<PAGE>
<PAGE>
________________________________________________________________________________
 
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
 
                            ------------------------
 
                                   FORM 10-K

                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                      THE SECURITIES EXCHANGE ACT OF 1934
 
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996           COMMISSION FILE NO. 1-4654
 
                            ------------------------
 
                               WITCO CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
                            ------------------------
 
<TABLE>
<S>                                                       <C>
                        DELAWARE                                                 13-1870000
            (STATE OR OTHER JURISDICTION OF                         (I.R.S. EMPLOYER IDENTIFICATION NO.)
             INCORPORATION OR ORGANIZATION)
 
                   ONE AMERICAN LANE                                             06831-2559
                 GREENWICH, CONNECTICUT                                          (ZIP CODE)
        (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
</TABLE>
 
       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (203) 552-2000
 
                            ------------------------
 
          SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
 
<TABLE>
<CAPTION>
                                                                           NAME OF EACH EXCHANGE
                          TITLE OF EACH CLASS                               ON WHICH REGISTERED
-----------------------------------------------------------------------   ------------------------
 
<S>                                                                       <C>
Common Stock -- $5 Par Value                                              New York Stock Exchange
Rights to Purchase Series A Participating                                 New York Stock Exchange
  Cumulative Preferred Stock
</TABLE>
 
     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 ____
 
     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 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]
 
     As  of February 28,  1997, the aggregate  market value of  the voting stock
held by non-affiliates of the Registrant, based on the closing price on February
28, 1997, on the New York Stock Exchange for the Registrant's Common Stock,  was
$1.75 billion.
 
     There  were 56,920,255 shares of  the Registrant's Common Stock outstanding
on February 28, 1997.
 
                      DOCUMENTS INCORPORATED BY REFERENCE
 
     Portions of Registrant's definitive Proxy Statement for its April 23, 1997,
Annual Meeting of Shareholders are incorporated by reference into Part III.
 
________________________________________________________________________________





<PAGE>
<PAGE>
                                     PART I
 
ITEM 1--BUSINESS
 
(a) GENERAL DEVELOPMENT OF BUSINESS
 
     Witco  Corporation (the  'Company' or 'Witco'),  established in  1920, is a
global manufacturer and  marketer of specialty  chemical and petroleum  products
for  use in a wide variety of  industrial and consumer applications. Most of the
Company's products are  sold to industrial  customers for use  as additives  and
intermediates  which impart  particular characteristics  to such  customers' end
products. On December 31,  1996, the Company  had approximately 7,220  employees
worldwide.
 
     In  1992, the Company completed the acquisition of the Industrial Chemicals
and Natural  Substances divisions  of Schering  AG Berlin.  As a  result of  the
acquisition,  the Company's international presence expanded with the addition of
a large chemical  manufacturing base  in Germany  and operations  in Spain,  the
United Kingdom, France and Italy.
 
     On  October 19,  1995, Witco completed  the acquisition  of OSi Specialties
Holding  Company  ('OSi  Specialties'  or  'OSi'),  an  entity  engaged  in  the
manufacture  of silicone surfactants,  amine catalysts, organofunctional silanes
and  specialty  fluids  with  manufacturing  and  blending  facilities  in  West
Virginia, Europe, South America and Asia.
 
     In  1995, the  Company completed the  disposition of its  Battery Parts and
Carbon Black operations. These  dispositions completed the Company's  previously
announced  plan to dispose of all of the businesses of the Company's Diversified
Products segment.
 
     In September 1995, Witco announced  its intention to divest its  Lubricants
Group.  In November 1996, the  Company disposed of its  grease gun and motor oil
portions  of  its  Lubricants  business.  The  Company  plans  to  complete  the
disposition of the Lubricants business by mid 1997.
 
     As  of December 31, 1996, the Company's operations were divided among three
business segments: Chemical, OSi Specialties  and Petroleum which are  described
in  Section (c) below. In connection with the Company's 1996 restructuring plan,
on January 28, 1997,  the Company announced the  reorganization of its  business
into  four groups; Oleochemicals and Derivatives, Polymer Chemicals, Performance
Chemicals and OrganoSilicones.  The Oleochemicals and  Derivatives Group,  which
contains  the Oleochemical assets of the former Oleo/Surfactants Group, produces
basic   oleochemicals--fatty   acids,  plastic   lubricants   and   oleochemical
derivatives.  The Polymer Chemicals Group, includes assets of the former Polymer
Additives Group  and certain  assets  of the  former  Resins Group.  This  group
focuses  on  the production  of additives  and initiators  in addition  to metal
organics, coatings and  adhesives. The Performance  Chemicals Group consists  of
the   former   Petroleum  Specialties   Group,   certain  assets   of   the  old
Oleo/Surfactants and Resins Groups and  Baxenden, a joint venture  headquartered
in  the United  Kingdom. The group  focuses on  producing petroleum specialties,
sulfonation and  ethoxylation operations,  and  urethane chemicals.  The  fourth
segment, the OrganoSilicones Group, which consists of the former OSi Specialties
Group, produces silanes, specialty fluids and urethane additives.
 
     On  December  12, 1996,  the Company  announced  a $600  million three-year
capital spending plan for new capacity, modernization, environmental and  safety
compliance   and  information  systems.  The  Company  also  plans  to  increase
investment in research and development. The Company intends to reduce the number
of its  manufacturing  facilities from  46  to 31  while  consolidating  related
distribution,  research and development and  administrative centers. The Company
also announced its intent to reduce its work force by 1,800 employees.
 
     The Company was incorporated  in 1958 under the  laws of Delaware as  Witco
Chemical  Company, Inc., at which time it succeeded by merger to the business of
Witco Chemical Company, an  Illinois corporation formed  in 1920. Its  executive
offices  are located  at One  American Lane,  Greenwich, Connecticut 06831-2559,
telephone (203) 552-2000.
 
                                       1
 



<PAGE>
<PAGE>
(b) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
 
     Reference is made  to Note 17  of Notes to  Financial Statements. See  Item
8--Financial  Statements  and  Supplementary  Data following  Part IV   of  this
report.
 
(c) NARRATIVE DESCRIPTION OF BUSINESS
 
     As of December 31, 1996, the Company's operations were divided among  three
business segments: Chemical, OSi Specialties and Petroleum Products.
 
Chemical Products
 
Oleo/Surfactants
 
     Witco  offers one of the broadest lines of surfactants and oleochemicals in
the chemical  industry, providing  'one-stop shopping'  for its  customers on  a
global  basis.  These products  are  sold to  a  range of  industries, including
cosmetics and pharmaceuticals; personal care, soap and detergent;  agricultural;
rubber;  food; paint and  protective coatings; and  textiles. Surfactants change
the surface tension of liquids. They include agricultural emulsifiers, which are
used to break up pesticides into small particles, thereby increasing  dispersion
and  improving  penetration,  and  food  emulsifiers,  which  impart  particular
characteristics (such as consistency) to certain foods. In addition, surfactants
are used in personal care products, fabric softeners, and detergents to  improve
penetration  and cleaning capability. These products complement those offered by
the Petroleum Specialties Group of  the Company's Petroleum Products segment  in
this area.
 
     Oleochemicals  are derived  from natural fats  and oils,  and include fatty
acids, fatty amines, esters and glycerines. Oleochemicals modify surfaces either
as direct  lubricants, or  as components  of ingredients  that modify  surfaces.
Examples of their diverse applications include acting as lubricants in plastics;
imparting  mold release features  for the rubber industry;  and acting as curing
systems for  rubber.  The  Company  is a  worldwide  producer  of  cationic  and
amphoteric  surfactant products. These materials are major ingredients in fabric
softener, hair conditioner and other personal care products.
 
Polymer Additives
 
     Witco is a worldwide  supplier of additives and  catalysts for the  polymer
industry.  It manufactures  stabilizers, lubricants,  plasticizers, and peroxide
catalysts used in  the manufacture of  polyvinyl chloride (PVC)  resin for  such
applications  as pipes, fittings, siding and packaging materials. The Company is
also  a  supplier  of  lubricants,   antioxidants  and  peroxide  catalysts   to
polyolefin/polystyrene  manufacturers. These  resins are  used extensively  in a
broad spectrum of applications  ranging from packaging  film to small  appliance
housings.  The  Company  is  a  global  producer  of  aluminum  alkyls,  used as
cocatalysts  in  the  production  of  polyolefins  (including  polyethylene  and
polypropylene,  which  are among  the world's  largest  volume plastics  used in
packaging, cars, furniture and appliances) and produces organotin compounds  for
the production of PVC stabilizers and biocides for marine paints.
 
Resins
 
     The  Resins Group, based in Germany, serves Witco's diverse global customer
base  for   polyurethane  intermediates,   epoxy  resins   and  hardeners   with
manufacturing  facilities in the U.S., France, U.K., Germany, Italy, Denmark and
Singapore.
 
     Witco has  been  developing water-based  and  high solids  technologies  to
replace solvent-based systems. This has increased the number of new products and
Witco's  market  share  among  multi-product  customers.  Witco  is  continually
developing technical applications  for these products  in new markets.  Examples
include  new water-based breathable textile coatings; patented dimethyl puyrazol
(DMP) blocked polyurethane high performance coatings; low fogging polyesters for
flexible polyurethane foam  for the  European market;  polyurethane systems  for
footwear; and water-based epoxy coating systems developed for the global market.
 
                                       2
 



<PAGE>
<PAGE>
Customers
 
     The  Company markets its  specialty chemical products  directly through its
own sales force and through an organized distribution program to more than 6,000
customers in the United States and more than 80 foreign countries operating in a
broad range  of industries.  Its chemical  business is  not dependent  upon  any
single  customer or a few customers. During the year ended December 31, 1996, no
customer accounted for more  than 4.4% of Chemical  Segment sales, and sales  to
the  ten largest customers accounted for approximately 19.5% of Chemical Segment
sales.
 
Competition
 
     Competition  in  the  Company's  specialty  chemicals  business  is   based
primarily on product consistency, quality and performance, customer service, and
the  technological resources necessary to develop  and deliver new products that
meet customer  needs.  Several factors  constitute  barriers to  entry  for  new
participants  in many  of the  Company's markets:  the need  to make significant
capital and research  and development  expenditures; the need  for an  extensive
distribution  network; the  high level  of expertise  needed to  solve technical
problems for  customers; manufacturing  and product  formulation knowledge;  the
lengthy   product  development  process;  and  customers'  general  aversion  to
contracting with unproven suppliers of specialty chemical products.  Competition
is  fragmented,  with no  one  competitor offering  products  across all  of the
Company's chemical product lines.
 
OSi Specialties
 
     OSi Specialties  manufactures and  sells over  500 silicone-based  chemical
intermediate  products  to  manufacturers  of  fiberglass,  reinforced plastics,
polyurethane  foam,   textiles,   coatings,  automotives,   adhesives,   rubber,
pharmaceuticals,  thermoplastics,  sealants  and  agricultural,  electrical  and
personal care  products throughout  the  world. In  1958, the  OSi  organization
invented  the use of  silicone surfactants in the  manufacture of urethane foam.
This fundamental  technological  advance facilitated  a  lower-cost,  continuous
manufacturing  method,  resulting in  accelerated  growth in  the  urethane foam
industry. OSi was also a pioneer  in the silanes industry, and was  instrumental
in developing key technology for the reinforcement of plastics.
 
     Regardless  of  form, most  silicones  share a  combination  of properties,
including electrical resistance, ability to maintain performance across a  broad
range  of  temperatures,  resistance  to  aging,  water  repellence, lubricating
characteristics  and  relative   chemical  and   physiological  inertness.   The
versatility  of  silicone-based  intermediates  has led  to  a  wide  variety of
applications across  a broad  spectrum  of industries  in all  major  countries.
Examples  of  OSi's products  include  catalysts, surfactants,  coupling agents,
process aids and other silicone-based specialty chemicals. Catalysts promote the
process of urethane foam and  polymer formation. Surfactants promote the  mixing
of  reactants, control cell  size and stabilize  urethane foam. Surfactants also
serve as wetting  agents in a  broad spectrum  of applications and  are used  in
personal  care products (hair  conditioning) and coatings  (for flow control and
leveling). Coupling agents bond inorganic and organic materials and enhance  the
physical, mechanical and adhesion properties of a variety of products, including
fiberglass,  sealants, rubber and  coatings. Process aides  include foam control
agents, which inhibit foam formation or reduce foam in such diverse applications
as antacid tablets, fountain soda and pulp and paper processing.
 
Raw Materials
 
     The principal raw materials for the OSi Specialties Segment's products  are
trichlorosilane,  polyether fluids and diethyl siloxane hydrolyzate. The Segment
purchases, in  the aggregate,  more than  40.7% of  its raw  materials from  Dow
Corning  Corporation  and  Union  Carbide  Corporation  under  various long-term
agreements, which  terms  expire at  various  times through  2000.  The  Segment
purchases  other  raw materials  from a  variety  of domestic  and international
suppliers, and these products are readily available from other suppliers.
 
                                       3
 



<PAGE>
<PAGE>
Customers
 
     The  Company   markets  its   OSi  Specialties   products  through   direct
distribution  using a trained sales force,  and through distributor sales in the
United States and foreign locations. During the year ended December 31, 1996, no
customer accounted for  more than  6.7% of  OSi Specialties  Segment sales,  and
sales  to the  ten largest  customers accounted  for approximately  24.5% of OSi
Specialties Segment sales.
 
Competition
 
     The OSi  Specialties Segment  competes with  most of  the global  silicones
companies,  but  typically in  product or  market  niches. Competition  is based
primarily on product consistency, quality and performance, customer service  and
the  technological resources necessary to develop  and deliver new products that
meet customer needs. Several factors constitute barriers to entry in many of the
OSi Specialties  Segment's markets:  the need  to make  significant capital  and
research  and development expenditures;  the need for  an extensive distribution
network; the high  level of  expertise needed  to solve  technical problems  for
customers;  manufacturing and product formulation knowledge; the lengthy product
development  process;  and  customers'  general  aversion  to  contracting  with
unproven suppliers of specialty chemical products.
 
Petroleum Products
 
Petroleum Specialties
 
     Witco  is an  important manufacturer  and marketer  of white  mineral oils,
petrolatums, refrigeration oils and  telecommunication cable filling  compounds,
as  well as natural  and synthetic petroleum sulfonates.  White mineral oils and
petrolatums are extensively refined, high purity petroleum products suitable for
food grade,  pharmaceutical  and  cosmetic  applications.  They  are  inert  and
non-reactive,  and  impart  emolliency,  moisture  resistance,  lubrication  and
insulation properties.  These products  are marketed  in coordination  with  the
Oleo/Surfactants  Group  of  the  Company's  Chemical  Segment.  In  addition to
personal care and food applications, white mineral oils and petrolatums are used
in plastics, agriculture, textiles and chemical processing. Petroleum sulfonates
are oil soluble, surface active agents  derived from both synthetic and  natural
petroleum  feedstocks.  They provide  properties of  emulsification, dispersion,
wetting of solids, and rust and corrosion inhibition, and are used in  lubricant
additives  and  metalworking fluids.  The Company  is also  a supplier  of fully
refined, FDA-quality microcrystalline waxes, which  are primarily used in  paper
lamination and packaging applications including cheese coatings.
 
Lubricants
 
     In  September 1995, Witco announced its  intention to divest its Lubricants
Group. In 1996, Witco sold its  Kendall/Amalie, private label grease and  grease
gun  manufacturing businesses. In addition, Witco sold its Bradford, PA refinery
in March 1997. Witco continues to operate as a supplier of specialty  naphthenic
oils,  which  are  marketed  to  the  rubber,  plastics,  ink  and  agricultural
industries, and asphalt and specialty road and surface treatment products, which
are sold primarily for highway  construction and maintenance through its  Golden
Bear  refinery. It is  anticipated that the Golden  Bear refinery, the remaining
business of  the  Lubricants  Group,  will  be sold  in  1997.  Results  of  its
Lubricants Group are currently reported as discontinued operations.
 
Customers
 
     The  Company's  petroleum products  are marketed  directly through  its own
sales force and through distributors and agents. During the year ended  December
31,  1996,  no customer  accounted for  more than  6.3% of  continuing Petroleum
Segment  sales,  and  sales   to  the  ten   largest  customers  accounted   for
approximately 24.1% of continuing Petroleum Segment sales.
 
                                       4
 



<PAGE>
<PAGE>
Competition
 
     Many  of  the  specialty petroleum  products  produced by  Witco,  like its
specialty chemical products, are  characterized by a need  for a high degree  of
manufacturing competence and technical service. The petroleum products market is
highly  competitive with the Company's products competing primarily on the basis
of pricing, quality and service.  The Company believes its technical  expertise,
reputation for quality products gives it advantages in the marketplace.
 
International Operations
 
     Sales  of Witco's  continuing non-U.S.  operations were  $935.4 million, or
41.3% of total sales for continuing operations, for the year ended December  31,
1996.  Witco's manufacturing and producing  operations outside the United States
are in Belgium, Brazil,  Canada, Denmark, England,  France, Germany, Hong  Kong,
Indonesia, Italy, Korea, Malaysia, Mexico, the Netherlands, Singapore, Spain and
Thailand.
 
Patents and Trademarks
 
     The  Company owns  and controls  patents, trade  secrets, trademarks, trade
names, copyrights and confidential information,  which in the aggregate, are  of
material  importance to  its business.  However, the  Company is  not materially
dependent upon  any single  patent or  trademark. The  Company's trademarks  are
registered  in the  United States  and in  a number  of foreign  countries, with
renewable terms of registration  expiring generally between  1996 and 2006.  The
Company intends to renew in a timely fashion those trademarks that are renewable
and  deemed important to  its continuing business  operations. Additionally, the
Company  currently   has  approximately   3,200  patents   and  pending   patent
applications  worldwide  related  to  its  continuing  business  operations. The
Company intends to  continue to  file patent  applications on  new and  emerging
technologies.
 
Backlog
 
     The  nature  of the  Company's business  is such  that customer  orders are
usually filled within 30  days. Accordingly, backlog is  not significant to  the
Company's business.
 
Research and Development
 
     The  Company  is  actively  engaged in  research  and  development programs
designed  to  develop  new   products,  manufacturing  processes,  systems   and
technologies  to enhance existing  products and processes.  The Company believes
its investments in  research and development  have been an  important factor  in
establishing   and   maintaining  its   competitive  position.   Witco  expended
approximately $73.1 million in 1996, $52.9 million in 1995 and $40.7 million  in
1994 on research and development of new products and services for its continuing
operations,  and for improvements and new  applications of existing products and
services for  its  continuing  operations.  During  1997  the  Company  will  be
consolidating  its U.S. research  and development facilities  into three primary
locations.
 
Environmental Matters
 
     The industries in which Witco operates have experienced increased operating
costs and capital investments  due to statutes and  regulations at the  federal,
state  and local levels for the protection of the environment and the health and
safety of employees and others. Witco believes that expenditures for  compliance
with  these statutes and regulations will  continue to have a significant impact
upon the conduct of its business. The trend for greater environmental  awareness
and  more stringent  environmental regulations is  likely to  continue and while
Witco cannot accurately predict how this trend will affect future operations and
earnings, Witco does not believe its costs will vary significantly from those of
its competitors in the chemical and petroleum industries.
 
     The  Company  evaluates  and  reviews  environmental  reserves  for  future
remediation  and  other  costs on  a  quarterly basis  to  determine appropriate
reserve amounts. Inherent in this  process are considerable uncertainties  which
affect  the  Company's ability  to estimate  the  ultimate costs  of remediation
efforts.
 
                                       5
 



<PAGE>
<PAGE>
Such uncertainties include the nature and extent of contamination at each  site,
evolving  governmental standards regarding  remediation requirements, the number
and financial condition of other potentially responsible parties at  multi-party
sites,   innovations  in   remediation  and  restoration   technology,  and  the
identification of additional environmental sites.
 
     In 1996, the Company completed  a comprehensive study of its  environmental
remediation  and  compliance  issues  throughout  the  organization.  This study
resulted in an increase to environmental reserves by $83.4 million. Reserves for
environmental remediation and compliance costs at December 31, 1996 amounted  to
$219.7  million (including $64.2 million  associated with environmental expenses
of the  Lubricants  Group), which  reflects  management's assessment  of  future
remediation and compliance costs in light of currently available information. Of
these reserves, $77.6 million are associated with plants to be shut-down or sold
as  part  of the  1996 and  1995  restructuring plans.  Remediation expenditures
charged to those reserves  were $14.7 million in  1996 and include  expenditures
currently mandated as well as those not initiated by any regulatory authority or
third  party. The Company anticipates 1997  expenditures to be approximately $60
million.
 
     Capital expenditures for air, water  and solid waste control equipment  and
facilities  amounted  to  $12.6  million in  1996.  The  Company  estimates that
approximately $20.0  million will  be expended  on similar  capital projects  in
1997.
 
     The  Company  is  continuing  its efforts  to  reduce  hazardous  waste and
emissions generated by its operations. Through improved operating  efficiencies,
installation  of additional  environmental control equipment  and utilization of
the latest innovations in waste  treatment technology, management believes  that
direct  recurring operating costs associated  with managing hazardous substances
and pollution can be maintained at or slightly above current levels. Such  costs
amounted to approximately $38 million in 1996.
 
