10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2008

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission File Number 1-5263

THE LUBRIZOL CORPORATION

(Exact name of registrant as specified in its charter)

Ohio	34-0367600
(State or other jurisdiction of incorporation or organization)	(I.R.S.Employer Identification No.)

29400 Lakeland Boulevard

Wickliffe, Ohio 44092-2298

(Address of principal executive offices)

(Zip Code)

(440) 943-4200

(Registrant’s telephone number, including area code)

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 whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer  x	Accelerated filer  ¨
Non-accelerated filer  ¨    (Do not check if smaller reporting company)	Smaller reporting company  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

Number of the registrant’s common shares, without par value, outstanding as of September 30, 2008: 67,256,350.

THE LUBRIZOL CORPORATION

Quarterly Report on Form 10-Q

Three and Nine Months Ended September 30, 2008

Table of Contents

			Page Number
PART I. FINANCIAL INFORMATION
	Item 1	Financial Statements (unaudited):
		Consolidated Statements of Income	3
		Consolidated Balance Sheets	4
		Consolidated Statements of Cash Flows	5
		Notes to Consolidated Financial Statements	6
	Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
	Item 3	Quantitative and Qualitative Disclosures about Market Risk	41
	Item 4	Controls and Procedures	42
PART II. OTHER INFORMATION
	Item 1A	Risk Factors	42
	Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	43
	Item 6	Exhibits	44
		Signatures	45

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

THE LUBRIZOL CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(In Millions Except Per Share Data)	Three Months Ended September 30,						Nine Months Ended September 30,
	2008			2007			2008			2007
Revenues	$	1,362.7		$	1,121.4		$	3,940.2		$	3,352.7
Cost of sales		1,078.2			846.0			3,057.4			2,503.0
Gross profit		284.5			275.4			882.8			849.7
Selling and administrative expenses		111.0			103.7			321.5			309.4
Research, testing and development expenses		55.8			56.0			165.6			161.4
Amortization of intangible assets		6.8			5.8			20.8			17.7
Restructuring and impairment charges		5.7			2.1			25.1			0.6
Other (income) expense-net		(2.5	)		(5.5	)		(6.4	)		(9.7	)
Interest income		(3.3	)		(6.9	)		(10.6	)		(20.9	)
Interest expense		21.6			21.7			60.2			70.3
Income before income taxes		89.4			98.5			306.6			320.9
Provision for income taxes		26.2			27.1			91.7			97.2
Net income	$	63.2		$	71.4		$	214.9		$	223.7
Net income per share, basic	$	0.93		$	1.03		$	3.15		$	3.23
Net income per share, diluted	$	0.92		$	1.02		$	3.12		$	3.19
Dividends paid per share	$	0.31		$	0.30		$	0.92		$	0.86

Amounts shown are unaudited.

See accompanying notes to the financial statements.

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THE LUBRIZOL CORPORATION

CONSOLIDATED BALANCE SHEETS

(In Millions Except Share Data)	September 30, 2008		December 31, 2007
ASSETS
Cash and cash equivalents	$	372.4	$	502.3
Investments		48.4		—
Receivables		791.4		665.9
Inventories		705.9		600.0
Other current assets		86.3		79.1
Total current assets		2,004.4		1,847.3
Property and equipment – at cost		2,860.1		2,763.2
Less accumulated depreciation		1,684.0		1,601.7
Property and equipment-net		1,176.1		1,161.5
Goodwill		1,163.3		1,170.8
Intangible assets-net		360.2		381.3
Investments in non-consolidated companies		8.2		8.3
Other assets		68.2		74.6
TOTAL	$	4,780.4	$	4,643.8
LIABILITIES AND SHAREHOLDERS’ EQUITY
Short-term debt and current portion of long-term debt	$	201.5	$	204.9
Accounts payable		462.1		404.8
Accrued expenses and other current liabilities		287.8		275.0
Total current liabilities		951.4		884.7
Long-term debt		1,228.4		1,223.9
Pension obligations		195.0		195.2
Other postretirement benefit obligations		89.0		93.1
Noncurrent liabilities		141.1		147.7
Deferred income taxes		90.5		85.5
Total liabilities		2,695.4		2,630.1
Minority interest in consolidated companies		62.0		62.4
Preferred stock without par value – unissued
Common shares without par value:
Authorized – 120,000,000 shares
Outstanding – 67,256,350 shares as of September 30, 2008 after deducting 18,939,544 treasury shares; 68,383,833 shares at December 31, 2007 after deducting 17,812,061 treasury shares		768.0		763.6
Retained earnings		1,208.2		1,128.7
Accumulated other comprehensive income		46.8		59.0
Total shareholders’ equity		2,023.0		1,951.3
TOTAL	$	4,780.4	$	4,643.8

Amounts shown are unaudited.

See accompanying notes to the financial statements.

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THE LUBRIZOL CORORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Millions)	Nine Months Ended September 30,
	2008			2007
CASH PROVIDED BY (USED FOR):
OPERATING ACTIVITIES
Net income	$	214.9		$	223.7
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		128.1			117.9
Deferred income taxes		(7.2	)		10.9
Deferred compensation		7.7			16.0
Restructuring and impairment charges		15.1			2.8
Gain from sales of property and equipment		(0.1	)		(8.0	)
Change in current assets and liabilities, net of acquisitions:
Receivables		(143.7	)		(46.1	)
Inventories		(107.6	)		33.7
Accounts payable, accrued expenses and other current liabilities		74.8			50.3
Other current assets		(0.1	)		8.1
		(176.6	)		46.0
Change in noncurrent liabilities		0.8			(1.9	)
Other items-net		—			(0.9	)
Total operating activities		182.7			406.5
INVESTING ACTIVITIES
Capital expenditures		(146.8	)		(121.6	)
Acquisitions		0.9			(15.7	)
Net proceeds from sales of property and equipment		1.5			12.9
Purchase of investments		(50.0	)		—
Other items – net		(0.1	)		(1.3	)
Total investing activities		(194.5	)		(125.7	)
FINANCING ACTIVITIES
Changes in short-term debt-net		0.2			(0.4	)
Proceeds from the issuance of long-term debt		0.4			—
Repayments of long-term debt		(0.2	)		(113.7	)
Dividends paid		(62.6	)		(59.4	)
Common shares purchased		(75.1	)		(82.1	)
Proceeds from the exercise of stock options		3.8			26.0
Tax benefit from the exercise of stock options and awards		2.2			8.5
Total financing activities		(131.3	)		(221.1	)
Effect of exchange rate changes on cash		13.2			10.6
Net (decrease) increase in cash and cash equivalents		(129.9	)		70.3
Cash and cash equivalents at the beginning of period		502.3			575.7
Cash and cash equivalents at the end of period	$	372.4		$	646.0

Amounts shown are unaudited.

See accompanying notes to the financial statements.

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THE LUBRIZOL CORPORATION

Notes to Consolidated Financial Statements

Three and Nine Months Ended September 30, 2008 and 2007

(Unaudited)

(In Millions of Dollars except Share and Per Share Data)

1. Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) for interim financial information and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all normal and recurring adjustments considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2008 are not necessarily indicative of the results that may be expected for the year ending December 31, 2008.

The balance sheet at December 31, 2007 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements.

2. Significant Accounting Policies

Net Income Per Share

Net income per share is computed by dividing net income by the weighted-average common shares outstanding during the period, including contingently issuable shares. Net income per diluted share includes the dilutive impact resulting from outstanding stock options and awards. Per share amounts are computed as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2008		2007		2008		2007
Numerator:
Net income	$	63.2	$	71.4	$	214.9	$	223.7
Denominator (in millions of shares):
Weighted-average common shares outstanding		67.8		69.2		68.2		69.3
Dilutive effect of stock options and awards		0.7		0.8		0.8		0.8
Denominator for net income per share, diluted		68.5		70.0		69.0		70.1
Net income per share, basic	$	0.93	$	1.03	$	3.15	$	3.23
Net income per share, diluted	$	0.92	$	1.02	$	3.12	$	3.19

There were 0.5 million and 0.3 million shares excluded from the diluted earnings per share calculations because they were antidilutive for the three and nine months ended September 30, 2008, respectively. There were an insignificant number of shares excluded from the diluted earnings per share calculations because they were antidilutive for the three and nine months ended September 30, 2007.

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THE LUBRIZOL CORPORATION

Notes to Consolidated Financial Statements

Three and Nine Months Ended September 30, 2008 and 2007

(Unaudited)

New Accounting Standards

In May 2008, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 162, “The Hierarchy of Generally Accepted Accounting Principles.” SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with U.S. GAAP. This statement will become effective on November 15, 2008. The company does not expect the adoption of this standard to have a material impact on its consolidated financial statements.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities – an amendment of FASB Statement No. 133.” This statement amends the disclosure requirements for derivative instruments and hedging activities in SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities.” SFAS No. 161 requires enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under SFAS No. 133 and its related interpretations and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance and cash flows. This statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. At initial adoption, comparative disclosures for earlier periods are encouraged, but not required. The company currently is evaluating the impact of this recently issued standard on its consolidated financial statements.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Financial Statements – an amendment of ARB No. 51.” This statement amends Accounting Research Bulletin No. 51, “Consolidated Financial Statements,” to establish accounting and reporting standards for noncontrolling interests in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. This statement requires consolidated net income attributable to both the parent and the noncontrolling interest to be reported and disclosed in the consolidated financial statements. This statement also requires expanded disclosures in the consolidated financial statements that clearly identify and distinguish between the interests of the parent’s owners and the interests of the noncontrolling owners of a subsidiary. SFAS No. 160 is effective for fiscal years and interim periods beginning after December 15, 2008 and shall be applied prospectively as of the beginning of the fiscal year in which it is initially adopted, except for the presentation and disclosure requirements, which are applied retrospectively for all periods presented. Early adoption is prohibited. The company currently is evaluating the impact of this recently issued standard on its consolidated financial statements.

In December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations.” This statement replaces SFAS No. 141, “Business Combinations,” and requires an acquirer to recognize the assets acquired, the liabilities assumed and any noncontrolling interests in the acquiree at the acquisition date, measured at their fair values as of that date, with limited exceptions. SFAS No. 141R requires that costs incurred to effect the acquisition be recognized separately from the acquisition as period costs. SFAS No. 141R also requires the recognition of restructuring costs that the acquirer expects to incur, but is not obligated to incur, separately from the business combination. In addition, this statement requires an acquirer to recognize assets and liabilities assumed arising from contractual contingencies as of the acquisition date, measured at their acquisition-date fair values. Other key provisions of this statement include the requirement to recognize the acquisition-date fair values of research and development assets separately from goodwill and the requirement to recognize changes in the amount of deferred tax benefits that are recognizable due to the business combination in either income from continuing operations in the period of the combination or directly in contributed capital, depending on the circumstances. At September 30, 2008, the company had amounts recorded in its financial statements for

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THE LUBRIZOL CORPORATION

Notes to Consolidated Financial Statements

Three and Nine Months Ended September 30, 2008 and 2007

(Unaudited)

unrecognized tax benefits and deferred tax valuation allowances related to past acquisitions. Any reversal of these amounts prior to the adoption of SFAS No. 141R would affect goodwill. However, subsequent to the adoption of SFAS No. 141R, any reversals would affect the income tax provision in the period of reversal. With the exception of certain tax-related aspects described above, this statement applies prospectively to business combinations for which the acquisition date is on or after fiscal years beginning after December 15, 2008. The company currently is evaluating the impact of this recently issued standard on its consolidated financial statements.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities.” This statement permits entities to make an irrevocable election to measure many financial instruments and certain other items at fair value at specified election dates. The fair value option may be applied instrument by instrument and must be applied to entire instruments. Unrealized gains and losses on items for which the entity elects the fair value option are reported in earnings. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The company adopted this standard on January 1, 2008 and did not elect to measure any financial instruments or other items at fair value that previously were not required under other accounting standards.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation.

3. Stock-Based Compensation

The company utilizes the 2005 Stock Incentive Plan (2005 Plan) to provide equity awards to its key employees and directors. Key employees and directors also may receive equity compensation under the company’s deferred compensation plans. The 2005 Plan, approved by the company’s shareholders on April 25, 2005, provides for the granting of stock appreciation rights, restricted and unrestricted shares, share units and options to buy common shares up to an aggregate of 4,000,000 common shares, of which no more than 2,000,000 can be settled as full-value awards. After the 2,000,000 limit has been reached, full-value awards are counted in a 3-to-1 ratio against the 4,000,000 limit. Options become exercisable 50% one year after date of grant, 75% after two years, 100% after three years and expire 10 years after the date of grant. In addition, the 2005 Plan provides each nonemployee director of the company an automatic annual grant of restricted stock units worth approximately $0.1 million based on the fair market value of the company’s common shares on the date of each Annual Meeting of Shareholders. These restricted stock units vest one year after the grant date. For all grants of share-based awards, fair market value is determined using the closing price of the company’s common shares on the date of grant.

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THE LUBRIZOL CORPORATION

Notes to Consolidated Financial Statements

Three and Nine Months Ended September 30, 2008 and 2007

(Unaudited)

The fair value of share-based payment awards is estimated using the Black-Scholes option pricing model. There were 253,100 and 213,200 stock options granted during the nine months ended September 30, 2008 and 2007, respectively. The weighted-average assumptions used to value the options granted were as follows:

	Nine Months Ended September 30,
	2008			2007
Risk-free interest rate		3.5	%		4.8	%
Dividend yield		2.1	%		2.0	%
Expected volatility		20.0	%		17.8	%
Expected life (years)		6.5			10.0
Weighted-average fair value per share of options granted during the period	$	12.27		$	14.68

The company uses treasury shares for all net common shares issued pursuant to the 2005 Plan and the deferred compensation plans. The company issued 27,000 and 124,475 common shares from treasury shares upon exercise of employee stock options during the three and nine months ended September 30, 2008, respectively. The company issued 39,288 and 877,421 common shares from treasury shares upon exercise of employee stock options during the three and nine months ended September 30, 2007, respectively. Cash received from option exercises during the nine months ended September 30, 2008 and 2007 was $3.8 million and $26.0 million, respectively. When options are exercised, the company receives a tax deduction for the excess of the stock price over the exercise price of the options. In addition, when the company issues share-based awards pursuant to the 2005 Plan, the company receives a tax deduction equal to the fair market value of the company’s common shares on the date of issuance. The company realized a reduction in its income tax payable of $2.2 million and $8.5 million for the nine months ended September 30, 2008 and 2007, respectively, relating to the exercise of stock options and the issuance of awards. For accounting purposes, these tax benefits were realized as increases in paid-in capital included in the common shares caption in shareholders’ equity (see Note 11).

At September 30, 2008, there was $14.5 million of total pretax unrecognized compensation cost related to all stock-based awards that were not vested. That cost is expected to be recognized over a weighted-average period of 1.7 years.

Under the company’s long-term incentive program (LTIP), dollar-based target awards are determined by the organization and compensation committee of the board of directors for three-year performance periods. During the nine months ended September 30, 2008, the award for the 2005-2007 performance period was distributed resulting in the issuance of 134,578 common shares and the deferral of 96,969 common shares into a deferred compensation plan. During the nine months ended September 30, 2007, the award for the 2004-2006 performance period was distributed resulting in the issuance of 71,658 common shares as well as a cash distribution and the deferral of 106,882 common shares into a deferred compensation plan.

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THE LUBRIZOL CORPORATION

Notes to Consolidated Financial Statements

Three and Nine Months Ended September 30, 2008 and 2007

(Unaudited)

The following table identifies the number of common shares expected to be issued based on current LTIP performance measures and the fair market value of the company’s common shares on the date of grant for the performance shares granted:

Award	Expected Number of Common Shares to be Issued	Fair Market Value of Common Shares on Date of Grant
2006-2008	284,792	$	43.07
2007-2009	250,984	$	53.07
2008-2010	116,098	$	58.45

Performance-based share awards at September 30, 2008 and changes during the nine months ended September 30, 2008 were as follows:

	Share Units		Weighted- Average Grant Date Fair Value Per Share
Nonvested at January 1, 2008	543,998		$	47.76
Granted	116,990		$	58.45
Performance increase	—		$	—
Vested	—		$	—
Forfeited	(9,114	)	$	49.36
Nonvested at September 30, 2008	651,874		$	49.66

Total stock-based compensation expense recognized in the consolidated statements of income for the three and nine months ended September 30, 2008 was $3.0 million and $8.5 million, respectively, compared with $4.3 million and $18.8 million, respectively, for the three and nine months ended September 30, 2007. The related tax benefit for the three and nine months ended September 30, 2008 was $1.1 million and $3.0 million, respectively, compared with $1.5 million and $6.6 million, respectively, for the three and nine months ended September 30, 2007.

In prior years, certain international employees received stock-based awards that are similar to stock appreciation rights. These awards vested 50% one year after grant, 75% two years after grant and 100% three years after grant and have a 10-year exercise period from the date of grant. The value of these awards is based on the fair market value of the company’s common shares and is paid in cash upon employee exercise. The value of the unexercised portion of these fully vested stock-based awards is accounted for as a liability award. Credits to compensation expense recognized in the consolidated statements of income for the three and nine months ended September 30, 2008 were $0.7 million and $2.6 million, respectively, compared with compensation expense of $0.1 million and $2.8 million, respectively, for the three and nine months ended September 30, 2007. These amounts are included in the total stock-based compensation expense reported above.

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THE LUBRIZOL CORPORATION

Notes to Consolidated Financial Statements

Three and Nine Months Ended September 30, 2008 and 2007

(Unaudited)

4. Acquisitions

On November 1, 2007, the company completed the acquisition of the refrigeration lubricants business of Croda International Plc (Croda) for approximately $123.7 million in cash, net of a $0.9 million purchase price adjustment received in the first quarter of 2008. The acquisition primarily included lubricant technology, trade names, customer lists, manufacturing know-how and inventory. No manufacturing facilities were included in the transaction. The company began consolidating the results of the refrigeration lubricants business of Croda in the company’s consolidated financial statements in November 2007. The purchase price allocation for this acquisition included goodwill of $51.2 million and intangible assets of $66.8 million.

On February 7, 2007, the company completed the acquisition of a broad line of metalworking additive products from Lockhart Chemical Company (Lockhart) for approximately $15.7 million in cash. The company purchased Lockhart’s entire metalworking product line, which included natural, synthetic and gelled sulfonates; emulsifier packages; corrosion inhibitors and lubricity agents; grease additives; oxidates; esters; soap; semi-finished coatings; and rust preventatives. The company began consolidating the results of the metalworking business of Lockhart in the company’s consolidated financial statements in February 2007. The purchase price allocation for this acquisition included goodwill of $8.3 million and intangible assets of $7.6 million.

The pro forma impacts of acquisitions in 2007 were immaterial to the company’s consolidated financial statements.

5. Inventories

The company’s inventories were comprised of the following:

	September 30, 2008		December 31, 2007
Finished products	$	382.7	$	332.7
Products in process		111.8		105.0
Raw materials		176.2		132.2
Supplies and engine test parts		35.2		30.1
Total inventories	$	705.9	$	600.0

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THE LUBRIZOL CORPORATION

Notes to Consolidated Financial Statements

Three and Nine Months Ended September 30, 2008 and 2007

(Unaudited)

6. Goodwill and Intangible Assets

Goodwill is tested for impairment at the reporting unit level as of October 1 each year or more frequently if events or circumstances occur that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The carrying amount of goodwill by reportable segment at September 30, 2008 follows:

	Lubrizol Advanced Materials			Lubrizol Additives			Total
Balance, January 1, 2008	$	1,010.9		$	159.9		$	1,170.8
Translation and other adjustments		(4.7	)		(2.8	)		(7.5	)
Balance, September 30, 2008	$	1,006.2		$	157.1		$	1,163.3

The following table shows the components of identifiable intangible assets:

	September 30, 2008				December 31, 2007
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Amortized intangible assets:
Customer lists	$	194.0	$	43.3	$	195.5	$	34.6
Technology		155.4		63.6		155.1		55.1
Trademarks		23.5		8.2		23.6		7.2
Patents		14.1		6.4		14.4		5.7
Land-use rights		11.0		1.8		10.3		1.5
Non-compete agreements		2.1		1.4		2.6		1.0
Total amortized intangible assets		400.1		124.7		401.5		105.1
Non-amortized trademarks		84.8		—		84.9		—
Total	$	484.9	$	124.7	$	486.4	$	105.1

Finite-lived intangible assets are amortized over their useful lives, which range between 3 and 50 years. The company’s indefinite-lived intangible assets consist of certain trademarks that are tested for impairment each year as of October 1 or more frequently if impairment indicators arise. Indefinite-lived trademarks are assessed for impairment separately from goodwill. Annual intangible amortization expense for the next five years will approximate $26.8 million in 2008, $25.1 million in 2009, $25.0 million in 2010, $24.8 million in 2011 and $24.4 million in 2012.

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THE LUBRIZOL CORPORATION

Notes to Consolidated Financial Statements

Three and Nine Months Ended September 30, 2008 and 2007

(Unaudited)

7. Comprehensive Income (Loss)

Total comprehensive income (loss) was comprised of the following:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2008			2007			2008			2007
Net income	$	63.2		$	71.4		$	214.9		$	223.7
Foreign currency translation adjustment		(80.2	)		40.4			(17.8	)		60.7
Pension and other postretirement benefit plans		3.6			1.6			4.3			1.6
Unrealized gain (loss) – natural gas hedges		(7.6	)		(0.3	)		(1.4	)		0.5
Amortization of treasury rate locks		0.8			0.8			2.7			2.3
Total comprehensive income (loss)	$	(20.2	)	$	113.9		$	202.7		$	288.8

8. Segment Reporting

The company is organized into two operating and reportable segments: Lubrizol Additives and Lubrizol Advanced Materials. The Lubrizol Additives segment represented 69% and 68% of the company’s consolidated revenues for the three and nine months ended September 30, 2008, respectively. The Lubrizol Advanced Materials segment represented 31% and 32% of the company’s consolidated revenues for the three and nine months ended September 30, 2008, respectively.

