 |  |        | 285,544 |                                            | $ | 31.12 | 
|                                  |  |        |         |                                            |   |       | 

The
weighted average grant date fair value of restricted stock granted in 2008,
2007 and 2006 were $28.88, $34.60 and $27.90 per share, respectively.

Information
with respect to stock options is summarized below:

|                                                 |  |         |         |                                   |   |                                                 |  |                             |     |  |   |       | 
|------------------------------------------------ |  | ------- | ------- | --------------------------------- | - | ----------------------------------------------- |  | --------------------------- | --- |  | - | ----- | 
|                                                 |  | Options |         | Weighted
 Average
 Exercise Price |   | Weighted
 Average
 Remaining
 Contractual
 Life |  | Aggregate
 Intrinsic
 Value |    
|                                                 |  |         |         |                                   |   |                                                 |  |                             |    
|Outstanding at December 31, 2007                 |  |         | 347,556 |                                   | $ | 19.47                                           |  |                             | 7.8 |  | $ | 3,781 | 
|Granted                                          |  |         | 80,120  |                                   |   | 29.67                                           |  |                             |     |  |   |       | 
|Exercised                                        |  |         | 11,636  |                                   |   | 15.35                                           |  |                             |     |  |   |       | 
|Forfeited                                        |  |         | 2,610   |                                   |   | 28.70                                           |  |                             |     |  |   |       | 
|                                                 |  |         |         |                                   |   |                                                 |  |                             |     |  |   |       | 
|Outstanding at December 31, 2008                 |  |         | 413,430 |                                   | $ | 21.50                                           |  |                             | 7.3 |  | $ | 693   | 
|                                                 |  |         |         |                                   |   |                                                 |  |                             |     |  |   |       | 
|Vested or expected to vest at December 31,
 2008 |  |         | 327,847 |                                   | $ | 21.04                                           |  |                             | 7.2 |  | $ | 601   | 
|                                                 |  |         |         |                                   |   |                                                 |  |                             |     |  |   |       | 
|Exercisable at December 31, 2008                 |  |         | 267,418 |                                   | $ | 16.44                                           |  |                             | 6.5 |  | $ | 693   | 
|                                                 |  |         |         |                                   |   |                                                 |  |                             |     |  |   |       | 

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.

|                                    |  |      |      |      |   |      |   |   |      |  
|----------------------------------- |  | ---- | ---- | ---- | - | ---- | - | - | ---- | -
|                                    |  | 2008 |      | 2007 |   | 2006 |  
|                                    |  |      |      |      |   |      |  
|Dividend
 yield                     |  |      |     |      |   |     |   |   |     |  
|Expected
 volatility                |  |      | 36   | %    |   | 19   | % |   | 31   | %
|Risk-free
 interest rate            |  |      | 2.87 | %    |   | 4.79 | % |   | 5.02 | %
|Expected
 holding period (in years) |  |      | 4    |      |   | 4    |   |   | 4    |  
|Weighted
 average fair value        |  | $    | 9.67 |      | $ | 8.39 |   | $ | 8.74 |  

-65-

---



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

The
total intrinsic value of options exercised was $174, $1,562 and $1,126 during
the years ended December 31, 2008, 2007 and 2006, respectively. The total fair
value of options vested during the year ended December 31, 2008, 2007 and 2006
was $597, $646 and $473, 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 $50, $618 and $445 during the years ended
December 31, 2008, 2007 and 2006, respectively.

As
of December 31, 2008, there was $2,348 of total unrecognized compensation cost
that is expected to be recognized over a weighted average period of 1.9 years.
The remaining unrecognized compensation cost for performance based restricted
stock may vary each reporting period based on changes in the expected
achievement of performance measures.