(d) FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS AND EXPORT SALES
 
     Witco's  foreign subsidiaries generally manufacture products similar to the
principal products manufactured  domestically. Subsidiaries  in the  Netherlands
and  Canada manufacture  petroleum specialty products;  subsidiaries in Belgium,
Brazil, Canada,  Denmark,  England, France,  Germany,  Italy, Mexico  and  Spain
manufacture  chemical products.  In early  1996, the  Company acquired  a resins
manufacturing  plant  in  Singapore.  In  addition,  OSi  Specialties   operates
producing  and  other facilities  in Korea,  Hong  Kong, Malaysia,  Thailand and
Indonesia.
 
     In accord  with normal  market conditions,  sales made  outside the  United
States are generally made on longer terms of payment than would be normal within
the  United States. Foreign operations are  subject to certain risks inherent in
carrying  on  international  business,   including  currency  devaluations   and
controls,  export and import restrictions, inflationary factors, product supply,
economic controls,  nationalization and  expropriation. The  likelihood of  such
occurrences  varies from country to country and is not predictable. However, the
Company's primary  foreign operations  are  based in  Western Europe  and  other
stable areas, and, therefore, the Company does not believe these risks will have
a significant impact upon the Company.
 
     Reference  is made to  Note 17 of  Notes to Financial  Statements. See Item
8--Financial  Statements  and  Supplementary  Data  following  Part IV  of  this
report.
 
ITEM 2--PROPERTIES
 
     At  December 31,  1996, Witco conducted  its operations  for its continuing
businesses in 57  manufacturing plants  and other  facilities, owned  in fee  or
occupied  under lease,  of which  25 are in  the United  States and  32 in other
countries.  Of  these   facilities,  29  are   utilized  for  Chemical   product
manufacturing;  10 are utilized for OSi Specialties product manufacturing; 7 are
utilized  for  Petroleum  product  manufacturing;   and  11  are  utilized   for
administrative  and  research  purposes.  All  of  the  facilities  are  in good
operating condition.
 
                                       6
 



<PAGE>
<PAGE>
 PRINCIPAL MANUFACTURING PLANTS AND OTHER IMPORTANT PHYSICAL PROPERTIES RELATED
       TO CONTINUING OPERATIONS--LOCATIONS BY INDUSTRY SEGMENT (OWNED IN
        FEE EXCEPT  WHERE PARENTHETICAL DATES REFER TO LEASE EXPIRATION)
 
      CHEMICAL SEGMENT FACILITIES
 
      United States
 
      Blue Island, Illinois*
      Chicago, Illinois*
      Mapleton, Illinois -- 2 Plants
      Harahan, Louisiana*
      Taft, Louisiana
      Perth Amboy, New Jersey
      Brooklyn, New York*
      Memphis, Tennessee
      Fort Worth, Texas*
      Houston, Texas
      La Porte, Texas*
      Marshall, Texas
      Janesville, Wisconsin
 
      International

      Brantford, Canada*                    St. Amour, France
      Montreal, Canada*                     Bergkamen, Germany (2091)
      Oakville, Canada*                     Steinau, Germany
      Soro, Denmark (2005)                  Gambolo, Italy
      Accrington, England                   Cuatitlan, Mexico
      Droitwich, England                    Singapore
      Flimby, England                       Granollers, Spain
      Elbeuf, France                        


      OSI SPECIALTIES SEGMENT FACILITIES

      United States

      Sistersville, West Virginia
 
      International
 
      Antwerp, Belgium (2019)
      Itatiba, Brazil
      Termoli, Italy
      Lerma, Mexico*
 
      PETROLEUM SEGMENT FACILITIES

      United States
 
      Gretna, Louisiana
      Petrolia, Pennsylvania*
      Trainer, Pennsylvania*

      International
 
      West Hill, Canada                     Haarlem, the Netherlands
      Amsterdam, the Netherlands            Koog Aan De Zaan, the Netherlands

------------
 
* Manufacturing plants, for which public announcements have been made  regarding
  the  Company's intention to close  or sell as part  of its asset consolidation
  plan.
 
                                       7
 



<PAGE>
<PAGE>
      OTHER FACILITIES

      United States
 
      Greenwich, Connecticut (2014)          World Headquarters--Principal
                                             Executive, Administrative and
                                             Sales Office
      Los Angeles, California (2001)         Administrative and Sales Office
      Tarrytown, New York (1997)             Research
      Oakland, New Jersey                    Research
      Dublin, Ohio                           Research
      Houston, Texas                         Administrative and Research
      S. Charleston, West Virginia (1997)    Administrative and Research


      International
 
      Paris, France (1999)                   Administrative and Sales Office
      Frankfurt, Germany (1997)              Principal European Executive
                                             and Administrative Office
      Singapore (1999)                       Administrative and Research
      Meyrin, Switzerland (2007)             Administrative and Research
 
     In addition, OSi  Specialties operates  producing and  other facilities  in
Korea, Hong Kong, Malaysia, Thailand and Indonesia.
 
ITEM 3--LEGAL PROCEEDINGS
 
     The  Company is a potentially responsible party ('PRP') or a defendant in a
number of governmental (federal, state and local) and private actions associated
with the release, or suspected release, of contaminants into the environment. As
a PRP, the Company may be liable for costs associated with the investigation and
remediation of environmental  contamination, as  well as  various penalties  and
damages to persons, property and natural resources. As of December 31, 1996, the
Company  was a PRP, or a  defendant, in connection with 76  sites at which it is
likely to incur  environmental response  costs as  a result  of actions  brought
against the Company pursuant to the federal Comprehensive Environmental Response
Compensation and Liability Act ('CERCLA'), the federal Resource Conservation and
Recovery Act ('RCRA') or similar state or local laws. With 27 exceptions, all of
these sites involve one or more other PRPs, and in most cases there are numerous
other  PRPs in addition to the Company.  CERCLA, RCRA and the state counterparts
to these federal laws authorize governments to investigate and remediate  actual
or  suspected  damage to  the environment  caused by  the release,  or suspected
release,  of  hazardous  substances  into  the  environment,  or  to  order  the
responsible parties to investigate and/or remediate such environmental damage.
 
     The  Company  evaluates  and  reviews  environmental  reserves  for  future
remediation and  other  costs on  a  quarterly basis  to  determine  appropriate
reserve  amounts. Inherent in this  process are considerable uncertainties which
affect the  Company's ability  to  estimate the  ultimate costs  of  remediation
efforts.  Such uncertainties include  the nature and  extent of contamination at
each site, evolving governmental  standards regarding remediation  requirements,
changes  in  environmental  regulations,  widely  varying  costs  of alternative
cleanup methods,  the  number  and  financial  condition  of  other  potentially
responsible  parties  at  multi-party  sites,  innovations  in  remediation  and
restoration technology and the identification of additional environmental sites.
 
     The Company  is a  defendant in  six  similar actions  arising out  of  the
Company's  involvement in the  polybutylene resin manufacturing  business in the
1970's. Five of the  following cases are currently  pending in California  state
courts  and one  is pending  in Texas  state court;  East Bay  Municipal Utility
District v. Mobil Oil Corporation, et  al., filed in November 1993, and  pending
in  Superior Court for the County of  San Mateo, California; City of Santa Maria
v. Shell Oil Company, et al., filed  in May 1994, and pending in Superior  Court
for  the  County  of  San Luis  Obispo,  California;  Nipomo  Community Services
District v.  Shell Oil  Company,  et al.,  filed in  May  1995, and  pending  in
Superior Court for the County of Santa Barbara, California; Alameda County Water
District    v.    Mobil   Oil    Corporation,   et    al.,   filed    in   April
 
                                       8
 



<PAGE>
<PAGE>
1996, and Marin Municipal Water District v. Shell Oil Company, et al., filed  in
May  1996, both pending in Superior Court for  the County of San Mateo; and City
of Austin v. Shell Oil  Company, et al. filed in  June 1996, and pending in  the
District  Court of Travis  County, Texas. The actions  generally allege that the
Company and several other defendants negligently misrepresented the  performance
of polybutylene pipe and fittings installed in water distribution systems. Other
allegations in the California and Texas actions include breach of the California
Unfair Practices Act and the Texas Deceptive Practices Act, respectively; breach
of  warranty, fraud and strict liability. It is possible that the Company may be
named as a defendant in  future actions arising out  of its past involvement  in
the polybutylene resin manufacturing business.
 
     The   Company  is  not   a  party  to   any  legal  proceedings,  including
environmental matters, which it believes will have a material adverse effect  on
its  consolidated financial  position. However, the  Company's operating results
could be  materially affected  in  future periods  by  the resolution  of  these
contingencies.
 
ITEM 4--SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
     There  were no matters submitted to a vote of security holders, through the
solicitation of proxies or otherwise,  during the fourth quarter ended  December
31, 1996.
 
                                       9





<PAGE>
<PAGE>
                       EXECUTIVE OFFICERS OF THE COMPANY
 
     The  following sets forth  information regarding executive  officers of the
Company as  of March  1, 1997,  and is  included in  Part I  in accordance  with
Instruction 3 of Item 401(b) of Regulation S-K.
 
<TABLE>
<CAPTION>
                                                SERVED IN
                                                 PRESENT
                                                POSITION               PRIOR BUSINESS EXPERIENCE
           NAME AND PRESENT TITLE                 SINCE                 (WITHIN LAST FIVE YEARS)               AGE
---------------------------------------------   ---------   ------------------------------------------------   ---
<S>                                             <C>         <C>                                                <C>
Peter J. Biancotti ..........................      1983                                                        53
  Vice President and Controller
E. Gary Cook ................................      1996     President and COO of Albermarle                    52
  Chairman of the Board,                                      Corporation--March 1994 to June 1996.
  President and CEO                                           President--Chemicals of Ethyl
                                                              Corp.--January 1992 to March 1994.
Bruce G. Davis ..............................      1995     Vice President Purchasing and Logistics,           48
  Vice President, Purchasing and Logistics                    Standard Products--1993 to 1995. Manager of
                                                              Materials, Sourcing and Support Operations, GE
                                                              Transportation Systems--1990 to 1993.
Camillo J. DiFrancesco ......................      1996     Vice President of Investor Relations--March        47
  Senior Vice President and Chief Financial                   1996 to September 1996. Vice President and
  Officer                                                     CFO, OSi Specialties, Inc.--July 1993 to
                                                              March 1996. Senior Vice President and CFO,
                                                              Roberston CECO Corporation--March 1991 to
                                                              May 1992.
Ronald Edelstein ............................      1995     Vice President, Information Systems--April         47
  Chief Information Officer, Vice President,                  1992 to December 1995. General Manager of
  Information Systems                                         Information Systems--October 1991 to April
                                                              1992.
Nirmal Jain .................................      1996     Group Vice President, Polymer Additives--1993      59
  Group Vice President, Polymer Chemicals                     to 1996. Vice President and General Manager,
                                                              Argus Division prior to January 1993.
Gerald Katz .................................      1996     Senior Vice President of Corporate                 59
  Senior Vice President, Performance                          Development--1995 to 1996. Group Vice
  Chemicals                                                   President and Senior Managing Director, Witco
                                                              Europe--1992 to 1994. Group Vice President
                                                              of the Chemical Group prior to 1992.
Yuan-Hu (Dick) Liu ..........................      1995     President, Du Pont China Holding Co. Ltd.--1993    59
  Group Vice President, Asia/Pacific                          to 1995. Group Manager/ Director Greater
                                                              China, Du Pont China Ltd.--1987 to 1993.
Peter Loewrigkeit ...........................      1996     Group Vice President of the Resins business        58
  Group Vice President, Special Assignment                    unit--1994 to 1995. Vice President,
                                                              Polyurethane/Polyesters business unit--1993
                                                              to 1994. Vice President and Business Manager,
                                                              Urethane business unit--1991 to 1993.
Dustan E. McCoy .............................      1996     Vice President, General Counsel and Corporate      47
  Senior Vice President, General Counsel and                  Secretary--April 1993 to October 1996.
  Corporate Secretary                                         Associate General Counsel, Ashland,
                                                              Inc.--1990 to 1993.
Clifford E. Montgomery ......................      1997     Vice President Human Resources, Quaker Chemical    49
  Vice President, Human Resources                             Corporation--January 1990 to December 1996.
</TABLE>
 
                                                        (continued on next page)
 
                                       10
 



<PAGE>
<PAGE>
(continued from previous page)
 
<TABLE>
<CAPTION>
                                                SERVED IN
                                                 PRESENT
                                                POSITION               PRIOR BUSINESS EXPERIENCE
           NAME AND PRESENT TITLE                 SINCE                 (WITHIN LAST FIVE YEARS)               AGE
---------------------------------------------   ---------   ------------------------------------------------   ---
<S>                                             <C>         <C>                                                <C>
Eric R. Myers ...............................      1996     Vice President of Investor Relations--             50
  Group Vice President, Corporate                             September 1996 to November 1996. Vice
  Restructuring/Implementation                                President and General Manager, Lubricants
                                                              Business--May 1993 to September 1996. Vice
                                                              President and General Manager, Kendall/Amalie
                                                              Division--January 1993 to April 1993. Vice
                                                              President and General Manager, Richardson
                                                              Battery Parts Division--May 1991 to December
                                                              1992. President and General Manager,
                                                              Bridgeport--Piedmont Manufacturing Co.
                                                              (Division of Bridge Products, Inc.) prior to
                                                              May 1991.
James M. Rutledge ...........................      1990                                                        44
  Vice President and Treasurer
Roger L. Sharp ..............................      1996     Vice  President of Operations  (Global Nylon) Du   54
  Senior Vice President, Global Operations                    Pont Corporation--prior to September 1996.
Frederick A. Shinners .......................      1996     Group Vice President of Oleo/ Surfactants--June    54
  Group Vice President, Managing Director,                    1994 to December 1996. Vice President and
  Europe                                                      General Manager of GE Silicones--August 1990
                                                              to June 1994.
Georg Urban .................................      1996     Managing Director of Witco's European              50
  Group Vice President, Oleochemicals &                       Surfactants business--1993 to 1996. COO and
  Derivatives                                                 Group Executive, Pfaudler--Europe prior to
                                                              1993.
David Verner ................................      1996     Vice President, Urethane Additives business        49
  Group Vice President, OrganoSilicones                       unit--October 1995 to April 1996. Vice
                                                              President, Urethane Additives, OSi
                                                              Specialties, Inc.--July 1993 to October
                                                              1995. Business Director of Union Carbide
                                                              Corporation prior to July 1993.
Donald E. Weinberg ..........................      1986                                                        61
  Vice President, General Manager, Golden
  Bear
</TABLE>
 
                                    PART II
 
ITEM 5--MARKET FOR THE COMPANY'S COMMON STOCK AND RELATED SHAREHOLDER MATTERS
 
     Witco's Common  Stock  is  listed  on the  New  York  Stock  Exchange.  The
following  table reflects  the high  and low sales  prices, as  reported on such
exchange for each quarterly period during the past two years:
 
<TABLE>
<CAPTION>
                                                    1996                 1995
                                             ------------------    ----------------
                 QUARTER                      HIGH        LOW       HIGH      LOW
------------------------------------------   -------    -------    ------    ------
 
<S>                                          <C>        <C>        <C>       <C>
First.....................................   $36.25     $29.13     $29.38    $24.25
Second....................................   $37.38     $31.88     $33.13    $27.25
Third.....................................   $34.63     $28.13     $35.63    $31.50
Fourth....................................   $33.50     $29.50     $35.13    $27.50
</TABLE>
 
                                       11
 



<PAGE>
<PAGE>
     The approximate number of holders of record of Common Stock as of  February
28, 1997, was 4,506.
 
     Dividends  on the Common Stock have been declared quarterly during the past
two years as follows:
 
<TABLE>
<CAPTION>
                                                                          PER SHARE
                                                                         ------------
                               QUARTER                                   1996    1995
----------------------------------------------------------------------   ----    ----
 
<S>                                                                      <C>     <C>
First.................................................................   $.28    $.28
Second................................................................   $.28    $.28
Third.................................................................   $.28    $.28
Fourth................................................................   $.28    $.28
</TABLE>
 
ITEM 6--SELECTED FINANCIAL DATA
 
     The data for this item are  submitted as a separate section following  Part
IV of this report.
 
ITEM 7--MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS
 
     The  data for this item are submitted  as a separate section following Part
IV of this report.
 
ITEM 8--FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
     The consolidated financial statements and supplementary data of the Company
and its subsidiaries  are included in  a separate section  following Part IV  of
this report.
 
ITEM 9--CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE
 
     None.
 
                                       12
 



<PAGE>
<PAGE>
                                    PART III
 
ITEM 10--DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
         DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
 
(a) Identification of Directors
 
     Reference  is made to pages 3 through 5  of the Proxy Statement to be filed
pursuant to Regulation 14A no later than March 31, 1997.
 
(b) Identification of Executive Officers
 
     Reference is made to Part I of this Form 10-K.
 
(c) Business Experience
 
     Reference is made to pages 3 through  5 of the Proxy Statement to be  filed
pursuant  to Regulation 14A no later than March 31, 1997 and Part I of this Form
10-K.
 
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
 
     Reference is made to page 9 of the Proxy Statement to be filed pursuant  to
Regulation 14A no later than March 31, 1997.
 
ITEM 11--EXECUTIVE COMPENSATION
 
     Reference  is  made  to  the  information  set  forth  under  the  captions
'Compensation of  Directors' and  'Executive Compensation'  on pages  7 and  10,
respectively,  of the Proxy Statement to be  filed pursuant to Regulation 14A no
later than March 31, 1997.
 
ITEM 12--SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
     For information  with  respect to  beneficial  ownership of  the  Company's
voting  securities, and rights thereto, reference is made to the information set
forth under the captions 'Ownership of Securities by Directors and Officers' and
'Security  Ownership  of  Certain  Beneficial   Owners'  on  pages  8  and   10,
respectively,  of the Proxy Statement to be  filed pursuant to Regulation 14A no
later than March 31, 1997.
 
ITEM 13--CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
(a) Transactions with Management and Others
 
     Reference  is  made  to  the  information  set  forth  under  the   caption
'Compensation  of Directors' and  'Transactions with Management'  on pages 7 and
19, respectively, of the Proxy Statement to be filed pursuant to Regulation  14A
no later than March 31, 1997.
 
(b) Certain Business Relationships
 
     Reference  is made to the information set forth under the captions 'Certain
Business Relationships' on  page 8  and 'Compensation  Committee Interlocks  and
Insider  Participation' on page 8 of the Proxy Statement to be filed pursuant to
Regulation 14A no later than March 31, 1997.
 
                                       13
 



<PAGE>
<PAGE>
                                    PART IV
 
ITEM 14--EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
 
     (a) 1 and 2--The  response to this portion of  Item 14  is  submitted as  a
separate section of this report.
 
     (a) 3--Exhibits:
 
<TABLE>
<CAPTION>
EXHIBIT
  NO.
-------
 
<C>       <S>
    3(i)  --Restated Certificate of Incorporation.(1)
    3(ii) --By-laws, as amended.(1)
    4     --Instruments defining the rights of security holders, including indentures.
          (i)   --Rights Agreement  dated as  of March  2, 1995,  between Witco  Corporation  and  First
                  Chicago Trust Company of New York.(2)
          (iii) --Pursuant to Regulation S-K,  Item 601(b)(4)(iii), no debt or other security instrument
                  represents  10%  of  the  total  assets  of  the  Registrant,  and  accordingly   such
                  instruments  are  not filed herewith. Registrant agrees  to furnish a copy of any such
                  agreement to the Commission upon request.
   10     --Material Contracts.
          (i)        --1. Agreement  and  Plan of  Merger dated as  of September 10,  1995, among  Witco
                          Corporation, Witsel  Corporation and OSi Specialties Holding Company.(3)
                     --2. Amendment dated as of October 18,  1995, to the Agreement and Plan  of  Merger
                          dated as of September 10, 1995,  among  Witco Corporation,  Witsel Corporation
                          and OSi  Specialties  Holding Company.(4)
                     --3. Credit Agreement dated as of October 18, 1995.(5)
                     --4. Amended and Restated Credit Agreement dated as of October 11, 1996.(6)
                     --5. Amendment No. 1  to Amended and Restated Credit Agreement dated as of December
                           23, 1996.
          (iii)(A)--Executive Compensation Plans and Arrangements Required to be Filed:
                  -- 1. 1986 Stock Option Plan for Employees, as amended.(7)
                  -- 2. 1989 Stock Option Plan for Employees.(8)
                  -- 3. 1992 Stock Option Plan for Employees.(9)
                  -- 4. 1995 Stock Option Plan for Employees.(10)
                  -- 5. Amendment No. 1 to 1995 Stock Option Plan for Employees.(11)
                  -- 6. Consultancy Agreement Between the Company and William Wishnick.(12)
                  -- 7. Employment Agreement, dated June 12, 1996, by and between Witco Corporation and
                        E. Gary Cook.(13)
                  -- 8. Witco Corporation 1994 Deferred Compensation Plan.(14)
                  -- 9. Supplemental  Executive  Retirement  Plan  of Witco Corporation as  amended and
                          restated effective December 5, 1995.(15)
   11     --Statement re Computation of Per Share Earnings.
   21     --Subsidiaries of the Registrant.
   23     --Consent of Independent Auditors.
   24     --Power of Attorney.(16)
   27     --Financial Data Schedule.
</TABLE>
 
     (b) Reports on Form 8-K.
 
          (i) A report on Form 8-K dated December 12, 1996, was filed during the
     quarter  ended December 31,  1996, responding to Item  5 in connection with
     the Company's  announcement  of a  merger  restructuring plan  including  a
     fourth  quarter pre-tax change  to earnings related  to the restructure and
     other matters.
 
     (c) The Exhibits  filed with  this report are  listed in  response to  Item
14(a)3.
 