Lubrizol Additives consists of two product lines: (i) engine additives and (ii) driveline and industrial oil additives. Engine additives is comprised of additives for lubricating engine oils, such as for gasoline, diesel, marine and stationary gas engines and additive components, additives for fuel products and refinery and oil field chemicals, as well as outsourcing strategies for supply chain and knowledge center management. In addition, this product line sells additive components and viscosity improvers within its lubricant and fuel additives product areas. Driveline and industrial oil additives is comprised of additives for driveline oils, such as automatic transmission fluids, gear oils and tractor lubricants and industrial oil additives, such as additives for hydraulic, grease and metalworking fluids, as well as compressor lubricants. Lubrizol Additives product lines generally are produced in company-owned or shared manufacturing facilities and largely sold to a common customer base.

The Lubrizol Advanced Materials segment consists of three product lines: (i) engineered polymers, (ii) performance coatings and (iii) Noveon^® consumer specialties. The engineered polymers product line is characterized by products such as TempRite^® engineered polymers and Estane^® thermoplastic polyurethane. Engineered polymers products are sold to a diverse customer base comprised of major manufacturers in the construction, automotive, telecommunications, electronics and recreation industries. The performance coatings product line includes high-performance polymers and additives for paints, coatings and adhesives, graphic arts, paper and textiles and plastics applications that are sold to customers worldwide. The Noveon consumer specialties product line is characterized by production of acrylic thickeners, specialty monomers, film formers, fixatives, emollients, silicones, surfactants and process chemicals. The company markets products in the Noveon consumer specialties product line to customers worldwide, which include major manufacturers of cosmetics, personal care products, water soluble polymers and household products.

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THE LUBRIZOL CORPORATION

Notes to Consolidated Financial Statements

Three and Nine Months Ended September 30, 2008 and 2007

(Unaudited)

The company primarily evaluates performance and allocates resources based on segment operating income, defined as revenues less expenses identifiable to the product lines included within each segment, as well as projected future returns. Segment operating income reconciles to consolidated income before income taxes by deducting net corporate expenses that are not attributed to the operating segments, restructuring and impairment charges and net interest expense.

The following table presents a summary of the results of the company’s reportable segments:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2008			2007			2008			2007
Revenues from external customers:
Lubrizol Additives	$	940.7		$	738.8		$	2,690.4		$	2,193.8
Lubrizol Advanced Materials		422.0			382.6			1,249.8			1,158.9
Total revenues	$	1,362.7		$	1,121.4		$	3,940.2		$	3,352.7
Segment operating income:
Lubrizol Additives	$	98.3		$	97.0		$	328.3		$	304.3
Lubrizol Advanced Materials		28.3			30.9			96.2			119.8
Segment operating income		126.6			127.9			424.5			424.1
Corporate expenses		(17.0	)		(17.7	)		(50.7	)		(57.0	)
Corporate other income (expense)-net		3.8			5.2			7.5			3.8
Restructuring and impairment charges		(5.7	)		(2.1	)		(25.1	)		(0.6	)
Interest expense-net		(18.3	)		(14.8	)		(49.6	)		(49.4	)
Income before income taxes	$	89.4		$	98.5		$	306.6		$	320.9

The company’s total assets by segment were as follows:

	September 30, 2008		December 31, 2007
Segment total assets:
Lubrizol Additives	$	1,818.1	$	1,663.4
Lubrizol Advanced Materials		2,311.3		2,240.0
Total segment assets		4,129.4		3,903.4
Corporate assets		651.0		740.4
Total consolidated assets	$	4,780.4	$	4,643.8

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THE LUBRIZOL CORPORATION

Notes to Consolidated Financial Statements

Three and Nine Months Ended September 30, 2008 and 2007

(Unaudited)

9. Pension and Postretirement Benefits

The components of net periodic pension cost and net periodic non-pension postretirement benefit cost consisted of the following:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2008			2007			2008			2007
Pension benefits:
Service cost – benefits earned during period	$	7.6		$	7.9		$	23.3		$	23.4
Interest cost on projected benefit obligation		10.6			10.0			32.8			29.7
Expected return on plan assets		(9.3	)		(8.7	)		(28.3	)		(25.8	)
Amortization of prior service costs		0.8			0.6			2.3			2.0
Recognized net actuarial loss		0.6			1.4			2.2			3.9
Net periodic pension cost	$	10.3		$	11.2		$	32.3		$	33.2
Other postretirement benefits:
Service cost – benefits earned during period	$	0.5		$	0.6		$	1.4		$	1.4
Interest cost on projected benefit obligation		1.4			1.5			4.5			4.4
Amortization of prior service credits		(1.7	)		(1.9	)		(5.1	)		(5.1	)
Amortization of initial net obligation		0.1			0.1			0.4			0.3
Recognized net actuarial loss		0.1			0.4			0.6			1.0
Settlement / curtailment gain		—			—			(1.1	)		—
Net periodic non-pension postretirement benefit cost	$	0.4		$	0.7		$	0.7		$	2.0

Expected employer contributions worldwide for pension benefits in 2008 approximate $58.2 million for the qualified plans, of which $24.5 million was contributed during the nine months ended September 30, 2008. The portion of the 2008 total expected contributions attributable to the U.S. qualified pension plans is $16.7 million, of which $16.4 million was contributed during the nine months ended September 30, 2008. The non-qualified pension plans and other postretirement benefit plans are unfunded. As a result, the 2008 expected contributions to these plans of $1.6 million and $5.1 million, respectively, represent actuarial estimates of future assumed payments based on historic retirement and payment patterns as well as medical trend rates and historical claim information, as appropriate.

10. Restructuring and Impairment Charges

During the three and nine months ended September 30, 2008, the company recorded aggregate restructuring and impairment charges of $5.7 million and $25.1 million, respectively. The restructuring and impairment charges during the nine months ended September 30, 2008 primarily related to business improvement initiatives in the performance coatings product line of the Lubrizol Advanced Materials segment and the decision to close a Lubrizol Additives blending, packaging and warehouse site in Ontario, Canada. The company completed the disposition of a textile compounding plant and recognized an asset impairment for a textile coatings production line in the first quarter of 2008. In the second quarter of 2008, the company announced additional steps in the improvement of its U.S.

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THE LUBRIZOL CORPORATION

Notes to Consolidated Financial Statements

Three and Nine Months Ended September 30, 2008 and 2007

(Unaudited)

performance coatings business. Manufacturing of certain products at various locations will cease or be transferred to more efficient production sites in order to align manufacturing with the company’s end-use markets. In addition, the company restructured its sales, marketing and research and development organizations within the performance coatings product line. In the third quarter of 2008, the company announced a plan to close a Lubrizol Additives blending, packaging and warehouse site in Ontario, Canada. Operations at the facility are expected to end by June 30, 2009. Approximately 30 employees will be impacted by this facility closure. The facility closure is expected to result in restructuring and impairment charges of approximately $10.9 million, of which $5.0 million has been incurred to date and $0.6 million is expected to be recognized in the remainder of 2008.

Collectively, these restructuring initiatives resulted in impairment charges of $15.0 million, exit costs of $0.4 million and severance and benefits of $9.7 million for the nine months ended September 30, 2008. The following table shows the reconciliation of the restructuring liability since January 1, 2008 by major restructuring activity:

	Liability January 1, 2008		Restructuring and Impairment Charges		Cash Paid			Non-cash Adjustments			Liability September 30, 2008
Performance Coatings 2008 business improvement initiatives	$	—	$	19.5	$	(3.7	)	$	(14.6	)	$	1.2
Lubrizol Additives plant closure and workforce reductions		—		5.0		—			(4.5	)		0.5
Lubrizol Advanced Materials plant closures and sale, production line impairments and workforce reductions		0.4		0.6		(0.6	)		(0.4	)		—
Bromborough, U.K. plant closure and sale		0.1		—		—			(0.1	)		—
Noveon International, Inc. restructuring liabilities assumed		0.5		—		—			—			0.5
	$	1.0	$	25.1	$	(4.3	)	$	(19.6	)	$	2.2

For the nine months ended September 30, 2008, $4.5 million of restructuring and impairment charges associated with the Lubrizol Additives plant closure and workforce reductions have been reflected as a non-cash adjustment within the reconciliation above as the resulting liability has been reclassified to pension and other postretirement benefit obligations at September 30, 2008.

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THE LUBRIZOL CORPORATION

Notes to Consolidated Financial Statements

Three and Nine Months Ended September 30, 2008 and 2007

(Unaudited)

11. Shareholders’ Equity

The following table summarizes the changes in shareholders’ equity since January 1, 2008:

	Number of Shares Outstanding		Shareholders’ Equity
			Common Shares			Retained Earnings			Accumulated Other Comprehensive Income			Total
Balance, January 1, 2008	68.4		$	763.6		$	1,128.7		$	59.0		$	1,951.3
Comprehensive income:
Net income				—			214.9			—			214.9
Other comprehensive loss				—			—			(12.2	)		(12.2	)
Total comprehensive income													202.7
Dividends declared							(63.0	)					(63.0	)
Deferred stock compensation	—			1.1			—			—			1.1
Common shares – treasury:
Common shares purchased	(1.4	)		(2.7	)		(72.4	)		—			(75.1	)
Shares issued upon exercise of stock options and awards	0.3			6.0			—			—			6.0
Balance, September 30, 2008	67.3		$	768.0		$	1,208.2		$	46.8		$	2,023.0

12. Fair Value Measurements

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements.” This statement defines fair value, establishes a framework for measuring fair value in accordance with U.S. GAAP and expands disclosure about fair value measurements. SFAS No. 157 does not expand the use of fair value measures in financial statements, but simplifies and codifies related guidance within U.S. GAAP. This statement defines fair value as the price that would be received to sell an asset or would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. SFAS No. 157 classifies the inputs used to measure fair value into three tiers. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. SFAS No. 157 is effective for fiscal years and interim periods beginning after November 15, 2007. SFAS No. 157 requires adoption prospectively as of the beginning of the fiscal year in which this statement initially is applied, with the exception of certain financial instruments, in which adoption is applied retrospectively as of the beginning of the fiscal year in which this statement initially is applied.

In February 2008, the FASB issued FASB Staff Position (FSP) 157-1 “Application of FASB Statement No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements That Address Fair Value Measurements for Purposes of Lease Classification or Measurement under Statement 13” and FSP 157-2 “Effective Date of Statement 157.” FSP 157-1 removed leasing transactions accounted for under Statement 13 and related guidance from the scope of SFAS No. 157. FSP 157-2 deferred the effective date of SFAS No. 157 for all nonfinancial assets and

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THE LUBRIZOL CORPORATION

Notes to Consolidated Financial Statements

Three and Nine Months Ended September 30, 2008 and 2007

(Unaudited)

liabilities to fiscal years beginning after November 15, 2008. In October 2008, the FASB issued FSP 157-3 “Determining the Fair Value of a Financial Asset when the Market for that Asset is not Active,” which outlines considerations for valuing financial assets in markets that are not active. The company adopted the required provisions of SFAS No. 157 for financial assets and liabilities on January 1, 2008. The company’s adoption of this standard for financial assets and liabilities did not have a material impact on its consolidated financial statements. The company currently is evaluating the impact of adopting the provisions of SFAS No. 157 for nonfinancial assets and liabilities on its consolidated financial statements.

The company estimates the fair value of financial instruments using available market information and generally accepted valuation methodologies. The following table shows the company’s financial assets and liabilities accounted for at fair value on a recurring basis at September 30, 2008:

	September 30, 2008		Fair Value Measurements at Reporting Date Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
			Level 1		Level 2		Level 3
Assets:
Forward commodity contracts (1)	$	0.1	$	—	$	0.1	$	—
Money market mutual funds (2)		221.2		171.2		50.0		—
Interest rate swaps (3)		2.5		—		2.5		—
Total	$	223.8	$	171.2	$	52.6	$	—
Liabilities:
Deferred compensation plans (4)	$	18.8	$	18.8	$	—	$	—

(1) The fair values of forward commodity contracts are based on counterparty quotes of market forward rates and reflect the present value of the amount that the company would pay or receive for contracts involving the same notional amounts and maturity dates.

(2) The company records the fair value of money market mutual funds within cash and cash equivalents, investments and other assets. The fair value of money market mutual funds held in inactive markets is corroborated through quoted prices in active markets for the fund’s underlying holdings, considering nonperformance and liquidity risks.

(3) The fair value of interest rate swaps is obtained from counterparty quotes, which use discounted cash flows and the then-applicable forward interest rates.

(4) The company allows directors and senior management to defer their fees, salary and incentive compensation into non-qualified deferred compensation plans, which are funded informally through trust-owned life insurance held in a rabbi trust. Deferrals can be made into various cash investment accounts and/or a share unit account. Changes in the value of compensation deferred under these plans are recognized each period based on the fair value of the underlying investments, including the company’s common share price if amounts are held in a share unit account at the end of the reporting period.

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THE LUBRIZOL CORPORATION

Notes to Consolidated Financial Statements

Three and Nine Months Ended September 30, 2008 and 2007

(Unaudited)

13. Contingencies

The company has numerous purchase commitments for materials, supplies and energy in the ordinary course of business. The company also has numerous sales commitments for product supply contracts in the ordinary course of business.

GENERAL

There are pending or threatened claims, lawsuits and administrative proceedings against the company or its subsidiaries, all arising from the ordinary course of business with respect to commercial, employment, product liability and environmental matters, which seek remedies or damages. The company believes that any liability that finally may be determined with respect to commercial and product liability claims should not have a material adverse effect on the company’s consolidated financial position, results of operations or cash flows. From time to time, the company also is involved in legal proceedings as a plaintiff involving contract, patent protection, environmental and other matters. Gain contingencies, if any, are recognized when they are realized.

ENVIRONMENTAL

The company’s environmental engineers and consultants review and monitor environmental issues at operating facilities and, where appropriate, the company initiates corrective and/or preventive environmental projects to ensure environmental compliance and safe and lawful activities at its current operations. The company also conducts compliance and management systems audits.

The company and its subsidiaries are generators of both hazardous and non-hazardous wastes, the treatment, storage, transportation and disposal of which are regulated by various laws and governmental regulations. These laws and regulations generally impose liability for costs to investigate and remediate contamination without regard to fault and, under certain circumstances, liability may be joint and several resulting in one party being held responsible for the entire obligation. Liability also may include damages to natural resources. Although the company believes past operations were in substantial compliance with the then-applicable regulations, either the company or the predecessor of Lubrizol Advanced Materials International, Inc. (LZAM International), the Performance Materials Segment of Goodrich Corporation (Goodrich), has been designated under a country’s laws and/or regulations as a potentially responsible party (PRP) in connection with several sites including both third party sites and/or current operating facilities.

The company participates in the remediation process for onsite and third-party waste management sites at which the company has been identified as a PRP. This process includes investigation, remedial action selection and implementation, as well as discussions and negotiations with other parties, which primarily include PRPs, past owners and operators and governmental agencies. The estimates of environmental liabilities are based on the results of this process. Inherent uncertainties exist in these estimates primarily due to unknown conditions, changing governmental regulations and legal standards regarding liability, remediation standards and evolving technologies for managing investigations and remediation. The company revises its estimates accordingly as events in this process occur and additional information is obtained.

The company’s environmental reserves, measured on an undiscounted basis, totaled $13.7 million at September 30, 2008 and $18.7 million at December 31, 2007. Of these amounts, $8.6 million and $5.3 million were included in accrued expenses and other current liabilities at September 30, 2008 and December 31, 2007, respectively. Goodrich provided LZAM International with an indemnity for various environmental liabilities. The company

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THE LUBRIZOL CORPORATION

Notes to Consolidated Financial Statements

Three and Nine Months Ended September 30, 2008 and 2007

(Unaudited)

estimates Goodrich’s share of such currently identified liabilities under the indemnity, which extends through February 2011, to be approximately $1.7 million of which $0.6 million of the recovery is included in receivables and $1.1 million is included in other assets. There are specific environmental contingencies for company-owned sites for which third parties such as past owners and/or operators are the named PRPs and also for which the company is indemnified by Goodrich. Goodrich currently is indemnifying LZAM International for several environmental remediation projects. Goodrich’s share of all of these liabilities may increase to the extent such third parties fail to honor their obligations through February 2011.

The company believes that its environmental accruals are adequate based on currently available information. However, it is reasonably possible that $8.3 million in additional costs may be incurred at certain locations beyond the amounts accrued as a result of new information, newly discovered conditions, changes in remediation standards or technologies or a change in the law. Additionally, as the indemnification from Goodrich extends through February 2011, changes in assumptions regarding when costs will be incurred may result in additional expenses to the company. Additional costs in excess of $8.3 million currently cannot be estimated.

INDEMNIFICATIONS

In connection with the sale of the food ingredients and industrial specialties business to SPM Group Holdings, LLC, now known as Emerald Performance Materials, LLC (Emerald), in May 2006, the company has provided indemnifications to Emerald with respect to the business sold. These indemnifications have been associated with the price and quantity of raw material purchases, permit costs, costs incurred due to the inability to obtain permits and environmental matters. The indemnifications related to the price of raw material purchases expired on December 31, 2007, with the remaining indemnifications expiring on December 31, 2011. In each of these circumstances, payment by the company is dependent on Emerald filing a claim. In addition, the company’s obligations under these agreements may be limited in terms of time and/or amount. It is not possible to predict the maximum potential amount of future payments under certain of these agreements due to the conditional nature of the company’s obligations and the unique facts and circumstances involved in each particular agreement. For those indemnification agreements where a payment by the company is probable and estimable, a liability has been recorded at September 30, 2008. The company believes that if it were to incur a loss in any of these matters, such loss would not have a material effect on the company’s business, financial condition or results of operations.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In Millions of Dollars Except Per Share Data)

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

OVERVIEW

We are an innovative specialty chemical company that produces and supplies technologies that improve the quality and performance of our customers’ products in the global transportation, industrial and consumer markets. Our business is founded on technological leadership. Innovation provides opportunities for us in growth markets as well as advantages over our competitors. From a base of approximately 1,600 patents, we use our product development and formulation expertise to sustain our leading market positions and fuel our future growth. We create additives, ingredients, resins and compounds that enhance the performance, quality and value of our customers’ products, while minimizing their environmental impact. Our products are used in a broad range of applications and are sold into stable markets such as those for engine oils, specialty driveline lubricants and metalworking fluids, as well as higher-growth markets such as personal care and over-the-counter pharmaceutical products and performance coatings and inks. Our engineered polymers products also are used in a variety of industries, including the construction, sporting goods, medical products and automotive industries. We are an industry leader in many of the markets in which our product lines compete.

We are geographically diverse, with an extensive global manufacturing, supply chain, technical and commercial infrastructure. We operate facilities in 27 countries, including production facilities in 19 countries and laboratories in 12 countries, in key regions around the world through the efforts of more than 6,950 employees. We sell our products in more than 100 countries and believe that our customers value our ability to provide customized, high-quality, cost-effective performance formulations and solutions worldwide. We also believe that our customers value our global supply chain capabilities.

During the third quarter of 2008, Hurricane Ike passed over our two Houston-area manufacturing facilities in Deer Park and Bayport, Texas without causing significant damage. These facilities, which primarily serve the Lubrizol Additives segment, were closed for approximately two weeks in preparation for, and recovery from, the storm. As a result of the hurricane interruption, $8.5 million of unabsorbed manufacturing costs attributed to the temporary shutdown of the facilities, as well as incremental maintenance and repair costs, were expensed in the three-month period rather than capitalized into inventory. The storm also caused shipment delays resulting from the plants’ closures. We expect to supply the majority of these shipments in the fourth quarter of 2008 and do not expect to lose any business due to these delays. Both facilities returned to normal operations by the end of the quarter.

During the three months ended September 30, 2008, we recorded aggregate restructuring and impairment charges of $5.0 million related to our decision to close a Lubrizol Additives blending, packaging and warehouse site in Ontario, Canada. We expect operations at the facility to end by June 30, 2009.

During the nine months ended September 30, 2008, we recorded aggregate restructuring and impairment charges of $20.1 million related to business improvement initiatives in the Lubrizol Advanced Materials segment, primarily within the performance coatings product line. We completed the disposition of a textile compounding plant and

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recognized an asset impairment for a textile coatings production line in the first quarter of 2008. In the second quarter of 2008, we announced additional steps in the improvement of our U.S. performance coatings business. Manufacturing of certain products at various locations will cease or be transferred to more efficient production sites in order to align manufacturing with our end-use markets. In addition, we restructured the sales, marketing and research and development organizations within our performance coatings product line in the second quarter of 2008.

Collectively, our restructuring initiatives resulted in impairment charges of $15.0 million, exit costs of $0.4 million and severance and benefits of $9.7 million for the nine months ended September 30, 2008. We expect to record an additional $6.3 million of restructuring and impairment charges for these previously announced plans, of which $1.0 million is expected to be recognized in the remainder of 2008. We expect the actions that we have announced to date to generate cost savings of approximately $3.0 million in 2008 and approximately $11.0 million in 2009.

On March 25, 2008, we announced our decision to launch a 10-year phased investment plan to increase global capacity in our Lubrizol Additives segment. We plan to make a greenfield investment in China as well as implement an extensive debottlenecking program at our existing facilities. As part of the 10-year plan, we signed a letter of intent to reserve land use rights in China for a wholly owned manufacturing plant, which will be developed and phased-in as market needs require. By phasing in selective capacity additions in China, we aim to respond to lubricant growth in Asia and better match our manufacturing capability with global demand patterns. We expect that the debottlenecking and China investment will require capital expenditures of approximately $200.0 million over the next decade.

On November 1, 2007, we completed the acquisition of the refrigeration lubricants business of Croda International Plc (Croda) for approximately $123.7 million in cash, net of a $0.9 million purchase price adjustment received in the first quarter of 2008. The acquisition primarily included lubricant technology, trade names, customer lists, manufacturing know-how and inventory. No manufacturing facilities were included in the transaction. We began consolidating the results of the refrigeration lubricants business of Croda in our consolidated financial statements in November 2007. The purchase price allocation for this acquisition included goodwill of $51.2 million and intangible assets of $66.8 million.