Note 13  Financial Instruments

Interest Rate Collar
Agreements

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 creditworthy
counterparties. In April, 2005, the Company entered into two no-cost interest
rate collar agreements, economically hedging $185,000 of its LIBOR-based
floating rate debt for five years. In September 2005, the Company designated
these agreements as cash flow hedges. On December 14, 2007, the Company
de-designated $4,400 of one of the interest rate collars as a cash flow hedge.
Accordingly, the affected portion of the accumulated unrealized loss ($32)
related to this portion of the instrument will remain in accumulated other
comprehensive income and be reclassified into earnings when the original hedged
interest rate payments occur. In addition, any change in fair value on this
portion of the instrument after this date will be recognized currently in other
income and expense. The remaining balance of the hedge is 100 percent effective
and therefore has 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,    |        
|                        |  |                  |        
|                        |  | 2008             |         | 2007        |  
|                        |  |                  |         |             |  
|                        |  | Carrying
 Amount |         | Fair
 Value |   | Carrying
 Amount |   | Fair
 Value |        
|                        |  |                  |         |             |   |                  |   |             |        
|                       
|Long-term
 debt         |  | $                | 213,388 |             | $ | 172,947          |   | $           | 239,869 |   | $ | 235,093 |  
|Derivative
 instruments |  | $                | (7,405  | )           | $ | (7,405           | ) | $           | (2,365  | ) | $ | (2,365  | )

The
fair values of cash and cash equivalents, receivables and payables approximate
their carrying values due to the short-term nature of the instruments. 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 was valued using the
income approach and information classified as level 2 in the fair value
hierarchy.

-66-

---



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

Note 14  Geographic and Industry Segment
Information

GenTek
operates through two primary business segments: valve actuation systems and
performance chemicals. The business segments were determined based on several
factors including products and services provided and markets served. The valve
actuation systems segment provides precision engineered valve actuation systems
and components for gasoline and diesel engines. The performance chemicals
segment provides chemical products to four principal markets: water treatment,
chemical processing, pharmaceutical and food additives and technology. The
accounting policies of the segments are the same as those described in the
summary of significant accounting policies.

Industry
segment information is summarized as follows:

|                                                                           |  |                           |         |                                |   |         |  |      |         |      |   |          |   |                      |         |      |   |         |  
|-------------------------------------------------------------------------- |  | ------------------------- | ------- | ------------------------------ | - | ------- |  | ---- | ------- | ---- | - | -------- | - | -------------------- | ------- | ---- | - | ------- | -
|                                                                           |  | Net
 Revenues             |         | Operating
 Profit (Loss)       |  
|                                                                           |  |                           |         |                                |  
|                                                                           |  | Years
 Ended December 31, |         | Years
 Ended December 31,      |  
|                                                                           |  |                           |         |                                |  
|                                                                           |  | 2008                      |         | 2007                           |   | 2006    |  | 2008 |         | 2007 |   | 2006     |  
|                                                                           |  |                           |         |                                |   |         |  |      |         |      |   |          |  
|Valve actuation systems                                                    |  | $                         | 115,417 |                                | $ | 152,076 |  | $    | 146,131 |      | $ | (166,363 | ) | $                    | (290    | )    | $ | 10,497  |  
|Performance chemicals                                                      |  |                           | 482,150 |                                |   | 396,683 |  |      | 373,347 |      |   | 65,335   |   |                      | 64,825  |      |   | 44,710  |  
|Corporate and other                                                        |  |                           | 10,472  |                                |   | 11,508  |  |      | 12,121  |      |   | (3,919   | ) |                      | (4,153  | )    |   | (6,597  | )
|                                                                           |  |                           |         |                                |   |         |  |      |         |      |   |          |   |                      |         |      |   |         |  
|Consolidated                                                               |  | $                         | 608,039 |                                | $ | 560,267 |  | $    | 531,599 |      |   | (104,947 | ) |                      | 60,382  |      |   | 48,610  |  
|                                                                           |  |                           |         |                                |   |         |  |      |         |      |   |          |   |                      |         |      |   |         |  
|Interest expense                                                           |  |                           |         |                                |   |         |  |      |         |      |   | 12,803   |   |                      | 22,685  |      |   | 29,137  |  
|Other (income), expense net                                                |  |                           |         |                                |   |         |  |      |         |      |   | 734      |   |                      | (1,500  | )    |   | (257    | )
|                                                                           |  |                           |         |                                |   |         |  |      |         |      |   |          |   |                      |         |      |   |         |  
|Consolidated income (loss) from continuing
 operations before income taxes |  |                           |         |                                |   |         |  |      |         |      | $ | (118,484 | ) | $                    | 39,197  |      | $ | 19,730  |  
|                                                                           |  |                           |         |                                |   |         |  |      |         |      |   |          |   |                      |         |      |   |         |  
|                                                                           |  |                           |         |                                |   |         |  |      |         |      |   |          |   |                      |         |      |   |         |  
|                                                                           |  | Capital
 Expenditures     |         | Depreciation
 and Amortization |  
|                                                                           |  |                           |         |                                |  
|                                                                           |  | Years
 Ended December 31, |         | Years
 Ended December 31,      |  
|                                                                           |  |                           |         |                                |  
|                                                                           |  | 2008                      |         | 2007                           |   | 2006    |  | 2008 |         | 2007 |   | 2006     |  
|                                                                           |  |                           |         |                                |   |         |  |      |         |      |   |          |  
|Valve actuation systems                                                    |  | $                         | 6,635   |                                | $ | 6,277   |  | $    | 3,871   |      | $ | 11,865   |   | $                    | 13,206  |      | $ | 12,692  |  
|Performance chemicals                                                      |  |                           | 32,994  |                                |   | 21,202  |  |      | 16,095  |      |   | 19,008   |   |                      | 19,629  |      |   | 18,466  |  
|Corporate and other                                                        |  |                           | 430     |                                |   | 1,106   |  |      | 17      |      |   | 1,939    |   |                      | 1,985   |      |   | 1,813   |  
|                                                                           |  |                           |         |                                |   |         |  |      |         |      |   |          |   |                      |         |      |   |         |  
|Consolidated                                                               |  | $                         | 40,059  |                                | $ | 28,585  |  | $    | 19,983  |      | $ | 32,812   |   | $                    | 34,820  |      | $ | 32,971  |  
|                                                                           |  |                           |         |                                |   |         |  |      |         |      |   |          |   |                      |         |      |   |         |  
|                                                                           |  |                           |         |                                |   |         |  |      |         |      |   |          |   |                      |         |      |   |         |  
|                                                                           |  |                           |         |                                |   |         |  |      |         |      |   |          |   | Identifiable
 Assets |        
|                                                                           |  |                           |         |                                |   |         |  |      |         |      |   |          |   |                      |        
|                                                                           |  |                           |         |                                |   |         |  |      |         |      |   |          |   | December
 31,        |        
|                                                                           |  |                           |         |                                |   |         |  |      |         |      |   |          |   |                      |        
|                                                                           |  |                           |         |                                |   |         |  |      |         |      |   |          |   | 2008                 |         | 2007 |  
|                                                                           |  |                           |         |                                |   |         |  |      |         |      |   |          |   |                      |         |      |  
|Valve actuation systems                                                    |  |                           |         |                                |   |         |  |      |         |      |   |          |   | $                    | 80,874  |      | $ | 266,454 |  
|Performance chemicals(1)                                                   |  |                           |         |                                |   |         |  |      |         |      |   |          |   |                      | 306,795 |      |   | 297,442 |  
|Corporate and other                                                        |  |                           |         |                                |   |         |  |      |         |      |   |          |   |                      | 37,643  |      |   | 35,737  |  
|Assets held for sale                                                       |  |                           |         |                                |   |         |  |      |         |      |   |          |   |                      |        |      |   | 14,346  |  
|                                                                           |  |                           |         |                                |   |         |  |      |         |      |   |          |   |                      |         |      |   |         |  
|Consolidated                                                               |  |                           |         |                                |   |         |  |      |         |      |   |          |   | $                    | 425,312 |      | $ | 613,979 |  
|                                                                           |  |                           |         |                                |   |         |  |      |         |      |   |          |   |                      |         |      |   |         |  

|    |                                                                  
|--- | -----------------------------------------------------------------
|   
|(1) | Includes equity method
 investments of $0 and $215, respectively.