     (d)  The response  to this portion  of Item  14 is submitted  as a separate
section of this report.
 
                                                        (footnotes on next page)
 
                                       14
 



<PAGE>
<PAGE>
(footnotes from previous page)
 
 (1) This Exhibit was  included as an  exhibit to the  quarterly report on  Form
     10-Q  for the  quarter ended  March 31,  1994, and  such Exhibit  is hereby
     incorporated by reference.
 
 (2) This Exhibit was included  as an exhibit to  the Registration Statement  on
     Form 8A filed with the Securities and Exchange Commission on March 3, 1995,
     and such Exhibit is hereby incorporated by reference.
 
 (3) This  Exhibit  was included  as Exhibit  2(a)  to Form  8-K filed  with the
     Securities and Exchange Commission on September 25, 1995, and such  Exhibit
     is hereby incorporated by reference.
 
 (4) This  Exhibit  was included  as Exhibit  2(c)  to Form  8-K filed  with the
     Securities and Exchange Commission on October 31, 1995, and such Exhibit is
     hereby incorporated by reference.
 
 (5) This Exhibit was  included as an  exhibit to  the Form 8-K  filed with  the
     Securities and Exchange Commission on October 31, 1995, and such Exhibit is
     hereby incorporated by reference.
 
 (6) This Exhibit was included as an exhibit to the quarterly report on Form 10Q
     for  the  quarter ended  September  30, 1996,  and  such Exhibit  is hereby
     incorporated by reference.
 
 (7) The 1986 Stock  Option Plan, as  amended, was  filed as an  Exhibit to  the
     Registration   Statement  on   Form  S-8,   registration  number  33-10715,
     Post-Effective Amendment No. 1 to Form  S-8 effective October 3, 1988,  and
     Post-Effective  Amendment No. 2  to Form S-8 effective  June 23, 1992. Such
     Exhibit is incorporated herein by reference.
 
 (8) The 1989 Stock  Option Plan  was filed as  an Exhibit  to the  Registration
     Statement  on Form S-8,  registration number 33-30995  effective October 2,
     1989, and Post-Effective  Amendment No. 1  to Form S-8  effective June  23,
     1992, and such Exhibit is hereby incorporated by reference.
 
 (9) The  1992 Stock  Option Plan  was filed as  an Exhibit  to the Registration
     Statement on Form  S-8, registration  number 33-48806,  effective June  23,
     1992, and such Exhibit is hereby incorporated by reference.
 
(10) The  1995 Stock  Option Plan  was filed as  an Exhibit  to the Registration
     Statement on Form  S-8, registration  number 33-60755,  effective June  30,
     1995, and such Exhibit is hereby incorporated by reference.
 
(11) Amendment No. 1 to the 1995 Stock Option Plan for employees was filed as an
     Exhibit  to  the Registration  Statement on  Form S-8,  registration number
     33-05509, effective June 7, 1996,  and such Exhibit is hereby  incorporated
     by reference.
 
(12) This  Exhibit was included as an exhibit  to the annual report on Form 10-K
     for the fiscal  year ended December  31, 1992, and  such Exhibit is  hereby
     incorporated by reference.
 
(13) This  Exhibit was included  as an exhibit  to the quarterly  report on Form
     10-Q for the quarter ended September  30, 1996, and such Exhibit is  hereby
     incorporated by reference.
 
(14) This  Exhibit was included as an exhibit  to the annual report on Form 10-K
     for the fiscal  year ended December  31, 1994, and  such Exhibit is  hereby
     incorporated by reference.
 
(15) This  Exhibit was included as an exhibit  to the annual report on Form 10-K
     for the fiscal  year ended December  31, 1995, and  such Exhibit is  hereby
     incorporated by reference.
 
(16) The Power of Attorney appears on the Signature Page.
 
                                       15





<PAGE>
<PAGE>
                                   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 21 day of March,
1997.
 
                                          WITCO CORPORATION
 
                                          By /s/          E. GARY COOK
                                             ...................................
                                                        E. GARY COOK
                                                   CHAIRMAN OF THE BOARD,
                                                         PRESIDENT
                                                AND CHIEF EXECUTIVE OFFICER
 
                               POWER OF ATTORNEY
 
     KNOW ALL MEN BY  THESE PRESENTS, that each  person whose signature  appears
below  constitutes and appoints E. GARY  COOK, CAMILLO DIFRANCESCO, OR DUSTAN E.
MCCOY, acting severally, his  true and lawful  attorney-in-fact and agent,  with
full  power of substitution and  resubstitution, for him and  in his name, place
and stead, in  any and all  capacities, to sign  any or all  amendments to  this
Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and
other  documents  in  connection  therewith, with  the  Securities  and Exchange
Commission, granting  unto  said  attorney-in-fact  and  agent  full  power  and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
might  or could  do in  person, hereby  ratifying and  confirming all  that said
attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
 
     Pursuant to the requirements of the  Securities Exchange Act of 1934,  this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities and on the dates indicated.
 
<TABLE>
<CAPTION>
                   NAME                                        TITLE                              DATE
------------------------------------------  --------------------------------------------   -------------------
<C>                                         <S>                                            <C>
PRINCIPAL EXECUTIVE OFFICERS:
 
             /s/ E. GARY COOK                Chairman of the Board, President and Chief      March 21, 1997
 .........................................                Executive Officer
               E. GARY COOK
 
PRINCIPAL FINANCIAL OFFICER:
 
         /s/ CAMILLO DIFRANCESCO             Senior Vice President and Chief Financial       March 21, 1997
 .........................................                     Officer
           CAMILLO DIFRANCESCO
DIRECTORS:
 
             /s/ E. GARY COOK                                 Director                       March 21, 1997
 .........................................
               E. GARY COOK
 
           /s/ SIMEON BRINBERG                                Director                       March 21, 1997
 .........................................
             SIMEON BRINBERG
 
           /s/ WILLIAM G. BURNS                               Director                       March 21, 1997
 .........................................
             WILLIAM G. BURNS
 
           /s/ WILLIAM R. GRANT                               Director                       March 21, 1997
 .........................................
             WILLIAM R. GRANT
</TABLE>
 
                                       16
 



<PAGE>
<PAGE>
 
<TABLE>
<CAPTION>
                   NAME                                        TITLE                              DATE
------------------------------------------  --------------------------------------------   -------------------
<C>                                         <S>                                            <C>
          /s/ RICHARD M. HAYDEN                               Director                       March 21, 1997
 .........................................
            RICHARD M. HAYDEN
 
            /s/ HARRY G. HOHN                                 Director                       March 21, 1997
 .........................................
              HARRY G. HOHN
 
         /s/ L. JOHN POLITE, JR.                              Director                       March 21, 1997
 .........................................
           L. JOHN POLITE, JR.
 
            /s/ DAN J. SAMUEL                                 Director                       March 21, 1997
 .........................................
              DAN J. SAMUEL
 
          /s/ WILLIAM R. TOLLER                               Director                       March 21, 1997
 .........................................
            WILLIAM R. TOLLER
 
           /s/ BRUCE F. WESSON                                Director                       March 21, 1997
 .........................................
             BRUCE F. WESSON
 
           /s/ WILLIAM WISHNICK                               Director                       March 21, 1997
 .........................................
             WILLIAM WISHNICK
</TABLE>
 
                                       17





<PAGE>
<PAGE>
                                ANNUAL REPORT ON


                                   FORM 10-K


                            ITEM 6, ITEM 7, ITEM 8,
                      ITEM 14(a)(1) AND (2) AND ITEM 14(d)
                         INDEX OF FINANCIAL STATEMENTS
                          YEAR ENDED DECEMBER 31, 1996


                               WITCO CORPORATION
                            GREENWICH, CONNECTICUT







<PAGE>
<PAGE>

                                     INDEX
                           ANNUAL REPORT ON FORM 10-K
         ITEM 6, ITEM 7, ITEM 8, ITEM 14(a)(1) AND (2), AND ITEM 14(d)
                               DECEMBER 31, 1996
 
<TABLE>
<CAPTION>
                                                                                                          PAGE NO.
                                                                                                          --------
 
<S>                                                                                                       <C>
ITEM 6--SELECTED FINANCIAL DATA........................................................................        1
 
ITEM 7--MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS..........        2
 
ITEM 8--FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA--SEE ITEM 14(a)(1) AND (2) BELOW.
</TABLE>
 
ITEM 14(a)(1) AND (2) AND ITEM 14(d)
 
     The  following consolidated  financial statements of  Witco Corporation and
subsidiary companies, for the year ended December 31, 1996, are included in Item
8:
 
<TABLE>
<CAPTION>
                                                                                                          PAGE NO.
                                                                                                          --------
 
<S>                                                                                                       <C>
     Report of Independent Auditors....................................................................     F-1
     Consolidated Balance Sheets -- December 31, 1996 and 1995.........................................     F-2
     Consolidated Statements of Operations Years Ended December 31, 1996, 1995 and 1994................     F-3
     Consolidated Statements of Cash Flows -- Years Ended December 31, 1996, 1995 and 1994.............     F-4
     Consolidated Statements of Shareholders' Equity -- Years Ended December 31, 1996, 1995 and 1994...     F-5
     Notes to Financial Statements.....................................................................     F-6
     Quarterly Financial Data For Continuing Operations (unaudited)....................................     F-23
</TABLE>
 
     The  following   consolidated  financial   statement  schedule   of   Witco
Corporation and subsidiary companies is included in Part IV, Item 14(d):
 
<TABLE>
<CAPTION>
                                                                                                          PAGE NO.
                                                                                                          --------
 
<S>                                                                                                       <C>
     Schedule II--Valuation and Qualifying Accounts....................................................      S-1
</TABLE>
 
     All  other schedules (Nos. I, III, IV and V) for which provision is made in
the applicable accounting regulation of  the Securities and Exchange  Commission
are  not  required  under  the related  instructions  or  are  inapplicable, and
therefore have been omitted.
 
     Financial statements (and summarized financial information) of 50% or  less
owned  persons accounted for by the equity method have been omitted because they
do not, considered individually  or in the  aggregate, constitute a  significant
subsidiary.


<PAGE>
<PAGE>

                                      WITCO CORPORATION AND SUBSIDIARY COMPANIES


<TABLE>
<CAPTION>

FIVE YEAR SUMMARY OF SELECTED FINANCIAL DATA
---------------------------------------------- -----------  -----------  ----------  -----------  ----------
(in millions except per share data)             1996(a)    1995(b)(e)(f)  1994(e)    1993(c)(e)   1992(d)(e)(g)
                                               -----------  -----------  ----------  -----------  ----------
<S>                                             <C>         <C>         <C>          <C>         <C>     
SELECTED STATEMENT OF OPERATIONS DATA
Net sales                                       $2,263.3    $1,985.1    $1,841.4     $1,763.1    $1,342.0
Gross profit                                       503.0       416.3       407.1        381.3       268.7
Operating income (loss) from continuing           (262.1)      201.3       173.4         76.1        71.7
  operations

Income (loss) from continuing operations
  before income taxes                             (325.8)      169.1       149.8         47.2        62.6
Income (loss) from continuing operations          (247.2)      100.3        94.4         25.1        38.3
Income (loss) from discontinued operations -
  net of income taxes                              (67.9)        4.1        12.7         (5.3)       15.5
Net income (loss)                               $ (315.1)   $  104.4    $  107.1     $   19.8    $   39.2

Per Common Share:

Income (loss) from continuing operations        $  (4.35)   $   1.78    $   1.70     $   0.56    $   0.88
Income (loss) from discontinued operations -
  net of income taxes                              (1.19)       0.07        0.22        (0.10)       0.02
                                               ----------- ----------- ----------   ----------- ----------
Net income (loss)                               $  (5.54)   $   1.85    $   1.92     $   0.46    $   0.90
                                               =========== =========== ==========   =========== ==========


SELECTED BALANCE SHEET DATA

Working capital                                 $  243.2    $  249.6    $  551.6     $  451.2    $  (21.6)
Property, plant and equipment expenditure
  (including acquisitions)                      $  161.2    $  343.0    $  107.4     $  103.7    $  322.8
Property, plant and equipment - net             $  735.4    $  789.8    $  720.0     $  696.5    $  721.2
Total assets                                    $2,391.7    $2,750.6    $1,919.3     $1,839.0    $1,811.8
Long-term debt                                  $  700.8    $  683.8    $  346.5     $  496.3    $  173.1
Total shareholders' equity                      $  627.9    $1,004.1    $  940.0     $  713.4    $  614.3
Book value per common share                     $  11.05    $  17.78    $  16.73     $  14.12    $  13.80
                                               ----------- ----------- ---------- -----------   ---------


SELECTED OTHER FINANCIAL DATA
Number of shareholders (record holders) - at       4,563       4,990       5,194        5,253       5,262
  year end
Weighted average number of common shares
  outstanding (in thousands)                      56,900      56,549      56,378       54,866      49,801
Dividends paid per share - common stock         $   1.12    $   1.12    $   1.03     $   0.94    $   0.92
Dividends declared per share - common stock     $   1.12    $   1.12    $   1.06     $   0.96    $   0.92
Market price to the nearest dollar, per
  common share on New York Stock Exchange       
  (high-low)                                    $  37-28    $  36-24    $  35-24    $  32-24    $   25-20
---------------------------------------------- ----------- ----------- ---------- ----------- -----------
</TABLE>

(a) Includes  charges of $345.1  ($239.3  after-tax  or $4.21 per common  share)
    related to a  restructuring  of the  Company's  operations  and $91.0 ($71.3
    after-tax  or $1.25 per common  share) for  non-recurring  items  related to
    provisions for litigation, environmental remediation costs and other costs.

(b) Includes  gains of $55.1  ($33.7  after-tax  or $.59 per common  share) as a
    result of settlements with certain of the Company's insurers, net of related
    legal and other costs and $54.0 ($33.0  after-tax or $.59 per common  share)
    from the disposition of businesses.  Also includes a restructuring charge of
    $33.8 ($20.6  after-tax or $.36 per common share) related to a write-down of
    property,  plant and equipment and other costs and $18.1 ($11.0 after-tax or
    $.20 per  common  share)  related  to  environmental  remediation  costs and
    litigation.

(c) Includes a charge of $68.9 ($42.0  after-tax  or $.77 per common  share) for
    environmental  remediation  costs,  disposition  of a  business,  work force
    reduction and other matters.

(d) Includes a charge of $20.1 ($12.5  after-tax  or  $.25 per common share) for
    consolidation of offices.

(e) Reclassified to conform to 1996 presentation.

(f) Includes the results of operations of OSi  Specialties  for the three months
    ended December 31, 1995.

(g) Net  income  (loss)  includes  a  cumulative  effect of accounting change of
    $(14.6).


                                       1


<PAGE>
<PAGE>



MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
RESULTS OF OPERATIONS
--------------------------------------------------------------------------------


LIQUIDITY AND FINANCIAL RESOURCES

Certain  statements  made in  this  "Management's  Discussion  and  Analysis  of
Financial  Condition  and Results of  Operations"  section are "forward  looking
statements" that involve certain risks and uncertainties. The factors that could
cause actual results to differ  materially from those presented  herein include,
without  limitation,  the Company's ability to generate  appropriate cash flows,
the cost and timing of the implementation of certain capital  improvements,  the
cost and timing associated with the planned  reduction in production  facilities
and workforce,  the Company's ability to effectively  divest certain assets, the
cost of  environmental  remediation  and compliance  efforts,  technological  or
competitive  changes  in any of the  Company's  businesses,  inability  to reach
agreement with third parties on planned  business  arrangements,  certain global
and regional  economic  conditions and other factors listed from time to time in
the Company's Securities and Exchange Commission filings.

Liquidity refers to the ability to generate  adequate amounts of cash to satisfy
the financial needs of an enterprise.  Cash flow from operations, a major source
of the Company's  liquidity,  provided funds of $470 million over the past three
years. Cash generated through  operations during this time period was sufficient
to support the Company's internal capital investment program. Additionally, with
proceeds  received  from  dispositions,  the  Company  was  able to  sustain  an
increasing  amount  of  dividends  paid  to  shareholders.   Additional  details
regarding  operating,  investing  and financing  activities  can be found in the
Consolidated Statements of Cash Flows.

During the fourth quarter of 1996, the Company's Board of Directors approved the
1996  restructuring  plan.  This was the  result of a review  undertaken  by the
Company's  management  to  improve  profitability,   increase  productivity  and
maximize  shareholder  value. In connection with the plan and other initiatives,
the Company recorded total charges of $436.1 million ($310.6 million  after-tax)
during the fourth quarter of 1996. Included therein is a restructuring charge of
$345.1 million,  principally consisting of severance,  environmental closure and
demolition  costs,  and  write-downs of fixed assets and goodwill.  In addition,
other  charges  of $91  million  were  recorded  to provide  for legal  matters,
environmental  remediation  and compliance and other items.  Approximately  $130
million of the $310.6 million  after-tax  charge will be expended as cash. These
funds will be expended primarily over a three year period.

The  principal  actions  in the  restructuring  involve  the  closure or sale of
fifteen production facilities and consolidation of support infrastructure.  This
will result in the elimination of  approximately  1,800  positions  worldwide by
1999.  The  Company  estimates  annual  savings  from  the  restructuring  to be
approximately  $200 million by the end of 1999 with no anticipated  reduction in
revenues.

During the fourth  quarter of 1995, a  restructuring  plan was  initiated  which
addressed  the  shut-down  of  five  facilities.  This  plan is  expected  to be
completed in 1997.

On October 18,  1995,  the  Company  entered  into a one year  credit  agreement
totaling  $675 million  with a consortium  of banks for the purpose of financing
the  acquisition  of OSi  Specialties  Holding  Company  and  its  wholly  owned
subsidiary OSi Specialties,  Inc. (collectively "OSi Specialties," or "OSi") and
to prepay OSi's  11.50%  Senior  Secured  Discount  Debentures  due 2004 and OSi
Specialties' 9.25% Senior Subordinated Notes due 2003. On February 12, 1996, the
Company  issued $150 million of 6.125% Notes due 2006 and $150 million of 6.875%
Debentures due 2026. The net proceeds of $297 million,  plus cash on hand,  were
used to repay $300 million of bank loans under the credit agreement. Immediately
thereafter,  the availability of funds under the credit agreement was reduced to
$375 million.

On October  11,  1996,  the credit  agreement  was  amended  and the term of the
facility was extended  until October 10, 1997. The interest rate at December 31,
1996, was approximately  5.77%.  During 1996, proceeds received from the sale of
certain of the Company's  Lubricants Group businesses and cash on hand were used
to reduce the amount  outstanding  under the credit  agreement to $90 million at
December 31,  1996.  The Company  anticipates  that the balance of the bank loan
will be repaid with  proceeds from the sale of the  remaining  Lubricants  Group
businesses and/or excess cash.

The Company is currently  negotiating  a new  five-year  $500 million  revolving
credit  agreement  with  various  banks which will  replace  its current  credit
agreement.  It is the Company's  belief that annual cash flows from  operations,
along  with  the  flexibility  provided  by the 


                                       2


<PAGE>
<PAGE>

--------------------------------------------------------------------------------

new credit  agreement,  will be sufficient to fund, for the foreseeable  future,
capital investments, dividend payments, commitments on environmental remediation
projects, and operating requirements.

As the Company continues to focus on global  expansion,  it has, through certain
of its international subsidiaries,  arrangements with various banks for lines of
credit. At December 31, 1996, these lines of credit aggregated $41.8 million, of
which $2.2 million was  utilized at year-end.  The Company has also entered into
certain  long-term  hedging  arrangements  to protect against  possible  adverse
currency exchange and interest rate  fluctuations.  The Company utilizes forward
contracts  to hedge  foreign  currency  risk on trade  accounts  receivable  and
payables.  These forward contracts are generally outstanding for 30 days and are
primarily  denominated in German marks,  Italian lire,  Swiss and French francs,
and British pounds (see Note 15 of Notes to Financial  Statements for additional
details).

Currently,  the Company's primary international  operations are based in Western
Europe.  Although there are certain risks inherent in carrying on  international
business,  including  currency  devaluations  and  controls,  export  and import
restrictions,  inflationary  factors,  product supply,  economic  controls,  and
nationalization  and  appropriation,  the Company does not believe these factors
will significantly affect its operations.

The Company  periodically  evaluates,  and periodically reviews with the Finance
Committee of the Board of Directors,  its liquidity requirements,  capital needs
and availability of external funds. As a result of this process, the Company has
in the  past  and may in the  future  seek to  restructure  indebtedness,  raise
additional  capital or take such other steps to increase or manage its liquidity
and financial resources.

CAPITAL INVESTMENTS AND COMMITMENTS

In  connection  with  the  aforementioned  1996  restructuring  plan  and  other
initiatives,  the Company intends to invest more than $600 million of internally
generated funds over the next three years.  $250 million will be invested in new
capacity to support future growth.  An additional $200 million will be allocated
to  modernize  plants  and  replace  capacity  at  closed  facilities.   Further
expenditures include $100 million for environmental, safety and other items, and
$50  million to upgrade  worldwide  information  systems.  These  amounts are in
addition to  approximately  $130 million in cash,  which is required for matters
reserved  for in  connection  with the 1996  restructuring  charge and for other
initiatives as discussed in Liquidity and Financial Resources.