On February 7, 2007, we completed the acquisition of a broad line of metalworking additive products from Lockhart Chemical Company (Lockhart) for approximately $15.7 million in cash. We purchased Lockhart’s entire metalworking product line, which included natural, synthetic and gelled sulfonates; emulsifier packages; corrosion inhibitors and lubricity agents; grease additives; oxidates; esters; soap; semi-finished coatings; and rust preventatives. We began consolidating the results of the metalworking business of Lockhart in our consolidated financial statements in February 2007. The purchase price allocation for this acquisition included goodwill of $8.3 million and intangible assets of $7.6 million.

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RESULTS OF OPERATIONS

Three Months Ended September 30, 2008 Compared With Three Months Ended September 30, 2007

Net income decreased $8.2 million to $63.2 million for the three months ended September 30, 2008 compared with $71.4 million for the same period in 2007. The decrease in earnings primarily was due to higher raw material costs, higher manufacturing expenses, the impact of Hurricane Ike, increased selling and administrative expenses, an increase in restructuring and impairment charges, a decrease in interest income, and an increase in the effective tax rate, offset by an improvement in the combination of price and product mix, a favorable currency impact and contributions from an acquisition. Despite the impact of Hurricane Ike, volume levels, excluding acquisitions, slightly exceeded the same period in 2007.

	Three Months Ended September 30,						$ Change			% Change
	2008			2007
Revenues	$	1,362.7		$	1,121.4		$	241.3		22	%
Cost of sales		1,078.2			846.0			232.2		27	%
Gross profit		284.5			275.4			9.1		3	%
Selling and administrative expenses		111.0			103.7			7.3		7	%
Research, testing and development expenses		55.8			56.0			(0.2	)	—
Amortization of intangible assets		6.8			5.8			1.0		17	%
Restructuring and impairment charges		5.7			2.1			3.6			*
Other (income) expense-net		(2.5	)		(5.5	)		3.0		(55	)%
Interest income		(3.3	)		(6.9	)		3.6		(52	)%
Interest expense		21.6			21.7			(0.1	)	—
Income before income taxes		89.4			98.5			(9.1	)	(9	)%
Provision for income taxes		26.2			27.1			(0.9	)	(3	)%
Net income	$	63.2		$	71.4		$	(8.2	)	(11	)%
Net income per share, basic	$	0.93		$	1.03		$	(0.10	)	(10	)%
Net income per share, diluted	$	0.92		$	1.02		$	(0.10	)	(10	)%

* Calculation not meaningful

Revenues The increase in revenues for the three months ended September 30, 2008 compared with the same period in 2007 was due to a 17% improvement in the combination of price and product mix, a 3% favorable currency impact and a 2% increase in volume. Included in these factors were incremental revenues from a 2007 acquisition, which contributed 2% to revenues for the quarter.

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Analysis of Volume - 2008 vs. 2007 Volume patterns vary in different geographic zones. The following table shows the geographic mix of our volume for the three months ended September 30, 2008 as well as the percentage changes compared with the same period in 2007:

	3rd Quarter 2008 Volume		3rd Quarter 2008 vs. 2007 % Change		Excluding the Impactof Acquisitions % Change
North America	41	%	(9	)%	(10	)%
Europe	28	%	9	%	7	%
Asia-Pacific / Middle East	24	%	19	%	18	%
Latin America	7	%	(4	)%	(5	)%
Total	100	%	2	%	1	%

Segment volume variances by geographic zone, as well as the factors explaining the changes in segment revenues for the three months ended September 30, 2008 compared with the same period in 2007, are contained within the “Segment Analysis” section.

Cost of Sales The increase in cost of sales for the three months ended September 30, 2008 compared with the same period in 2007 primarily was due to higher raw material costs, higher manufacturing expenses and an increase in volume. Average raw material cost increased 29% in the third quarter of 2008 compared with the same period in 2007. Total manufacturing expenses increased 15% in the third quarter of 2008 compared with the same quarter last year primarily due to an unfavorable currency impact, incremental costs of $8.5 million related to Hurricane Ike, higher utilities, increased contract labor, and increased salaries and benefits, partially offset by lower environmental-related charges. On a per-unit-sold basis, manufacturing costs increased 13% in the third quarter of 2008 compared with the same quarter in the prior year. Excluding hurricane-related costs, on a per-unit-sold basis, manufacturing costs increased 9% in the third quarter of 2008 compared with the same quarter in the prior year.

Gross Profit Gross profit increased $9.1 million, or 3%, for the three months ended September 30, 2008 compared with the same period in 2007. The increase primarily was due to an improvement in the combination of price and product mix, a favorable currency impact and higher volume, partially offset by higher average raw material cost and higher manufacturing expenses, including those costs attributable to Hurricane Ike. Our gross profit percentage decreased in the third quarter of 2008 to 20.9% compared with 24.6% in the same quarter last year as the increase in revenues from higher volumes and pricing improvements to recover higher raw material costs was substantially greater than the increase in gross profit dollars.

Selling and Administrative Expenses Selling and administrative expenses increased $7.3 million, or 7%, for the three months ended September 30, 2008 compared with the same period in 2007. The increase primarily was due to higher information technology costs, including the implementation of a common information systems platform primarily in the Lubrizol Advanced Materials segment, and an unfavorable currency impact, partially offset by lower incentive compensation expense.

Research, Testing and Development Expenses Research, testing and development expenses in the third quarter of 2008 were comparable with the same quarter in 2007.

Restructuring and Impairment Charges We recorded aggregate restructuring and impairment charges of $5.7 million for the three months ended September 30, 2008. The restructuring and impairment charges primarily related to the decision in the third quarter of 2008 to close a Lubrizol Additives blending, packaging and

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warehouse site in Ontario, Canada, in addition to business improvement initiatives in the Lubrizol Advanced Materials segment. We expect operations at the Ontario, Canada facility to end by June 30, 2009. Approximately 30 employees will be impacted by this facility closure. We expect the facility closure to result in restructuring and impairment charges of approximately $10.9 million, of which $5.0 million has been incurred to date and $0.6 million is expected to be recognized in the remainder of 2008.

The components of restructuring and impairment charges are detailed as follows:

	Three Months Ended September 30, 2008
	Asset Impairments		Other Plant Exit Costs		Severance and Benefits		Total
Performance Coatings 2008 business improvement initiatives	$	0.3	$	—	$	0.2	$	0.5
Lubrizol Additives plant closure and workforce reductions		—		—		5.0		5.0
Lubrizol Advanced Materials workforce reductions		—		—		0.2		0.2
Total restructuring and impairment charges	$	0.3	$	—	$	5.4	$	5.7

	Three Months Ended September 30, 2007
	Asset Impairments		Other Plant Exit Costs		Severance and Benefits		Total
Lubrizol Advanced Materials production line impairment and workforce reductions	$	2.0	$	—	$	0.1	$	2.1

Interest Income The decrease in interest income in the third quarter of 2008 compared with the same period in 2007 primarily was due to our lower cash and cash equivalents balance and lower average interest rates.

Interest Expense Interest expense in the third quarter of 2008 was comparable with the same period in 2007 as the reduction in interest expense from lower debt balances was offset by higher average interest rates.

Provision for Income Taxes Our effective tax rate was 29.3% in the third quarter of 2008 compared with 27.5% in the the same period in 2007. The effective tax rate for the third quarter of 2008 was higher than the same period in 2007 due to the favorable resolution of tax matters from prior years during the third quarter of 2007.

Net Income Primarily as a result of the above factors, net income per diluted share decreased 10% to $0.92 for the three months ended September 30, 2008 compared with $1.02 in the same period in 2007.

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Nine Months Ended September 30, 2008 Compared With Nine Months Ended September 30, 2007

Net income decreased $8.8 million to $214.9 million for the nine months ended September 30, 2008 compared with $223.7 million for the same period in 2007. The decrease in earnings primarily was due to higher raw material costs, higher manufacturing expenses, an increase in restructuring and impairment charges, the impact of Hurricane Ike and higher selling, technology, administrative and research (STAR) expenses, offset by an improvement in the combination of price and product mix, an increase in volume, a favorable currency impact and contributions from acquisitions.

	Nine Months Ended September 30,						$ Change			% Change
	2008			2007
Revenues	$	3,940.2		$	3,352.7		$	587.5		18	%
Cost of sales		3,057.4			2,503.0			554.4		22	%
Gross profit		882.8			849.7			33.1		4	%
Selling and administrative expenses		321.5			309.4			12.1		4	%
Research, testing and development expenses		165.6			161.4			4.2		3	%
Amortization of intangible assets		20.8			17.7			3.1		18	%
Restructuring and impairment charges		25.1			0.6			24.5			*
Other (income) expense-net		(6.4	)		(9.7	)		3.3		(34	)%
Interest income		(10.6	)		(20.9	)		10.3		(49	)%
Interest expense		60.2			70.3			(10.1	)	(14	)%
Income before income taxes		306.6			320.9			(14.3	)	(4	)%
Provision for income taxes		91.7			97.2			(5.5	)	(6	)%
Net income	$	214.9		$	223.7		$	(8.8	)	(4	)%
Net income per share, basic	$	3.15		$	3.23		$	(0.08	)	(2	)%
Net income per share, diluted	$	3.12		$	3.19		$	(0.07	)	(2	)%

* Calculation not meaningful

Revenues The increase in revenues for the nine months ended September 30, 2008 compared with the same period in 2007 was due to a 10% improvement in the combination of price and product mix, a 4% increase in volume and a 4% favorable currency impact. Included in these factors were incremental revenues from our 2007 acquisitions, which contributed 2% to revenues for the period.

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Analysis of Volume - 2008 vs. 2007 Volume patterns vary in different geographic zones. The following table shows the geographic mix of our volume for the nine months ended September 30, 2008 as well as the percentage changes compared with the same period in 2007:

	Year-to-Date 2008 Volume		Year-to-Date 2008 vs. 2007 % Change		Excluding the Impact of Acquisitions % Change
North America	42	%	(6	)%	(7	)%
Europe	27	%	8	%	6	%
Asia-Pacific / Middle East	24	%	19	%	17	%
Latin America	7	%	19	%	18	%
Total	100	%	4	%	3	%

Segment volume variances by geographic zone, as well as the factors explaining the changes in segment revenues for the nine months ended September 30, 2008 compared with the same period in 2007, are contained within the “Segment Analysis” section.

Cost of Sales The increase in cost of sales for the nine months ended September 30, 2008 compared with the same period in 2007 primarily was due to higher raw material and manufacturing costs and an increase in volume. Average raw material cost increased 21% during 2008 compared with the same period in 2007. Total manufacturing expenses increased 9% for the nine months ended September 30, 2008 compared with the same period last year primarily due to an unfavorable currency impact, increased salaries and benefits, utilities, incremental costs of $8.5 million related to Hurricane Ike, and increased maintenance materials, partially offset by lower environmental-related charges. On a per-unit-sold basis, manufacturing costs increased 5% for the nine months ended September 30, 2008 compared with the same period in the prior year.

Gross Profit Gross profit increased $33.1 million, or 4%, for the nine months ended September 30, 2008 compared with the same period in 2007. The increase primarily was due to an improvement in the combination of price and product mix, higher volume and a favorable currency impact, partially offset by higher average raw material cost and higher manufacturing expenses. Our gross profit percentage decreased to 22.4% for the nine months ended September 30, 2008 compared with 25.3% in the same period last year as the increase in revenues from higher volume and pricing improvements to recover higher raw material costs was substantially greater than the increase in gross profit dollars.

Selling and Administrative Expenses Selling and administrative expenses increased $12.1 million, or 4%, for the nine months ended September 30, 2008 compared with the same period in 2007. The increase primarily was due to an unfavorable currency impact, an increase in salaries and benefits, mostly attributable to annual merit increases and growth resources in the Lubrizol Advanced Materials segment, and an increase associated with the implementation of a common information systems platform primarily in the Lubrizol Advanced Materials segment, partially offset by a decrease in incentive compensation expense.

Research, Testing and Development Expenses Research, testing and development expenses increased $4.2 million, or 3%, for the nine months ended September 30, 2008 compared with the same period in 2007 primarily due to an increase in salaries and benefits, higher outside testing expenses and an unfavorable currency impact.

Restructuring and Impairment Charges For the nine months ended September 30, 2008 and 2007, we recorded aggregate restructuring and impairment charges of $25.1 million and $0.6 million, respectively. The restructuring and impairment charges during the nine months ended September 30, 2008 primarily related to business

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improvement initiatives in the performance coatings product line of the Lubrizol Advanced Materials segment and the decision to close a Lubrizol Additives blending, packaging and warehouse site in Ontario, Canada.

In the first nine months of 2007, the restructuring and impairment charges primarily related to asset impairment charges of approximately $2.5 million for product lines in the Lubrizol Advanced Materials segment, offset by a pretax gain and restructuring credit of $2.8 million recorded on the sale of the manufacturing facility located in Bromborough, U.K. in January 2007 for net cash proceeds of $5.9 million.

The components of restructuring and impairment charges are detailed as follows:

	Nine Months Ended September 30, 2008
	Asset Impairments		Other Plant Exit Costs		Severance and Benefits		Total
Performance Coatings 2008 business improvement initiatives	$	14.7	$	0.4	$	4.4	$	19.5
Lubrizol Additives plant closure and workforce reductions		—		—		5.0		5.0
Lubrizol Advanced Materials product line impairments and workforce reductions		0.3		—		0.3		0.6
Total restructuring and impairment charges	$	15.0	$	0.4	$	9.7	$	25.1

	Nine Months Ended September 30, 2007
	Asset Impairments (Gains)			Other Plant Exit Costs		Severance and Benefits		Total
Lubrizol Advanced Materials plant closures and workforce reductions	$	2.5		$	0.2	$	0.6	$	3.3
Bromborough, U.K. plant closure and sale		(2.8	)		0.1		—		(2.7	)
Total restructuring and impairment (credits) charges	$	(0.3	)	$	0.3	$	0.6	$	0.6

Other Income-Net Other income-net of $6.4 million for the nine months ended September 30, 2008 primarily consisted of a net favorable currency impact and a $2.0 million gain associated with the settlement of an antitrust lawsuit, partially offset by minority interest earnings. Other income-net of $9.7 million in the same period in 2007 primarily consisted of a $5.0 million gain recorded on the sale of land in the Lubrizol Additives segment.

Interest Income The decrease in interest income for the nine months ended September 30, 2008 compared with the same period in 2007 primarily was due to our lower cash and cash equivalents balance and lower average interest rates.

Interest Expense The decrease in interest expense for the nine months ended September 30, 2008 compared with the same period in 2007 was due to our reduced debt balances and lower average interest rates.

Provision for Income Taxes Our effective tax rate was 29.9% for the nine months ended September 30, 2008 compared with 30.3% for the same period in 2007. The decrease in the effective tax rate primarily was a result of lower U.S. tax on foreign income and improvements in our geographic earnings mix, partially offset by the non-recurrence of benefits from the favorable resolution of tax matters in 2007.

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Net Income Primarily as a result of the above factors, net income per diluted share decreased 2% to $3.12 for the nine months ended September 30, 2008 compared with $3.19 in the same period in 2007.

SEGMENT ANALYSIS

We primarily evaluate performance and allocate resources based on segment operating income, defined as revenues less expenses identifiable to the product lines included within each segment, as well as projected future returns. Segment operating income will reconcile to consolidated income before income taxes by deducting net corporate expenses that are not attributable to the operating segments, restructuring and impairment charges and net interest expense.

The proportion of consolidated revenues and segment operating income attributed to each segment was as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2008		2007		2008		2007
Revenues:
Lubrizol Additives	69	%	66	%	68	%	65	%
Lubrizol Advanced Materials	31	%	34	%	32	%	35	%
Segment Operating Income:
Lubrizol Additives	78	%	76	%	77	%	72	%
Lubrizol Advanced Materials	22	%	24	%	23	%	28	%

The operating results by segment were as follows:

	Three Months Ended September 30,				$ Change			% Change		Nine Months Ended September 30,				$ Change			% Change
	2008		2007							2008		2007
Revenues:
Lubrizol Additives	$	940.7	$	738.8	$	201.9		27	%	$	2,690.4	$	2,193.8	$	496.6		23	%
Lubrizol Advanced Materials		422.0		382.6		39.4		10	%		1,249.8		1,158.9		90.9		8	%
Total	$	1,362.7	$	1,121.4	$	241.3		22	%	$	3,940.2	$	3,352.7	$	587.5		18	%
Gross Profit:
Lubrizol Additives	$	181.3	$	176.7	$	4.6		3	%	$	567.4	$	531.2	$	36.2		7	%
Lubrizol Advanced Materials		103.2		98.7		4.5		5	%		315.4		318.5		(3.1	)	(1	)%
Total	$	284.5	$	275.4	$	9.1		3	%	$	882.8	$	849.7	$	33.1		4	%
Segment Operating Income:
Lubrizol Additives	$	98.3	$	97.0	$	1.3		1	%	$	328.3	$	304.3	$	24.0		8	%
Lubrizol Advanced Materials		28.3		30.9		(2.6	)	(8	)%		96.2		119.8		(23.6	)	(20	)%
Total	$	126.6	$	127.9	$	(1.3	)	(1	)%	$	424.5	$	424.1	$	0.4		—

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Three Months Ended September 30, 2008 Compared With Three Months Ended September 30, 2007

LUBRIZOL ADDITIVES SEGMENT

Revenues Revenues increased 27% for the three months ended September 30, 2008 compared with the same period in 2007. The increase was due to a 20% increase in the combination of price and product mix, a 4% increase in volume and a 3% favorable currency impact. Included in these factors were the incremental revenues from the refrigeration lubricants acquisition completed in 2007, which contributed 3% to revenues in the quarter.

Volume patterns vary in different geographic zones. The following table shows the geographic mix of our volume for the three months ended September 30, 2008 as well as the percentage changes compared with the same period in 2007:

	3rd Quarter 2008 Volume		3rd Quarter 2008 vs. 2007 % Change		Excluding the Impact of Acquisitions % Change
North America	31	%	(11	)%	(12	)%
Europe	33	%	13	%	10	%
Asia-Pacific / Middle East	28	%	19	%	17	%
Latin America	8	%	(2	)%	(3	)%
Total	100	%	4	%	2	%

Stronger customer demand, emerging market growth and favorable customer order patterns in the Asia-Pacific / Middle East region, particularly China, led to increased volume in two of our three international zones. The volume decrease in North America for the three-month comparative period primarily was due to delayed customer shipments as a result of Hurricane Ike, lower customer demand and the introduction of more concentrated products, partially offset by the favorable impact from an acquisition. The refrigeration lubricants acquisition contributed 2% to our overall volume increase in the third quarter of 2008 compared with the same period in 2007. We estimated that Hurricane Ike negatively impacted our third quarter volume by approximately 3% due to delayed shipments, of which more than 75% was attributed to our North America region.

Gross Profit Gross profit increased $4.6 million, or 3%, in the third quarter of 2008 compared with the same period in 2007. The increase primarily related to improvements in the combination of price and product mix, higher volume, favorable currency and contributions from the refrigeration lubricants acquisition, substantially offset by higher raw material and manufacturing costs. Average raw material cost increased 34% for the three months ended September 30, 2008 compared with the same period in 2007. In the third quarter of 2008, we implemented global price increases announced in May and July to offset the higher cost of sales associated with continued increases in raw material costs and energy-related operating expenses. We expect the full impact of these increases to be realized in the fourth quarter of 2008. Total manufacturing costs increased 17% in the third quarter of 2008 compared with the same period in 2007. The increase in total manufacturing costs primarily was due to $7.8 million of costs related to Hurricane Ike, an unfavorable currency impact, higher volume, higher utilities and increased salaries and wages, partially offset by lower environmental-related charges. Manufacturing costs on a per-unit-sold basis increased 21% for the three-month comparative period. Excluding hurricane-related costs, on a per-unit-sold basis, manufacturing costs increased 14% in the third quarter of 2008 compared with the same quarter in the prior year.

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The gross profit percentage decreased to 19.3% for the three months ended September 30, 2008 from 23.9% in the same period in 2007 as the increase in revenues from higher volumes and pricing improvements to recover higher raw material costs were substantially greater than the increase in gross profit dollars. The impact of Hurricane Ike-related costs also contributed to this decrease.

Selling, Technical, Administrative and Research Expenses STAR expenses increased $1.3 million, or 2%, for the three months ended September 30, 2008 compared with the same period in 2007. The increase in STAR expenses primarily was due to an unfavorable currency impact, mostly offset by a decrease in incentive compensation expense.

Segment Operating Income Segment operating income increased 1% for the three months ended September 30, 2008 compared with the same period in 2007 due to the factors discussed above.

LUBRIZOL ADVANCED MATERIALS SEGMENT

Revenues Revenues increased 10% for the three months ended September 30, 2008 compared with the same period in 2007. The increase was due to a 12% increase in the combination of price and product mix and a 2% favorable currency impact, partially offset by a 4% decrease in volume.

Volume patterns vary in different geographic zones. The following table shows the geographic mix of our volume for the three months ended September 30, 2008 as well as the percentage changes compared with the same period in 2007:

	3rd Quarter 2008 Volume		3rd Quarter 2008 vs. 2007 % Change
North America	64	%	(8	)%
Europe	16	%	(4	)%
Asia-Pacific / Middle East	16	%	20	%
Latin America	4	%	(13	)%
Total	100	%	(4	)%

Volume in North America decreased 8% as an increase in our engineered polymers product line was more than offset by a decrease in our performance coatings product line. The increase in our engineered polymers product line primarily was due to strong customer demand in advance of announced price increases in our TempRite^® engineered polymers business predominately in commercial water, industrial and fire sprinkler applications. The decrease in our performance coatings product line was due to continued weakness in textile applications as well as lower demand in inks and paint and coatings applications.

Volume in Europe decreased 4% as an increase in our engineered polymers product line was more than offset by decreases in our performance coatings and Noveon^® consumer specialties product lines. The increase in our engineered polymers product line was due to increased customer demand in plumbing and explosives applications. Volume decreased in our performance coatings product line as we experienced lower customer demand in paint and coatings, textile and graphic arts applications. Volume in our Noveon consumer specialties product line decreased due to business loss in our AMPS^® specialty monomers business largely as a result of production problems that occurred in 2007, as well as weaker customer demand in personal care applications.