-67-

---



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

Geographic
area information is summarized as follows:

|              |  |                          |         |                       |   |         |  |      |         |      |   |         |  |   |         | 
|------------- |  | ------------------------ | ------- | --------------------- | - | ------- |  | ---- | ------- | ---- | - | ------- |  | - | ------- | 
|              |  | External
 Revenues(1)    |         | Long-Lived
 Assets(2) |  
|              |  |                          |         |                       |  
|              |  | Year
 Ended December 31, |         | December
 31,         |  
|              |  |                          |         |                       |  
|              |  | 2008                     |         | 2007                  |   | 2006    |  | 2008 |         | 2007 |  
|              |  |                          |         |                       |   |         |  |      |         |      |  
|United States |  | $                        | 549,100 |                       | $ | 451,470 |  | $    | 431,382 |      | $ | 215,210 |  | $ | 208,919 | 
|Canada        |  |                          | 25,699  |                       |   | 44,326  |  |      | 46,618  |      |   | 6,700   |  |   | 8,813   | 
|Other foreign |  |                          | 33,240  |                       |   | 64,471  |  |      | 53,599  |      |   | 937     |  |   | 2,394   | 
|              |  |                          |         |                       |   |         |  |      |         |      |   |         |  |   |         | 
|Consolidated  |  | $                        | 608,039 |                       | $ | 560,267 |  | $    | 531,599 |      | $ | 222,847 |  | $ | 220,126 | 
|              |  |                          |         |                       |   |         |  |      |         |      |   |         |  |   |         | 

|    |                                                                                                     
|--- | ----------------------------------------------------------------------------------------------------
|   
|(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

GenTek
provided General Chemical Industrial Products (GCIP) with certain
administrative services pursuant to a transition support agreement entered into
in connection with the spinoff of GenTek from GCIP in 1999. These services
terminated in 2006. For the years ended December 31, 2008, 2007 and 2006,
GenTek charged GCIP $0, $0 and $561, respectively, related to this agreement.
GCIP supplies soda ash to GenTek. For the years ended December 31, 2008, 2007
and 2006, purchases from GCIP amounted to $4,956, $2,863 and $2,934,
respectively.

Note 16  Discontinued Operations

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, which is no longer a reportable 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. The sale was completed on February 16, 2007. This business
was formerly reported as part of the manufacturing segment, which is no longer
a reportable segment.

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 $677
and $5,380 for the years ending December 31, 2007 and 2006, 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.

-68-

---



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

On
April 27, 2007, the Company signed an agreement to sell its wholly owned
subsidiary Defiance Testing and Engineering Services, Inc. to Ashok Leyland of
Chennai, India for $17,000 in cash, minus a working capital adjustment of $300.
During the first quarter of 2007, the Company recorded an impairment charge of
$6,150 to reflect the revised estimated fair value of goodwill of the business
based upon the purchase offers which has been included in loss from
discontinued operations. The transaction was completed on July 17, 2007. The
business was formerly reported as part of the manufacturing segment, which is
no longer a reportable segment.

On
November 14, 2008, the Company completed the sale of its wire and cable
manufacturing business in Mineral Wells, Texas to Southwire Company for cash
proceeds of $9,481. In addition, the Company retained working capital of
approximately $1,700. This business was formerly reported as part of the
corporate and other segment.

The
components of assets held for sale were as follows:

|                               |  |               |   |      |   |        | 
|------------------------------ |  | ------------- | - | ---- | - | ------ | 
|                               |  | December
 31, |  
|                               |  |               |  
|                               |  | 2008          |   | 2007 |  
|                               |  |               |   |      |  
|Accounts
 receivable           |  | $             |  |      | $ | 112    | 
|Inventories                    |  |               |  |      |   | 2,347  | 
|Other
 current assets          |  |               |  |      |   | 1      | 
|Property,
 plant and equipment |  |               |  |      |   | 10,242 | 
|Goodwill                       |  |               |  |      |   | 1,644  | 
|                               |  |               |   |      |   |        | 
|                               |  | $             |  |      | $ | 14,346 | 
|                               |  |               |   |      |   |        | 

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

|                                   |  |               |   |      |   |     | 
|---------------------------------- |  | ------------- | - | ---- | - | --- | 
|                                   |  | December
 31, |  
|                                   |  |               |  
|                                   |  | 2008          |   | 2007 |  
|                                   |  |               |   |      |  
|Accrued
 liabilities               |  | $             |  |      | $ | 34  | 
|Current
 portion of long-term debt |  |               |  |      |   | 25  | 
|Long-term
 debt                    |  |               |  |      |   | 235 | 
|                                   |  |               |   |      |   |     | 
|                                   |  | $             |  |      | $ | 294 | 
|                                   |  |               |   |      |   |     | 

The
businesses included in discontinued operations had revenues of $25,379, $84,959
and $378,932 and pretax profit (loss) of $1,713, $(5,935) and $(20,429) for the
years ended December 31, 2008, 2007 and 2006, respectively.