In 1996,  the Company  continued to upgrade  existing  facilities  and to expand
capacity to meet changing market demands.  Total capital  expenditures  for 1996
were $161.2 million.  Capital expenditures related to continuing operations were
$149.3  million,  bringing the total for the past three years to $337.5 million.
The capital  investment  program in 1997, which will include the  aforementioned
1996 restructuring plan, will continue to focus on capacity expansion and market
share growth and is expected to approximate $250 million in 1997. Investments in
the  form  of  research  and  development,  quality  initiatives  and  marketing
alliances will also continue in all key product lines.

ENVIRONMENTAL MATTERS

The Company operates in an industry subject to extensive  regulations related to
the  protection  of the  environment  and the health and safety of employees and
others.  Domestic  operations are subject to a myriad of environmental  statutes
and  regulations  at  the  federal,   state  and  local  levels.  The  Company's
international  production  facilities  operate  in an  environmental  regulatory
framework  in  which  governmental   authorities  typically  are  granted  broad
discretionary powers which require manufacturing  facilities to obtain operating
permits to continue operations.

The Company  believes that  expenditures  for  compliance  with these  statutes,
regulations  and permits  will  continue to have a  significant  impact upon the
conduct of its business.  The trend toward greater  environmental  awareness and
more stringent  environmental  regulations is likely to continue,  and while the
Company  cannot  accurately  predict how this will affect future  operations and
earnings,  the Company does not believe its costs will  significantly  vary from
those  of its  competitors.  Consistent  with  the  Company's  concern  for  the
protection and improvement of the environment worldwide, the Company continually
monitors the  environmental  impact of past and present  operating  practices in
light of changing environmental  standards.  Where remedial action is indicated,
the Company assesses the probability and scope of potential  remediation  costs.
To determine the appropriate reserve amounts, management reviews, on a quarterly
basis,  currently available  infor-


                                       3


<PAGE>
<PAGE>

--------------------------------------------------------------------------------

mation  pertaining  to each  environmental  site.  Inherent in this  process are
considerable  uncertainties  which affect the Company's  ability to estimate the
ultimate costs of remediation.  Such uncertainties include the nature and extent
of  contamination  at  each  site,  evolving  governmental  standards  regarding
remediation requirements,  changes in environmental regulations,  widely varying
costs of  alternative  cleanup  methods,  the number and financial  condition of
other  potentially  responsible  parties at  multi-party  sites,  innovations in
remediation and restoration  technology,  and the  identification  of additional
environmental  sites.  As a result,  as remediation  efforts proceed at existing
sites and new sites are  assimilated  into the review  process,  charges against
income for  environmental  reserves  could have a material  effect on results of
operations  in a  particular  quarter or year.  However,  such  charges  are not
expected  to  have a  material  adverse  effect  on the  Company's  consolidated
financial position, cash flow or liquidity.

In  connection  with  the 1996  restructuring  plan,  the  Company  completed  a
comprehensive  study of its  environmental  remediation  and  compliance  issues
throughout the organization. This study resulted in an increase to environmental
reserves of $83.4 million. Reserves for environmental remediation and compliance
costs at December 31, 1996,  amounted to $219.7 million (including $64.2 million
associated with environmental  expenses of the Lubricants Group), which reflects
management's  assessment of future  remediation and compliance costs in light of
currently  available  information.  Of these total  reserves,  $77.6 million are
associated  with  plants  to be  shut-down  or sold as part of the 1996 and 1995
restructuring plans.

Remediation expenditures charged to environmental reserves were $14.7 million in
1996 and include expenditures  currently mandated as well as those not initiated
by any  regulatory  authority  or third  party.  The  Company  anticipates  1997
remediation expenditures to approximate $60 million.

Capital  expenditures  for air,  water and solid  waste  control  equipment  and
facilities  amounted  to $12.6  million  in 1996.  The  Company  estimates  that
approximately $20 million will be expended on similar capital projects in 1997.

The Company is continuing  its efforts to reduce  hazardous  waste and emissions
generated  by  its  operations.   Through   improved   operating   efficiencies,
installation of additional  environmental  control  equipment and utilization of
the latest innovations in waste treatment  technology,  management believes that
direct recurring  operating costs associated with managing hazardous  substances
and pollution can be maintained at or slightly above current levels.  Such costs
amounted to approximately $38 million in 1996.

CONTINGENCIES

The Company is a  potentially  responsible  party  ("PRP") or a  defendant  in a
number of governmental (federal, state and local) and private actions associated
with the release, or suspected release, of contaminants into the environment. As
a PRP, the Company may be liable for costs associated with the investigation and
remediation of environmental  contamination,  as well as various penalties,  and
damages to persons, property and natural resources.

The Company is not a party to any legal  proceedings  or  environmental  matters
which it  believes  will have a  material  adverse  effect  on its  consolidated
financial position, cash flow or liquidity. It is possible, however, that future
results of operations  for any particular  quarterly or annual period,  could be
materially affected by such legal proceedings or environmental matters. However,
the Company  does not expect the results of such  proceedings  or  environmental
matters to materially affect its competitive position.

DISCONTINUED OPERATIONS

On  September  11,  1995,  the Company  announced  its  intention  to divest its
Lubricants Group (see Note 18 of Notes to Financial Statements).

RESULTS OF CONTINUING OPERATIONS

The Company reported a loss from continuing operations in 1996 of $247.2 million
compared  to income  of  $100.3  million  and  $94.4  million  in 1995 and 1994,
respectively.  The three-year period included several  non-recurring items which
affect comparison.  The following table shows the effect of these  non-recurring
items on continuing operations.


                                       4


<PAGE>
<PAGE>



--------------------------------------------------------------------------------


SUMMARY OF NON-RECURRING ITEMS
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
 (millions of dollars                        1996                              1995
   except per share data)      --------------------------------- ----------------------------------
                               PRE-TAX   AFTER-TAX    INCOME     Pre-Tax    After-Tax    Income
                                INCOME      INCOME     (LOSS)      Income     Income      (Loss)
                                (LOSS)      (LOSS)    PER SHARE    (Loss)     (Loss)    Per Share
                               --------------------------------- ----------------------------------
<S>                             <C>       <C>           <C>        <C>        <C>          <C>  
 Continuing operations
   excluding non-recurring      $ 110.3   $   63.4      $ 1.11     $111.9     $  65.2      $1.16
   items
 Restructuring charge (a)        (345.1)    (239.3)      (4.21)     (33.8)      (20.6)      (.36)
 Other charges (b)                (91.0)     (71.3)      (1.25)     (18.1)      (11.0)      (.20)
 Insurance settlements (c)           -          -           -        55.1        33.7        .59
 Gain on disposition of
   operations of                     -          -           -        54.0        33.0        .59
   subsidiaries (d)
                               ---------- ----------- ---------- ----------- ---------- -----------
 Continuing operations          $(325.8)   $(247.2)     $(4.35)    $169.1      $100.3      $1.78
 ----------------------------- ---------- ----------- ---------- ----------- ---------- -----------
</TABLE>

    The only  non-recurring  item in 1994 was a gain of $5.1 ($3.1  after-tax or
    $.06 per common  share)  from the  disposition  of the metal  finishing  and
    metalworking operations of a subsidiary.

(a) Included in the  restructuring  charge of $345.1 ($239.3  after-tax or $4.21
    per common  share) for the year ended  December 31, 1996 are  severance  and
    related  costs of $104.5,  a writedown of property,  plant and  equipment of
    $96.9,  environmental  closure  costs of $53.3,  a writedown of goodwill and
    intangibles of $40.0,  demolition  costs of $26.2, and other costs of $24.2.
    In addition,  the year ended  December 31,  1995,  includes a  restructuring
    charge (previously classified as other expense (income)-net) of $33.8 ($20.6
    after-tax  or $.36 per common  share)  related to a writedown  of  property,
    plant and equipment of $21.8 and other costs of $12.0.

(b) The year ended December 31, 1996,  includes other  non-recurring  charges of
    $91.0  ($71.3  after-tax  or $1.25 per common  share).  The charges  include
    provisions  for  litigation  of $34.7,  environmental  remediation  costs of
    $30.1, and other matters of $26.2. In addition,  the year ended December 31,
    1995, includes other non-recurring charges of $18.1 ($11.0 after-tax or $.20
    per common share) related to provisions for environmental  remediation costs
    and litigation.

(c) The year ended December 31, 1995,  includes gains of $55.1 ($33.7  after-tax
    or $.59 per common  share) as a result of  settlements  with  certain of the
    Company's insurers, net of related legal and other costs.

(d) The year ended December 31, 1995, includes a gain of $9.5 ($5.9 after-tax or
    $.11 per common share) from the  disposition of the Battery Parts  business,
    and a gain of $44.5  ($27.1  after-tax  or $.48 per common  share)  from the
    disposition of the Carbon Black business.


1996 VS. 1995

Current year  consolidated net sales from continuing  operations of $2.3 billion
were 14  percent  greater  than  1995.  The  increase  was  attributable  to the
inclusion of OSi Specialties in 1996 for a full year which more than covered the
loss in sales  resulting  from the  disposition  of businesses in 1996 and 1995.
Consolidated  net  sales,   adjusted  to  exclude  sales   attributable  to  OSi
Specialties for the first nine months of 1996 and  dispositions  for both years,
rose 1 percent  over 1995.  This  increase  was driven by higher  sales  prices,
partially  offset by the  unfavorable  impact of a  comparatively  stronger U.S.
dollar, while volume was essentially unchanged.

Income from continuing  operations,  excluding  non-recurring  items,  was $63.4
million in 1996 compared to $65.2 million in 1995.  The adverse effect on income
of higher  interest  expense,  the loss of earnings  attributable to the sale of
businesses  and lower  interest  income was largely offset by the inclusion of a
full year of OSi Specialties' higher margin operations. The increase in interest
expense was attributable to financing the acquisition of OSi Specialties and the
assumption of OSi  Specialties'  debt,  while the decline in interest income was
due to a reduction in funds  available for short term  investing  resulting from
the acquisition of OSi Specialties and payment of bank loans. Other major income
and expense categories  appearing on the Consolidated  Statements of Operations,
adjusted for the  acquisition  and  dispositions,  were  comparable to 1995 on a
percentage of net sales basis.

The  effective  tax benefit rate of 24.1% for the year ended  December 31, 1996,
differs from the U.S.  statutory tax rate of 35% primarily due to foreign income
taxes in excess of statutory rates, non-deductible goodwill amortization related
to OSi  Specialties,  state income taxes and the  write-down  of  non-deductible
goodwill and intangibles (see Note 12 of Notes to Financial Statements).



                                       5


<PAGE>
<PAGE>


--------------------------------------------------------------------------------




SEGMENT INFORMATION

As a  result  of the  Company's  decision  to sell  the  Lubricants  Group,  the
operating  results of which have been recorded as discontinued  operations,  the
Petroleum Segment consists solely of the Petroleum Specialties Group.

The Company's operating income from continuing operations for both 1996 and 1995
included several  non-recurring  items which affect comparison.  Excluding these
items,  operating  income from continuing  operations was $174.1 million in 1996
compared  to $144.0  million in 1995.  The  following  table shows the effect of
these  non-recurring  items on operating  income from  continuing  operations by
industry segment.


<TABLE>
<CAPTION>

                      --------------------------------------------------
(millions of dollars)                        1996                       
                      --------------------------------------------------
                                   OSI                 CORPORATE &      
                      CHEMICAL SPECIALTTIES PETROLEUM UNALLOCATED TOTAL 
                      -------------------------------------------------- 
<S>                    <C>       <C>        <C>         <C>      <C>
Operating income
 (loss) from
 continuing           
 operations                      
 excluding
 non-recurring items    $ 113.4      $58.4     $ 23.6     $(21.3)   $ 174.1  
Restructuring charge     (197.7)       -        (94.0)     (53.4)    (345.1) 
Other charges             (24.4)       -        (17.3)     (49.3)     (91.0) 
Insurance settlements       -          -           -          -         -    
 Gain on disposition     
  of subsidiaries           -          -           -          -         -
                         --------------------------------------------------- 
Operating income
 (loss) from            
 continuing                                                    
 operations             $(108.7)    $58.4     $(87.7)    $(124.0)   $(262.0) 
</TABLE>


<TABLE>
<CAPTION>
(millions of dollars)                             1995               
                     -----------------------------------------------------------
                                   OSI              DIVERSIFIED CORPORATE &       
                     CHEMICAL SPECIALTIES PETROLEUM  PRODUCTS   UNALLOCATED TOTAL
                     -----------------------------------------------------------
 <S>                  <C>          <C>       <C>     <C>        <C>      <C> 
Operating income                                                                
 (loss) from
 continuing                                                                     
 operations                                                                     
 excluding                                                                      
 non-recurring items  $109.6       $7.4      $36.1   $10.2      $(19.3)  $144.0 
Restructuring charge   (33.1)        -        (0.7)     -           -     (33.8)
Other charges          (12.9)        -        (1.4)   (1.5)       (2.3)   (18.1)
Insurance                  
 settlements              -          -          -       -         55.1     55.1
Gain on disposition   
 of subsidiaries          -          -          -     54.0           -     54.0
                     -----------------------------------------------------------
Operating income                                                                
 (loss) from     
 continuing                                                                     
 operations          $ 63.6        $7.4      $34.0   $62.7     $ 33.5     $201.2
-----------------------------------------------------------  
The only  non-recurring  item in 1994 was a gain of $5.1 ($3.1 after-tax or $.06
per common share) from the disposition of the metal  finishing and  metalworking
operations of a subsidiary (Diversified Products).
</TABLE>








CHEMICAL SEGMENT

Segment  1996 net sales of $1.4  billion  were  essentially  equal to 1995.  The
effect of a 3 percent  decline in volume,  mainly due to the  disposition of the
Company's interest in an Israeli  manufacturer and the strengthening of the U.S.
dollar against key global  currencies,  offset the impact of a favorable product
sales mix and higher prices in certain business sectors.

Chemical segment 1996 operating  income,  excluding  non-recurring  charges from
both years,  rose from $109.6  million in 1995 to $113.4  million in 1996. The 3
percent  improvement  was  attributable  to  higher  earnings  reported  by  the
segment's  Polymer  Additives  Group. The group reported higher sales benefiting
from an upturn in the construction and automotive  markets.  Sales and operating
earnings were  particularly  strong in the Vinyl portion of the group's business
where market share was gained.  The  consumption of rigid vinyl in house siding,
window  frames and pipe resulted in strong sales of organotin  heat  stabilizers
and lubricants.  Packaging film  applications  for  polyolefins  also provided a
strong market for amide  lubricants  and stearates.  Despite  higher sales,  the
Oleo/Surfactants  Group's 1996 income was down from 1995.  Global demand for the
group's  agricultural  surfactants  was up  dramatically  in 1996  driven by the
introduction  of a new product into the pesticides  market.  Group earnings were
adversely  affected by higher raw  material  costs and the loss of certain  high
margin volume in a sector of the group's business,  a soft glycerin market,  and
higher expenses  attributable  to the current year's severe winter weather.  The
Resins  Group's  1996 sales and  operating  income  decreased  compared to 1995.
Despite  excellent  growth  in its  specialty  products  area of  aqueous  epoxy
hardeners, aqueous urethanes, breathable textile coatings and blocked isocyanate
systems,  the group was adversely  affected by a shrinkage of the U.S. polyester
polyurethanes  foam  market  and  the  resulting  lower  prices.   Higher  costs
associated  with the  severity  of the 1996  winter  weather  in both the United
States and Europe also adversely affected the Resins Group's earnings.

OSI SPECIALTIES

Current  year  operating  income  for  this  segment  included  a full  year  of
operations  as compared to three months in 1995.  OSi  Specialties  added $448.6
million to net sales in 1996 compared to $101.3  million in 1995.  The segment's
1996 operating  income of $58.4 million was $51 million  greater than the income
reported in 1995.

Sales for the fourth  quarter,  the comparable  period of ownership,  were up 10
percent over 1995 due to greater  volume and  favorable  product mix.  Operating
income for this comparable  period increased from $7.4 million to $13 million as
a result of  efficiencies  and  reductions in  non-manufacturing  costs achieved
primarily through acquisition related synergies.


                                       6



<PAGE>
<PAGE>


PETROLEUM SEGMENT

The  segment's  current year net sales of $381.6  million were 2 percent  behind
1995.  Although  benefiting  from a 1 percent  increase  in volume,  competitive
pricing  pressures and the unfavorable  impact of a comparatively  stronger U.S.
dollar caused segment sales to decline.

Operating income,  excluding  non-recurring  charges,  was $23.6 million in 1996
compared  to $36.1  million in 1995.  The segment  was  burdened  during 1996 by
increased    depreciation   and   manufacturing   costs   resulting   from   the
under-utilization of manufacturing  capacity  attributable to 1995 expansions at
facilities  in the U.S. and Holland.  Lower than  anticipated  demand  precluded
recovery  of these  costs.  1996  earnings  were also  adversely  affected  by a
weakening  of  sales  prices  due  to  market  conditions  and  increased  costs
attributable  to higher U.S.  utility  rates and severe winter  weather  related
expenditures.

1995 VS. 1994

Consolidated 1995 net sales from continuing  operations rose $143.7 million or 8
percent compared to 1994 levels.  The inclusion of OSi's fourth quarter sales of
$101.3  million  offset an $80.6  million  decline in sales  resulting  from the
disposition of the Diversified  Products Segment. Of the remaining increase,  55
percent was  attributed to higher sales prices and product mix and 40 percent to
favorable  currency  exchange  rates,  while 5 percent  resulted from  increased
volume.

Income from continuing  operations,  excluding  non-recurring charges and gains,
was  $65.2  million  in 1995,  compared  to  $91.3  million  in  1994.  Although
contributing  $7.4  million to  operating  income,  OSi,  acquired in the fourth
quarter of 1995, generated a loss of $3.6 million, net of an income tax benefit,
goodwill amortization and associated financing costs. Excluding OSi Specialties'
fourth quarter results,  an overall erosion in gross profit margins of 2 percent
accounted for  approximately  85 percent of the current year's decline in income
from continuing operations, excluding non-recurring items. Each of the Company's
segments  reported  1995  earnings  that were below 1994 levels,  primarily as a
result of the  inability to fully recoup  higher raw  material  feedstock  costs
through increased sales prices.  Also adversely affecting 1995 results was a 3.7
percent increase in the effective tax rate principally attributable to a greater
proportion  of  earnings  in  higher  tax   jurisdictions  and  an  increase  in
non-deductible goodwill amortization.  Adding to earnings,  interest income rose
during  1995  as a  result  of  higher  interest  rates  and the  investment  of
additional funds generated from the sale of the Diversified Products businesses.
Remaining changes in income and expense categories appearing on the Consolidated
Statements  of  Income  were  primarily  attributable  to  the  OSi  Specialties
acquisition.

Effective January 1, 1995, the Company changed its method of inventory valuation
under  dollar  value  LIFO  from  LIFO  double  extension  to LIFO  link  chain.
Management  believes that the LIFO link chain method is preferable because it is
the predominate  method used in the industry and will mitigate the dollar impact
of volume fluctuations on results of operations. It is not possible to determine
the  effect of the change on  retained  earnings  as of  January 1, 1995,  or on
income as  previously  reported  for the years ended  December 31, 1994 or 1993.
This change did not have a material effect on 1995 net income.

The Company adopted Statement of Financial  Accounting Standards (SFAS) No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of,"  effective  January 1, 1995.  SFAS No. 121 requires  impairment
losses to be recorded on long-lived assets used in operations when indicators of
impairment are present and the undiscounted cash flows estimated to be generated
by those  assets are less than the  assets  carrying  amount.  SFAS No. 121 also
addresses the accounting for long-lived  assets that are expected to be disposed
of. The adoption of SFAS No. 121 did not have a material impact on the Company's
financial  position or results of  operations  other than its effect on the 1995
restructuring charge (see Note 2 of Notes to Financial Statements).

SEGMENT INFORMATION

A comparison of operating income from continuing operations for 1995 and 1994 is
affected by the  inclusion of  non-recurring  items in both  periods.  Operating
income from continuing  operations,  excluding  non-recurring items, declined to
$144 million in 1995, from $168.6 million in 1994.

CHEMICAL SEGMENT

Chemical Segment 1995 net sales of $1.4 billion were $105 million, or 8 percent,
over the prior  year.  Higher  sales  prices  accounted  for 60  percent  of the
increase

                                       7



<PAGE>
<PAGE>


with   the  balance  due  to  the  favorable  impact  of  a weaker U.S.  dollar,
while volume was unchanged.  Although each of the segment's  businesses reported
unit sales prices that  surpassed  1994 levels,  competitive  pricing  pressures
precluded increases sufficient to cover higher raw material feedstock costs.

This segment's  operating income,  excluding  non-recurring  charges,  of $109.6
million in 1995 was $15.9 million,  or 13 percent,  lower than 1994. Each of the
segment's  three business  groups  reported  comparable  percentage  declines in
operating  earnings.  The   Oleo/Surfactants  Group, the largest  contributor to
segment sales and operating income,  experienced a year in which product margins
eroded as a result of the inability to fully recover  increased  feedstock costs
due to competitive pricing restraints. This was most evident in the group's line
of products that reach the consumer market,  where shipment volume was also down
12 percent from the prior year. Additionally,  the Oleo/Surfactants Group's 1995
earnings were adversely affected by the need to purchase  intermediate  products
as a result of equipment  renovations.  The renovations  have been completed and
production  returned to normal levels during the fourth quarter.  An increase in
reserves for insurance claims accounted for a substantial portion of the Polymer
Additives  Group's decline in operating  income.  The group's earnings were also
adversely  affected by a downturn in the housing and construction  markets,  and
lower product margins in specific lines of business.  Shipment volume was down 4
percent in the Vinyl Business Unit,  reflecting  fewer housing and  construction
starts.  Tin  stabilizer  margins were off from the prior year due to higher raw
material costs,  while the substitution of  environmentally  friendly barium and
zinc  based  stabilizers  for those  containing  cadmium  resulted  in a further
erosion  of  margins.  The shift was a result of a June 1994  decision  to cease
domestic  production of cadmium based stabilizers and exit the U.S. market. With
approximately 80 percent of the Resins Group's  business  originating in Europe,
the slowdown in the European economy  experienced  during the latter part of the
year had a great influence on the group's  reported 1995 fourth quarter results.
The poor  fourth  quarter  caused full year  operating  earnings to be below the
prior year. A decline in product margins also contributed to the lower earnings.
Each of the group's business units reported increases in raw material costs that
resulted  in margins  that were below the prior  year.  Additionally,  increased
effluent control costs attributable to a shared,  non-owned  wastewater treating
plant in Germany adversely affected 1995 operating results.