Volume in Asia-Pacific / Middle East increased 20% with increases in our engineered polymers and performance coatings product lines. The increase in our engineered polymers product line was due to increased customer

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demand in India, China and the Middle East in our TempRite business, predominately in plumbing applications. The increase in our performance coatings product line was due to increased customer demand in paints and coatings, paper and packaging applications.

Volume in Latin America decreased 13% as an increase in our Noveon consumer specialties product line was more than offset by a decrease in our engineered polymers and performance coatings product lines. The increase in our Noveon consumer specialties product line was due to higher demand in personal care applications. The decrease in our engineered polymers product line was due to customer order patterns in our TempRite business. The decrease in our performance coatings product line was due to lower customer demand in inks and textile applications.

Gross Profit Gross profit increased $4.5 million in the third quarter of 2008 compared with the same period in 2007. The increase primarily related to volume increases in the TempRite business as well as improved pricing in our Noveon consumer specialties product line, offset by increased raw material costs and lower volumes in our performance coatings product line and our Estane^® business. For the three months ended September 30, 2008, we experienced a 17% increase in average raw material cost compared with the same period in 2007. Total manufacturing costs increased 12% in the third quarter of 2008 compared with the same period in 2007 primarily due to an unfavorable currency impact, increased depreciation expense, and increased salaries and benefits attributable to annual merit increases. Manufacturing costs on a per-unit-sold basis were 17% higher for the three-month comparative period.

The gross profit percentage decreased to 24.5% for the three months ended September 30, 2008 from 25.8% in the same period in 2007. The decrease in gross profit percentage primarily was due to increased raw material costs, which outpaced increased selling prices, and decreased volume.

Selling, Technical, Administrative and Research Expenses STAR expenses increased $6.5 million, or 10%, for the three months ended September 30, 2008 compared with the same period in 2007. The increase in STAR expenses primarily was due to higher costs associated with the implementation of a common information systems platform, increased salaries and benefits and an unfavorable currency impact.

Segment Operating Income Segment operating income decreased 8% for the three months ended September 30, 2008 compared with the same period in 2007 due to the factors discussed above.

Nine Months Ended September 30, 2008 Compared With Nine Months Ended September 30, 2007

LUBRIZOL ADDITIVES SEGMENT

Revenues Revenues increased 23% for the nine months ended September 30, 2008 compared with the same period in 2007. The increase was due to an improvement in the combination of price and product mix of 11%, an 8% increase in volume and a 4% favorable currency impact. Included in these factors were the incremental revenues from our 2007 acquisitions, which contributed 3% to revenues for the nine months ended September 30, 2008.

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Volume patterns vary in different geographic zones. The following table shows the geographic mix of our volume for the nine months ended September 30, 2008 as well as the percentage changes compared with the same period in 2007:

	Year-to-Date 2008 Volume		Year-to-Date 2008 vs. 2007 % Change		Excluding the Impact of Acquisitions % Change
North America	32	%	(5	)%	(7	)%
Europe	32	%	12	%	9	%
Asia-Pacific / Middle East	28	%	19	%	17	%
Latin America	8	%	19	%	18	%
Total	100	%	8	%	6	%

Stronger customer demand, emerging market growth and favorable customer order patterns in Asia-Pacific / Middle East, particularly China, led to increased volume in our international zones. The volume decrease in North America for the nine-month comparative period primarily was due to lower customer demand in both our product lines, delayed customer shipments as a result of Hurricane Ike and the introduction of more concentrated products, partially offset by the favorable impact of acquisitions. Acquisitions contributed 2% to our overall volume increase for the first nine months of 2008 compared with the same period in 2007. We estimated that Hurricane Ike negatively impacted our nine-month volume by approximately 1% due to delayed shipments, of which more than 75% was attributed to our North America region.

Gross Profit Gross profit increased $36.2 million, or 7%, for the nine months ended September 30, 2008 compared with the same period in 2007. The increase primarily related to improvements in the combination of price and product mix, higher volume, favorable currency and contributions from acquisitions, substantially offset by increased raw material and manufacturing costs. Average raw material cost increased 23% for the nine months ended September 30, 2008 compared with the same period in 2007. In the first nine months of 2008, we implemented several global price increases to offset the higher cost of sales associated with continued increases in raw material and energy-related operating costs. Total manufacturing costs increased 11% in the first nine months of 2008 compared with the same period in 2007. The increase in total manufacturing costs primarily was due to higher volume, an unfavorable currency impact, higher utilities, increased salaries and benefits, incremental costs related to Hurricane Ike and higher maintenance supplies and materials and contract labor costs, partially offset by lower environmental-related charges. Manufacturing costs on a per-unit-sold basis were 7% higher for the nine-month comparative period.

The gross profit percentage decreased to 21.1% for the nine months ended September 30, 2008 from 24.2% in the same period in 2007 as the increase in revenues from higher volumes and pricing improvements to recover higher raw material costs was substantially greater than the increase in gross profit dollars.

Selling, Technical, Administrative and Research Expenses STAR expenses increased $2.8 million, or 1%, for the nine months ended September 30, 2008 compared with the same period in 2007. The increase in STAR expenses primarily was due to an unfavorable currency impact and increased salaries and benefits attributable to annual merit increases, partially offset by a decrease in incentive compensation expense.

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Other (Income) Expense-Net Other expense-net was $4.7 million in 2008 compared with other income-net of $3.7 million in 2007. Other expense-net for the nine months ended September 30, 2008 included a $2.0 million gain associated with the settlement of an antitrust lawsuit, while other income-net in the same period in 2007 included a $5.0 million gain on the sale of land. Due to the increased earnings from our joint ventures that are included in the consolidated statement of income, other (income) expense-net in 2008 also includes $3.2 million of additional minority interest expense compared with the prior year.

Segment Operating Income Segment operating income increased 8% for the nine months ended September 30, 2008 compared with the same period in 2007 due to the factors discussed above.

LUBRIZOL ADVANCED MATERIALS SEGMENT

Revenues Revenues increased 8% for the nine months ended September 30, 2008 compared with the same period in 2007. The increase was due to an 8% increase in the combination of price and product mix and a 3% favorable currency impact, partially offset by a 3% decrease in volume.

Volume patterns vary in different geographic zones. The following table shows the geographic mix of our volume for the nine months ended September 30, 2008 as well as the percentage changes compared with the same period in 2007:

	Year-to-Date 2008 Volume		Year-to-Date 2008 vs. 2007 % Change
North America	64	%	(7	)%
Europe	17	%	(6	)%
Asia-Pacific / Middle East	14	%	18	%
Latin America	5	%	20	%
Total	100	%	(3	)%

Volume in North America decreased 7% as an increase in our Noveon consumer specialties product line was more than offset by decreases in our performance coatings and engineered polymers product lines. The increase in our Noveon consumer specialties product line was due to strong customer demand as well as business gains in our surfactants business and higher demand in personal care applications. The decrease in our performance coatings product line was due to continued weakness in textile applications as well as lower demand in inks and paint and coatings applications. The decrease in our engineered polymers product line was due to lower demand in plumbing applications impacting our TempRite business. This decrease partially was offset by higher demand in our Estane business, predominately in film and sheet applications.

Volume in Europe decreased 6% as increases in our engineered polymers product line were more than offset by decreases in our performance coatings and Noveon consumer specialties product lines. The increase in our engineered polymers product line was due to increased customer demand in plumbing, industrial and explosives applications. Volume decreased in our performance coatings product line as we experienced lower customer demand in paint and coatings, textile and graphic arts applications. Volume in our Noveon consumer specialties product line decreased due to business loss in our AMPS specialty monomers business largely as a result of production problems that occurred in 2007.

Volume in Asia-Pacific / Middle East increased 18% with increases in all of our product lines. The increase in our engineered polymers product line was due to increased customer demand in our TempRite business, predominately

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in plumbing applications. The increase in our performance coatings product line was due to increased customer demand in paints and coatings, paper and packaging applications. The increase in our Noveon consumer specialties product line was due to increased customer demand in personal care applications.

Volume in Latin America increased 20% due to increases in our engineered polymers and Noveon consumer specialties product lines, partially offset by a decrease in our performance coatings product line. The increase in our engineered polymers product line was due to business gains in plumbing and footwear applications. The increase in our Noveon consumer specialties product line was due to increased customer demand in personal care applications while the decrease in our performance coatings product line was due to lower customer demand in inks and textile applications.

Gross Profit Gross profit decreased $3.1 million, or 1%, for the nine months ended September 30, 2008 compared with the same period in 2007. The decrease primarily related to increased raw material costs, particularly in our TempRite business, and lower volume in our performance coatings product line. This decrease partially was offset by improved pricing in our Estane business as well as volume increases in the Noveon consumer specialties product line and Estane business. For the nine months ended September 30, 2008, we experienced a 17% increase in average raw material cost compared with the same period in 2007. Total manufacturing costs increased 5% for the nine months ended September 30, 2008 compared with the same period in 2007 primarily due to an unfavorable currency impact, increased salaries and benefits attributable to annual merit increases and increased depreciation expense, offset by lower environmental-related charges. Manufacturing costs on a per-unit-sold basis increased 8% for the nine-month comparative period.

The gross profit percentage decreased to 25.2% for the nine months ended September 30, 2008 from 27.5% in the same period in 2007. The decrease in gross profit percentage primarily was due to increased raw material costs, which outpaced increased selling prices.

Selling, Technical, Administrative and Research Expenses STAR expenses increased $19.8 million, or 11%, for the nine months ended September 30, 2008 compared with the same period in 2007. The increase in STAR expenses primarily was due to higher costs associated with the implementation of a common information systems platform, an unfavorable currency impact and increased salaries and benefits attributable to annual merit increases, partially offset by a decrease in incentive compensation expense and the favorable resolution of non-income tax related audits.

Segment Operating Income Segment operating income decreased 20% for the nine months ended September 30, 2008 compared with the same period in 2007 due to the factors discussed above.

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WORKING CAPITAL, LIQUIDITY AND CAPITAL RESOURCES

The following table summarizes the major components of cash flow:

	Nine Months Ended September 30,
	2008			2007
Cash provided by (used for):
Operating activities	$	182.7		$	406.5
Investing activities		(194.5	)		(125.7	)
Financing activities		(131.3	)		(221.1	)
Effect of exchange-rate changes on cash		13.2			10.6
Net (decrease) increase in cash and cash equivalents	$	(129.9	)	$	70.3

OPERATING ACTIVITIES

The decrease in cash provided by operating activities for the nine months ended September 30, 2008 compared with the same period in 2007 primarily was attributable to a significant increase in our working capital investment in 2008 and the 2007 cash flow benefit from our initiative to reduce inventories. During 2008, significantly higher raw material costs and selling prices contributed to increased inventories and accounts receivable.

We manage inventories and accounts receivable on the basis of average days sales in inventory and average days sales in receivables. Our goal is to minimize our investment in inventories while at the same time ensuring reliable supply for our customers. Our average days sales in inventory improved to 72.4 days for the nine months ended September 30, 2008 from 73.2 days for the year ended December 31, 2007. Our average days sales in receivables increased to 48.9 days for the nine months ended September 30, 2008 from 47.2 days for the year ended December 31, 2007. The increase in our international sales relative to our domestic sales had an unfavorable impact on our days sales in receivables.

INVESTING ACTIVITIES

Cash used for investing activities increased $68.8 million for the nine months ended September 30, 2008 compared with the same period in 2007. The increase primarily related to higher capital expenditures of $146.8 million for the nine months ended September 30, 2008 compared with $121.6 million for the same period in 2007. In 2008, we estimate annual capital expenditures will be approximately $205.0 million to $215.0 million. For the nine months ended September 30, 2008, we recorded a cash outflow of $50.0 million associated with an investment held in a money market mutual fund that is no longer considered a cash equivalent. See “Capitalization, Liquidity and Credit Facilities” below for further discussion. In 2007, we acquired Lockhart’s metalworking business for approximately $15.7 million and we realized proceeds of $12.9 million from the sales of property and equipment, primarily associated with the sale of the Bromborough, U.K. plant.

FINANCING ACTIVITIES

Cash used for financing activities decreased $89.8 million for the nine months ended September 30, 2008 compared with the same period in 2007. Cash used for financing activities of $131.3 million for the nine months ended September 30, 2008 primarily consisted of the repurchase of common shares and the payment of dividends. Cash used for financing activities in the same period in 2007 was $221.1 million, which primarily consisted of the

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repayment of €60.0 million against our €250.0 million revolving credit agreement, the repurchase of common shares and payment of dividends, partially offset by proceeds from the exercise of stock options.

On September 23, 2008, our board of directors declared a regular quarterly dividend of $0.31 per common share payable December 10, 2008 to shareholders of record at the close of business on November 10, 2008.

CAPITALIZATION, LIQUIDITY AND CREDIT FACILITIES

At September 30, 2008, our total debt outstanding of $1,429.9 million consisted of 72% fixed-rate debt and 28% variable-rate debt, including $400.0 million of fixed-rate debt that effectively has been swapped for a variable rate. Our weighted-average interest rate at September 30, 2008 was approximately 5.6%.

Our net debt to capitalization ratio at September 30, 2008 was 34.3%. Net debt represents total short-term and long-term debt, excluding original issue discounts and unrealized gains and losses on derivative instruments designated as fair-value hedges of fixed-rate debt, reduced by cash and cash equivalents. Capitalization is calculated as shareholders’ equity plus net debt. Total debt as a percent of capitalization was 41.4% at September 30, 2008.

Our ratio of current assets to current liabilities was 2.1 at September 30, 2008.

Our $350.0 million revolving credit facility, which matures in September 2011, allows us to borrow at variable rates based upon the U.S. prime rate or LIBOR plus a specified credit spread. Our €250.0 million revolving credit facility, which matures in September 2010, allows us to borrow at variable rates based on EURIBOR plus a specified credit spread. At September 30, 2008, we had no outstanding borrowings under these agreements.

Our cash and cash equivalents balance of $372.4 million at September 30, 2008 will be used to fund ongoing operations and to pay down debt. We currently anticipate using some of this cash and cash equivalents balance to retire $200.0 million in notes in December 2008.

At September 30, 2008, we had a $50.0 million investment in a money market mutual fund that froze all distributions on September 17, 2008 due to liquidity constraints. Although we gave our redemption notice to this fund prior to September 17, 2008, we did not receive our full distribution. This fund is being liquidated under the supervision of the Securities and Exchange Commission. Accordingly, our holding in this money market mutual fund was no longer classified as a cash equivalent at September 30, 2008 due to its change in liquidity. We received a distribution of $25.4 million in October 2008, and anticipate receiving additional distributions over the next 13 months. We do not expect the delayed distribution of this fund to alter materially our plans with respect to debt retirement or acquisition opportunities.

We continue to believe that our cash flow from operations, borrowing capacity under our credit facilities, and our ability to obtain additional financing provide sufficient liquidity to maintain our current operations, pay dividends, pursue acquisitions and service our debt. However, in response to the current contraction in the credit markets, we have suspended temporarily our share repurchase program as a precaution in order to preserve liquidity.

CONTRACTUAL CASH OBLIGATIONS

Our contractual cash obligations at December 31, 2007 are contained on page 21 of our 2007 Annual Report to shareholders. During the nine months ended September 30, 2008, our non-cancelable purchase commitments decreased approximately $20.7 million to $156.4 million. At September 30, 2008, our non-cancelable purchase commitments by period were $29.0 million, $113.0 million, $10.7 million and $3.7 million for the 2008, 2009-2010, 2011-2012 and 2013 and later periods, respectively. During the nine months ended September 30, 2008, expected contributions to our defined benefit pension plans increased approximately $27.7 million to $58.2 million, primarily as a result of the expected settlement of a non-US pension plan in the fourth quarter of 2008. Other than the changes in non-cancelable purchase commitments and defined benefit pension plans, we do not believe there have been any significant changes in our contractual cash obligations since December 31, 2007.

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Our debt level will require us to dedicate a portion of our cash flow to make interest and principal payments, thereby reducing the availability of our cash for acquisitions or other purposes. Nevertheless, we believe our future operating cash flow will be sufficient to cover debt service, capital expenditures, dividends and other obligations, and that we have untapped borrowing capacity that can provide us with additional financial resources. We currently have a shelf registration statement filed with the SEC pursuant to which debt securities, preferred or common shares, or warrants may be issued. We intend to use our shelf registration to refinance our 4.625% notes due October 1, 2009.

At September 30, 2008, we had $39.8 million of contingent obligations under standby letters of credit issued in the ordinary course of business to financial institutions, customers and insurance companies to secure short-term support for a variety of commercial transactions, insurance and benefit programs.

NEW ACCOUNTING STANDARDS

In May 2008, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 162, “The Hierarchy of Generally Accepted Accounting Principles.” SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with U.S. generally accepted accounting principles (U.S. GAAP). This statement will become effective on November 15, 2008. We do not expect the adoption of this standard to have a material impact on our consolidated financial statements.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities – an amendment of FASB Statement No. 133.” This statement amends the disclosure requirements for derivative instruments and hedging activities in SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities.” SFAS No. 161 requires enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under SFAS No. 133 and its related interpretations and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance and cash flows. This statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. At initial adoption, comparative disclosures for earlier periods are encouraged, but not required. We currently are evaluating the impact of this recently issued standard on our consolidated financial statements.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Financial Statements – an amendment of ARB No. 51.” This statement amends Accounting Research Bulletin No. 51, “Consolidated Financial Statements,” to establish accounting and reporting standards for noncontrolling interests in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. This statement requires consolidated net income attributable to both the parent and the noncontrolling interest to be reported and disclosed in the consolidated financial statements. This statement also requires expanded disclosures in the consolidated financial statements that clearly identify and distinguish between the interests of the parent’s owners and the interests of the noncontrolling owners of a subsidiary. SFAS No. 160 is effective for fiscal years and interim periods beginning after December 15, 2008 and shall be applied prospectively as of the beginning of the fiscal year in which it is initially adopted, except for the presentation and disclosure requirements, which are applied retrospectively for all periods presented. Early adoption is prohibited. We currently are evaluating the impact of this recently issued standard on our consolidated financial statements.

In December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations.” This statement replaces SFAS No. 141, “Business Combinations,” and requires an acquirer to recognize the assets acquired, the

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liabilities assumed and any noncontrolling interests in the acquiree at the acquisition date, measured at their fair values as of that date, with limited exceptions. SFAS No. 141R requires that costs incurred to effect the acquisition be recognized separately from the acquisition as period costs. SFAS No. 141R also requires recognition of restructuring costs that the acquirer expects to incur, but is not obligated to incur, separately from the business combination. In addition, this statement requires an acquirer to recognize assets and liabilities assumed arising from contractual contingencies as of the acquisition date, measured at their acquisition-date fair values. Other key provisions of this statement include the requirement to recognize the acquisition-date fair values of research and development assets separately from goodwill and the requirement to recognize changes in the amount of deferred tax benefits that are recognizable due to the business combination in either income from continuing operations in the period of the combination or directly in contributed capital, depending on the circumstances. At September 30, 2008, we had amounts recorded in our financial statements for unrecognized tax benefits and deferred tax valuation allowances related to past acquisitions. Any reversal of these amounts prior to the adoption of SFAS No. 141R would affect goodwill. However, subsequent to the adoption of SFAS No. 141R, any reversals would affect the income tax provision in the period of reversal. With the exception of certain tax-related aspects described above, this statement applies prospectively to business combinations for which the acquisition date is on or after fiscal years beginning after December 15, 2008. We currently are evaluating the impact of this recently issued standard on our consolidated financial statements.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities.” This statement permits entities to make an irrevocable election to measure many financial instruments and certain other items at fair value at specified election dates. The fair value option may be applied instrument by instrument and must be applied to entire instruments. Unrealized gains and losses on items for which the entity elects the fair value option are reported in earnings. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. We adopted this standard on January 1, 2008 and did not elect to measure any financial instruments or other items at fair value that previously were not required under other accounting standards.

CAUTIONARY STATEMENTS FOR SAFE HARBOR PURPOSES

This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements within the meaning of the federal securities laws. As a general matter, forward-looking statements are those focused upon future plans, objectives or performance as opposed to historical items and include statements of anticipated events or trends and expectations and beliefs relating to matters not historical in nature. Forward-looking statements are subject to uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. These uncertainties and factors could cause our actual results to differ materially from those matters expressed in or implied by any forward-looking statements, although we believe our expectations reflected in those forward-looking statements are based upon reasonable assumptions. For this purpose, any statements contained herein that are not statements of historical fact should be deemed to be forward-looking statements.

We believe that the following factors, among others, could affect our future performance and cause our actual results to differ materially from those expressed or implied by forward-looking statements made in this quarterly report:

• The cost, availability and quality of raw materials, especially petroleum-based products.

• Our ability to sustain profitability of our products in a competitive environment.

• The demand for our products as influenced by factors such as the global economic environment, longer-term technology developments and the success of our commercial development programs.

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• The effects of required principal and interest payments and the access to capital on our ability to fund capital expenditures and acquisitions and to meet operating needs.

• The risks of conducting business in foreign countries, including the effects of fluctuations in currency exchange rates upon our consolidated results and political, social, economic and regulatory factors.

• The extent to which we are successful in expanding our business in new and existing markets and in identifying, understanding and managing the risks inherent in those markets.

• Our ability to identify, finance, complete and integrate acquisitions for profitable growth and operating efficiencies.

• Our success at continuing to develop proprietary technology to meet or exceed new industry performance standards and individual customer expectations.

• Our ability to implement a new common information systems platform primarily into our Lubrizol Advanced Materials segment successfully, including the management of project costs, its timely completion and realization of its benefits.

• Our ability to continue to reduce complexities and conversion costs and modify our cost structure to maintain and enhance our competitiveness.

• Our success in retaining and growing the business that we have with our largest customers.

• The cost and availability of energy, especially natural gas and electricity.

• The effect of interest rate fluctuations on our net interest expense.