-69-

---



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

Note 17  Unaudited Quarterly Information

|                                             |  |       |         |        |   |         |     |        |         |     |   |          |     
|-------------------------------------------- |  | ----- | ------- | ------ | - | ------- | --- | ------ | ------- | --- | - | -------- | ----
|                                             |  | 2008  |        
|                                             |  |       |        
|                                             |  | First |         | Second |   | Third   |     | Fourth |        
|                                             |  |       |         |        |   |         |     |        |        
|Net revenues(1)                              |  | $     | 143,109 |        | $ | 154,113 |     | $      | 171,669 |     | $ | 139,148  |     
|Gross profit                                 |  |       | 21,074  |        |   | 26,283  |     |        | 31,276  |     |   | 27,948   |     
|Net income
 (loss)                           |  |       | 1,375   | (2)    |   | 8,341   | (3) |        | 7,302   | (4) |   | (126,048 | )(5)
|                                             |  |       |         |        |   |         |     |        |         |     |   |          |     
|Earnings
 (loss) per common share  basic:   |  |       |         |        |   |         |     |        |         |     |   |          |     
|Net income
 (loss)                           |  | $     | 0.14    |        | $ | 0.83    |     | $      | 0.72    |     | $ | (12.63   | )   
|                                             |  |       |         |        |   |         |     |        |         |     |   |          |     
|Earnings
 (loss) per common share  diluted: |  |       |         |        |   |         |     |        |         |     |   |          |     
|Net income
 (loss)                           |  | $     | 0.13    |        | $ | 0.76    |     | $      | 0.67    |     | $ | (12.63   | )   
|                                             |  |       |         |        |   |         |     |        |         |     |   |          |     

|    |                                                                                                             
|--- | ------------------------------------------------------------------------------------------------------------
|   
|(1) | Excludes revenues relating
 to discontinued operations of $8,259, $7,762, $7,074, and $2,284,
 respectively.
|    |                                                                                                             
|(2) | Includes a pension
 curtailment gain of $36.                                                                
|    |                                                                                                             
|(3) | Includes restructuring
 charges of $508.                                                                    
|    |                                                                                                             
|(4) | Includes restructuring
 charges of $898.                                                                    
|    |                                                                                                             
|(5) | Includes restructuring
 charges of $995 and impairment charges of $156,539.                                 

|                                             |  |       |         |        |   |         |     |        |         |     |   |         |    
|-------------------------------------------- |  | ----- | ------- | ------ | - | ------- | --- | ------ | ------- | --- | - | ------- | ---
|                                             |  | 2007  |        
|                                             |  |       |        
|                                             |  | First |         | Second |   | Third   |     | Fourth |        
|                                             |  |       |         |        |   |         |     |        |        
|Net revenues(1)                              |  | $     | 141,870 |        | $ | 143,006 |     | $      | 141,402 |     | $ | 133,989 |    
|Gross profit                                 |  |       | 26,401  |        |   | 26,577  |     |        | 22,188  |     |   | 27,967  |    
|Net income
 (loss)                           |  |       | (3,261  | )(2)   |   | 5,045   | (3) |        | 9,183   | (4) |   | 18,800  | (5)
|                                             |  |       |         |        |   |         |     |        |         |     |   |         |    
|                                             |  |       |         |        |   |         |     |        |         |     |   |         |    
|Earnings
 (loss) per common share  basic:   |  |       |         |        |   |         |     |        |         |     |   |         |    
|Net income
 (loss)                           |  | $     | (0.32   | )      | $ | 0.49    |     | $      | 0.89    |     | $ | 1.82    |    
|                                             |  |       |         |        |   |         |     |        |         |     |   |         |    
|Earnings
 (loss) per common share  diluted: |  |       |         |        |   |         |     |        |         |     |   |         |    
|Net income
 (loss)                           |  | $     | (0.28   | )      | $ | 0.43    |     | $      | 0.80    |     | $ | 1.64    |    
|                                             |  |       |         |        |   |         |     |        |         |     |   |         |    