OSI SPECIALTIES

The Company acquired OSi  Specialties,  a high margin leading global producer of
organofunctional  silane and other specialty silicone  derivative  products,  on
October 19, 1995. The newly acquired business, which traditionally experiences a
"soft"  fourth  quarter,  added  $101.3  million  to sales and $7.4  million  to
operating  income,  which included the amortization of intangibles  generated by
the acquisition.

PETROLEUM SEGMENT

Net sales for the  Petroleum  Segment  of $388.9  million in 1995  exceeded  the
previous year by $20.1 million, or 5 percent.  One-half of the increase in sales
was attributable to favorable currency rates of exchange,  particularly  against
the Dutch  guilder,  with the bulk of the balance  resulting  from higher  sales
prices and product mix.  Rising 1 percent,  shipment  volume was comparable with
the prior year.

Petroleum Segment operating income,  excluding  non-recurring charges, was $36.1
million, a decline of $8.1 million compared to 1994. The segment was impacted by
higher  feedstock  costs  throughout  1995 due to periodic  shortages and market
conditions.  The scarcity of key feedstocks  created the need to purchase higher
priced,  sometimes lower yield,  alternatives and resulted in lost sales.  Lower
than  anticipated  production  volume,  and additional  costs  attributed to the
start-up of the group's recently  completed  Extracted Sulfonic Acid Unit in the
U.S. and Calcium  Sulfonates  Plant in Holland,  also  adversely  affected  1995
operating results.

DIVERSIFIED PRODUCTS SEGMENT

The sale of the Carbon Black and Battery Parts businesses  during the first half
of 1995 completed the divestiture of the Diversified Products segment.  Reported
segment  operating  earnings for 1995 and 1994 included gains of $54 million and
$5.1  million,   respectively,   attributable  to  the  sale  of  the  segment's
businesses.

OUTLOOK

The Company is optimistic that results from  continuing  operations in 1997 will
exceed 1996 results. Several factors contribute to this optimism. The successful
im-

                                       8



<PAGE>
<PAGE>



plementation  of  the  1997 portion of the 1996  restructuring  plan will reduce
the  Company's  fixed and variable  costs in 1997.  While the full extent of the
reductions  will not be realized until 2000,  these  reductions  will positively
influence the Company's  cost  structure in 1997.  During 1997, the Company will
initiate activities to improve yields at its manufacturing facilities which will
remain open following  completion of the 1996 restructuring  plan, and while the
most significant  results from this initiative will not likely occur until after
1997, results in 1997 will be positively affected by the initiative. The Company
is attempting through innovative and aggressive activities with its raw material
suppliers to reduce its raw material  costs and believes  that 1997 results will
be improved by the results of these activities. The recent reorganization of the
Company's  corporate  structure creating four business groups from the five that
existed in 1996,  along with the reduction in the number of total business units
within these groups from 18 to 11,  should,  along with  redirected  pricing and
marketing  strategies,  permit the Company's businesses to attain higher margins
in 1997 than in 1996, favorably influencing 1997 results.

The Company will  continue to  aggressively  pursue  implementation  of the 1996
restructuring   plan,  and,   following  the  completion  of  the  restructuring
envisioned in the 1996 restructuring  plan, the Company believes it will achieve
the following long-term  financial goals:  revenues of up to $3.0 billion within
five years;  gross margins to exceed 30%;  operating  margins in the  mid-teens;
earnings per share growth  sufficient to maintain  return on equity greater than
20%; debt to total  capitalization of 30-45%;  and, a return on capital employed
greater  than the  Company's  cost of  capital  so that  shareholder  value will
increase.

Statements made in this "Outlook" section are "forward looking  statements" that
involve  certain  risks and  uncertainties.  The factors that could cause actual
results  to differ  materially  from those  presented  herein  include,  without
limitation,  the Company's ability to generate  appropriate cash flows, the cost
and timing of the implementation of certain capital  improvements,  the cost and
timing  associated  with the planned  reduction  in  production  facilities  and
workforce,  the Company's ability to effectively divest certain assets, the cost
of   environmental   remediation  and  compliance   efforts,   technological  or
competitive  changes  in any of the  Company's  businesses,  inability  to reach
agreement with third parties on planned  business  arrangements,  certain global
and regional  economic  conditions and other factors listed from time to time in
the Company's Securities and Exchange Commission filings.

                                      9



<PAGE>
<PAGE>

--------------------------------------------------------------------------------





REPORT OF ERNST & YOUNG LLP,
INDEPENDENT AUDITORS

Board of Directors and Shareholders
Witco Corporation

We  have  audited  the  accompanying   consolidated   balance  sheets  of  Witco
Corporation  and Subsidiary  Companies as of December 31, 1996 and 1995, and the
related  consolidated  statements of operations,  shareholders'  equity and cash
flows for each of the three years in  the  period ended  December 31, 1996.  Our
audits also  included  the  financial  statement schedule listed in the Index at
Item  14(a). These  financial statements and schedule are the  responsibility of
the  Company's  management.  Our responsibility  is  to  express  an  opinion on
these financial statements and schedule based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  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,  the financial  statements  referred to above present fairly, in
all material respects,  the consolidated financial position of Witco Corporation
and  Subsidiary  Companies at December 31, 1996 and 1995,  and the  consolidated
results of their  operations and their cash flows for each of the three years in
the period ended  December 31,  1996,  in  conformity  with  generally  accepted
accounting principles. Also, in our opinion,  the  related  financial  statement
schedule, when considered in relation to the basic financial statements taken as
a whole,  presents  fairly  in  all  material respects the information set forth
therein.

As discussed in Note 1 to the financial statements,  in 1995 the Company changed
its method of accounting  for inventory  valuation  under dollar value LIFO from
LIFO double extension to LIFO link chain.

As discussed in Note 1 to the financial statements,  in 1995 the Company adopted
the  provisions  of  Statement  of  Financial   Accounting  Standards  No.  121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of."


                                                        /s/ ERNST & YOUNG LLP


Stamford, Connecticut
January 31, 1997,
except for Note 19, as to
which the date is March 4, 1997

                                       F-1





<PAGE>
<PAGE>



                                      WITCO CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>
(in thousands of dollars except per share data)
-------------------------------------------------------------------------------------------------

DECEMBER 31                                                                1996          1995
                                                                        -----------   -----------
<S>                                                                     <C>           <C>        
ASSETS
Current Assets
   Cash and cash equivalents                                            $    59,201   $   143,994
   Accounts and notes receivable, less allowance of $14,201
     and $ 7,104                                                            390,288       406,486
   Inventories                                                              284,500       322,898
   Deferred income taxes                                                     92,490        47,784
   Prepaid and other current assets                                          26,947        22,883
                                                                        -----------   -----------
      Total Current Assets                                                  853,426       944,045
                                                                        -----------   -----------
Property, Plant and Equipment, less accumulated depreciation of
   $761,926 and $608,435                                                    735,392       789,827
Goodwill and Other Intangible Assets, less accumulated
   amortization of $133,625 and $62,450                                     653,733       728,124
Deferred Income Taxes                                                        16,438          --
Deferred Costs and Other Assets                                              72,976       118,182
Net Assets of Discontinued Operations                                        59,740       170,426
                                                                        -----------   -----------
      TOTAL ASSETS                                                      $ 2,391,705   $ 2,750,604
                                                                        ===========   ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
   Notes and loans payable                                              $    94,929   $   309,171
   Accounts payable and other current liabilities                           515,344       385,294
                                                                        -----------   -----------
      Total Current Liabilities                                             610,273       694,465
                                                                        -----------   -----------
Long-term Debt                                                              700,820       683,830
Deferred Income Taxes                                                          --          87,532
Deferred Credits and Other Liabilities                                      452,747       280,660
Shareholders' Equity
   $2.65 Cumulative Convertible Preferred Stock, par value $1
      per share: authorized - 14 shares, issued and outstanding                   6             7
      - 6 and 7 shares
   Common Stock, par value $5 per share: authorized - 100,000
      shares, issued and outstanding - 56,763 and 56,435 shares             283,818       282,173
   Capital in excess of par value                                           138,453       131,076
   Equity adjustments:
      Foreign currency translation                                           11,989        17,222
      Pensions and other                                                     (6,423)       (4,898)
   Retained earnings                                                        200,022       578,537
                                                                        -----------   -----------
      Total Shareholders' Equity                                            627,865     1,004,117
                                                                        -----------   -----------
      TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                        $ 2,391,705   $ 2,750,604
----------------------------------------------------------------------  -----------   -----------
</TABLE>

See accompanying notes 


                                      F-2

<PAGE>
<PAGE>


                                      WITCO CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF OPERATIONS
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>
(in thousands of dollars except per share data)
-----------------------------------------------------------------------------------------------------
FOR THE YEARS ENDED DECEMBER 31                                1996          1995           1994
                                                           ------------- -------------- -------------
<S>                                                          <C>           <C>            <C>       
Net Sales                                                    $2,263,327    $1,985,077     $1,841,414
Cost of Goods Sold                                            1,760,320     1,568,822      1,434,330
                                                           ------------- -------------- -------------
Gross Profit                                                    503,007       416,255        407,084

Operating Expenses
   Selling expense                                              106,261        83,829         77,740
   General and administrative expenses                          152,186       121,425        112,318
   Research and development                                      73,088        52,907         40,717
   Other expenses (income) - net                                 88,400       (76,998)         2,924
   Restructuring charge                                         345,130        33,842              -
                                                           ------------- -------------- -------------
      Total Operating Expenses                                  765,065       215,005        233,699
                                                           ------------- -------------- -------------

Operating Income (Loss) from Continuing Operations             (262,058)      201,250        173,385

Other Expense (Income) - Net
   Interest expense                                              69,334        43,689         29,674
   Interest income                                               (9,114)      (15,104)       (10,032)
   Other expense - net                                            3,531         3,525          3,951
                                                           ------------- -------------- -------------
Income (Loss) from Continuing Operations before Income
  Taxes                                                        (325,809)      169,140        149,792
Income Taxes (Benefit)                                          (78,635)       68,794         55,372
                                                           ------------- -------------- -------------
Income (Loss) from Continuing Operations                       (247,174)      100,346         94,420
Income from Discontinued Operations - Net of Income
  Taxes of $283, $3,034 and $7,685                                  340         4,099         12,647
Estimated Loss on Disposal - Net of Income Tax Benefit
   of $43,612                                                   (68,253)            -              -
                                                           ------------- -------------- -------------
Income (Loss) from Discontinued Operations                      (67,913)        4,099         12,647
                                                           ------------- -------------- -------------
Net Income (Loss)                                            $ (315,087)   $  104,445    $   107,067
                                                           ============= ============== =============

Net Income (Loss) Per Common Share: Primary
   Income (loss) from continuing operations                       $(4.35)        $1.78         $1.70
   Income (loss) from discontinued operations - net of
     income taxes                                                  (1.19)          .07           .22
                                                           ------------- -------------- -------------
      NET INCOME (LOSS) PER COMMON SHARE: PRIMARY                 $(5.54)        $1.85         $1.92
                                                           ============= ============== =============

Net Income (Loss) Per Common Share: Fully Diluted
   Income (loss) from continuing operations                       $(4.35)        $1.77         $1.69
   Income (loss) from discontinued operations - net of
     income taxes                                                  (1.19)          .07           .22
                                                           ------------- -------------- -------------
      NET INCOME (LOSS) PER COMMON SHARE: FULLY DILUTED           $(5.54)        $1.84         $1.91
--------------------------------------------------------------------------------------- -------------
</TABLE>

See accompanying notes.



                                      F-3


<PAGE>
<PAGE>


                                      WITCO CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>
(in thousands of dollars)
---------------------------------------------------------------------------------------------
FOR THE YEARS ENDED DECEMBER 31                                  1996        1995        1994
                                                            ---------   ---------   ---------
<S>                                                         <C>         <C>         <C>      
OPERATING ACTIVITIES
   Net income (loss)                                        $(315,087)  $ 104,445   $ 107,067
   Adjustments to reconcile net income (loss) to net
      cash provided by operating activities:
        Depreciation and amortization                         128,793     119,571     105,120
        Provision (benefit) for deferred income taxes        (159,311)     (6,884)     17,666
        Pension cost                                           15,154      10,130      12,378
        Gain on disposition of operations of subsidiaries        (412)    (51,183)     (4,820)
        Estimated loss on disposal of Lubricants Group        111,865        --          --
        Provision for environmental remediation and            
          compliance                                           30,077      15,348        --
        Provision for litigation                               34,733       9,500        --
        Restructuring charge                                  345,130      33,842        --
        Changes in operating assets and liabilities:
          Accounts and notes receivable                        13,089     (26,609)    (51,639)
          Inventories                                          36,672     (12,849)    (23,750)
          Prepaid and other current assets                      4,956       9,866      (3,791)
          Accounts payable and other current liabilities      (76,286)    (41,709)     (5,492)
        Other                                                  17,927     (28,548)     (5,007)
                                                            ---------------------------------
      Net Cash Provided by Operating Activities               187,300     134,920     147,732
                                                            ---------------------------------
INVESTING ACTIVITIES
   Expenditures for property, plant and equipment            (161,163)   (115,845)   (107,438)
   Proceeds from dispositions                                 136,941     146,026      24,194
   Acquisitions of businesses, net of cash acquired              --      (481,431)       --
   Other                                                        1,769      (2,443)      1,732
                                                            ---------------------------------
      Net Cash Used in Investing Activities                   (22,453)   (453,693)    (81,512)
                                                            ---------------------------------
FINANCING ACTIVITIES
   Dividends paid                                             (63,351)    (63,026)    (55,013)
   Payments on borrowings                                    (526,378)   (367,541)     (8,398)
   Proceeds from borrowings                                   335,565     681,551         954
   Proceeds from exercise of stock options                      7,084       6,523       2,734
   Other                                                         --          --           (63)
                                                            ---------------------------------
      Net Cash Provided by (Used in) Financing Activities    (247,080)    257,507     (59,786)
                                                            ---------------------------------
EFFECTS OF EXCHANGE RATE CHANGES ON CASH AND CASH
  EQUIVALENTS                                                  (2,560)      8,087       7,689
                                                            ---------------------------------
    INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS          (84,793)    (53,179)     14,123
                                                            ---------------------------------
Cash and Cash Equivalents at Beginning of Year                143,994     197,173     183,050
                                                            ---------------------------------
Cash and Cash Equivalents at End of Year                    $  59,201   $ 143,994   $ 197,173
---------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes 



                                      F-4

<PAGE>
<PAGE>


                                      WITCO CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
(in thousands of dollars)
-----------------------------------------------------------------------------------------------------------------------------------
                                                       Capital    Foreign        Pensions                  Treasury
                                Preferred   Common     Excess of  Currency         and        Retained      Stock
                                  Stock     Stock      Par Value  Translation      Other       Earnings     at Cost    Total
                              -----------------------------------------------------------------------------------------------------
<S>                         <C>           <C>           <C>           <C>           <C>           <C>          <C>           <C> 
BALANCE AT DECEMBER 31, 1993      $  9    $ 254,089    $ 6,123    $ (23,723)   $ (6,548)   $  488,241    $ (4,776)   $ 713,415
Net Income                                                                                    107,067                  107,067
Cash Dividends Declared:
  Preferred stock                                                                                 (20)                     (20)
  Common stock                                                                                (58,089)                 (58,089)
Common Stock Issued:
  Conversion of
    convertible debentures                   27,472    121,037                                                         148,509
  Employee plans                                           739                                              1,995        2,734
  Conversions                       (2)                   (256)                                               304           46
Equity Adjustments                                                   22,242       4,102                                 26,344
                               -----------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1994         7      281,561    127,643       (1,481)     (2,446)      537,199      (2,477)     940,006
Net Income                                                                                    104,445                  104,445
Cash Dividends Declared:
  Preferred stock                                                                                 (18)                     (18)
  Common stock                                                                                (63,089)                 (63,089)
Common Stock Issued:
  Employee plans                                607      3,535                                              2,380        6,522
  Conversions                                     5       (102)                                                97           --
Equity Adjustments                                                     18,703        (2,452)                            16,251
                               -----------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1995         7      282,173     131,076        17,222        (4,898)  578,537         --     1,004,117
Net Income (Loss)                                                                            (315,087)                (315,087)
Cash Dividends Declared:
  Preferred stock                                                                                 (18)                     (18)
  Common stock                                                                                (63,410)                 (63,410)
Common Stock Issued:
  Employee plans                              1,319       5,814                                                          7,133
  Conversions                       (1)          30         (25)                                                             4
  Restricted stock                              296       1,588                      (1,884)                                --
Equity Adjustments                                                     (5,233)          359                             (4,874)
                               -----------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1996      $  6     $283,818    $138,453       $11,989       $(6,423) $200,022      $  --      $627,865
                               -----------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes 


                                      F-5

<PAGE>
<PAGE>


                                     WITCO CORPORATION AND SUBSIDIARY COMPANIES
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------
NOTE 1   SUMMARY OF SIGNIFICANT ACCOUNTING
         POLICIES

ORGANIZATION: Witco Corporation is a worldwide manufacturer of high quality
specialty chemical products. The Company's products are used primarily as
intermediates by other manufacturers in industries such as personal care and
household products, agricultural, automotive, housing and construction,
packaging, food and textiles.

PRINCIPLES OF CONSOLIDATION AND USE OF ESTIMATES: The consolidated financial
statements include the accounts of all majority owned subsidiaries after the
elimination of inter-company transactions. The preparation of financial
statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the amounts reported in
the financial statements and accompanying notes. Actual results could differ
from those estimates.

RECLASSIFICATIONS: Certain prior year amounts have been reclassified to conform
with the current year presentation.

CASH EQUIVALENTS: Cash equivalents consist of highly liquid investments with a
maturity of three months or less when purchased.

INVENTORIES: Inventories are stated at the lower of cost or market. Cost is
determined on either the Last-In, First-Out (LIFO) or First-In, First-Out (FIFO)
basis. Effective January 1, 1995, the Company changed its method of inventory
valuation under dollar value LIFO from LIFO double extension to LIFO link chain.
Management believes that the LIFO link chain method is preferable because it is
the predominate method used in the industry and will mitigate the impact of
volume fluctuations on results of operations. The change in accounting method
had no material effect on income for the year ended December 31, 1995. It is not
possible to determine the effect of the change on retained earnings as of
January 1, 1995, or income as previously reported for the year ended December
31, 1994.

PROPERTY, PLANT AND EQUIPMENT: Property, plant and equipment is stated at cost
and depreciation is provided principally using the straight-line method based on
estimated useful lives.

LONG-LIVED ASSETS AND INTANGIBLE ASSETS: The Company adopted Statement of
Financial Accounting Standards (SFAS) No. 121 "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" effective January
1, 1995. SFAS 121 requires impairment losses to be recorded on long-lived assets
used in operations when indicators of impairment are present and the
undiscounted cash flows estimated to be generated by those assets are less than
the assets' carrying amount. SFAS 121 also addresses the accounting for
long-lived assets that are expected to be disposed of. The adoption of SFAS No.
121 did not have a material impact on the Company's financial position or
results of operations. As indicated in Note 2 of Notes to Financial Statements,
the Company recognized impairment losses associated with the restructuring plans
in 1996 and 1995.

Intangible assets primarily include goodwill, the excess of purchase price over
the estimated fair value of net assets acquired, and are being amortized over
periods not in excess of forty years. The Company periodically evaluates the
carrying value of intangible assets in relation to the estimated cash flows of
the underlying businesses. An impairment loss may be recognized if the expected
cash flow is less than book value. The Company recognized an impairment loss on
certain intangible assets, as disclosed in Note 2 of Notes to Financial
Statements, as part of the 1996 restructuring plan.

RESEARCH AND DEVELOPMENT COSTS: The Company's research and development costs are
charged to expense as incurred. These charges to continuing operations amounted
to $73,088,000 (1996), $52,907,000 (1995), and $40,717,000 (1994).

ENVIRONMENTAL REMEDIATION COSTS: Environmental remediation costs are charged to
expense if the remediation is the result of past practices or events and the
expenditures are not expected to benefit future operations. Projected costs are
accrued when it is probable that a liability has been incurred and the amount
can be reasonably estimated. Accruals are recorded at undiscounted amounts
without regard to any third party recoveries, and are regularly adjusted as
environmental assessments and remediation efforts proceed.