• The risk of weather-related disruptions to our Lubrizol Additives production facilities located near the U.S. Gulf Coast.

• Significant changes in government regulations affecting environmental compliance.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

We operate manufacturing and blending facilities, laboratories and offices around the world and utilize fixed-rate and variable-rate debt to finance our global operations. As a result, we are subject to business risks inherent in non-U.S. activities, including political and economic uncertainties, import and export limitations, and market risks related to changes in interest rates and foreign currency exchange rates. We believe the political and economic risks related to our foreign operations are mitigated due to the stability of the countries in which our largest foreign operations are located.

In the normal course of business, we use derivative financial instruments including interest rate and commodity hedges and forward foreign currency exchange contracts to manage our market risks. Our objective in managing our exposure to changes in interest rates is to limit the impact of such changes on our earnings and cash flow. Our objective in managing the exposure to changes in foreign currency exchange rates is to reduce volatility on our earnings and cash flow associated with such changes. Our primary currency exposures are the euro, the pound sterling, the Japanese yen and certain Latin American currencies. Our objective in managing our exposure to changes in commodity prices is to reduce the volatility on earnings of utility expense. We do not hold derivatives for trading purposes.

We measure our market risk related to our holdings of financial instruments based on changes in interest rates, foreign currency rates and commodity prices utilizing a sensitivity analysis. The sensitivity analysis measures the potential loss in fair value, cash flow and earnings based on a hypothetical 10% change (increase and decrease) in interest, currency exchange rates and commodity prices. We use current market rates on our debt and derivative portfolios to perform the sensitivity analysis. Certain items such as lease contracts, insurance contracts and obligations for pension and other postretirement benefits are not included in the analysis.

Our primary interest rate exposures relate to our cash and cash equivalents, fixed-rate and variable-rate debt and interest rate swaps. The calculation of potential loss in fair value is based on an immediate change in the net present values of our interest rate-sensitive exposures resulting from a 10% change in interest rates. The potential loss in cash flow and income before tax is based on the change in the net interest income/expense over a one-year period due to an immediate 10% change in rates. A hypothetical 10% increase or decrease in interest rates would have had a respective favorable or unfavorable impact on fair values of $47.7 million and $49.8 million at September 30, 2008 and December 31, 2007, respectively. In addition, a hypothetical 10% increase or decrease in interest rates would have had a respective unfavorable or favorable impact on annualized cash flows and income before tax of $0.7 million and $0.6 million in 2008 and 2007, respectively.

Our primary currency exchange rate exposures are to foreign currency-denominated debt, intercompany debt, cash and cash equivalents and forward foreign currency exchange contracts. The calculation of potential loss in fair value is based on an immediate change in the U.S. dollar equivalent balances of our currency exposures due to a 10% shift in exchange rates. The potential loss in cash flow and income before tax is based on the change in cash flow and income before tax over a one-year period resulting from an immediate 10% change in currency exchange rates. A hypothetical 10% increase or decrease in currency exchange rates would have had a respective unfavorable or favorable impact on fair values of $20.9 million and $17.0 million at September 30, 2008 and December 31, 2007, respectively. In addition, a hypothetical 10% increase or decrease in currency exchange rates would have had a respective unfavorable or favorable impact on annualized cash flows of $34.2 million and $27.9 million and on annualized income before tax of $11.8 million and $4.1 million in 2008 and 2007, respectively.

Our primary commodity hedge exposures relate to natural gas and electric utility expenses. The calculation of potential loss in fair value is based on an immediate change in the U.S. dollar equivalent balances of our commodity exposures due to a 10% shift in the underlying commodity prices. The potential loss in cash flow and income before tax is based on the change in cash flow and income before tax over a one-year period resulting from

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an immediate 10% change in commodity prices. A hypothetical 10% increase or decrease in commodity prices would have had a respective favorable or unfavorable impact on fair values of $2.1 million and $1.4 million at September 30, 2008 and December 31, 2007, respectively, and on annualized cash flows and income before tax of $2.1 million and $1.5 million in 2008 and 2007, respectively.

Item 4. Controls and Procedures

At the end of the period covered by this quarterly report (September 30, 2008), we carried out an evaluation, under the supervision and with the participation of the company’s management, including our chief executive officer and chief financial officer, of the effectiveness of our disclosure controls and procedures, as such term is defined in Rule 13a-15(e) of the Securities Exchange Act of 1934 (the Exchange Act). Based on that evaluation, our chief executive officer and chief financial officer concluded that as of the end of such period, our disclosure controls and procedures were effective and designed to ensure that all material information required to be disclosed by the company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

During the third quarter of 2008, we continued to refine our implementation of a common information systems platform in the North American operations of our Lubrizol Advanced Materials segment that occurred during the second quarter of 2008. During the third quarter of 2008, we performed additional internal control procedures to provide reasonable assurance with respect to our financial statement preparation and presentation for the periods covered by this quarterly report. We currently are not aware of any material adverse impacts on our internal controls over financial reporting as a result of this change. Other than ongoing changes to internal processes and control procedures related to this implementation, there were no changes in our internal control over financial reporting identified in the evaluation described in the preceding paragraph that occurred during the third quarter of 2008 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1A. Risk Factors

There are no material changes from risk factors as disclosed previously in our Form 10-K for the year ended December 31, 2007.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a) On July 1, 2008, we issued 338 common shares in a private placement transaction exempt from registration under Section 4(2) of the Securities Act of 1933 (the Securities Act). We issued the common shares to one former officer under a senior management deferred compensation plan.

On July 31, 2008, we issued 217 common shares in a transaction exempt from registration under Regulation S of the Securities Act. We issued the common shares to one employee of a wholly owned United Kingdom subsidiary of the company under an employee benefit plan.

On August 1, 2008, we issued 895 common shares in a private placement transaction exempt from registration under Section 4(2) of the Securities Act. We issued the common shares to one participant in a senior management deferred compensation plan.

On September 2, 2008, we issued 331 common shares in private placement transactions exempt from registration under Section 4(2) of the Securities Act. We issued the common shares to one former officer under a senior management deferred compensation plan and to one former director under the deferred compensation plan for directors.

(c) The following table provides information regarding our purchases of Lubrizol common shares during the quarter.

Period	Total Number of Shares Purchased1	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs2	Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs
July 1, 2008 through July 31, 2008	507	$	43.22	0	4,230,918
August 1, 2008 through August 31, 2008	475,357	$	52.67	475,000	3,755,918
September 1, 2008 through September 30, 2008	5	$	52.99	0	3,755,918
Total	475,869			475,000	3,755,918

¹ This column includes common shares (507 in July; 357 in August; and 5 in September) that we purchased pursuant to our deferred compensation plans, whereby we withhold shares upon a distribution to pay the withholding taxes on behalf of the employee.

² This column represents common shares that we purchased at a cost of $25.0 million pursuant to a previously announced share repurchase plan authorized by the board of directors on April 23, 2007. Under this plan, we can repurchase up to five million shares, which will be effected through open market purchases or in negotiated transactions. This plan will expire when we repurchase all of the shares authorized under the plan. This plan is part of our program to repurchase up to $300.0 million common shares through 2009. In response to the current contraction in the credit markets, we have suspended temporarily this share repurchase program.

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Item 6. Exhibits

3.1	Amended Articles of Incorporation of The Lubrizol Corporation, as adopted September 23, 1991 (incorporated by reference to Exhibit 3.1 to The Lubrizol Corporation’s annual report on Form 10-K for the year ended December 31, 2004).
3.2	Regulations of The Lubrizol Corporation, as amended effective April 27, 1992 (incorporated by reference to Exhibit 3.2 to The Lubrizol Corporation’s annual report on Form 10-K for the year ended December 31, 2004).
3.3	Amendment to Article Fourth of Amended Articles of Incorporation (incorporated by reference to Exhibit 4.1 to The Lubrizol Corporation’s annual report on Form 10-K for the year ended December 31, 2004).
10.1*	The Lubrizol Corporation Senior Management Deferred Compensation Plan, as amended.
10.2*	The Lubrizol Corporation 2005 Executive Council Deferred Compensation Plan, as amended.
10.3*	The Lubrizol Corporation 2005 Deferred Compensation Plan for Directors, as amended.
10.4*	The Lubrizol Corporation 2005 Excess Defined Benefit Plan, as amended.
10.5*	Supplemental Retirement Plan for Donald W. Bogus, as amended.
10.6*	Employment Agreement effective January 1, 2003, between The Lubrizol Corporation and Donald W. Bogus, as amended.
10.7*	Form of The Lubrizol Corporation 2005 Stock Incentive Plan Performance Share Award, as amended.
10.8*	The Lubrizol Corporation Annual Incentive Pay Plan, as amended.
31.1	Rule 13a-14(a) Certification of the Chief Executive Officer, as created by Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Rule 13a-14(a) Certification of the Chief Financial Officer, as created by Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of the Chief Executive Officer and Chief Financial Officer of The Lubrizol Corporation pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act.

* Indicates management contract or compensatory plan or arrangement.

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Signatures

Pursuant to the requirements 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.

THE LUBRIZOL CORPORATION

/s/ W. Scott Emerick

W. Scott Emerick

Chief Accounting Officer and Duly Authorized Signatory of The Lubrizol Corporation

Date: November 7, 2008

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EX-10.1

Exhibit 10.1

THE LUBRIZOL CORPORATION

Senior Management Deferred Compensation Plan

(As Amended, October 1, 2008)

1. Purpose. The purpose of this Senior Management Deferred Compensation Plan (the “Plan”) is to permit an a person who is an officer (as identified by the Company for Section 16 purposes under the Securities Exchange Act of 1934) of The Lubrizol Corporation (the “Company”) or, for amounts earned in 2005, who was an officer of the Company during 2004, or effective January 1, 2006, who is selected to participate in the Plan by the Organization and Compensation Committee of the Board of Directors of the Company (“Committee”), (hereinafter referred to as the “Participant”), who wishes, to defer a portion of such Participant’s compensation earned in calendar years beginning on or after January 1, 2005, as provided in the Plan. Notwithstanding any provision to the contrary, prior to January 1, 2006, for purposes of this Plan, an “officer” or “Participant” does not include any employee of Noveon, Inc. or its affiliates.

2. Administration. The Plan shall be administered by the Committee. The Committee’s interpretation and construction of all provisions of the Plan shall be binding and conclusive upon all Participants and their heirs and/or successors.

3. Right to Defer Compensation.

(a) A Participant of the Company may, at any time prior to January 1 of a given calendar year, elect, for the calendar year, to defer under the Plan a pre-selected amount of such Participant’s compensation specified in paragraph (c) below, which such Participant may thereafter be entitled to receive for services performed during such elected calendar year. Notwithstanding the foregoing, if allowed by the Company, at any time up to six months prior to the payment of performance-based long-term incentive compensation, a Participant may elect to defer under the Plan a pre-selected amount of such compensation specified in (c)(iii) below, provided however, that any such election shall only be made in accordance with Section 409A of the Internal Revenue Code of 1986, as amended and the regulations thereunder.

(b) The election under Section 3(a) shall take effect on the first day of the calendar year following the date on which the election is made and such election shall be irrevocable for any elected calendar year after such elected calendar year shall have commenced.

(c) A Participant may elect to defer up to 90 percent of one or more of the following:

(i) Base salary;

(ii) Annual incentive pay, if any.

(iii) Stock compensation from the long term incentive plan, if any.

(iv) Stock compensation pursuant to an employment agreement dated as of January 1, 2003 provided, however, that the actual amount deferred will be the elected amount less any applicable withholding taxes.

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(d) Notwithstanding paragraphs (a), (b) and (c), the first year a Participant becomes eligible to participate in the Plan, he may make an initial deferral election within 30 days after he becomes eligible to participate but only with respect to compensation paid for services performed after the election.

(e) At the time elections are made pursuant to paragraphs (a) or (d), and in addition to the provisions of paragraphs (a) through (d), a Participant may elect to defer that portion or all of the Participant’s cash and/or stock compensation (i) described in paragraph (c) and/or (ii) any other plan or program that provides for cash or stock compensation, to the extent that such amounts would otherwise be nondeductible by the Company pursuant to Section 162(m) of the Internal Revenue Code of 1986, as amended. For purposes of the preceding sentence, the amount to be deferred with respect to any compensation plans payable in Company shares shall be determined by taking into consideration any fixed cash compensation to be received subsequent to the date on which shares are distributable under such program. Notwithstanding any other provision of this Plan, deferrals under this paragraph (e) shall be distributable only six (6) months after the Participant separates from service in accordance with Section 6.

(f) All elections under this Plan shall be made by written notice delivered to the Vice President, Human Resources, of the Company specifying (i) the portion, if any, determined under paragraph (c), of each category of the Participant’s compensation to be deferred for a year, as described above, (ii), if applicable, the time of distribution, and (iii) the payment option as provided in Section 6 for distributions.

(g) Notwithstanding paragraph (f), any compensation earned after the end of the first month in which a Participant under this Plan no longer is a Participant, as defined in Section 1, but continues to be employed by the Company, shall not be deferred, provided however, the balance in the Participant’s Deferral Accounts shall continue to be held and administered pursuant to the Plan; provided further that the provisions of this paragraph (g) shall not apply for amounts earned in 2005.

4. Deferral of Cash Compensation.

(a) On the date the cash compensation (and effective January 1, 2008, stock compensation) deferred under the Plan would have become payable to the Participant in the absence of an election under the Plan to defer payment thereof, the amount of such deferred compensation shall be credited to a Stock Deferral Account and/or any of the Cash Deferral Account investment portfolios designated as available by the Committee from time to time. All Deferral Accounts shall be established and maintained for each Participant in the Company’s accounting books and records and the Company shall be under no obligation to purchase any investments designated by the Participant. To the extent that, at the time amounts are credited to a Participant’s Deferral Accounts, any federal, state or local payroll withholding tax applies (e.g., Medicare withholding tax), the Participant shall be responsible for the payment of such amount to the Company and the Company shall promptly remit such amount to the proper taxing authority.

(b) Participant’s Cash Deferral Accounts shall be credited with any gains or losses equal to those generated as if the Participant’s Cash Deferral Account balances had been invested in the applicable investment portfolio(s) selected by the Participant

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(c) A Participant’s deferred cash compensation (and effective for deferrals after January 1, 2008, stock compensation) credited to a Participant’s Stock Deferral Account shall be used to determine the number of full and fractional units (“Units”) representing Company Common Shares (“Shares”) which the deferred amount would purchase at the closing price for the Shares on the New York Stock Exchange (“NYSE”) composite transactions reporting system on the date that the deferred amount is credited pursuant to paragraph (a) and if Shares were not traded on that date on the NYSE, then such computation shall be made as of the first preceding day on which Shares were so traded. The Company shall credit the Participant’s Stock Deferral Account with the number of full and fractional Units so determined. A Participant’s Stock Deferral Account shall be administered in accordance with Section 5(b) through (e).

(d) A Participant may elect pursuant to rules established by the Committee to transfer a portion or all of the balance of any Deferral Account established under this Section 4 to any other such Deferral Account; provided, however, that effective May 1, 2008, any stock compensation deferred into the Plan will be allocated to a Stock Fund Account where it must remain for more than six months after deferral.

(e) Notwithstanding the foregoing, a Participant may elect to have any portion or all of the Participant’s cash deferrals credited to any of the Deferral Accounts listed in paragraph (a) and may transfer balances in accordance with paragraph (d) provided that the Participant is considered, in the judgment of the Chief Executive Officer of the Company, to be on plan to meet the Participant’s Company Share ownership guideline. Otherwise, a Participant must elect that at least 50% of any cash compensation (and effective January 1, 2008, stock compensation) deferral hereunder be credited to a Stock Deferral Account and may not transfer any portion of the balance of the Stock Deferral Account to another Deferral Account.

5. Deferral of Stock Compensation.

(a) Prior to January 1, 2008, at the time that Shares are distributable to a Participant, who has elected to defer the receipt thereof under Section 3(c) or (e), in lieu of Shares being issued, there shall be credited to a separate Stock Deferral Account for the Participant, full stock equivalent units (“Units”) which shall be established and maintained on the Company’s records. One Unit shall be allocated to the Stock Deferral Account for each such Share. The balance of a Stock Deferral Account established under this Section 5(a) pursuant to deferrals under Section 3(c)(iii) or (iv) may not be transferred to any other Deferral Account.

(b) As of each dividend payment date established by the Company for the payment of cash dividends with respect to its Shares, the Company shall credit each separate Stock Deferral Account of a Participant with an additional number of whole and/or fractional Units equal to:

(i) the product of (x) the dividend per Share which is payable with respect to such dividend payment date, multiplied by (y) the number of whole and fractional Units credited to the separate Stock Deferral Account of a Participant as of such payment date;

divided by

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(ii) The closing price of a Share on the dividend payment date (or if Shares were not traded on that date, on the next preceding day on which Shares were so traded), as reported on the NYSE-composite tape.

(c) At no time prior to actual delivery of Shares pursuant to the Plan, shall the Company be obligated to purchase or reserve Shares for delivery of a Participant and the Participant shall not be a shareholder nor have any of the rights of a shareholder with respect to the Units credited to the Participant’s Stock Deferral Accounts.

(d) To the extent that, at the time Units are credited to a Stock Deferral Account of a Participant, any federal, state or local payroll withholding tax applies (e.g., Medicare withholding tax), the Participant shall be responsible for the payment of such amount to the Company and the Company shall promptly remit such amount to the proper taxing authority.

(e) In the event of any change in the number of outstanding Shares by reason of any stock dividend, stock split up, recapitalization, merger, consolidation, exchange of shares or other similar corporate change, the number of Units in each separate Stock Deferral Account of a Participant shall be appropriately adjusted to take into account any such event.

6. Payment of Deferred Compensation.

(a) In the event a Participant separates from service prior to commencing to receive scheduled withdrawal payments of the Participant’s Deferral Accounts, such scheduled withdrawal payments, if any, that have not commenced pursuant to Section 7, and the amount selected by the Participant to be paid upon a separation from service, shall be paid to the Participant in: (i) a single lump sum; (ii) annual, semi-annual or quarterly substantially equal installments over a period, not exceeding twenty (20) years; or (iii) a specific percentage in a lump sum followed by annual, semi-annual or quarterly substantially equal periodic installments over a period, not exceeding twenty (20) years, as the Participant shall have selected pursuant to Section 3(f). Such periodic payments shall begin or the lump sum payment shall be made, as the case may be, from the Participant’s Deferral Accounts, at such time, within 60 days after not less than six (6) nor more than twelve (12) months after the Participant’s separation from service, as the Participant shall have selected pursuant to Section 3(f); provided, however, that if Participant has not selected a payment option with respect to payment upon a separation from service, such amounts shall be paid in a lump sum within 60 days after the six-month anniversary after Participant’s separation from service. Installment payments made after the first installment or lump sum payment, as the case may be, will be made on the annual, semi-annual or quarterly anniversary of the first installment or lump sum payment, as the case may be, as elected pursuant to Section 3(f). Notwithstanding the foregoing, a Participant may elect not less than twelve (12) months prior to the Participant’s separation from service, to change the time or form of distribution of the Participant’s Deferral Accounts upon a separation from service; provided, however that any such change shall be invalid if the effect of such change is to accelerate distribution; provided, further that upon any such change, the distribution shall be paid at least five (5) years after the date originally selected pursuant to Section 3(f).

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(b) The amount of each installment payable to a Participant from the Participant’s Cash Deferral Accounts shall be determined by dividing the aggregate balance of such Participant’s Cash Deferral Accounts by the number of periodic installments (including the current installment) remaining to be paid. Until a Participant’s Cash Deferral Accounts has been completely distributed, the balance thereof remaining, from time to time, shall be credited with gains and losses on a monthly basis as provided in Section 4(b).

(c) The amount of any installment payable to a Participant from the Participant’s Stock Deferral Accounts shall be determined by dividing the balance of the aggregate number of Units in the Participant’s Stock Deferral Accounts by the number of periodic installments (including the current installment) remaining to be paid and the quotient shall be the number of Shares that are payable. If the determination of the installment payable from the Participant’s Stock Deferral Accounts results in a fractional Share being payable, the installment payment shall exclude any such fractional Share payment except that, in the final installment payment, any such fractional Share shall be paid in cash in an amount as determined by the Committee. Until the Participant’s Stock Deferral Accounts have been completely distributed, the balance in the Stock Deferral Accounts shall continue to be credited with the dividend equivalents on such balances as provided in Section 5(b).

(d) In the event a Participant dies prior to receiving payment of the entire amount of the Participant’s Deferral Accounts, the unpaid balance shall be paid to such beneficiary as the Participant may have designated in writing to the Vice President, Human Resources, of the Company as the beneficiary to receive any such post-death distribution under the Plan or, in the absence of such written designation, to the Participant’s legal representative or to the beneficiary designated in the Participant’s last will as the one to receive such distributions. Distributions upon the death of a Participant shall commence within 60 days after the death of the Participant in: (i) a single lump sum; (ii) annual, semi-annual or quarterly substantially equal installments over a period, not exceeding twenty (20) years; or (iii) a specific percentage in a lump sum followed by annual, semi-annual or quarterly substantially equal installments over a period, not exceeding twenty (20) years as elected by the Participant pursuant to Section 3(f) and the amount of each installment shall be computed as provided in Section 6(b), and (d) as the case may be; provided, however, that if Participant has not selected a payment option with respect to payment upon death, such amounts shall be paid to Participant’s beneficiary in a lump sum within 60 days after the death of the Participant. Installment payments made after the first installment or lump sum payment, as the case may be, will be made on the annual, semi-annual or quarterly anniversary of the first installment or lump sum payment, as the case may be, as elected pursuant to Section 3(f). Notwithstanding the foregoing, a Participant may elect not less than twelve (12) months prior to the Participant’s death, to change the time or form of distribution of the Participant’s Deferral Accounts; provided, however that any such change shall be invalid if the effect of such change is to accelerate distribution; provided, further that upon any such change, the distribution shall be paid at least five (5) years after the date originally selected pursuant to Section 3(f).