|    |                                                                                                                
|--- | ---------------------------------------------------------------------------------------------------------------
|   
|(1) | Excludes revenues relating
 to discontinued operations of $46,760, $19,358, $10,334, and $8,507,
 respectively.
|    |                                                                                                                
|(2) | Includes restructuring
 charges of $1,282 and a pension curtailment gain of $555.                              
|    |                                                                                                                
|(3) | Includes restructuring charges
 of $1,587 and a pension curtailment gain of $140.                              
|    |                                                                                                                
|(4) | Includes restructuring
 charges of $793, impairment charges of $914 and a pension curtailment gain of
 $2,565. 
|    |                                                                                                                
|(5) | Includes restructuring
 charges of $388.                                                                       

-70-

---



|              |                                                                                      
|------------- | -------------------------------------------------------------------------------------
|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 Exchange Act as of the end of the period
covered by this Annual 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, the Company 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,
2008.

GenTeks
independent registered public accounting firm, Deloitte & Touche LLP, has
audited GenTeks financial statements for the year ended December 31, 2008
included in this Annual Report on Form 10-K (and issued a report dated March
13, 2009 which expressed an unqualified opinion on those financial statements)
and, as part of that audit, have issued a report on internal control over
financial reporting, a copy of which is included in this Annual Report on Form
10-K.

-71-

---



REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM

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

We have audited the internal
control over financial reporting of GenTek Inc. and subsidiaries (the
Company) as of December 31, 2008 based on criteria established in Internal Control
 Integrated Framework issued by the Committee of Sponsoring Organizations of
the Treadway Commission. 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,
included in the accompanying Managements Report on Internal Control Over
Financial Reporting. Our responsibility is to express an opinion on 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,
assessing the risk that a material weakness exists, testing and evaluating the
design and operating effectiveness of internal control based on the assessed
risk, and performing such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable basis for our
opinion.

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 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, the Company
maintained, in all material respects, effective internal control over financial
reporting as of December 31, 2008, 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, 2008 of the Company and our
report dated March 13, 2009 expressed an unqualified opinion on those financial
statements and financial statement schedule.

/s/ Deloitte
& Touche LLPParsippany, New Jersey

March
13, 2009

-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.

|             |                  
|------------ | -----------------
|Item 9B.    | Other Information

None.

PART III

|         |                                                         
|-------- | --------------------------------------------------------
|Item 10. | Directors, Executive
 Officers and Corporate Governance.

Directors.
For information relating to the Companys Directors, see the information under
the caption Election of Directors in the Companys definitive 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, 2008 or 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 Item 1. -
Executive Officers and Key Employees of this Annual 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 and Related Stockholder Matters.

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.

-73-

---



Securities
Authorized for Issuance Under Equity Compensation Plans.
For certain information relating to equity compensation plans, see the
information under the caption Item 5. Market for Registrants Common Equity,
Related Stockholder Matters and Issuer Purchases of Equity Securities ―
Equity Compensation Plan Information of this Annual Report.

|         |                                                                            
|-------- | ---------------------------------------------------------------------------
|Item 13. | Certain
 Relationships and Related Transactions, and Director Independence.

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, 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).               