STOCK BASED COMPENSATION: The Company accounts for stock option grants in
accordance with APB Opinion No. 25, "Accounting for Stock Issued to Employees,"
and, accordingly, recognizes no compensation expense for the stock options
granted since the exercise price of the option was the same as the market value
of the 




                                      F-6

<PAGE>
<PAGE>

                                     WITCO CORPORATION AND SUBSIDIARY COMPANIES
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------

Company's common stock. As prescribed under SFAS No. 123, "Accounting for
Stock Based Compensation," the Company has disclosed in Note 10 of Notes to
Financial Statements, the pro forma effects on net income (loss) and earnings
(loss) per share of recording compensation expense for the fair value of the
options granted.

INCOME TAXES: Income taxes have been provided using the liability method in
accordance with SFAS No. 109 "Accounting for Income Taxes."

COMMON SHARE DATA: Net income (loss) per common share is based upon net income
(loss) adjusted for interest (net of tax) on the 5.50% Convertible Subordinated
Debentures through March 1994 and the preferred stock dividend requirements. The
weighted average number of common shares outstanding during each year includes
dilutive common stock equivalents, principally shares issuable in connection
with the 5.50% Convertible Subordinated Debentures through March 1994 and the
Company's stock option plans. Fully diluted net income (loss) per common share
additionally reflects the assumed conversion of the outstanding convertible
preferred stock if dilutive.


NOTE 2   RESTRUCTURING

In December 1996, in connection with management's plan to reduce costs and
improve operating efficiencies, the Company recorded a restructuring charge of
approximately $345,130,000. The principal actions in the 1996 restructuring plan
involve the closure or sale of 15 production facilities (13 included in the
Chemical Segment and 2 included in the Petroleum Segment) and consolidation of
support infrastructure. This restructuring, which will result in the elimination
of approximately 1,800 corporate staff and manufacturing positions, will be
completed by 1999. In addition, the year ended December 31, 1995, included a
restructuring charge of $33,842,000 related to plant consolidation. The
shut-down of the five facilities (principally in the Chemical Segment) addressed
by the 1995 initiative is expected to be completed during 1997.



The major components of the restructuring charges are as follows:

--------------------------------------------------------------------------------
(thousands of dollars)

<TABLE>
<CAPTION>
DESCRIPTION                                                      1996       1995
--------------------------------------------------------------------------------
<S>                                                          <C>        <C>     
Severance and related costs                                  $104,456   $  1,900
Write-down of property, plant and equipment                    96,879     21,840
Environmental remediation and compliance                       53,298      2,090
Write-down of goodwill and intangibles                         40,000      1,856
Demolition costs                                               26,200      4,605
Other                                                          24,297      1,551
                                                             -------------------
                                                             $345,130   $ 33,842
--------------------------------------------------------------------------------
</TABLE>


NOTE 3   ACQUISITION AND DISPOSITIONS

On October 19, 1995, the Company acquired OSi Specialties Holding Company and
OSi Specialties, Inc. (collectively "OSi") from an investor group led by DLJ
Merchant Banking Partners, L.P. in a cash transaction for approximately
$486,000,000. OSi manufactures a full line of silicone surfactants, amine
catalysts, organofunctional silanes and specialty fluids at key manufacturing
facilities in the United States, Belgium, Italy and Brazil.

The acquisition was accounted for as a purchase and accordingly, the results of
operations have been included in the consolidated financial statements from the
date of acquisition. An allocation of the purchase price resulted in an excess
over the estimated fair value of net assets acquired (goodwill) of approximately
$517,000,000. This is being amortized on a straight line basis over forty years.



                                      F-7

<PAGE>
<PAGE>


                                     WITCO CORPORATION AND SUBSIDIARY COMPANIES
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------

The pro forma  unaudited  results of operations for the years ended December 31,
1995 and  1994,  assuming  the  acquisition  of OSi had been  consummated  as of
January 1, 1994, are as follows:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------
(in thousands of dollars except per share data)                 1995          1994
                                                             -------------------------
<S>                                                        <C>           <C>       
Net sales                                                     $2,322,216    $2,235,736
                                                             ------------ ------------
Income from continuing operations                               $101,119       $84,547
Income from discontinued operations - net of income taxes          4,099        12,647
                                                             ------------ ------------
Net income                                                    $105,218      $ 97,194
                                                             ------------ ------------
Net income per common share: primary
  Income from continuing operations                               $1.79         $1.52
  Income from discontinued operations - net of income taxes         .07           .22
                                                             ------------ ------------
Net income per common share: primary                              $1.86         $1.74
--------------------------------------------------------------------------------------
</TABLE>


On September 11, 1995, the Company announced its intention to divest its
Lubricants Group. On November 1, 1996, the Company sold certain assets of its
Kendall/ Amalie business to Sun Company Inc. for $74,386,000. Also on November
1, the Company sold certain assets of its grease gun manufacturing business to
Epicor Industries, a wholly owned subsidiary of Stant Corporation, for
$11,019,000 and certain assets of its grease business to Exxon Company, U.S.A.
for $35,284,000. All amounts are subject to certain post-closing adjustments
(see Note 18 of Notes to Financial Statements for more information regarding
discontinued operations).

On June 30, 1995, the Company sold the operations of its Continental Carbon
subsidiary to China Synthetic Rubber Corporation for $121,900,000, resulting in
a gain of $27,073,000, or $.48 per common share. Continental Carbon manufactures
carbon black which is used primarily in the tire and rubber industry.

On March 24, 1995, the Company sold the operations of its Battery Parts business
to Acro Products,  Inc. for $24,100,000,  resulting in a gain of $5,918,000,  or
$.11 per common share.  Battery Parts  manufactures  rubber and plastic  battery
containers, covers and parts and custom injection molded parts.

The operating results individually and in the aggregate of the 1995 dispositions
were not significant to the consolidated results of operations.



NOTE 4   INVENTORIES

Inventories are classified as follows:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
(thousands of dollars)                                  1996          1995
                                                    ------------- --------------
<S>                                                  <C>            <C>     
Raw materials and supplies                           $  99,112      $115,231
Finished goods                                         185,388       207,667
                                                    ------------- --------------
                                                      $284,500      $322,898
--------------------------------------------------------------------------------
Work in progress included above is not significant.
</TABLE>


Inventories valued on a LIFO basis, at December 31, 1996 and 1995, amounted to
$107,524,000 and $118,774,000, respectively. Inventories would have been
$40,964,000 and $41,499,000 higher than reported at December 31, 1996 and 1995,
respectively, if the FIFO method (which approximates current cost) had been used
by the Company for all inventories.



                                      F-8

<PAGE>
<PAGE>

                                     WITCO CORPORATION AND SUBSIDIARY COMPANIES
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------

NOTE 5    PROPERTY, PLANT AND EQUIPMENT

A summary of property, plant and equipment follows:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
(thousands of dollars)                               1996          1995
                                                 ------------------------------
<S>                                              <C>           <C>         
Land                                             $    34,597   $    35,259
Buildings and improvements                           172,695       186,904
Machinery, fixtures, and equipment                 1,202,449     1,114,452
Assets under construction                             87,577        61,647
                                                 ------------------------------
                                                   1,497,318     1,398,262
Less accumulated depreciation                        761,926       608,435
                                                 ------------------------------
                                                 $   735,392   $   789,827
-------------------------------------------------------------------------------
</TABLE>


Depreciation expense, including amortization of assets under capital lease
obligations, from continuing operations amounted to $99,676,000 (1996),
$81,766,000 (1995), and $71,830,000 (1994).

At December 31, 1996 and 1995, buildings and improvements included approximately
$14,500,000 and $17,000,000, respectively, related to an office/laboratory
facility under a capital lease. The decrease from 1995 was the result of foreign
currency translation.



NOTE 6    GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill and other intangible assets consist of the following:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
(thousands of dollars)                                1996          1995
                                                  -----------------------------
<S>                                                 <C>           <C>     
Goodwill                                            $660,853      $666,880
Patents and licenses                                  59,912        58,561
Other                                                 66,593        65,133
                                                  -----------------------------
                                                     787,358       790,574
Less accumulated amortization                        133,625        62,450
                                                  -----------------------------
                                                    $653,733      $728,124
-------------------------------------------------------------------------------
</TABLE>



Amortization expense from continuing  operations amounted to $29,117,000 (1996),
$20,805,000 (1995), and $16,833,000 (1994).



NOTE 7   ACCOUNTS PAYABLE AND OTHER CURRENT
         LIABILITIES

Components of accounts payable and other current liabilities consist of the
following:

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------
(thousands of dollars)                                       1996          1995
                                                         ------------------------
<S>                                                        <C>           <C>     
Trade accounts payable                                     $155,130      $166,688
Other accruals                                              154,696       126,139
Reserves for environmental remediation and compliance        68,776        23,597
Reserve for restructuring                                    46,244         2,583
Payroll related liabilities                                  39,713        54,015
Reserve for disposition of Lubricants Group                  31,438             -
Income taxes                                                 19,347        12,272
                                                         ------------------------
                                                           $515,344      $385,294
---------------------------------------------------------------------------------
</TABLE>



                                      F-9

<PAGE>
<PAGE>


                                     WITCO CORPORATION AND SUBSIDIARY COMPANIES
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------

NOTE 8   INDEBTEDNESS

On October 18, 1995, the Company entered into a one year credit agreement
totaling $675,000,000 with a consortium of banks for the purpose of financing
the OSi acquisition and to prepay OSi's 11.50% Senior Secured Discount
Debentures due 2004 and OSi Specialties' 9.25% Senior Subordinated Notes due
2003. On February 12, 1996, the Company issued $150,000,000 of 6.125% Notes due
2006 and $150,000,000 of 6.875% Debentures due 2026. The net proceeds of
$297,000,000, plus cash on hand, were used to repay $300,000,000 of bank loans
under the credit agreement. Immediately thereafter, the availability of funds
under the credit agreement was reduced to $375,000,000, $90,000,000 of which was
utilized at December 31, 1996. On October 11, 1996, the credit agreement was
amended and the term of the facility was extended until October 10, 1997. The
interest rate at December 31, 1996, was approximately 5.77%.

At December 31, 1995, the Company had $605,000,000 outstanding under the credit
agreement, including $305,000,000 in the Notes and Loans Payable caption of the
Company's Balance Sheet. The interest rate at December 31, 1995 was
approximately 6.1%.




<TABLE>
<CAPTION>
Following is a summary of long-term debt:
-------------------------------------------------------------------------------------
(thousands of dollars)                                       1996          1995
                                                          ---------------------------
<S>                                                      <C>            <C>
Short-term bank loan (refinanced)                         $       -      $300,000
6.125% Notes due 2006                                       150,000             -
6.875% Debentures due 2026                                  150,000             -
6.60% Notes due 2003                                        165,000       165,000
7.75% Debentures due 2023                                   110,000       110,000
7.325% Notes due 1998                                        46,242        49,210
6.47% Bank Loan due 2000                                     20,976        21,838
Capital Lease Obligation                                     14,449        17,822
6.30% Bank Loan due 2001                                     14,420             -
5.85% Pollution Control Revenue Bonds due 2023               10,000        10,000
8.20% Bank Loan due 2006                                      9,879             -
Industrial Development Revenue Bond due 2014                  8,500         8,500
Other                                                         2,723         3,945
                                                          ---------------------------
                                                            702,189       686,315
Less amounts included in notes and loans payable              1,369         2,485
                                                          ---------------------------
                                                           $700,820      $683,830
-------------------------------------------------------------------------------------
</TABLE>


The Company has arrangements with various banks for lines of credit for its
international subsidiaries aggregating $41,845,000, of which $2,216,000 was
utilized at December 31, 1996. The weighted average interest rates on
international short-term borrowings outstanding were 4.33% (1996) and 6.36%
(1995).

Principal maturities of long-term debt including capital lease obligations
through the year 2001 at December 31, 1996 are $1,369,000 (1997), $47,752,000
(1998), $2,517,000 (1999), $23,639,000 (2000), and $17,239,000 (2001).




Following is a summary of interest from continuing operations:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
(thousands of dollars)                   1996           1995          1994
                                     ------------------------------------------
<S>                                     <C>            <C>           <C>    
Interest expense                        $69,334        $43,689       $29,674
Capitalized interest                      1,503          1,429         2,214
                                     ------------------------------------------
  Total interest incurred               $70,837        $45,118       $31,888
                                     ------------------------------------------
  Total interest payments               $62,593        $47,016       $34,190
-------------------------------------------------------------------------------
</TABLE>



NOTE 9   SHAREHOLDERS' EQUITY

On March 2, 1995, the Board of Directors unanimously approved a Shareholder
Rights Plan (the "Plan"). The Plan was implemented by the issuance of one
preferred stock purchase right for each share of common stock outstanding at the
close of business on March 2, 1995, or issued thereafter until the rights become
exercisable. Each right entitles the holder in certain events to purchase
one-one thousandth of a share of participating preferred stock at a purchase
price of $110. Each one-one thousandth of a share of participating preferred


                                      F-10

<PAGE>
<PAGE>

                                     WITCO CORPORATION AND SUBSIDIARY COMPANIES
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------

stock is intended to represent the economic equivalent of one share of common
stock. Under the Plan, 300,000 shares of participating cumulative preferred
stock without par value have been authorized.

The rights currently are not exercisable. If a person or group acquires more
than 15% of the outstanding common stock, or at the Board of Directors election
if a tender offer for more than 15% of the outstanding common stock is
commenced, or if such person or group acquires the Company in a merger or other
business combination, each right (other than those held by the acquiring person)
will entitle the holder to purchase stock of the Company or stock or other
property of the acquiring person having a value of twice the purchase price. The
rights will expire on March 2, 2005, unless redeemed earlier by the Company in
whole, but not in part, at a price of $.01 per right.

Each share of $2.65 Cumulative Convertible Preferred Stock is entitled to one
vote and has a minimum liquidating preference of $66 per share. Each share is
subject to redemption at the Company's option at $66 per share and is
convertible into 16.8075 shares of the Company's common stock. At December 31,
1996, unissued common stock of the Company was reserved for issuance in
accordance with the $2.65 Cumulative Convertible Preferred Stock (109,000
shares).

The Company has authorized 8,300,000 shares of series preferred stock, which,
when issued, will have such rights, power, and preferences as shall be fixed by
the Company's Board of Directors.

Dividends declared per share on the Company's common stock amounted to $1.12
(1996), $1.12 (1995), and $1.06 (1994).


Common and preferred stock transactions were as follows:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
(thousands of shares)                           1996        1995       1994
                                               --------------------------------
<S>                                                 <C>        <C>         <C>
Convertible Preferred Stock
  Outstanding at beginning of year                  7          7           9
  Conversions                                      (1)         -          (2)
                                               --------------------------------
    Outstanding at End of Year                      6          7           7
Common Stock
  Issued at beginning of year                  56,435     56,312      50,818
  Net shares issued under employee plans          263        122           -
  Conversions                                       6          1           -
  Restricted stock                                 59          -           -
  Conversion of convertible debentures              -          -       5,494
                                               --------------------------------
    Issued at End of Year                      56,763     56,435      56,312
Treasury Stock
  In treasury at beginning of year                  -        165         318
  Net shares issued under employee plans            -       (159)       (133)
  Conversions                                       -         (6)        (20)
                                               --------------------------------
    In Treasury at End of Year                      -          -         165
-------------------------------------------------------------------------------
</TABLE>



NOTE 10  STOCK BASED COMPENSATION PLANS

The Company has two fixed option plans for certain employees. Under the 1992
Incentive Stock Option Plan, the Company may grant options to its employees for
up to 161,000 shares of common stock. Under the 1995 Incentive Stock Option
Plan, the Company may grant options to its employees for up to 1,183,000 shares
of common stock. These plans provide that shares granted come from the Company's
authorized but unissued or reacquired common stock. The price of the options
granted pursuant to these plans will not be less than 100 percent of the fair
market value of the shares on the date of grant.

These options are exercisable in installments within a period not to exceed ten
years from the date of grant. The options outstanding at December 31, 1996 and
1995, expire on various dates through June 2006. At December 31, 1996 and 1995,
unissued common stock of the Company reserved for issuance in accordance with
the stock option plans are 5,627,000 and 4,893,000 shares, respectively.

In 1996, restricted stock awards were granted to two key employees pursuant to
certain employment agreements between the Company and such employees. The
restricted stock will vest for two awards totaling 40,000 shares if certain
performance-based criteria are met. 

                                      F-11

<PAGE>
<PAGE>

                                     WITCO CORPORATION AND SUBSIDIARY COMPANIES
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------

Unless these performance criteria are met, these restricted stock awards shall
terminate on either September 9, 2001, or June 13, 2002, according to the terms
of the awards. An award of 19,186 shares of restricted common stock will vest
over time through 1998.

The Company has elected to follow Accounting Principals Board Opinion (APB) No.
25 "Accounting for Stock Issued to Employees" and related Interpretations in
accounting for its employee stock options. Under APB No. 25, the Company does
not recognize compensation expense since the exercise price of the options
granted is equal to the market value of the Company's common stock at the date
of grant. Statement of Financial Accounting Standard No. 123 "Accounting for
Stock Based Compensation" (SFAS 123) requires the Company to disclose the pro
forma impact on net income (loss) and earnings (loss) per share as if
compensation expense associated with employee stock options had been calculated
under the fair value method of SFAS 123 for employee stock options granted
subsequent to December 31, 1994.

The fair value of each option grant is estimated on the date of grant using a
Black-Scholes option-pricing model with the following weighted-average
assumptions used for grants in 1996 and 1995, respectively; dividend yield of
4%; expected volatility of .214 and .215; risk-free interest rates of 6.1% and
6.05%; and weighted-average expected lives of 5.5 and 6.5 years.

The weighted-average fair value of the restricted stock on the date of grant was
$32 with a weighted-average remaining contractual life of 4.6 years.

The Company's net income (loss) and net income (loss) per common share have been
adjusted to the pro forma amounts  indicated below.  These pro forma effects may
not be  representative  of the effects on future years because of the subjective
assumptions used in the fair value estimate  calculated under the  Black-Scholes
model and that new grants are generally made each year.

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
(in thousands of dollars except per share data)            1996              1995
                                                       -----------------------------
<S>                              <C>                  <C>               <C>     
Net income (loss)                  As reported           $(315,087)        $104,445
                                   Pro forma             $(317,658)        $104,105
Net income (loss) per common       As reported              $(5.54)           $1.85
  share: primary                   Pro forma                $(5.58)           $1.84
Net income (loss) per common       As reported              $(5.54)           $1.84
  share: fully diluted             Pro forma                $(5.58)           $1.84
------------------------------------------------------------------------------------
</TABLE>

Because SFAS 123 is applicable only to options granted subsequent to December
31, 1994, its pro forma effect will not be fully reflected until 1999 since
options vest over five years.

A summary of the Company's stock option activity and related information for the
years ended December 31 follows:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------
(shares in thousands)                         1996                  1995                  1994
                                       ----------------------------------------------------------------
                                                  WEIGHTED-            Weighted-             Weighted-
                                                  AVERAGE              Average               Average
                                                  EXERCISE             Exercise              Exercise
                                                   PRICE                 Price                 Price
                                        SHARES               Shares                Shares
                                       ---------- --------- ---------- ---------- ---------- ----------
<S>                                      <C>         <C>      <C>         <C>       <C>         <C>
Options outstanding, beginning of        
  year                                   2,619       $28      2,054       $27       1,472       $23
Granted                                  2,182        33        879        28         780        32
Exercised                                 (267)       25       (300)       20        (149)       18
Forfeited                                 (251)       30        (14)       29         (49)       27
                                       ---------- --------- ---------- ---------- ---------- ----------
Options outstanding, end of year         4,283       $30      2,619       $28       2,054       $27
Options exercisable at end of year       1,827       $29        808       $27         720       $24
Weighted-average fair value of
  options granted during the year        $6.35                $5.66               $      -
-------------------------------------------------------------------------------------------------------
</TABLE>

Exercise prices for options outstanding as of December 31, 1996, ranged from
$21.38 to $33.25. The weighted-average remaining contractual life of these
options is 8.5 years.