(e) In the event a Participant becomes disabled prior to the Participant’s separation from service or scheduled withdrawal date, the unpaid balance shall be paid to the Participant commencing within 60 days after the date of Participant’s disability in: (i) a single lump; (ii) annual, semi-annual or quarterly substantially equal installments over a period, not exceeding twenty (20) years; or (iii) a specified percentage in a lump sum followed by annual, semi-annual or quarterly substantially installments over a period, not

5

exceeding twenty (20) years as elected by the Participant pursuant to Section 3(f) and the amount of each installment shall be computed as provided in Section 6(b), and (d) as the case may be; provided, however, that if Participant has not selected a payment option with respect to payment upon disability, such amounts shall be paid to Participant in a single lump sum within 60 days after Participant’s disability. Installment payments made after the first installment or lump sum payment, as the case may be, will be made on the annual, semi-annual or quarterly anniversary of the first installment or lump sum payment, as the case may be, as elected pursuant to Section 3(f). Notwithstanding the foregoing, a Participant may elect not less than twelve (12) months prior to the Participant’s disability, to change the time or form of distribution of the Participant’s Deferral Accounts, provided, however that any such change shall be invalid if the effect of such change is to accelerate distribution; provided, further that upon any such change, the distribution shall be paid at least five (5) years after the date originally selected pursuant to Section 3(f). For purposes of this paragraph (e), the term “disabled” means (A) the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; or (B) the Participant is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company.

(f) Tax withholding for distributions under Sections 6 and 7 of Participant’s Stock Deferral Accounts shall be made from those Shares otherwise issuable and shall be such number of Shares that will provide for the federal, state and/or local income tax at the rates then applicable for supplemental wages, unless otherwise requested by the Participant, but in no event less than the statutory minimums for tax withholding.

(g) For purposes under paragraph (f) of determining the number of Shares that are to be withheld to provide for the tax withholding, Shares shall be valued at the closing price on the New York Stock Exchange of a Share on the date the Shares are distributable (or if the Shares were not traded on that date, on the next preceding day on which the Shares were so traded). If the determination of the tax withholding would require the withholding of a fractional Share, the Company shall withhold the nearest whole number of Shares needed to pay the tax withholding, rounded up, and remit to the Participant in cash the amount of the excess after the withholding taxes have been satisfied.

(h) Payments from the Cash Deferral Accounts shall be made in cash and payments from the Stock Deferral Accounts shall be made in Shares. The amount of any distribution pursuant to Sections 6 through 8 shall reduce the balance held in the Participant’s corresponding Deferral Accounts as of the date of such distribution. Installment payments shall be made pro-rata from a Participant’s Deferral Accounts.

7. Scheduled Withdrawal Accounts. Pursuant to Section 3 a Participant may elect to receive part or all of the Participant’s deferrals under Section 3(c)(i) and (ii) (and for all deferrals on or after January 1, 2008) in accordance with Participant’s elections for up to three scheduled withdrawal accounts, and with respect to Participant’s deferrals prior to January 1, 2008 pursuant to Section 3(c)(iii) and 3(e) a Participant may elect to receive part or all of Participant’s deferrals in accordance with Participant’s elections for up to three scheduled withdrawal accounts, each of which shall commence within 60 days after the date elected by the Participant pursuant to Section 3(f) in: (i) a single lump sum; (ii) annual, semi-annual or quarterly substantially equal installments over a period, not

6

exceeding twenty (20) years; or (iii) a specified percentage in a lump sum followed by annual, semi-annual or quarterly substantially equal installments over a period, not exceeding twenty (20) years and the amount of each installment shall be computed as provided in Section 6(b), and (c) as the case may be. Installment payments made after the first installment or lump sum payment, as the case may be, will be made on the annual, semi-annual or quarterly anniversary of the first installment or lump sum payment, as the case may be, as elected pursuant to Section 3(f). Notwithstanding the foregoing, a Participant may elect not less than twelve (12) months prior to the Participant’s date of the scheduled withdrawal, to change the time or form of distribution of the Participant’s Deferral Accounts, provided, however that any such change shall be invalid if the effect of such change is to accelerate distribution; provided, further that upon any such change, the distribution shall be paid at least five (5) years after the date originally selected pursuant to Section 3(f).

8. Unforeseeable Emergency. The Committee may accelerate the distribution of part or all of one or more of a Participant’s Deferral Accounts for reasons of an unforeseeable emergency that cannot be met using other resources, as determined by the Committee pursuant to the terms of this Section 8. For purposes of the Plan, an unforeseeable emergency is a severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participant’s spouse, the Participant’s beneficiary or the Participant’s dependent (as defined in Section 152 of the Code, without regard to Section 152(b)(1), (b)(2) and (d)(1)(B)); the loss of Participant’s property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by insurance, for example, not as a result of a natural disaster); or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. A distribution based on severe financial hardship shall not exceed the amount reasonably necessary to satisfy the emergency need (which may include amounts necessary to pay any Federal, state, local or foreign income taxes or penalties reasonably anticipated from the distribution).

9. Non-assignability. None of the rights or interests in any of the Participant’s Deferral Accounts shall, at any time prior to actual payment or distribution pursuant to the Plan, be assignable or transferable in whole or in part, either voluntarily or by operation of law or otherwise, and such rights and interest shall not be subject to payment of debts by execution, levy, garnishment, attachment, pledge, bankruptcy or in any other manner.

10. Interest of Participant. The Company shall be under no obligation to segregate or reserve any funds or other assets for purposes relating to the Plan and, except as set forth in this Plan, no Participant shall have any rights whatsoever in or with respect to any funds or other assets held by the Company for purposes of the Plan or otherwise. Each Participant’s accounts maintained for purposes of the Plan merely constitute bookkeeping entries on records of the Company, constitute the unsecured promise and obligation of the Company to make payments as provided herein, and shall not constitute any allocation whatsoever of any cash, shares or other assets of the Company or be deemed to create any trust or special deposit with respect to any of the Company’s assets. Notwithstanding the foregoing provisions, nothing in this Plan shall preclude the Company from setting aside Shares or funds in trust pursuant to one or more trust agreements between a trustee and the Company. However, no Participant shall have any secured interest or claim in any assets or property of the Company or any such trust and all Shares or funds contained in such trust shall remain subject to the claims of the Company’s general creditors.

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11. Amendment. The Board of Directors of the Company, or the Organization and Compensation Committee may, from time to time, amend or terminate the Plan, provided that no such amendment or termination of the Plan shall adversely affect a Participant’s accounts as they existed immediately before such amendment or termination or the manner of distribution thereof, unless such Participant shall have consented thereto in writing. Notice of any amendment or termination of the Plan shall be given promptly to all Participants.

12. Plan Implementation. This Plan is adopted and effective for deferrals of compensation earned for calendar years beginning on or after January 1, 2005 and amended and restated January 1, 2008.

13. Section 409A Transition Elections. A Participant who prior to January 1, 2008 has made an initial deferral election under this Plan may change the form and/or time of payment with respect to any or all of such elections; provided however that (a) no such election may be made for amounts otherwise payable under this Plan during 2007, and (b) no payment pursuant to such election may be payable prior to May 1, 2008. A Participant who after January 1, 2008 but prior to January 1, 2009 has made an initial deferral election under this Plan may change the form and/or time of payment with respect to any or all of such elections; provided however that (a) no such election may be made for amounts otherwise payable under this Plan during 2008, and (b) no payment pursuant to such election may be payable prior to May 1, 2009.

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EX-10.2

Exhibit 10.2

THE LUBRIZOL CORPORATION

2005 EXECUTIVE COUNCIL

DEFERRED COMPENSATION PLAN

(As Amended, October 1, 2008)

1. Purpose. The purpose of this 2005 Executive Council Deferred Compensation Plan (the “Plan”) is to permit a person who is a member of the Executive Council (sometimes hereinafter referred to as the “Member” or as the “Participant”), and who is employed by The Lubrizol Corporation (the “Company”), to defer a portion of such Member’s compensation earned in calendar years beginning on or after January 1, 2005, as provided in this Plan.

2. Administration. The Plan shall be administered by the Organization and Compensation Committee of the Board of Directors of the Company (the “Committee”). The Committee’s interpretation and construction of all provisions of the Plan shall be binding and conclusive upon all Participants and their heirs and/or successors.

3. Right to Defer Compensation.

(a) A Member may, at any time prior to January 1 of a given calendar year, elect, for one the calendar year commencing with the calendar year immediately following the election (“Participation Year”), to defer under the Plan a pre-selected fixed dollar amount or percentage up to 90 percent of such Member’s annual variable compensation, if any (the “deferred compensation”), under the Company’s annual incentive plan (“Incentive Plan”), which such Participant may thereafter be entitled to receive for services performed during the Participation Year; provided, however that the actual amount deferred will be the elected amount less any applicable withholding taxes. Notwithstanding the foregoing, a Member may prior to March 15, 2005 make an election relating to deferred compensation with respect to services performed on or after January 1, 2005 and on or before December 31, 2005.

(b) The election under this Section 3 shall take effect on the first day of the elected Participation Year and such election shall be irrevocable for any elected Participation Year once such Participation Year shall have commenced.

(c) Notwithstanding paragraphs (a) and (b), the first year a Participant becomes eligible to participate in the Plan, he may make an initial deferral election within 30 days after he becomes eligible to participate but only with respect to compensation paid for services performed after the election.

(d) All elections under this Plan shall be made by written notice (on a form provided by the Company) specifying the deferred compensation, if any, determined under paragraph (a).

(e) A Participant must make an election for each Participation Year. Notwithstanding paragraph (b) and the first sentence of this paragraph (e), any variable compensation earned after the end of the first month in which a Participant under this Plan ceases to be a Member, as defined in Section 1, but continues to be employed by the Company, shall not be deferred, provided however, the balance in the Participant’s Stock Deferral Accounts shall continue to be held and administered pursuant to the Plan.

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(f) All notices by a Participant under the Plan shall be in writing and shall be given to the Company’s Vice President, Human Resources.

(g) Once a Member has met the Member’s Lubrizol stock ownership guidelines, the Member is no longer eligible to make a deferral election under this Plan; provided however, the foregoing shall not apply to a Member who becomes subject to a higher stock ownership guideline due to a change in the stock ownership requirements or due to the Member’s promotion to a higher level of stock ownership requirement until the Member has met the new stock ownership guidelines.

4. Stock Deferral Accounts and Stock Matching Accounts.

(a) At the close of business of the day on which the Incentive Plan deferred compensation would have been payable to the Participant in the absence of the election under the Plan to defer payment thereof, there shall be credited to a separate Stock Deferral Account and Stock Matching Account for each Participant full and fractional stock equivalent units (“Units”) which shall be established as hereinafter provided and shall be maintained for each Participant on the Company’s records.

(b) The number of full and fractional Units that shall be credited to a separate Stock Deferral Account for a Participant shall be equal to an amount determined by dividing the Participant’s deferred compensation for the applicable Participation Year by the average of the closing price for Lubrizol Common Shares (“Shares”) on the New York Stock Exchange (“NYSE”) composite transactions reporting system (“composite tape”) for each of the ten (10) consecutive trading days commencing on the fourth business day following the release of earnings for such Participation Year.

(c) The number of full and fractional Units that shall be credited to a separate Stock Matching Account for a Participant shall be equal to an amount determined by multiplying the number of Units determined in paragraph (b) by .25.

(d) To the extent that, at the time Units are credited to a Stock Deferral Account Stock Matching Account of a Participant, any federal, state or local payroll withholding tax applies (e.g., Medicare withholding tax), the Participant shall be responsible for the payment of such amount to the Company and the Company shall promptly remit such amount to the proper taxing authority.

(e) The amount of deferred compensation used in the formulae set forth in paragraphs (b) and (c) shall not constitute sums due and owing to Participant. Such amounts shall be used solely as part of the formulae to determine the number of full and fractional Units.

(f) As of each dividend payment date established by the Company for the payment of cash dividends with respect to its Shares, the Company shall credit each separate Stock Deferral Account and Stock Matching Account of a Participant with an additional number of whole and/or fractional Units equal to:

(i) the product of (x) the dividend per Share which is payable with respect to such dividend payment date, multiplied by (y) the number of whole and fractional Units credited to the separate Stock Deferral Account and Stock Matching Account, respectively, of the Participant as of such payment date;

2

divided by

(ii) the closing price of a Share on the dividend payment date (or if Shares were not traded on that date, on the next preceding day on which Shares were so traded), as reported on the NYSE- composite tape.

(g) At no time prior to actual delivery of Shares pursuant to the Plan shall the Company be obligated to purchase or reserve Shares for delivery to any Participant and a Participant shall not be a shareholder or have any of the rights of a shareholder with respect to the Units credited to each separate Stock Deferral Account or Stock Matching Account of a Participant.

5. Payment of Deferred Compensation.

(a) All Units credited to a separate Stock Deferral Account and Stock Matching Account of Participant, including dividend equivalents thereon, shall be payable to the Participant in a lump sum within 60 days after the third anniversary from the first date Units were credited to such separate Stock Deferral Account and Stock Matching Account of the Participant under Section 4(a) for a particular Participation Year unless the Participant elects at the time of deferral under Section 3 to have the Units paid six (6) months after the Participant’s separation from service or upon another specified date; provided, however, that after the Participant makes the deferral election under Section 5, the Participant may elect once for any Participation Year of deferral, to change the date of distribution to another in-service year or six (6) months after the Participant has separated from service; provided further, that any such modification must be made in writing at least twelve (12) months prior to the original date of distribution; provided further, that the deferred distribution date must be at least five (5) years after the date originally selected. Amounts so further deferred will be paid within 60 days after the date selected.

(b) All distributions or payments of Units to a Participant in the Participant’s Stock Deferral Account shall be made in Shares equal to the number of whole Units credited to the separate Stock Deferral Account(s) of the Participant which become payable in accordance with Section 5(a). Any fractional number of Units shall be paid in cash in lieu of Shares based on the closing price for a Share on the NYSE composite tape on the date the Stock Deferral Account(s) become payable.

(c) All distributions or payments of Units to a Participant in the Participant’s Stock Matching Account shall be made in cash equal to the number of whole Units credited to the separate Stock Matching Account(s) of the Participant, which become payable in accordance with Section 5(a) multiplied by the closing price for a Share on the NYSE composite tape on the date the Stock Matching Account(s) become payable.

(d) To the extent that, at the time Shares are distributed to a Participant, any federal, state or local payroll withholding tax applies, tax withholding for distributions shall be made from those Shares that would provide for the federal, state and/or local income tax at the rates then applicable for supplemental wages, unless otherwise requested by the Participant, but in no event less than the statutory minimums for tax withholding. For purposes of determining the number of Shares that are to be withheld to provide for the

3

tax withholding, Shares shall be valued at the closing price on the New York Stock Exchange of a Share on the date the Shares are distributable (or if the Shares were not traded on that date, on the next preceding day on which the Shares were so traded). If the determination of the tax withholding would require the withholding of a fractional Share, the Company shall withhold the nearest whole number of Shares needed to pay the tax withholding, rounded up, and remit to the Participant in cash the amount of the excess after the withholding taxes have been satisfied.

(e) In the event a Participant dies prior to receiving payment of the entire amount in each separate Stock Deferral Account and Stock Matching Account of the Participant, the unpaid balance shall be paid within 60 days after the date of death to such beneficiary as the Participant may have designated in writing to the Vice President, Human Resources, of the Company as the beneficiary to receive any such post-death distribution under the Plan or, in the absence of such written designation, to the Participant’s legal representative or to the beneficiary designated in the Participant’s last will as the one to receive such distributions.

(f) To the extent the Committee deems necessary, the Shares distributed to a Participant pursuant to Section 5(a) or 6 or to a beneficiary pursuant to Section 5(e) may contain such restrictions on the right of immediate transfer as the Committee may reasonably determine.

6. Unforeseeable Emergency. The Committee may accelerate the distribution of part or all of one or more of a Participant’s separate Stock Deferral Accounts and Stock Matching Account for reasons of an unforeseeable emergency that cannot be met using other resources, as determined by the Committee pursuant to the terms of this Section 8. For purposes of the Plan, an unforeseeable emergency is a severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participant’s spouse, the Participant’s beneficiary or the Participant’s dependent (as defined in Section 152 of the Code, without regard to Section 152(b)(1), (b)(2) and (d)(1)(B)); the loss of Participant’s property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by insurance, for example, not as a result of a natural disaster); or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. A distribution based on severe financial hardship shall not exceed the amount reasonably necessary to satisfy the emergency need (which may include amounts necessary to pay any Federal, state, local or foreign income taxes or penalties reasonably anticipated from the distribution).

7. Non-assignability. None of the rights or interests in any of the Participant’s separate Stock Deferral Accounts and Stock Matching Accounts shall, at any time prior to actual payment or distribution pursuant to the Plan, be assignable or transferable in whole or in part, either voluntarily or by operation of law or otherwise, and such rights and interest shall not be subject to payment of debts by execution, levy, garnishment, attachment, pledge, bankruptcy or in any other manner.

8. Interest of Participant. The Company shall be under no obligation to segregate or reserve any funds or other assets for purposes relating to the Plan and, except as set forth in this Plan, no Participant shall have any rights whatsoever in or with respect to any funds or other assets held by the Company for purposes of the Plan or otherwise. Each Participant’s separate Stock Deferral Accounts and Stock Matching Accounts maintained for purposes of the Plan merely constitutes a bookkeeping entry on records of the Company,

4

constitutes the unsecured promise and obligation of the Company to make payments as provided herein, and shall not constitute any allocation whatsoever of any cash or other assets of the Company or be deemed to create any trust or special deposit with respect to any of the Company’s assets. Notwithstanding the foregoing provisions, nothing in this Plan shall preclude the Company from setting aside Shares or funds in trust pursuant to one or more trust agreements between a trustee and the Company. However, no Participant shall have any secured interest or claim in any assets or property of the Company or any such trust and all Shares or funds contained in such trust shall remain subject to the claims of the Company’s general creditors.

9. Miscellaneous. In the event of any change in the number of outstanding Shares by reason of any stock dividend, stock split up, recapitalization, merger, consolidation, exchange of shares or other similar corporate change, the number of Units credited to each separate Stock Deferral Account and Stock Matching Account of a Participant shall be appropriately adjusted to take into account any such event.

10. Amendment. The Board of Directors of the Company, or the Organization and Compensation Committee, may, from time to time, amend or terminate the Plan, provided that no such amendment or termination of the Plan shall adversely affect any Stock Deferral Account or Stock Matching Account of a Participant as it existed immediately before such amendment or termination or the manner of distribution thereof, unless such Participant shall have consented thereto in writing. Notice of any amendment or termination of the Plan shall be given promptly to all Participants.

11. Plan Implementation. This Plan is adopted and effective for deferrals of variable compensation earned for calendar years beginning on and after January 1, 2005, and amended and restated January 1, 2008.

12. Section 409A Transition Elections. A Participant who prior to January 1, 2008 has made an initial deferral election under this Plan may change the form and/or time of payment with respect to any or all of such elections provided however, that any election to change the time and/or form of payment shall be made prior to December 1, 2007; provided however that (a) no such election may be made for amounts otherwise payable under this Plan during 2007, and (b) no payment pursuant to such election may be payable prior May 1, 2008.

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EX-10.3

Exhibit 10.3

THE LUBRIZOL CORPORATION

2005 Deferred Compensation Plan For Directors

(As Amended, October 1, 2008)

1. Purpose. The purpose of this 2005 Deferred Compensation Plan For Directors (the “Plan”) is to continue to permit any member of the Board of Directors (the “Participant”) of The Lubrizol Corporation (the “Company”), to defer all or a portion of the compensation earned as a director in calendar years beginning on or after January 1, 2005, until after the Participant separates from service as a director, all as provided in the Plan.

2. Administration. The Plan shall be administered by the Organization and Compensation Committee of the Board of Directors of the Company (the “Committee”). The Committee’s interpretation and construction of all provisions of this Plan shall be binding and conclusive. In the event that a Participant is a member of the Committee, such Participant shall not participate in any decision of the Committee relating to that Participant’s participation in this Plan.

3. Right to Defer Compensation.

(a) Any director of the Company may, at any time prior to January 1 of a given calendar year, elect to defer under this Plan all, or such portion as the director may designate, of (i) that director’s annual retainer fee, (ii) the attendance fees for attending directors’ meetings or committees thereof and/or (iii) stock compensation under The Lubrizol Corporation 2005 Stock Incentive Plan. All compensation deferred shall be deferred on the day that such compensation would otherwise have been paid to the director.

(b) The election described in paragraph (a) shall be made by written notice delivered to the Vice President, Human Resources, of the Company specifying (i) the portion of designated compensation to be deferred for such year, (ii) time of distribution, and (iii) if applicable, the payment option.

(c) The election under this Section 3 shall take effect on the first day of the calendar year following the year in which the election is made. A new election must be made for each calendar year.

(d) Notwithstanding paragraphs (a), (b) and (c), the first year a Participant becomes eligible to participate in the Plan, he may make an initial deferral election within 30 days after he becomes eligible to participate but only with respect to compensation paid for services performed after the election.

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4. Deferral of Cash Compensation.

(a) On the date the cash compensation (and effective January 1, 2008, stock compensation) deferred under the Plan would have become payable to the Participant in the absence of an election under the Plan to defer payment thereof, the amount of such deferred compensation shall be credited to a Stock Deferral Account and/or any of the Cash Deferral Account investment portfolios designated as available by the Committee from time to time. All Deferral Accounts shall be established and maintained for each Participant in the Company’s accounting books and records and the Company shall be under no obligation to purchase any investments designated by the Participant.

(b) Participant’s Cash Deferral Accounts shall be credited with any gains or losses equal to those generated as if the Participant’s Cash Deferral Account balances had been invested in the applicable investment portfolio(s) selected by the Participant

(c) A Participant’s deferred cash compensation (and effective for deferrals after January 1, 2008, stock compensation) credited to a Participant’s Stock Deferral Account shall be used to determine the number of full and fractional units (“Units”) representing Company Common Shares (“Shares”) which the deferred amount would purchase at the closing price for the Shares on the New York Stock Exchange (“NYSE”) composite transactions reporting system on the date that the deferred amount is credited pursuant to paragraph (a) and if Shares were not traded on that date on the NYSE, then such computation shall be made as of the first preceding day on which Shares were so traded. The Company shall credit the Participant’s Stock Deferral Account with the number of full and fractional Units so determined. A Participant’s Stock Deferral Account shall be administered in accordance with Section 5(b) through (e).