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| |      |  |                                                                                                                                                                                                                                                                                                                 
| | ---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 3.1  |  | Third
 Amended and Restated Certificate of Incorporation of GenTek Inc., effective
 as of May 9, 2006 (incorporated by reference to Exhibit 3.1 of the
 Registrants Form 10-Q, for the quarter ended March 31, 2006, as filed with
 the Securities and Exchange Commission).                                   
| |      |  |                                                                                                                                                                                                                                                                                                                 
| | 3.2  |  | Second
 Amended and Restated By-Laws of GenTek Inc., effective as of August 7, 2007
 (incorporated by reference to Exhibit 3.2 of the Registrants Form 8-K, dated
 August 7, 2007, 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 Exhibit 4.2 of 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 Exhibit 4.3 of 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 GenTek Inc. and the holders named
 therein dated as of November 10, 2003 (incorporated by reference to Exhibit
 10.1 of 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.
 Amended and Restated 2003 Management and Directors Incentive Plan
 (incorporated by reference to the Registrants proxy statement dated April
 17, 2007, as filed with the Securities and Exchange Commission on April 25,
 2007).                                                                 
| |      |  |                                                                                                                                                                                                                                                                                                                 
| | 10.3 |  | GenTek Inc.
 Key Employee Retention Plan (incorporated by reference to Exhibit 10.14 of
 the Registrants Form 10-K for the year ended December 31, 2002, as filed
 with the Securities and Exchange Commission).                                                                                               
| |      |  |                                                                                                                                                                                                                                                                                                                 
| | 10.4 |  | Form of
 Indemnification Agreement (incorporated by reference to Exhibit 10.11 of the
 Registrants Form 10-K for the year ended December 31, 2003, as filed with
 the Securities and Exchange Commission).                                                                                                     
| |      |  |                                                                                                                                                                                                                                                                                                                 
| | 10.5 |  | GenTek Inc.
 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 |  | Form of
 Director Restricted Stock Agreement (incorporated by reference to Exhibit
 10.15 to the Registrants Form 10-Q for the quarter ended June 30, 2004, as
 filed with the Securities and Exchange Commission).                                                                                            
| |      |  |                                                                                                                                                                                                                                                                                                                 
| | 10.7 |  | Form of
 Performance Contingent Restricted Stock Agreement (incorporated by reference
 to Exhibit 10.9 to the Registrants Form 10-Q for the quarter ended June 30,
 2007, as filed with the Securities and Exchange Commission).                                                                               

-75-

---



| |       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | ----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10.8  |  | Form of
 Restricted Stock Agreement (incorporated by reference to Exhibit 10.17 to the
 Registrants Form 10-Q for the quarter ended June 30, 2004, as filed with the
 Securities and Exchange Commission).                                                                                                                                                                                                                                                                                                                                                                                    
| |       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | 10.9  |  | Form of
 Stock Option Agreement (incorporated by reference to Exhibit 10.18 to the
 Registrants Form 10-Q for the quarter ended June 30, 2004, as filed with the
 Securities and Exchange Commission).                                                                                                                                                                                                                                                                                                                                                                                        
| |       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | 10.10 |  | Form of
 Performance Cash Award Agreement (incorporated by reference to Exhibit 10.19
 to the Registrants Form 10-Q for the quarter ended June 30, 2004, as filed
 with the Securities and Exchange Commission).                                                                                                                                                                                                                                                                                                                                                                              
| |       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | 10.11 |  | Master
 Settlement Agreement, dated April 30, 2004, among GenTek Holding Corporation,
 General Chemical LLC, and Honeywell International Inc. (incorporated by
 reference to Exhibit 10.22 to the Registrants Form 10-Q for the quarter
 ended September 30, 2004, as filed with the Securities and Exchange
 Commission).                                                                                                                                                                                                                                                                    
| |       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | 10.12 |  | 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 Exhibit 10.18 to the
 Registrants Form 10-K for the year ended December 31, 2004, as filed with
 the Securities and Exchange Commission).
| |       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | 10.13 |  | Employment
 Agreement with William E. Redmond, Jr., dated May 23, 2005 (incorporated by
 reference to Exhibit 10.21 to the Registrants Form 10-Q for the quarter
 ended June 30, 2005, as filed with the Securities and Exchange Commission).                                                                                                                                                                                                                                                                                                                                                 
| |       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | 10.14 |  | Amendment to Employment Agreement with William E. Redmond, Jr.,
    dated December 29, 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | 10.15 |  | GenTek Inc. Executive
 Severance Plan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | 10.16 |  | 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).                                                                                                                                                                                                                                                                                                                                    
| |       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | 10.17 |  | Second
 Amendment to First Lien Credit and Guaranty Agreement dated July 14, 2006
 (incorporated by reference to Exhibit 10.25 to the Registrants Form 10-Q for
 the quarter ended June 30, 2006, as filed with the Securities and Exchange
 Commission).                                                                                                                                                                                                                                                                                                                                     
| |       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | 10.18 |  | 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).                                                                                                                                                                                                                                                                                                                                                                                              
| |       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | 10.19 |  | Third
 Amendment to First Lien Credit and Guaranty Agreement and waiver dated March
 19, 2007 (incorporated by reference to Exhibit 10.29 to the Registrants Form
 10-K for the year ended December 31, 2006, as filed with the Securities and
 Exchange Commission).                                                                                                                                                                                                                                                                                                                         