                                      F-12

<PAGE>
<PAGE>


                                     WITCO CORPORATION AND SUBSIDIARY COMPANIES
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------

NOTE 11  OTHER EXPENSES (INCOME) - NET

The components of other expenses (income) - net from continuing operations are
as follows:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
(thousands of dollars)                                               1996         1995       1994
                                                                  -----------------------------------
<S>                                                                 <C>        <C>          
Provision for litigation                                            $34,733    $      -     $     -
Provision for environmental remediation and compliance               30,077      13,800           -
Amortization of intangibles                                          29,117      20,805      16,833
Settlements with certain of the company's insurers                        -     (55,149)          -
Gain on disposition of operations of subsidiaries                         -     (54,079)          -
Other - net                                                          (5,527)     (2,375)    (13,909)
                                                                  -----------------------------------
                                                                    $88,400    $(76,998)   $   2,924
-----------------------------------------------------------------------------------------------------
</TABLE>


NOTE 12   INCOME TAXES

The components of income (loss) from continuing operations before income taxes
are:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
(thousands of dollars)                                               1996         1995       1994
                                                                  -----------------------------------
<S>                                                                <C>          <C>        <C>      
Domestic                                                           $(335,609)   $113,308   $  91,387
Foreign                                                                9,800      55,832      58,405
                                                                  -----------------------------------
                                                                   $(325,809)   $169,140    $149,792
-----------------------------------------------------------------------------------------------------
</TABLE>


The provision for income taxes from continuing operations consists of the
following:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
(thousands of dollars)                                               1996         1995       1994
                                                                  -----------------------------------
<S>                                                                <C>          <C>         <C>    
Current
  Federal                                                          $(14,514)    $49,675     $25,115
  State                                                                 735       8,336       4,630
  Foreign                                                            38,564      16,004       9,870
Deferred
  Federal                                                           (85,750)     (6,361)      6,824
  State                                                             (11,771)       (800)      1,000
  Foreign                                                            (5,699)      2,588       8,916
Investment tax credit amortization                                     (200)       (648)       (983)
                                                                  -----------------------------------
                                                                   $(78,635)    $68,794     $55,372
-----------------------------------------------------------------------------------------------------
</TABLE>

The effective income tax rate from continuing operations varied from the
statutory federal income tax rate as follows:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
                                                                     1996         1995       1994
                                                                  -----------------------------------
<S>                                                                  <C>           <C>         <C>  
Statutory federal income tax rate                                    (35.0)%       35.0%       35.0%
Foreign income taxes in excess of statutory rate                       8.1           -           -
Non-deductible goodwill and intangibles write-down                     3.9           -           -
State income taxes - net                                              (3.4)         4.5         3.8
Non-deductible goodwill amortization                                   1.8          1.1          .3
Amortization of investment tax credits                                  -           (.4)        (.6)
Other                                                                   .5           .5        (1.5)
                                                                  -----------------------------------
                                                                     (24.1)%       40.7%       37.0%
-----------------------------------------------------------------------------------------------------
</TABLE>

The components of deferred income taxes are as follows:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
(thousands of dollars)                                                         1996         1995
                                                                            -------------------------
<S>                                                                           <C>        <C>       
Current Deferred Tax (Assets) Liabilities:
  Reserve for environmental remediation and compliance                       $(27,339)   $ (12,208)
  Accrual items                                                               (19,698)     (20,451)
  Reserve for disposition of Lubricants Group                                 (12,260)           -
  Inventories                                                                   3,905          202
  Other - net                                                                 (37,098)     (15,327)
                                                                            =========================
                                                                             $(92,490)   $ (47,784)
                                                                            =========================
Non-current Deferred Tax (Assets) Liabilities:
  Depreciation                                                               $110,396     $138,381
  Reserve for environmental remediation and compliance                        (56,734)     (23,548)
  Net operating loss carryforward                                             (21,239)     (36,059)
  Postretirement benefits other than pensions                                 (20,469)     (14,744)
  Other - net                                                                 (28,392)      23,502
                                                                            -------------------------
                                                                             $(16,438)   $  87,532
-----------------------------------------------------------------------------------------------------
</TABLE>


                                      F-13

<PAGE>
<PAGE>
                                     WITCO CORPORATION AND SUBSIDIARY COMPANIES
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------


No federal or state income taxes have been provided on approximately
$154,438,000 of unremitted earnings of the Company's international subsidiaries
at December 31, 1996. As a result of the availability of foreign tax credits,
based on current rates, no significant federal or state income taxes would be
payable if these earnings were distributed.

At December 31, 1996, the Company has federal net operating losses of
approximately $48,800,000 which are subject to certain limitations and expire as
follows: $1,600,000 (2008), $32,200,000 (2009), and $15,000,000 (2010). The
Company has foreign net operating losses of approximately $6,600,000 with no
expiration date.

Cash payments for income taxes amounted to $24,716,000 (1996), $59,505,000
(1995), and $45,108,000 (1994).


NOTE 13  PENSION PLANS

The Company has various non-contributory defined benefit pension plans covering
substantially all of its domestic employees and certain international employees.
Benefits are primarily based upon levels of compensation and/or years of
service. The Company's funding policy is based upon funding at the minimum
annual amounts required by applicable federal laws and regulations plus such
additional amounts as the Company may determine to be appropriate from time to
time. Plan assets consist of publicly traded securities and investments in
commingled funds administered by independent investment advisors.

Certain union employees of the Company participate in multi-employer plans and
the Company makes contributions primarily based upon hours worked. These plans
provide defined benefits to these employees.

Employees of international subsidiaries are covered by various pension benefit
arrangements, some of which are considered to be defined benefit plans for
financial reporting purposes. Assets of the plans are comprised primarily of
insurance contracts and equity securities. Benefits under these plans are
primarily based upon levels of compensation. Funding policies are based on legal
requirements, tax considerations and local practices.


Net pension cost includes the following components:


<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------
(thousands of dollars)                     1996                   1995                   1994
                                   -----------------------------------------------------------------------
                                   DOMESTIC  INTERNATIONAL Domestic  International Domestic  International
                                   -----------------------------------------------------------------------
<S>                              <C>        <C>           <C>       <C>           <C>       <C>
Service cost for benefits earned
  during the period                $ 10,456    $ 4,600     $ 6,561    $ 3,823     $  8,284   $ 3,722
Interest cost on the projected
  benefit obligation                 25,997      7,154      24,337      6,478      22,652      5,516
Actual (gain) loss on plan assets   (39,145)    (1,046)    (63,453)    (7,486)      7,287     (2,576)
Net amortization and deferral         9,883     (2,745)     35,206      4,180     (32,743)      (314)
Curtailment loss                     44,547          -           -          -           -          -
                                   -----------------------------------------------------------------------
Total Pension Cost                   51,738      7,963       2,651      6,995       5,480      6,348
Multi-employer plans                    473          -         411          -         421          -
Other international plans                 -         68           -         73           -        129
                                   -----------------------------------------------------------------------
Net Pension Cost                     52,211      8,031       3,062      7,068       5,901      6,477
Less pension cost of
  discontinued operations            10,292          -          15          -       1,009          -
                                   -----------------------------------------------------------------------
Net Pension Cost from Continuing
  Operations                       $ 41,919    $ 8,031    $  3,047    $ 7,068    $  4,892    $ 6,477
                                                                               
----------------------------------------------------------------------------------------------------------
</TABLE>


The domestic curtailment loss of $44,547,000 is reflected in the Consolidated
Statement of Operations as follows: $35,047,000 is included in the restructuring
charge and $9,500,000 is included in Loss from Discontinued Operations.



                                      F-14

<PAGE>
<PAGE>


                                     WITCO CORPORATION AND SUBSIDIARY COMPANIES
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------


The weighted average assumptions used to calculate costs were as follows:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------
                                           1996                   1995                   1994
                                   --------------------------------------------------------------------
                                   DOMESTIC  INTERNATIONAL Domestic  International Domestic  International
                                   --------------------------------------------------------------------
<S>                                <C>         <C>         <C>        <C>        <C>         <C> 
Discount rate                         7.0%        7.0%        8.5%       7.1%       7.0%        6.9%
Rate of increase in compensation      
  level                               4.5%        4.3%        4.5%       4.3%       4.5%        4.3%
Expected long-term rate of
  return on assets                   10.0%        7.9%       10.0%       8.0%      10.0%        8.0%
-------------------------------------------------------------------------------------------------------
</TABLE>

The discount rate used to calculate domestic pension cost was changed from 8.5%
in 1995 to 7.0% in 1996 which increased pension cost by approximately
$4,900,000.


The funded status and amounts recognized in the Company's Consolidated Balance
Sheets at December 31, 1996 and 1995, for the domestic plans were as follows:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------
(thousands of dollars)                                   1996                         1995
                                              ---------------------------------------------------------
                                                    PLANS IN WHICH:              Plans in which:
                                              ---------------------------------------------------------
                                                 ASSETS      ACCUMULATED      Assets      Accumulated
                                                 EXCEED       BENEFITS        Exceed       Benefits
                                              ACCUMULATED   EXCEED ASSETS  Accumulated   Exceed Assets
                                                BENEFITS                     Benefits
                                              ---------------------------------------------------------
<S>                                            <C>          <C>             <C>            <C>      
Actuarial present value of:
  Vested benefits                              $(267,946)   $  (82,112)     $(259,114)     $(70,936)
  Nonvested benefits                              (4,995)      (10,341)        (6,358)       (2,166)
                                              ---------------------------------------------------------
    Accumulated Benefit Obligation              (272,941)      (92,453)      (265,472)      (73,102)
Effect of anticipated future compensation         
   levels                                         (9,713)      (18,224)       (22,489)      (20,922)
                                              ---------------------------------------------------------
    Projected Benefit Obligation                (282,654)     (110,677)      (287,961)      (94,024)
Plan assets at fair value                        294,264        49,756        291,165        38,213
                                              ---------------------------------------------------------
    Plan Assets in Excess of (Less than)
      Projected Benefit Obligation                11,610       (60,921)         3,204       (55,811)
Unrecognized prior service cost                   10,764         6,205         28,915         6,294
Unrecognized net transition (asset)               
   obligation                                     (8,522)          286        (11,636)          637
Unrecognized net loss                             13,530        12,396         45,621        12,823
Adjustment required to recognize minimum               -       (13,395)             -       (14,596)
  liability
                                              ---------------------------------------------------------
    Noncurrent Pension Asset (Liability)      $   27,382    $  (55,429)    $   66,104      $(50,653)
-------------------------------------------------------------------------------------------------------
</TABLE>

The assumptions used to calculate December 31, 1996 and 1995, obligations for
domestic plans were as follows:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------
                                                                                 1996         1995
                                                                              -------------------------
<S>                                                                                <C>          <C> 
Discount rate                                                                      7.5%         7.0%
Rate of increase in compensation level                                             4.5%         4.5%
-------------------------------------------------------------------------------------------------------
</TABLE>

The revised domestic discount rate of 7.5% resulted in a decrease of
approximately $17,300,000 and $20,900,000 in the 1996 accumulated and projected
benefit obligation, respectively.



                                      F-15

<PAGE>
<PAGE>


                                     WITCO CORPORATION AND SUBSIDIARY COMPANIES
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------

The funded status and amounts recognized in the Company's Consolidated Balance
Sheets at December 31, 1996 and 1995, for the international plans were as
follows:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------
(thousands of dollars)                                   1996                         1995
                                              ---------------------------------------------------------
                                                    PLANS IN WHICH:              Plans in which:
                                              ---------------------------------------------------------
                                                 ASSETS      ACCUMULATED      Assets      Accumulated
                                                 EXCEED       BENEFITS        Exceed       Benefits
                                              ACCUMULATED   EXCEED ASSETS  Accumulated   Exceed Assets
                                                BENEFITS                     Benefits
                                              ---------------------------------------------------------
<S>                                             <C>           <C>            <C>           <C>      
Actuarial present value of:
  Vested benefits                               $(34,802)     $(46,579)      $(31,122)     $(41,227)
  Nonvested benefits                              (1,717)       (8,366)        (1,620)       (2,483)
                                              ---------------------------------------------------------
    Accumulated Benefit Obligation               (36,519)      (54,945)       (32,742)      (43,710)
Effect of anticipated future compensation         
  levels                                          (7,065)      (23,822)        (7,387)      (18,497)
                                              ---------------------------------------------------------
    Projected Benefit Obligation                 (43,584)      (78,767)       (40,129)      (62,207)
Plan assets at fair value                         48,819           196         47,567           289
                                              ---------------------------------------------------------
    Plan Assets in Excess of (Less than)
      Projected Benefit Obligation                 5,235       (78,571)         7,438       (61,918)
Unrecognized prior service cost                    1,309            14          1,597            15
Unrecognized net transition (asset)               
  obligation                                      (5,473)        2,711         (5,787)          (21)
Unrecognized net loss (gain)                       1,963         5,915           (795)        1,280
                                              ---------------------------------------------------------
    Noncurrent Pension Asset (Liability)      $    3,034      $(69,931)     $   2,453      $(60,644)
-------------------------------------------------------------------------------------------------------
</TABLE>

The assumptions  used to calculate  December 31, 1996 and 1995,  obligations for
international plans were as follows:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------
                                                                                 1996         1995
                                                                              -------------------------
<S>                                                                                <C>          <C> 
Discount rate                                                                      6.6%         7.1%
Rate of increase in compensation level                                             3.9%         4.3%
-------------------------------------------------------------------------------------------------------
</TABLE>



The Company sponsors a defined contribution savings plan, the Witco Corporation
Employee Retirement Savings Plan, which is organized under sections 401(k) and
401(a) of the Internal Revenue Code. The Plan allows salary and hourly
non-bargaining employees to contribute up to a maximum of 15% of their base pay
with the Company providing a matching contribution of 50 cents for each dollar
up to 6%. In addition, the Company sponsors the OSi Specialties, Inc. 401(k)
Savings and Investment Plan which covers all full time employees of OSi. The
Plan allows employees to contribute a maximum of 17.5% of eligible compensation
and the Company provides a matching contribution of 50% up to 7.5%. The Plans
permit employees to make contributions on both a pre-tax and after-tax basis.
Participants are immediately vested in their contributions and become fully
vested in the matching contribution upon meeting certain service requirements.
Union employees' participation, provisions, contributions and employer match are
based upon terms of their respective collective bargaining agreement.

The Company's matching contributions were $4,200,000 (1996), $3,900,000 (1995)
and $4,300,000 (1994).


NOTE 14   POSTRETIREMENT BENEFITS OTHER THAN
          PENSIONS

The Company provides health and life insurance to certain domestic retired
employees, most of whom contribute to its cost. Substantially all employees
presently become eligible for retiree benefits after reaching retirement age
while working for the Company. The cost of the retiree medical plan is provided
by retiree contributions that are adjusted annually to reflect current health
costs. For domestic employees subject to collective bargaining arrangements, the
cost is shared by the Company in accordance with the bargained agreements. Life
insurance benefits for certain retired employees are provided with the Company
assuming the cost. The Company's policy is to fund the plans at the discretion
of management.


                                      F-16

<PAGE>
<PAGE>

                                      WITCO CORPORATION AND SUBSIDIARY COMPANIES

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Postretirement benefit obligations at December 31, 1996 and 1995, are as
follows:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
(thousands of dollars)                                                       1996           1995
                                                                         ----------------------------
<S>                                                                        <C>            <C>    
Accumulated Postretirement Benefit Obligation:
   Retirees                                                                $43,134        $29,359
   Active plan participants fully eligible for benefits                      8,250          9,535
   Other active plan participants                                            7,362         12,086
                                                                         ----------------------------
    Total Accumulated Postretirement Benefit Obligation                     58,746         50,980
Unrecognized net (loss)                                                       (262)        (7,010)
                                                                         ----------------------------
    Accrued Postretirement Benefit Liability                               $58,484        $43,970
-----------------------------------------------------------------------------------------------------
</TABLE>

Net periodic postretirement benefit costs include the following components:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
(thousands of dollars)                                         1996          1995           1994
                                                           ------------------------------------------
<S>                                                         <C>             <C>            <C>    
Service cost of benefits earned                             $     637       $   486        $   591
Interest cost on accumulated postretirement benefits            3,082         2,938          2,634
Curtailment loss                                               13,443             -              -
Net amortization                                                   21          (747)           275
                                                           ------------------------------------------
    Net Periodic Postretirement Benefit Costs                 $17,183        $2,677         $3,500
-----------------------------------------------------------------------------------------------------
</TABLE>


For measuring the expected postretirement benefit obligation, a 8% and 8.5%
annual rate of increase in the per capita claims cost was assumed for 1996 and
1995, respectively. The rate was assumed to decrease by 1% per year to 5% in
1999 and remain at that level thereafter. The discount rate used in determining
the accumulated postretirement benefit obligation was 7.5% for 1996 and 7% for
1995. The discount rates used in determining the net periodic postretirement
benefit costs were 7% (1996), 8.3% (1995) and 7% (1994). In 1996, a curtailment
charge of $13,443,000 was recognized in connection with the 1996 restructuring
plan.

The effect of a 1% increase in the health care cost trend rate would increase
the present value of the accumulated postretirement benefit obligation at
December 31, 1996, by approximately $4,900,000 and the net periodic
postretirement benefit cost for 1996 by approximately $500,000.

Certain union employees of the Company participate in multi-employer plans that
provide defined postretirement health and life insurance benefits. The net
periodic postretirement benefit cost for these employees is not distinguishable.
The Company's costs associated with these plans on a cash basis is not
significant.


NOTE 15  FINANCIAL INSTRUMENTS

The Company enters into foreign currency forward contracts, currency swaps and
other financial market instruments to hedge the effect of foreign currency
fluctuations on the financial statements. The foreign exchange contracts are
accounted for as hedges of net investments and transaction hedges. Gains and
losses on hedges of net investments are recognized as a component of
shareholders' equity. Gains and losses on transaction hedges are recognized in
income and offset the foreign exchange gains and losses on the related
transaction.

At December 31, 1996 and 1995, the Company had outstanding swap contracts with
aggregate notional amounts of approximately $197,000,000 for each year to hedge
its foreign net investments and also to fix the interest rates on the same
amount of indebtedness at a weighted average interest rate of approximately 8%.
The net interest rate differentials that are paid or received are reflected
currently as adjustments to interest expense. The foreign currency contracts are
primarily in German marks and expire in March 2003.

At December 31, 1996 and 1995, the Company had outstanding forward contracts
with aggregate notional amounts of approximately $137,000,000 and $164,000,000,
respectively, to hedge foreign currency risk on accounts receivable and payable.
These forward contracts are generally outstanding for 30 days and are primarily
denominated in German marks, Italian lire, Swiss and French francs, and British
pounds.

All contracts have been entered into with major financial institutions. The risk
associated with these




                                      F-17

<PAGE>
<PAGE>


                                     WITCO CORPORATION AND SUBSIDIARY COMPANIES
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------

transactions is the cost of replacing, at current market rates, agreements in
the event of default by the counterparties. Management believes the risk of
incurring such losses is remote.

The following summarizes the major methods and assumptions used in estimating
the fair values of financial instruments.

CASH AND CASH EQUIVALENTS: The carrying amount approximates fair value due to
the short maturity of these instruments.

NOTES RECEIVABLE: The fair value is estimated by discounting the future cash
flows using the interest rates at which similar loans would be made under
current conditions.

LONG-TERM DEBT (INCLUDING SHORT-TERM PORTION): The fair value for the 6.60% and
the 6.125% Notes in addition to the 7.75% and the 6.875% Debentures were based
on quoted market values. For all other long-term debt which have no quoted
market price, the fair value is estimated by discounting projected future cash
flows using the Company's incremental borrowing rate.

FOREIGN CURRENCY/INTEREST RATE SWAP CONTRACTS: The fair value is the amount at
which the contracts could be settled based on quotes provided by investment
banking firms.

FAIR VALUES OF FINANCIAL INSTRUMENTS: The following table presents the carrying
amounts and estimated fair values of material financial instruments used by the
Company in the normal course of its business.


<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------
(thousands of dollars)                                   1996                         1995
                                              ---------------------------------------------------------
                                                CARRYING                    Carrying
                                                 AMOUNT      FAIR VALUE      Amount       Fair Value
                                              ---------------------------------------------------------
<S>                                             <C>             <C>          <C>            <C>     
Cash and cash equivalents                       $  59,201       $59,201      $143,994       $143,994
Notes receivable                                $  24,422       $24,449      $ 26,387       $ 26,366
Long-term debt                                  $ 700,820      $666,847      $686,315       $696,193
Off-balance sheet financial instruments:
  Unrealized loss on foreign
    currency/interest rate swap contracts       $       -      $(35,775)     $      -       $(41,895)
-------------------------------------------------------------------------------------------------------
</TABLE>



NOTE 16  COMMITMENTS AND CONTINGENCIES

OPERATING LEASES: At December 31, 1996, minimum rental commitments related to
continuing operations under noncancelable operating leases amounted to
$19,954,000 (1997), $12,854,000 (1998), $11,378,000 (1999), $8,374,000 (2000),
$8,243,000 (2001), and $85,440,000 (2002 and thereafter).

Rental expenses under operating leases from continuing operations were
$22,725,000 (1996), $16,597,000 (1995) and $16,758,000 (1994).

CAPITAL LEASE: The Company has a capital lease for an office/laboratory facility
located in Meyrin, Switzerland. The lease contains purchase options and expires
in 2007.

Future minimum lease payments at December 31, 1996, were as follows:

     --------------------------------------------------
     (thousands of dollars)
     1997                                     $  1,964
     1998                                        1,964
     1999                                        1,964
     2000                                        1,964
     2001                                        1,964
     2002 and thereafter                        11,786
                                             ----------
       Total minimum lease payments             21,606
     Amounts representing interest              (7,157)
                                             ----------
       Present value of net minimum lease       14,449
         payments
     Current portion                              (869)
                                             ----------
     Long-term obligation                    $13,580
     --------------------------------------------------

The lease contains a sublease agreement for one third of the facility over the
length of the lease with the lessee providing a pro rata share of the minimum
lease payments.

CAPITAL COMMITMENTS: At December 31, 1996, the estimated costs to complete
authorized projects under construction related to continuing operations amounts
to $82,024,000.


                                      F-18

<PAGE>
<PAGE>



                                     WITCO CORPORATION AND SUBSIDIARY COMPANIES
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------



LITIGATION, CLAIMS AND CONTINGENCIES: The Company is a potentially responsible
party ("PRP") or a defendant in a number of governmental (federal, state and
local) and private actions associated with the release, or suspected release, of
contaminants into the environment. As a PRP, the Company may be liable for costs
associated with the investigation and remediation of environmental
contamination, as well as various penalties and damages to persons, property and
natural resources. As of December 31, 1996, the Company was a PRP, or a
defendant, in connection with 76 sites at which it is likely to incur
environmental response costs as a result of actions brought against the Company
pursuant to the federal Comprehensive Environmental Response Compensation and
Liability Act ("CERCLA"), the federal Resource Conservation and Recovery Act
("RCRA") or similar state or local laws. With 27 exceptions, all of these sites
involve one or more PRPs, and in most cases there are numerous other PRPs in
addition to the Company. CERCLA, RCRA and the state counterparts to these
federal laws authorize governments to investigate and remediate actual or
suspected damage to the environment caused by the release, or suspected release,
of hazardous substances into the environment, or to order the responsible
parties to investigate and/or remediate such environmental damage.