(d) A Participant may elect pursuant to rules established by the Committee to transfer a portion or all of the balance of any Deferral Account established under this Section 4 to any other such Deferral Account; provided, however, that effective April 28, 2008, any stock compensation deferred into the Plan will be allocated to a Stock Fund Account where it must remain for more than six months after deferral.

5. Deferral of Stock Compensation.

(a) Prior to January 1, 2008, at the time that Shares are distributable to a Participant, who has elected to defer the receipt thereof under Section 3, in lieu of Shares being issued, there shall be credited to a separate Stock Deferral Account for the Participant, full stock equivalent units (“Units”) which shall be established and maintained on the Company’s records. One Unit shall be allocated to the Stock Deferral Account for each such Share. The balance of a Stock Deferral Account established under this Section 5(a) pursuant to deferrals under Section 3 may not be transferred to any other Deferral Account.

(b) As of each dividend payment date established by the Company for the payment of cash dividends with respect to its Shares, the Company shall credit each separate Stock Deferral Account of a Participant with an additional number of whole and/or fractional Units equal to:

(i) the product of (x) the dividend per Share which is payable with respect to such dividend payment date, multiplied by (y) the number of whole and fractional Units credited to the separate Stock Deferral Account of a Participant as of such payment date;

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divided by

(ii) The closing price of a Share on the dividend payment date (or if Shares were not traded on that date, on the next preceding day on which Shares were so traded), as reported on the NYSE-composite tape.

(c) At no time prior to actual delivery of Shares pursuant to the Plan, shall the Company be obligated to purchase or reserve Shares for delivery of a Participant and the Participant shall not be a shareholder nor have any of the rights of a shareholder with respect to the Units credited to the Participant’s Stock Deferral Accounts.

(d) In the event of any change in the number of outstanding Shares by reason of any stock dividend, stock split up, recapitalization, merger, consolidation, exchange of shares or other similar corporate change, the number of Units in each separate Stock Deferral Account of a Participant shall be appropriately adjusted to take into account any such event.

6. Payment of Deferred Compensation.

(a) In the event a Participant separates from service prior to commencing to receive scheduled withdrawal payments of the Participant’s Deferral Accounts, such scheduled withdrawal payments, if any, that have not commenced pursuant to Section 7, and the amount selected by Participant to be paid upon a separation from service, shall be to the Participant in: (i) a single lump sum; (ii) annual, semi-annual or quarterly substantially equal installments over a period, not exceeding twenty (20) years; or (iii) a specified percentage in a lump sum followed by annual, semi-annual or quarterly substantially equal installments over a period, not exceeding twenty (20) years, as the Participant shall have selected pursuant to Section 3(b). Such periodic payments shall begin or the lump sum payment shall be made, as the case may be, from the Participant’s Deferral Accounts, at such time, within 60 days after not less than six (6) months nor more than twelve (12) months after the Participant’s separation from service, as the Participant shall have selected pursuant to Section 3(b); provided, however, that if Participant has not selected a payment option with respect to payment upon a separation from service, such amounts shall be paid in a lump sum within 60 days after the six-month anniversary after Participant’s separation from service. Installment payments made after the first installment or lump sum payment, as the case may be, will be made on the annual, semi-annual or quarterly anniversary of the first installment or lump sum payment, as the case may be, as elected pursuant to Section 3(b). Notwithstanding the foregoing, a Participant may elect not less than twelve (12) months prior to the Participant’s separation from service, to change the time or form of distribution of the Participant’s Deferral Accounts upon a separation from service; provided, however that any such change shall be invalid if the effect of such change is to accelerate distribution; provided, further that upon any such change, the distribution shall be paid at least five (5) years after the date originally selected pursuant to Section 3(b).

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(b) The amount of each installment payable to a Participant from the Participant’s Cash Deferral Accounts shall be determined by dividing the aggregate balance of such Participant’s Cash Deferral Accounts by the number of periodic installments (including the current installment) remaining to be paid. Until a Participant’s Cash Deferral Accounts has been completely distributed, the balance thereof remaining, from time to time, shall be credited with gains and losses on a monthly basis as provided in Section 4(b).

(c) The amount of any installment payable to a Participant from the Participant’s Stock Deferral Accounts shall be determined by dividing the balance of the aggregate number of Units in the Participant’s Stock Deferral Accounts by the number of periodic installments (including the current installment) remaining to be paid and the quotient shall be the number of Shares that are payable. If the determination of the installment payable from the Participant’s Stock Deferral Accounts results in a fractional Share being payable, the installment payment shall exclude any such fractional Share payment except that, in the final installment payment, any such fractional Share shall be paid in cash in an amount as determined by the Committee. Until the Participant’s Stock Deferral Accounts have been completely distributed, the balance in the Stock Deferral Accounts shall continue to be credited with the dividend equivalents on such balances as provided in Section 5(b).

(d) In the event a Participant dies prior to receiving payment of the entire amount of the Participant’s Deferral Accounts, the unpaid balance shall be paid to such beneficiary as the Participant may have designated in writing to the Vice President, Human Resources, of the Company as the beneficiary to receive any such post-death distribution under the Plan or, in the absence of such written designation, to the Participant’s legal representative or to the beneficiary designated in the Participant’s last will as the one to receive such distributions. Distributions subsequent to the death of a Participant shall commence within 60 days after the death of the Participant in: (i) a single lump sum; (ii) annual, semi-annual or quarterly substantially equal installments over a period, not exceeding twenty (20) years; or (iii) a specified percentage in a lump sum followed by annual, semi-annual or quarterly substantially equal installments over a period, not exceeding twenty (20) years as elected by the Participant pursuant to Section 3(b) and the amount of each installment shall be computed as provided in Section 6(b), and (d) as the case may be; provided, however, that if Participant has not selected a payment option with respect to payment upon death, such amounts shall be paid to Participant’s beneficiary in a lump sum within 60 days after the death of the Participant. Installment payments made after the first installment or lump sum payment, as the case may be, will be made on the annual, semi-annual or quarterly anniversary of the first installment or lump sum payment, as the case may be, as elected pursuant to Section 3(b). Notwithstanding the foregoing, a Participant may elect not less than twelve (12) months prior to the Participant’s death, to change the time or form of distribution of the Participant’s Deferral Accounts; provided, however that any such change shall be invalid if the effect of such change is to accelerate distribution; provided, further that upon any such change, the distribution shall be paid at least five (5) years after the date originally selected pursuant to Section 3(b).

(e) Payments from the Cash Deferral Accounts shall be made in cash and payments from the Stock Deferral Accounts shall be made in Shares. The amount of any distribution pursuant to Sections 6 through 8 shall reduce the balance held in the Participant’s corresponding Deferral Accounts as of the date of such distribution. Installment payments shall be made pro-rata from a Participant’s Deferral Accounts.

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7. Scheduled Withdrawal Accounts. Pursuant to Section 3, a Participant may elect to receive part or all of the Participant’s deferrals in accordance with Participant’s elections pursuant to Section 3(a)(i) and (ii) (and for all deferrals on or after January 1, 2008) for up to three scheduled withdrawal accounts and with respect to Participant’s deferrals prior to January 1, 2007 pursuant to Section 3(a)(iii) a Participant may elect to receive part or all of Participant’s deferrals in accordance with Participant’s elections for up to three scheduled withdrawal accounts,, each of which shall commence within 60 days after the date elected by the Participant pursuant to Section 3(b) in: (i) a single lump sum; (ii) annual, semi-annual or quarterly substantially equal installments over a period, not exceeding twenty (20) years; or (iii) a specified percentage in a lump sum followed by annual, semi-annual or quarterly substantially equal installments over a period, not exceeding twenty (20) years and the amount of each installment shall be computed as provided in Section 6(b), and (c) as the case may be. Notwithstanding the foregoing, a Participant may elect not less than twelve (12) months prior to the Participant’s date of the scheduled withdrawal, to change the time or form of distribution of the Participant’s Deferral Accounts, provided, however that any such change shall be invalid if the effect of such change is to accelerate distribution; provided, further that upon any such change, the distribution shall be paid at least five (5) years after the date originally selected pursuant to Section 3(b).

8. Unforeseen Emergency. The Committee may accelerate the distribution of part or all of one or more of a Participant’s Deferral Accounts for reasons of an unforeseeable emergency that cannot be met using other resources, as determined by the Committee pursuant to the terms of this Section 8. For purposes of the Plan, an unforeseeable emergency is a severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participant’s spouse, the Participant’s beneficiary or the Participant’s dependent (as defined in Section 152 of the Code, without regard to Section 152(b)(1), (b)(2) and (d)(1)(B)); the loss of Participant’s property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by insurance, for example, not as a result of a natural disaster); or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. A distribution based on severe financial hardship shall not exceed the amount reasonably necessary to satisfy the emergency need (which may include amounts necessary to pay any Federal, state, local or foreign income taxes or penalties reasonably anticipated from the distribution).

9. Non-assignability. None of the rights or interests in any of the Participant’s Deferral Accounts shall, at any time prior to actual payment or distribution pursuant to the Plan, be assignable or transferable in whole or in part, either voluntarily or by operation of law or otherwise, and such rights and interest shall not be subject to payment of debts by execution, levy, garnishment, attachment, pledge, bankruptcy or in any other manner.

10. Interest of Participant. The Company shall be under no obligation to segregate or reserve any funds or other assets for purposes relating to the Plan and, except as set forth in this Plan, no Participant shall have any rights whatsoever in or with respect to any funds or other assets held by the Company for purposes of the Plan or otherwise. Each Participant’s accounts maintained for purposes of the Plan merely constitute bookkeeping entries on records of the Company, constitute the unsecured promise and obligation of the Company to make payments as provided herein, and shall not constitute any allocation whatsoever of any cash, shares or other assets of the Company or be deemed to create any trust or special deposit with respect to any of the Company’s assets. Notwithstanding the foregoing provisions, nothing in this Plan shall preclude the Company from setting aside Shares or funds in trust pursuant to one or

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more trust agreements between a trustee and the Company. However, no Participant shall have any secured interest or claim in any assets or property of the Company or any such trust and all Shares or funds contained in such trust shall remain subject to the claims of the Company’s general creditors.

11. Amendment. The Board of Directors of the Company, or the Organization and Compensation Committee may, from time to time, amend or terminate the Plan, provided that no such amendment or termination of the Plan shall adversely affect a Participant’s accounts as they existed immediately before such amendment or termination or the manner of distribution thereof, unless such Participant shall have consented thereto in writing. Notice of any amendment or termination of the Plan shall be given promptly to all Participants.

12. Plan Implementation. This Plan is adopted and effective for deferrals of compensation earned for calendar years beginning on or after January 1, 2005, and amended and restated January 1, 2008.

13. Section 409A Transition Elections. A Participant who prior to January 1, 2008 has made an initial deferral election under this Plan may change the form and/or time of payment with respect to any or all of such elections; provided however that (a) no such election may be made for amounts otherwise payable under this Plan during 2007, and (b) no payment pursuant to such election may be payable prior to May 1, 2008. A Participant who after January 1, 2008 but prior to January 1, 2009 has made an initial deferral election under this Plan may change the form and/or time of payment with respect to any or all of such elections; provided however that (a) no such election may be made for amounts otherwise payable under this Plan during 2008, and (b) no payment pursuant to such election may be payable prior to May 1, 2009.

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EX-10.4

Exhibit 10.4

THE LUBRIZOL CORPORATION

2005 EXCESS DEFINED BENEFIT PLAN

(As Amended and Restated January 1, 2008)

The Lubrizol Corporation hereby establishes, effective January 1, 2005, and amended and restated as of January 1, 2008, The Lubrizol Corporation 2005 Excess Defined Benefit Plan (the “Plan”) for the purposes of providing supplemental benefits to certain employees, as permitted by Section 3(36) of the Employee Retirement Income Security Act of l974 and providing deferred compensation benefits to a select group of management and highly compensated employees.

ARTICLE I

DEFINITIONS AND CONSTRUCTION

1.1 Definitions. For the purposes hereof, the following words and phrases shall have the meanings indicated, unless a different meaning is plainly required by the context:

(a) Code. the term “Code” shall mean the Internal Revenue Code as amended from time to time. Reference to a section of the Code shall include such section and any comparable section or sections of any future legislation that amends, supplements, or supersedes such section.

(b) Company. The term “Company” shall mean The Lubrizol Corporation, an Ohio corporation, its corporate successors and the surviving corporation resulting from any merger of The Lubrizol Corporation with any other corporation or corporations, and any subsidiaries of The Lubrizol Corporation which adopt the Plan.

(c) Lubrizol Pension Plan. The term “Lubrizol Pension Plan” shall mean The Lubrizol Corporation Pension Plan as the same shall be in effect on the date of a Participant’s retirement, death, or other termination of employment.

(d) Participant. The term “Participant” shall mean any person employed by the Company who is designated by the Board of Directors as an officer for the purposes of Section 16 of the Securities Exchange Act of 1934, or whose benefits under the Lubrizol Pension Plan are limited by the application of Section 401(a)(17) of the Internal Revenue Code of 1986, as amended, or, effective January 1, 2005, who participates in The Lubrizol Corporation Senior Management Deferred Compensation Plan.

(e) Plan. The term “Plan” shall mean the excess defined benefit pension plan as set forth herein, together with all amendments hereto, which Plan shall be called “The Lubrizol Corporation 2005 Excess Defined Benefit Plan.”

(f) Trust. The term “Trust” shall mean The Lubrizol Corporation Excess Defined Benefit Plan Trust established pursuant to the Trust Agreement.

(g) Trust Agreement. The term “Trust Agreement” shall mean The Lubrizol Corporation Excess Defined Benefit Plan Trust Agreement.

1.2. Additional Definitions. All other words and phrases used herein shall have the meanings given them in the Lubrizol Pension Plan, unless a different meaning is clearly required by the context.

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ARTICLE II

SUPPLEMENTAL PENSION BENEFIT

2.1 Eligibility. A Participant who separates from service with the Company and its subsidiaries and

(a) whose benefits under the Lubrizol Pension Plan are limited by the provisions of Section 401(a)(17) or 415 of the Code,

(b) who participated in The Lubrizol Corporation 2005 Deferred Compensation Plan for Officers,

(c) who participated in The Lubrizol Corporation 2005 Executive Council Deferred Compensation Plan, or

(d) effective January 1, 2006, who participated in The Lubrizol Corporation Senior Management Deferred Compensation Plan

shall be eligible for a supplemental pension benefit determined in accordance with the provisions of Section 2.2.

2.2 Amount. Subject to the provisions of Article III, the monthly supplemental pension benefit payable to an eligible Participant shall be equal to an amount which shall be determined in the normal form of payment under the Lubrizol Pension Plan, regardless of any election of optional method of payment by the Participant under the Lubrizol Pension Plan or this Plan, and shall be equal to the sum of (I) plus (II), where (I) is the result, but not less than zero, of (b) minus (a); and (II) is the result, but not less than zero, of (c) minus (b), where:

(a) equals the monthly pension benefit payable to the Participant under the Lubrizol Pension Plan in the normal form of payment;

(b) equals the monthly pension benefit which would have been payable under the benefit formula in the Lubrizol Pension Plan as if:

(1) the limitation of Section 415 of the Code on total benefits that may be accrued under the Lubrizol Pension Plan was not in effect;

(2) any amount payable under The Lubrizol Corporation 2005 Excess Defined Contribution Plan attributable to participation in The Lubrizol Corporation Employees’ Profit Sharing Plan and Savings Plan did not and would not increase the compensation or otherwise affect the compensation or any other variable used in the benefit formula under the Lubrizol Pension Plan;

(3) any participation by the Participant in The Lubrizol Corporation 2005 Deferred Compensation Plan for Officers, The Lubrizol Corporation 2005 Executive Council Deferred Compensation Plan, or, effective January 1, 2006, in The Lubrizol Corporation Senior Management Deferred Compensation Plan did not decrease the compensation or otherwise affect the compensation or any other variable used in the benefit formula under the Lubrizol Pension Plan; and

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(4) all years of service of the Participant with Lubrizol or Noveon are counted; and

(c) equals the monthly pension benefit which would have been payable under the benefit formula in the Lubrizol Pension Plan as if:

(1) the limitations of Section 401(a)(17) of the Code on compensation that may be taken into account in determining benefits under the Lubrizol Pension Plan was not in effect;

(2) the limitation of Section 415 of the Code on total benefits that may be accrued under the Lubrizol Pension Plan was not in effect;

(3) any amount payable under The Lubrizol Corporation 2005 Excess Defined Contribution Plan attributable to participation in The Lubrizol Corporation Employees’ Profit Sharing Plan and Savings Plan did not and would not increase the compensation or otherwise affect the compensation or any other variable used in the benefit formula under the Lubrizol Pension Plan;

(4) any participation by the Participant in The Lubrizol Corporation 2005 Deferred Compensation Plan for Officers, The Lubrizol Corporation 2005 Executive Council Deferred Compensation Plan, or, effective January 1, 2006, in The Lubrizol Corporation Senior Management Deferred Compensation Plan did not decrease the compensation or otherwise affect the compensation or any other variable used in the benefit formula under the Lubrizol Pension Plan; and

(5) all years of service of the Participant with Lubrizol are counted, excluding any service before January 1, 2006 for employees who were part of Noveon on December 31, 2005.

2.3 Vesting. Each Participant shall be vested in his supplemental pension benefit under this Plan as determined in accordance with the vesting provisions of the Lubrizol Pension Plan.

ARTICLE III

PAYMENT OF BENEFITS

3.1 Payment to Participant.

(a) Each Participant who separates from service with the Company and its related corporations shall receive payment of his supplemental pension benefit in the standard form of payment of a single lump-sum payment payable the later of the six- month anniversary following the separation from service or within 30 days following the calendar year in which Participant separated from service.

(b) At least 12 months prior to the distribution date specified in paragraph (a) Participants may instead elect to receive the actuarial equivalent of the benefit determined under Section 2.2 on the date of separation from service, and payable commencing at least five years after the distribution date specified in paragraph (a) above in accordance with any one of the following options:

(i) Substantially equal monthly payments will be made to the Participant for his lifetime with the continuance to his Beneficiary of such amount after his death for the remainder, if any, of the 120-month term that commenced with the date as of which the first payment of such monthly benefit is made, and with any such monthly benefits remaining unpaid upon the death of the survivor of the Participant and his Beneficiary to be made to the estate of such survivor.

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(ii) A reduced monthly retirement benefit of substantially equal payments payable to such Participant for his lifetime with the continuance of a monthly benefit equal to fifty percent (50%) of such reduced amount after his death to the Participant’s Beneficiary during the lifetime of the Beneficiary, provided that such Beneficiary is living at the time of such Participant’s separation from service and survives such Participant.

(iii) A reduced monthly retirement benefit of substantially equal payments payable to such Participant during his lifetime with the continuance of a monthly benefit equal to one hundred percent (100%) of such reduced amount after his death to the Participant’s Beneficiary during the lifetime of the Beneficiary, provided such Beneficiary is living at the time of such Participant’s separation from service and survives such Participant.

(v) Effective January 1, 2005, a single lump-sum payment.

Monthly payments made after the first payment will be made on the monthly anniversary of the first payment.

(c) Notwithstanding the foregoing, if the Participant is entitled to a benefit under The Lubrizol Corporation 2005 Officers’ Supplemental Retirement Plan, the benefit under this Plan shall be paid at the same time and in the same form of payment as the benefit under The Lubrizol Corporation 2005 Officers’ Supplemental Retirement Plan.

The forms of payment described shall be calculated using the same actuarial factors and interest rates used under The Lubrizol Corporation Pension Plan (or its successor) as in effect on the date of separation from service.

3.2 Payment in the Event of Death Prior to Commencement of Distribution. If a Participant dies prior to commencement of benefits under the Plan, his surviving spouse, if any, shall be eligible for a survivor benefit which is equal to one-half of the reduced monthly benefit the Participant would have received under the Plan if the Participant had retired on the day before his death and had elected to receive his benefit under the Lubrizol Pension Plan in a 50 percent joint and survivor annuity form. In making the determinations and reductions required in this Section 3.2, the Company shall apply the assumptions then in use under the Lubrizol Pension Plan. For purposes hereof, a surviving spouse shall only be eligible for a benefit under this Section 3.2, if such spouse had been married to the deceased Participant for at least one year as of the date of the Participant’s death. Benefits hereunder shall commence within 60 days after the death of the Participant and shall be paid monthly in substantially equal payments for the life of the surviving spouse.

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ARTICLE IV

ADMINISTRATION

4.1 Authority of the Company. The Company shall be responsible for the general administration of the Plan, for carrying out the provisions hereof, and for making, or causing the Trust to make, any required supplemental benefit payments. The Company shall have all such powers as may be necessary to carry out the provisions of the Plan, including the power to determine all questions relating to eligibility for and the amount of any supplemental pension benefit and all questions pertaining to claims for benefits and procedures for claim review; to resolve all other questions arising under the Plan, including any questions of construction; and to take such further action as the Company shall deem advisable in the administration of the Plan. The Company may delegate any of its powers, authorities, or responsibilities for the operation and administration of the Plan to any person or committee so designated in writing by it and may employ such attorneys, agents, and accountants as it may deem necessary or advisable to assist it in carrying out its duties hereunder. The actions taken and the decisions made by the Company hereunder shall be final and binding upon all interested parties.