-76-

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| |       |  |                                                                                                                                                                                                                                   
| | ----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10.20 |  | GenTek Inc.
 Directors Deferred Compensation Program (incorporated by reference to
 Exhibit 10.28 to the Registrants Form 10-Q for the quarter ended September
 30, 2007, as filed with the Securities and Exchange Commission).
| |       |  |                                                                                                                                                                                                                                   
| | 10.21 |  | Letter Agreement with Robert Novo, dated December
        31, 2008.                                                                                                                                                               
| |       |  |                                                                                                                                                                                                                                   
| | 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-

---



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 13 day of March, 2009.

| |             |                              |                                      
| | ----------- | ---------------------------- | -------------------------------------
| | 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 13,
 2009
|                                             |  |                                             |  |                
|William E. Redmond, Jr.                      |  |                                             |  |                
|                                             |  |                                             |  |                
|Principal
 financial and accounting officer: |  |                                             |  |                
|                                             |  |                                             |  |                
|/s/ Thomas
 B. Testa                         |  | Vice
 President and Chief Financial Officer |  | March 13,
 2009
|                                             |  |                                             |  |                
|Thomas B. Testa                              |  |                                             |  |                
|                                             |  |                                             |  |                
|Directors:                                   |  |                                             |  |                
|                                             |  |                                             |  |                
|/s/ John G.
 Johnson, Jr.                    |  | Chairman and
 Director                      |  | March 13,
 2009
|                                             |  |                                             |  |                
|John G. Johnson, Jr.                         |  |                                             |  |                
|                                             |  |                                             |  |                
|/s/ Henry L.
 Druker                         |  | Director                                    |  | March 13,
 2009
|                                             |  |                                             |  |                
|Henry L. Druker                              |  |                                             |  |                
|                                             |  |                                             |  |                
|/s/ Kathleen
 R. Flaherty                    |  | Director                                    |  | March 13,
 2009
|                                             |  |                                             |  |                
|Kathleen R. Flaherty                         |  |                                             |  |                
|                                             |  |                                             |  |                
|/s/ John F.
 McGovern                        |  | Director                                    |  | March 13,
 2009
|                                             |  |                                             |  |                
|John F. McGovern                             |  |                                             |  |                
|                                             |  |                                             |  |                
|/s/ William
 E. Redmond, Jr.                 |  | Director                                    |  | March 13,
 2009
|                                             |  |                                             |  |                
|William E. Redmond, Jr.                      |  |                                             |  |                
|                                             |  |                                             |  |                
|/s/ Richard
 A. Rubin                        |  | Director                                    |  | March 13,
 2009
|                                             |  |                                             |  |                
|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 at
 Beginning of
 Period |       | Additions
 Charged
 To Income |   | Deductions
 From Reserves |  | Other* |        | Balance at
 End of Period |  
|                                                              |  |                                  |       |                               |   |                           |  |        |        |                           |  
|                                                              |  |                                  |       |                               |   |                           |  |        |        |                           |   |       |   |   |       | 
|Year ended December 31, 2008
 Allowance for doubtful accounts |  | $                                | 3,334 |                               | $ | 947                       |  | $      | (1,359 | )                         | $ | (223  | ) | $ | 2,699 | 
|Year ended December 31, 2007
 Allowance for doubtful accounts |  | $                                | 3,181 |                               | $ | 272                       |  | $      | (1,143 | )                         | $ | 1,024 |   | $ | 3,334 | 
|Year ended December 31, 2006
 Allowance for doubtful accounts |  | $                                | 2,757 |                               | $ | 409                       |  | $      | (670   | )                         | $ | 685   |   | $ | 3,181 | 

* Primarily
foreign exchange, except for an $809 addition in 2007 for a customer deduction
related to a warranty issue.

-80-

---