The Company evaluates and reviews environmental reserves for future remediation
and other costs on a quarterly basis to determine appropriate reserve amounts.
Inherent in this process are considerable uncertainties which affect the
Company's ability to estimate the ultimate costs of remediation efforts. Such
uncertainties include the nature and extent of contamination at each site,
evolving governmental standards regarding remediation requirements, changes in
environmental regulations, widely varying costs of alternative cleanup methods,
the number and financial condition of other potentially responsible parties at
multi-party sites, innovations in remediation and restoration technology, and
the identification of additional environmental sites.

At December 31, 1996 and 1995, the Company's reserves for environmental
remediation and compliance costs (including $64,224,000 at December 31, 1996, of
both current and long-term environmental liabilities for the Lubricants Group
and $77,649,000 at December 31, 1996, of both current and long-term
environmental liabilities for plants to be either sold or closed) amounted to
$219,697,000 and $106,182,000 (including $22,536,000 for the Lubricants Group),
respectively, reflecting the Company's estimate of the costs to be incurred over
an extended period of time in respect of those matters which are reasonably
estimable. At December 31, 1996 and 1995, $150,921,000 and $60,049,000,
respectively, of the reserves are included in Deferred Credits and Other
Liabilities on the Consolidated Balance Sheets.

The Company is a defendant in six similar actions arising out of the Company's
involvement in the polybutylene resin manufacturing business in the 1970's. Five
of the following cases are currently pending in California state courts and one
is pending in Texas state court; East Bay Municipal Utility District v. Mobil
Oil Corporation, et al., filed in November 1993, and pending in Superior Court
for the County of San Mateo, California; City of Santa Maria v. Shell Oil
Company, et al., filed in May 1994, and pending in Superior Court for the County
of San Luis Obispo, California; Nipomo Community Services District v. Shell Oil
Company, et al., filed in May 1995, and pending in Superior Court for the County
of Santa Barbara, California; Alameda County Water District v. Mobil Oil
Corporation, et al., filed in April 1996, and Marin Municipal Water District v.
Shell Oil Company, et al., filed in May 1996, both pending in superior Court for
the County of San Mateo; and City of Austin v. Shell Oil Company, et al., filed
in June 1996, and pending in the District Court of Travis County, Texas. The
actions generally allege that the Company and several other defendants
negligently misrepresented the performance of polybutylene pipe and fittings
installed in water distribution systems. Other allegations in the California and
Texas actions include breach of the California Unfair Practices Act and the
Texas Deceptive Practices Act, respectively, breach of warranty, fraud and
strict liability. It is possible that the Company may be named as a defendant in
future actions arising out of its past involvement in the polybutylene resin
manufacturing business.

The Company is not a party to any legal proceedings, including environmental
matters, which it believes will have a material adverse effect on its
consolidated financial position. However, the Company's operating results could
be materially affected in future periods by the resolution of these
contingencies.


                                      F-19


<PAGE>
<PAGE>



                                     WITCO CORPORATION AND SUBSIDIARY COMPANIES
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------

NOTE 17  OPERATIONS BY INDUSTRY SEGMENT AND
         GEOGRAPHIC AREA

The following is a summary of the Company's operations by industry segment and
geographic area:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
(thousands of dollars)                                              1996           1995           1994
                                                            --------------------------------------------
<S>                                                          <C>            <C>            <C>        
Net Sales
  Chemical                                                   $ 1,435,852    $ 1,442,320    $ 1,336,907
  OSi Specialties                                                448,592        101,312           --
  Petroleum                                                      381,621        388,872        368,747
  Diversified products                                              --           61,412        141,995
  Intersegment elimination                                        (2,738)        (8,839)        (6,235)
                                                            --------------------------------------------
    Net Sales                                                $ 2,263,327    $ 1,985,077    $ 1,841,414
                                                            --------------------------------------------
Operating Income
  Chemical                                                   $  (108,687)   $    63,611    $   125,459
  OSi Specialties                                                 58,351          7,385           --
  Petroleum                                                      (87,746)        33,955         44,240
  Diversified products                                              --           62,689         17,714
  Corporate and unallocated                                     (123,976)        33,610        (14,028)
                                                            --------------------------------------------
    Operating income (loss) from continuing operations          (262,058)       201,250        173,385
                                                            --------------------------------------------
Other expense - net                                               (3,531)        (3,525)        (3,951)
Interest income (expense) - net                                  (60,220)       (28,585)       (19,642)
                                                            --------------------------------------------
    Income (loss) from continuing operations before income 
      taxes                                                  $  (325,809)   $   169,140    $   149,792
                                                            --------------------------------------------
Assets
  Chemical                                                   $   915,604    $ 1,090,837    $ 1,101,519
  OSi Specialties                                                969,620        966,501           --
  Petroleum                                                      209,154        246,259        507,848
  Diversified products                                              --             --          107,376
  Net assets of discontinued operations                           59,740        170,426           --
  Corporate (principally cash, cash equivalents and              237,587        276,581        202,602
    deferred pension costs)
                                                            --------------------------------------------
    Assets                                                   $ 2,391,705    $ 2,750,604    $ 1,919,345
--------------------------------------------------------------------------------------------------------
</TABLE>

The following table presents a  reconciliation  of operating  income (loss) from
continuing  operations  on a segment  basis  detailing  unusual or  infrequently
occurring items which affect comparability between years:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
(thousands of dollars)
                                                                          1996
                                          -------------------------------------------------------------------------
                                                              OSi                         CORPORTAE &
                                          CHEMICAL        SPECIALTIES     PETROLEUM       UNALLOCATED      TOTAL
                                          -------------------------------------------------------------------------
<S>                                        <C>             <C>            <C>             <C>             <C>   
Operating income
 (loss) from
 continuing                               
 operations on a   
 comparative basis                         $ 113,398       $  58,351      $  23,582       $ (21,273)      $ 174,058
Restructuring charge                        (197,724)           --          (94,031)        (53,375)       (345,130)
Other charges                                (24,361)           --          (17,297)        (49,328)        (90,986)
Insurance                                 
 settlements                                    --              --             --              --              --   
Gain on disposition                       
 of subsidiaries                                --              --             --              --              --   
                                          -------------------------------------------------------------------------
Operating income
 (loss) from                              
 continuing
 operations                                $(108,687)      $  58,351      $ (87,746)      $(123,976)      $(262,058)
                                          -------------------------------------------------------------------------


<CAPTION>

-------------------------------------------------------------------------------------------------------------------
(thousands of dollars)
                                                                                   1995
                                          -----------------------------------------------------------------------------------------
                                                              OSi                        Diversified      Corporated &
                                           Chemical       Specialties     Petroleum        Products       Unallocated        Total
                                          -----------------------------------------------------------------------------------------
<S>                                        <C>             <C>            <C>             <C>             <C>             <C>      
Operating income
 (loss) from
 continuing                                
 operations on a
 comparative basis                         $ 109,603       $   7,385      $  36,105       $  10,160       $ (19,289)      $ 143,964
Restructuring charge                         (33,092)           --             (750)           --              --           (33,842)
Other charges                                (12,900)           --           (1,400)         (1,550)         (2,250)        (18,100)
Insurance                                  
 settlements                                    --              --             --              --            55,149          55,149
Gain on disposition                        
 of subsidiaries                                --              --             --            54,079            --            54,079
                                          -----------------------------------------------------------------------------------------
Operating income
 (loss) from                               
 continuing
 operations                                $  63,611       $   7,385      $  33,955        $62,689        $  33,610       $ 201,250
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>



The only unusual item in 1994 was a gain of $5,070 from the disposition of the
metal finishing and metalworking operations of a subsidiary (Diversified
Products).


                                      F-20

<PAGE>
<PAGE>


                                     WITCO CORPORATION AND SUBSIDIARY COMPANIES
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------
(thousands of dollars)                                              1996          1995          1994
                                                            -------------------------------------------
<S>                                                          <C>           <C>           <C>        
Depreciation and Amortization
  Chemical                                                   $    67,312   $    69,917   $    62,795
  OSi Specialties                                                 37,865         9,439          --
  Petroleum                                                       19,110        16,758        14,568
  Diversified products                                              --           3,719         9,351
  Corporate                                                        4,506         2,738         1,949
                                                            -------------------------------------------
    Depreciation and amortization from continuing            $   128,793   $   102,571   $    88,663
      operations
                                                            -------------------------------------------
Capital Expenditures (exclusive of acquisitions)
  Chemical                                                   $    74,230   $    53,134   $    44,323
  OSi Specialties                                                 40,477        12,400          --
  Petroleum                                                       16,641        16,755        25,647
  Diversified products                                              --           4,388         5,623
  Discontinued operations                                         11,844        17,557        17,502
  Corporate                                                       17,971        11,611        14,343
                                                            -------------------------------------------
    Capital Expenditures                                     $   161,163   $   115,845   $   107,438
                                                            -------------------------------------------
Net Sales
  United States                                              $ 1,450,996   $ 1,247,287   $ 1,225,062
  Western Europe                                                 775,078       662,099       541,060
  Other International                                            217,447       163,636       137,855
  Inter-area elimination                                        (180,194)      (87,945)      (62,563)
                                                            -------------------------------------------
    Net Sales                                                $ 2,263,327   $ 1,985,077   $ 1,841,414
                                                            -------------------------------------------
Operating Income
  United States                                              $  (280,774)  $   131,604   $   102,017
  Western Europe                                                  22,153        55,324        54,184
  Other International                                             (3,437)       14,322        17,184
                                                            -------------------------------------------
    Operating income (loss) from continuing operations       $  (262,058)  $   201,250   $   173,385
                                                            -------------------------------------------
Assets
  United States                                              $ 1,580,470   $ 1,491,188   $ 1,211,125
  Western Europe                                                 640,265       884,139       604,342
  Other International                                            111,230       204,851       103,878
  Net assets of discontinued operations (United States)           59,740       170,426          --
                                                            -------------------------------------------
    Assets                                                   $ 2,391,705   $ 2,750,604   $ 1,919,345
-------------------------------------------------------------------------------------------------------
</TABLE>



Intersegment and inter-area sales are accounted for on the same basis used to
price sales to similar non-affiliated customers and such sales are eliminated in
arriving at consolidated amounts.

The Company does not allocate income and expenses that are of a general
corporate nature to industry segments in computing operating income. These
include general corporate expenses, interest income and expense, and certain
other income and expenses not directly attributable to a specific segment.

In 1996, corporate and unallocated includes charges of $53,375,000 related to a
restructuring of the Company's operations and $49,328,000 of non-recurring items
related to provisions for litigation and other matters.

1995 corporate and unallocated includes income of $55,149,000 as a result of
settlements with certain of the Company's insurers, net of related legal and
other costs.

Foreign currency translation and transaction gains and losses included in net
income are not significant.

OSi Specialties purchases, in the aggregate, approximately 40% of its raw
materials from Dow Corning Corporation and Union Carbide Corporation under
various long-term agreements which terms expire at various times through 2000.


NOTE 18  DISCONTINUED OPERATIONS

On September 11, 1995, the Company announced its intention to divest its
Lubricants Group. These operations are reflected as discontinued operations for
all periods presented in the Company's Statements of Operations. Net sales for
discontinued operations amounted to $332,930,000 (1996), $373,363,000 (1995) and
$383,255,000 (1994). During 1996, the Company recorded an estimated net loss on
disposal of $68,253,000,




                                      F-21

<PAGE>
<PAGE>



                                     WITCO CORPORATION AND SUBSIDIARY COMPANIES
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------


or $1.20 per common share, associated with the divestiture of the Lubricants
Group. The loss is based upon events and information which resulted in
management's revised estimate of the net realizable value of the Lubricants
Group. This revised estimate is based upon contract negotiations, lower than
anticipated bids for portions of the group and amendments to the Company's plan
of disposal, including plant closures, which resulted in a write-down of certain
assets and a provision for associated costs.

On November 1, 1996, the Company sold certain assets of its Kendall/Amalie
business and certain assets of its grease and grease gun manufacturing
businesses for approximately $120,689,000, subject to certain post-closing
adjustments.

The components of net assets of discontinued operations included in the
Company's Consolidated Balance Sheets at December 31, 1996 and 1995, are as
follows:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
(thousands of dollars)                                   1996         1995
                                                      -------------------------
<S>                                                     <C>        <C>      
Accounts and notes receivable - net                     $19,331    $  61,633
Inventories                                              10,781       38,378
Property, plant and equipment - net                      30,756      112,639
Accounts payable and other current liabilities           (2,000)     (39,603)
Other assets and liabilities - net                          872       (2,621)
                                                      -------------------------
                                                        $59,740     $170,426
-------------------------------------------------------------------------------
</TABLE>


Additional liabilities of the Lubricants Group to be retained by the Company as
of December 31, 1996, amounted to $66,634,000 included in the Accounts Payable
and Other Current Liabilities caption of the Company's Balance Sheet including
$31,438,000 related to the reserve for disposition of the business, $18,611,000
for environmental remediation and compliance costs and $16,585,000 for current
payables and accruals. Additionally, $45,613,000 is included in the Deferred
Credits and Other Liabilities caption for environmental remediation and
compliance costs.

Under generally accepted accounting principles, a provision for loss on
discontinued operations has been included based on management's best estimates
of the amounts expected to be realized on the sale of the remaining portions of
the Lubricants Group. While estimates are based on an analysis of the
facilities, including appraisals by investment bankers, there have been limited
recent sales of comparable properties to consider in preparing such valuations.
The amounts the Company will ultimately realize could differ materially in the
near term from the amounts assumed in arriving at the loss anticipated on
disposal of the discontinued operations.



NOTE 19  SUBSEQUENT EVENTS

DISCONTINUED OPERATIONS

Effective February 28, 1997, the Company sold its refinery in Bradford,
Pennsylvania to American Refining Group, Inc. for approximately $17,000,000. On
March 4, 1997, the Company signed a letter of intent to sell its Golden Bear
Division, the remaining business of the Lubricants Group. The Company
anticipates no additional losses will be incurred as a result of these
transactions.



                                      F-22

<PAGE>
<PAGE>


                                      WITCO CORPORATION AND SUBSIDIARY COMPANIES

QUARTERLY FINANCIAL DATA FROM CONTINUING OPERATIONS (UNAUDITED)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
(in thousands of dollars except per share data)
------------------------------------------------------------------------------------------------------------------
                                 1996                                           1995
              --------------------------------------------------  ------------------------------------------------
                                                        INCOME                                          Income
                                          INCOME        (LOSS)                            Income        (Loss)
                                          (LOSS)        FROM                              (Loss)        from
                            COST OF        FROM       CONTINUING                Cost of     from        Continuing
                 NET         GOODS      CONTINUING    OPERATIONS     Net         Goods    Continuing    Operations
  QUARTER       SALES        SOLD       OPERATIONS   PER SHARE(f)   Sales        Sold     Operations    Per Share(f)
-------------------------------------------------------------------------------------------------------------------
<S>           <C>        <C>          <C>           <C>         <C>        <C>        <C>             <C>  
   First      $ 589,425  $  448,345      $25,581       $ .45       $517,952    $405,213    $30,270 (a)     $ .54 (a)
   Second       571,458     434,680       18,519         .33        489,231     390,634     69,021 (b)      1.22 (b)
   Third        562,049     437,952       11,928         .21        441,902     352,554     19,444 (c)       .34 (c)
   Fourth       540,395     439,343     (303,202)(e)   (5.33)(e)    535,992     420,421    (18,389)(d)      (.32)(d)
             ------------------------------------------------------------------------------------------------------
             $2,263,327  $1,760,320    $(247,174)     $(4.35)    $1,985,077  $1,568,822   $100,346         $1.78
--------------------------------------------------------------------------------------------------------------------
</TABLE>


(a) Includes a gain of $5,918, or $.11 per common share, from the disposition of
    the Company's Battery Parts business.

(b) Includes a gain of $27,073, or $.48 per common share, from  the  disposition
    of the Company's Carbon Black business, and a gain  of  $23,032, or $.40 per
    common share, as a result of  settlements  with  certain  of  the  Company's
    insurers, net of related legal and other costs.

(c) Includes  a  gain  of  $4,410,  or  $.08  per  common  share, as a result of
    settlements with certain of the Company's insurers, net of related legal and
    other costs.

(d) Includes a restructuring charge of $20,644, or $.36 per common  share; other
    non-recurring  charges  of  $11,041,  or  $.20  per common share, related to
    provisions for environmental remediation costs and litigation; and a gain of
    $6,236, or $.11 per common share, as a result of settlements with certain of
    the Company's insurers, net of related legal and other costs.

(e) Includes a restructuring charge of $239,270, or $4.21 per common share,  and
    other non-recurring charges of $71,336, or $1.25 per common  share,  related
    to provisions for litigation,  environmental  remediation  costs  and  other
    costs.

(f) Per share amounts for the quarter are computed independently;  and,  due  to
    the  computation  formula,  the  sum  of  the  quarters  may  not  equal the
    year-to-date period.


RESPONSIBILITY FOR FINANCIAL STATEMENTS

Witco is responsible for the integrity of the financial data reported by it and
its subsidiary companies. This requires preparing financial statements and other
financial data which fairly reflect Witco's consolidated financial position and
results of operations in accordance with generally accepted accounting
principles, including certain data that is based on management's best estimates
and judgment.

In the preparation of its financial data and to safeguard its assets against
unauthorized acquisition, use, or disposition, Witco establishes and maintains
accounting and reporting systems supported by internal accounting controls.
Witco believes that a high level of internal accounting control is maintained by
the selection and training of qualified personnel, by appropriate delegation of
authority and division of responsibilities, by the establishment and
communication of accounting and business policies, and by conducting internal
audits including follow-up procedures that require responsive action by
management. In establishing systems of internal accounting control, Witco weighs
the cost of such systems against the benefits that it believes can be derived.

Ernst & Young LLP, independent auditors, are engaged to audit and render an
opinion as to whether Witco's financial statements present fairly Witco's
consolidated financial position and operating results. Their audits are
conducted in accordance with generally accepted audited standards, and their
report is included herein.

The Audit Committee of the Board of Directors, consisting of four non-employee
directors, reviews Witco's accounting and auditing policies, practices and the
services to be performed by the independent auditors. The Audit Committee meets
with management, with the internal auditors and with the independent auditors in
the exercise of its responsibilities.



                                      F-23






<PAGE>
<PAGE>
                                                                     SCHEDULE II
 
                   WITCO CORPORATION AND SUBSIDIARY COMPANIES
                       VALUATION AND QUALIFYING ACCOUNTS
                             (THOUSANDS OF DOLLARS)
 
<TABLE>
<CAPTION>
                     COLUMN A                        COLUMN B              COLUMN C             COLUMN D     COLUMN E
---------------------------------------------------  --------      ------------------------     --------     --------
                                                                          ADDITIONS
                                                                   ------------------------
                                                     BALANCE AT    CHARGED TO    CHARGED TO                   BALANCE
--------------------------------------------------   BEGINNING     COSTS AND       OTHER                      AT END
                   DESCRIPTION                       OF PERIOD      EXPENSES      ACCOUNTS     DEDUCTIONS    OF PERIOD
--------------------------------------------------   ----------    ----------    ----------    ----------    --------
 
<S>                                                  <C>           <C>           <C>           <C>           <C>
Year ended December 31, 1996:
     Valuation and qualifying accounts deducted
       from assets to which they apply:
          Allowances for doubtful
            receivables-trade.....................     $7,104        $8,235       $  3,036(a)    $4,174(b)   $14,201
                                                     ----------    ----------    ----------    ----------    --------
                                                     ----------    ----------    ----------    ----------    --------
 
Year ended December 31, 1995:
     Valuation and qualifying accounts deducted
       from assets to which they apply:
          Allowances for doubtful
            receivables-trade.....................     $8,863        $2,615       $ (3,197)(c)    $1,177(b)   $ 7,104
                                                     ----------    ----------    ----------    ----------    --------
                                                     ----------    ----------    ----------    ----------    --------
 
Year ended December 31, 1994:
     Valuation and qualifying accounts deducted
       from assets to which they apply:
          Allowances for doubtful
            receivables-trade.....................     $6,821        $2,209       $    821       $  988(b)   $ 8,863
                                                     ----------    ----------    ----------    ----------    --------
                                                     ----------    ----------    ----------    ----------    --------
</TABLE>
 
------------
 
Notes:
 
(a) Amount represents a reclassification.
 
(b) Uncollectible receivables charged against the allowance provided.
 
(c) Amount principally consists of the  allowance for doubtful accounts of  $2.2
    million  from the Lubricants Group, which  is reflected on the Balance Sheet
    as net assets of discontinued operations.
 
                                      S-1







<PAGE>
<PAGE>
                               WITCO CORPORATION
                               INDEX TO EXHIBITS
 
<TABLE>
<CAPTION>
EXHIBIT
  NO.                               DESCRIPTION
--------                            -----------
 
 <S>          <C>
 10(i)(5).  -- Amendment No. 1 to Amended and Restated Credit Agreement dated as
               of December 23, 1996.
   
 11.        -- Statement re Computation of Per Share Earnings.
  
 21.        -- Subsidiaries of the Registrant.
     
 23.        -- Consent of Independent Auditors.
     
 27.        -- Financial Data Schedule.
     
</TABLE>


<PAGE>