4.2 Claims Review Procedure. The Company shall notify the person who files a claim for benefits (hereinafter referred to as the “Claimant”) of the Plan’s adverse benefit determination within a reasonable period of time, but not later than 90 days after the receipt of the claim by the Plan, unless the Company determines that special circumstances require an extension of time for processing the claim. If the Company determines that special circumstances require an extension of time for processing is required, written notice of the extension shall be furnished to the Claimant prior to the termination of the initial 90-day period. In no event shall such extension exceed a period of 90 days from the end of such initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Plan expects to render the benefit determination. Whenever the Company decides for whatever reason to deny, whether in whole or in part, a claim for benefits filed by any Claimant, the Company shall transmit to the Claimant a written notice of the Company’s decision, which shall be written in a manner calculated to be understood by the Claimant and contain a statement of the specific reasons for the denial of the claim, reference to the specific Plan provisions on which the determination was based, a description of any additional material or information necessary for the Claimant to perfect the claim and an explanation of why such material or information is necessary, a description of the Plan’s review procedures and the time limits applicable to such procedures, include a statement of the Claimant’s right to bring civil action under Section 502(a) ERISA following an adverse benefit determination on review. Within 60 days of the date on which the Claimant receives such notice, he or his authorized representative may request that the claim denial be reviewed by filing with the Company a written request therefor, which request shall contain the following information:

(a) the date on which the Claimant’s request was filed with the Company; provided, however, that the date on which the Claimant’s request for review was in fact filed with the Company shall control in the event that the date of the actual filing is later than the date stated by the Claimant pursuant to this paragraph (a);

(b) the specific portions of the denial of his claim which the Claimant requests the Company to review;

(c) a statement by the Claimant setting forth the basis upon which he believes the Company should reverse the Company’s previous denial of his claim for benefits and accept his claim as made; and

(d) any written comments, documents, records and other information which the Claimant desires the Company to examine in its consideration of his position as stated pursuant to paragraph (c).

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Claimant shall be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the Claimant’s claim for benefits. The review of the claim will take into account all comments, documents, records and other information submitted by the Claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. Within no later than 60 days of the date determined pursuant to paragraph (a) of this Section 4.2, the Company shall notify Claimant of the Plan’s benefit determination, unless the Company determines that special circumstances require an extension of time for processing the claim. If the Company determines that an extension of time for processing is required, written notice of the extension will be furnished to the Claimant prior to the termination of the initial 60-day period. In no event shall such extension exceed a period of 60 days from the end of the initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Plan expects to render the determination on review. The Company shall provide the Claimant with a written notification of the Plan’s benefit determination on review, written in a manner calculated to be understood by the Claimant, including the reasons and Plan provisions upon which its decision was based, a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the Claimant’s claim for benefits, and a statement of the Claimant’s right to bring an action under Section 502(a) of ERISA.

ARTICLE V

AMENDMENT AND TERMINATION

The Company reserves the right to amend or terminate the Plan in whole or in part at any time and to suspend operation of the Plan, in whole or in part, at any time, by resolution or written action of its Board of Directors or by action of a committee to which such authority has been delegated by the Board of Directors; provided, however, that no amendment shall result in the forfeiture or reduction of the interest of any Participant or person claiming under or through any one or more of them pursuant to the Plan; provided, further that, effective January 1, 2006, notwithstanding Section 2.3, upon a termination of the Plan each Participant shall be fully vested in his supplemental pension benefit under this Plan. Any amendment of the Plan shall be in writing and signed by authorized individuals.

ARTICLE VI

MISCELLANEOUS

6.1 Non-Alienation of Retirement Rights or Benefits. No Participant shall encumber or dispose of his right to receive any payments hereunder, which payments or the right thereto are expressly declared to be non-assignable and non-transferable. If a Participant attempts to assign, transfer, alienate or encumber his right to receive any payment hereunder or permits the same to be subject to alienation, garnishment, attachment. execution, or levy of any kind, then thereafter during the life of such Participant, and also during any period in which any Participant is incapable in the judgment of the Company of attending to his financial affairs, any payments which the Company is required to make hereunder may be made, in the discretion of the Company, directly to such Participant or to any other person for his use or benefit or that of his dependents, if any, including any person furnishing goods or services to or for his use or benefit or the use or benefit of his dependents, if any. Each such payment may be made without the intervention of a guardian, the receipt of the payee shall constitute a complete acquittance to the Company with respect thereto, and the Company shall have no responsibility for the proper allocation thereof.

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6.2 Plan Non-Contractual. Nothing herein contained shall be construed as a commitment or agreement on the part of any person employed by the Company to continue his employment with the Company, and nothing herein contained shall be construed as a commitment on the part of the Company to continue the employment or the annual rate of compensation of any such person for any period, and all Participants shall remain subject to discharge to the same extent as if the Plan had never been established.

6.3 Trust. In order to provide a source of payment for its obligations under the Plan, the Company has established the Trust, the terms of which are governed by the Trust Agreement.

6.4 Interest of a Participant. Subject to the provisions of the Trust Agreement, the obligation of the Company under the Plan to provide a Participant with a supplemental pension benefit constitutes the unsecured promise of the Company to make payments as provided herein, and no person shall have any interest in, or a lien or prior claim upon, any property of the Company.

6.5 Controlling Status. No Participant shall be eligible for a benefit under the Plan unless such Participant is a Participant on the date of his retirement, death, or other termination of employment.

6.6 Claims of Other Persons. The provisions of the Plan shall in no event be construed as giving any person, firm or corporation any legal or equitable right as against the Company, its officers, employees, or directors, except any such rights as are specifically provided for in the plan or are hereafter created in accordance with the terms and provisions of the Plan.

6.7 Severability. The invalidity or unenforceability of any particular provision of the Plan shall not affect any other provision hereof, and the Plan shall be construed in all respects as if such invalid or unenforceable provision were omitted herefrom.

6.8 Governing Law. The provisions of the Plan shall be governed and construed in accordance with the laws of the State of Ohio.

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EX-10.5

Exhibit 10.5

Supplemental Retirement Plan

for Donald W. Bogus

(As Amended and Restated January 1, 2009)

In addition to the benefits accrued under The Lubrizol Corporation Pension Plan and Employees’ Profit Sharing and Savings Plan, and any accrued benefits under the associated excess plans, Lubrizol will also establish a supplemental retirement plan on behalf of Donald W. Bogus with the following terms and conditions:

1) On Mr. Bogus’ first day of employment, and on each anniversary of that date thereafter, 500 phantom shares of Lubrizol stock will be credited to a supplemental retirement account on Mr. Bogus’ behalf. In addition, 500 phantom shares of Lubrizol stock will be credited to the supplemental retirement account on Mr. Bogus’ behalf on January 2, 2009, provided Mr. Bogus signs a General Release provided Lubrizol.

2) If Mr. Bogus works until age 65, over the 12 year period a total of 6,000 phantom shares would be credited to the account.

3) Dividends on accumulated phantom shares will be posted throughout the year and will be used as the basis for purchasing additional phantom shares under the plan.

4) In the event of a change in control, as defined in the Executive Employment Agreement, or at the time of Mr. Bogus’ death, Lubrizol would fully credit the account with the remaining balance of the 6,000 phantom shares.

5) In the event of Mr. Bogus’ death, the account balances will be paid as follows:

(a) If Mr. Bogus is entitled to a benefit under The Lubrizol Corporation 2005 Officers’ Supplemental Retirement Plan (SORP), the account balances under this Plan will be paid at the same time and in the same form of payment as the benefit under SORP.

(b) If Mr. Bogus is not entitled to a benefit under SORP, the account balances under this Plan will be paid in a lump sum to his estate within 60 days after his death.

6) In the event of Mr. Bogus’ separation from service, the account balances will be paid as follows:

(a) If Mr. Bogus is entitled to a benefit under SORP, the account balances under this Plan will be paid at the same time and in the same form of payment as the benefit under SORP.

(b) If Mr. Bogus is not entitled to a benefit under SORP, the account balances under this Plan will be paid in a lump sum within 60 days after the six month anniversary of Mr. Bogus’ separation from service.

7) Phantom shares accumulated under the plan will be included when considering share ownership objectives under the Executive Council Ownership Guidelines.

8) Amounts may be withheld at the time of distribution for tax purposes. Mr. Bogus, or his estate, may elect distribution in the form of shares or cash at the time of distribution for phantom shares that are attributable to deferrals prior April 1, 2004. For phantom shares that are attributable to deferrals on or after April 1, 2004, the distribution will be a cash amount equal to the number of phantom shares multiplied by the closing price per common share of The Lubrizol Corporation on the New York Stock Exchange Composite Transactions Reporting System on the date of death or separation from service.

9) As the shares are unregistered, certain restrictions on selling/trading may apply at the time of distribution.

10) The Medicare tax on the increase in the value of the account year over year will be entered into Mr. Bogus’ pay on an annual basis.

EX-10.6

Exhibit 10.6

EMPLOYMENT AGREEMENT

(Amended and Restated January 1, 2009)

This EMPLOYMENT AGREEMENT (this “Agreement”), entered into as of January 1, 2003, by and between The Lubrizol Corporation, an Ohio corporation (the “Company”), and Donald W. Bogus (the “Executive”), amended and restated as of January 1, 2008 and further amended and restated as of January 1, 2009;

WITNESSETH:

WHEREAS, the Executive is a senior executive of the Company and has made and is expected to continue to make major contributions to the profitability, growth and financial strength of the Company;

WHEREAS, the Company desires to encourage Executive to remain with the Company for a number of years.

WHEREAS, this Agreement is not intended to alter materially the compensation and benefits which the Executive could reasonably expect to receive from the Company that are not addressed within this Agreement; and

WHEREAS, the Executive is willing to render services to the Company on the terms and subject to the conditions set forth in this Agreement;

NOW, THEREFORE, the Company and the Executive agree as follows:

1. If the Executive remains in the employ of the Company until January 1, 2008, he will receive the following:

A. 15,000 Lubrizol Common Shares issued in the lump sum between January 2, 2008 and March 15, 2008.

B. Coverage under The Lubrizol Corporation Executive Death Benefit Plan at the later of January 1, 2008 or age 60, provided he is still employed with the Company at such time.

C. Coverage under The Lubrizol Corporation Officers’ Supplemental Retirement Plan (SORP) at the later of January 1, 2008 or age 60, provided he is still employed with the Company at such time. At age 61, the amount provided will be at least $50,000; at age 62, at least $100,000; at age 63, at least $150,000; at age 64, at least $200,000; and at age 65, at least $250,000, with such amounts comprised of the amount calculated under the SORP, and if lesser than the amounts previously cited, through additional payments made by the Company to the Executive. Any additional payments made by the Company shall be made in the same form and time as payments made under the SORP. Notwithstanding the foregoing, the amount provided under this Section 1.C. will be at least $100,000 as of January 2, 2009, provided Executive signs a General Release provided by the Company.

The Company shall withhold from any payment hereunder the amount required to pay applicable withholding taxes.

2. Executive will not have voting or dividend rights in number of shares listed in 1.A above, unless and until the Shares are issued.

3. Successors and Assigns to the Company

A. The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business and/or assets of the Company, by agreement in form and substance satisfactory to the Executive, expressly to assume and agree to perform this Agreement in the same manner and to the same extent the Company would be required to perform if no such succession had taken place. This Agreement will be binding upon and inure to the benefit of the Company and any successor to the Company, including without limitation any persons acquiring directly or indirectly all or substantially all of the business and/or assets of the Company whether by purchase, merger, consolidation, reorganization or otherwise (and such successor will thereafter be deemed the “Company” for the purposes of this Agreement), but will not otherwise be assignable, transferable or delegable by the Company.

B. This Agreement inures to the benefit of and is enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees and/or legatees.

C. This Agreement is personal in nature and neither of the parties hereto will, without the consent of the other, assign, transfer or delegate this Agreement or any rights or obligations hereunder except as expressly provided in Sections 3(A) and (B) above. Without limiting the generality of the foregoing, the Executive’s right to receive the benefits hereunder is not assignable, transferable or delegable, whether by pledge, creation of a security interest or otherwise, other than by a transfer by his will or by the laws of descent and distribution and, in the event of any attempted assignment or transfer contrary to this Section 3(C), the Company has no liability to pay any amount so attempted to be assigned, transferred or delegated.

D. The Company and the Executive recognize that each party will have no adequate remedy at law for breach by the other of any of the agreements contained herein and, in the event of any such breach, the Company and the Executive hereby agree and consent that the other shall be entitled to a decree of specific performance, mandamus or other appropriate remedy to enforce performance of this Agreement.

4. For all purposes of this Agreement, all communications including without limitation notices, consents, requests or approvals, provided for herein must be in writing and will be deemed to have been duly given when delivered or five business days after having been mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed to the Company (to the attention of the Secretary of the Company) at its principal executive office and to the Executive at his principal residence, or to such other address as any party may have furnished to the other in writing and in accordance herewith, except that notices of change of address shall be effective only upon receipt.

5. The validity, interpretation, construction and performance of this Agreement is governed by the laws of the State of Ohio, without giving effect to the principles of conflict of laws of such State.

6. If any provision of this Agreement or the application of any provision hereof to any person or circumstances is held invalid, unenforceable or otherwise illegal, the remainder of this Agreement and the application of such provision to any other person or

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circumstances shall not be affected, and the provision so held to be invalid, unenforceable or otherwise illegal shall be reformed to the extent (and only to the extent) necessary to make it enforceable, valid and legal.

7. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by the Executive and the Company. No waiver by either party hereto at any time of any breach by the other party hereto or compliance with any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, expressed or implied with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement, other than the Employment Agreement between Executive and the Company dated July 24, 2000, as may be amended from time to time, which remains in full force and effect.

8. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same agreement.

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the date first above written.

EXECUTIVE	THE LUBRIZOL CORPORATION
/s/ Donald W. Bogus	By:	/s/ James L. Hambrick
		Chief Executive Officer

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EX-10.7

Exhibit 10.7

THE LUBRIZOL CORPORATION

2005 STOCK INCENTIVE PLAN

PERFORMANCE SHARE AWARD

THIS PERFORMANCE SHARE AWARD, dated this      day of             , 2        , (the “Grant Date”) by The Lubrizol Corporation (the “Company”) to                                         , an employee of the Company and/or a Subsidiary (as defined in the Plan).

The following terms and provisions apply to this Performance Share Award:

1. The Company hereby grants to you, under the provisions of Section 9 of the Company’s 2005 Stock Incentive Plan, as amended (the “Plan”), the number of Company Common Shares, without par value, in accordance with the three-year performance target approved by the Organization and Compensation Committee. The Company Common Shares granted hereunder are referred to herein as the “Shares”.

2. If there is a Change in Control, as defined under the Plan, prior to the receipt of Shares under Section 1, above, you will receive a pro-rata number of Shares within 60 days after the Change in Control. The pro-rata number of Shares will be determined as shown on Exhibit A attached to this Award.

3. If you separate from service due to retirement (either normal or early retirement) prior to the receipt of Shares pursuant to Section 1, above, you will receive a pro-rata number of Shares between the January 1 and March 15 of the year following the end of the three-year cycle based on the number of full months which have elapsed since the date of this Award at the time or your separation from service or death. In no event will the payment of Shares be made earlier than six months after your separation from service due to retirement.

If you separate from service due to death prior to the receipt of Shares pursuant to Section 1, above, your beneficiary will receive a pro-rata number of Shares between the January 1 and March 15 of the year following the end of the three-year cycle based on the number of full months which have elapsed since the date of this Award at the time or your service or death. If the Company does not have a beneficiary election on file at the time of your death, the Shares will be issued to your spouse, or if your spouse is not living at the time of issuance, your children who are living, or if you have no living children at the time of issuance, your estate.

If you separate from service (voluntarily or involuntarily) for any other reason prior to the receipt of Shares pursuant to Section 1, above, you will forfeit any Shares under this Award, unless otherwise specifically approved by the Committee, upon the recommendation of the Chief Executive Officer.

4. The Award is not transferable by you during your life.

5. Prior to the issuance of Shares to you, you will not be a shareholder of the Company and you will have no rights under the Award as a shareholder of the Company. No dividends or other amount will be allocated or paid to you with respect to the Award.

6. If there is a stock split, reverse stock split or stock dividend, the number of Shares specified in Section 1, above will be increased or decreased in direct proportion to the increase or decrease in the number of Company Shares by reason of the stock split, reverse stock split or stock dividend.

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7. Shares will not be distributed under this Award if the issuance of the Shares would violate:

(a) any applicable state securities law;

(b) any applicable registration or other requirements under the Securities Act of 1933, as amended (the “Securities Act”), the Securities Exchange Act of 1934, as amended, or the listing requirements of any stock exchange on which the Company’s Shares are listed; or

(c) any similar legal requirement of any governmental authority regulating the issuance of shares by the Company.

Further, if a Registration Statement with respect to the Shares to be issued is not in effect or if counsel for the Company deems it necessary or desirable in order to avoid possible violation of the Securities Act, the Company may require, as a condition to its issuance and delivery of certificates for the Shares, that you deliver to the Company a statement in writing that you understand the Shares may be “restricted securities” as defined in Rule 144 of the Securities and Exchange Commission and that any resale, transfer or other disposition of the Shares will be accomplished only in compliance with Rule 144, the Securities Act, or other or subsequent applicable Rules and Regulations thereunder. Further still, the Company may place on the certificates evidencing the Shares an appropriate legend under Rule 144.

8. (a) When the Common Shares are distributable to you pursuant to Section 1, above, you may be subject to income and other taxes on the value of the Shares on the date of distribution. The Company will withhold a sufficient number of Shares that will provide for the federal, state and/or local income tax at the rates then applicable for supplemental wages, unless otherwise requested by you, but in no event less than the statutory minimums for tax withholding.

(b) For purposes of determining the number of Common Shares that are to be withheld to provide for the tax withholding pursuant to Section 8(a), Common Shares will be valued at the closing price of a Common Share on the New York Stock Exchange on the date Shares are distributable to you. If the determination of the tax withholding requires the withholding of a fractional Share, the Company shall withhold the nearest whole number of Shares needed to pay the tax withholding, rounded up, and remit to you in cash the amount of the excess after the withholding taxes have been satisfied.

9. Prior to the distribution of Shares pursuant to Section 1, the Committee has the right in its sole discretion to reduce the amount of this Award.

10. The Committee has conclusive authority, subject to the express provisions of the Plan, as in effect from time to time, and this Award, to interpret this Award and the Plan, and to establish, amend and rescind rules and regulations for the administration of the Plan. The Committee may correct any defect or supply any omission or reconcile any inconsistency in this Award in the manner and to the extent it deems expedient to carry the Plan into effect, and it is the sole and final judge of such expediency. The Board of Directors of the Company may from time to time grant to the Committee such further powers and authority as the Board determines to be necessary or desirable.

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11. You must hold any Shares that are distributed to you under this Award at least until you have met your Share ownership guideline.

12. Notwithstanding any other provision of this Award, your Award will be subject to all of the provisions of the Plan in force from time to time.

THE LUBRIZOL CORPORATION
By
	James L. Hambrick
	Chairman, President and CEO

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EXHIBIT A

Determination of Pro-Rata Common Shares Upon a Change in Control Under Section 2

Pursuant to the terms of Section 2, the number of pro-rata Common Shares upon a Change in Control will be determined as follows:

1. No payout if 12 months has not elapsed since the date of this Award.

2. If more than 12 months has elapsed since the date of this Award:

(a) Determine the measurement growth rate for each full year that has elapsed in the 3-year period as of the date of the Change in Control,

(b) The 3-year cumulative measurement growth will be imputed as either the 1-year measurement growth (if the Change in Controls occurs during the second year) or the 2-year cumulative measurement growth (if the Change in Control occurs during the third year).

(c) Payout is then pro-rated based on number of full months that have elapsed since the date of this Award, payable within 60 days after the Change in Control.

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EX-10.8

Exhibit 10.8

THE LUBRIZOL CORPORATION

ANNUAL INCENTIVE PAY PLAN

(As Amended September 23, 2008)

INTRODUCTION

The Lubrizol Corporation (hereinafter referred to as the “Corporation”) hereby establishes, effective as of January 1, 2008, The Lubrizol Corporation Annual Incentive Pay Plan (hereinafter referred to as the “Plan”) in order to provide an award for employees which reflects the pursuit of superior performance, increased customer satisfaction and enhancement of shareholder value. Awards for participating employees under the Plan shall depend upon corporate performance measures as determined by the Committee for the Plan Year.

Except as otherwise provided, the Plan shall be administered by the Organization and Compensation Committee (hereinafter referred to as the “Committee”) of the Board of Directors of the Corporation. The Committee shall have conclusive authority to construe and interpret the Plan and any agreements entered into under the Plan and to establish, amend, and rescind rules and regulations for its administration. The Committee shall also have any additional authority as the Board may from time to time determine to be necessary or desirable.

ARTICLE I

DEFINITIONS

1.01 Definitions. The following terms shall have the indicated meanings for purposes of the Plan:

(a) “Board” shall mean the Board of Directors of the Corporation.

(b) “Chief Executive Officer” shall mean the chief executive officer of the Corporation.

(c) “Committee” shall mean the Organization and Compensation Committee of the Board, or other designated committee of the Board, consisting of persons who are not Employees or International Employees.

(d) “Corporation” shall mean The Lubrizol Corporation, a corporation organized under the laws of the State of Ohio.

(e) “Director” shall mean a member of the Board.

(f) ‘“Employee” shall mean any person other than an Officer, who is employed for a wage or salary by the Corporation or a domestic Subsidiary.

(g) “International Employee” shall mean any person who is employed for a wage or salary by an international Subsidiary of the Corporation.

(h) “International Participant” shall mean any International Employee who has been selected by the Committee pursuant to Article VI of the Plan, and who has not for any reason becomes ineligible to participate in the Plan.

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(i) “Individual Award” shall mean the amount paid (or to be paid) to a Participant or International Participant, as the case may be, by the Corporation pursuant to the Plan.

(j) “Individual Target Award” shall have the definition, and shall be determined, as set forth in Section 3.02 herein.

(k) “Officer” shall mean an employee of the Corporation or a Subsidiary who is a member of the Executive Council of the Corporation.

(l) “Participant” shall mean all Officers, and any Employee who has been selected by the Committee pursuant to Article II herein to participate in the Plan, and have not for any reason become ineligible to participate in the Plan.

(m) “Pay” shall be determined at the time of calculating the Individual Performance Shares and shall be the Participant’s base pay.

(n) “Plan” shall mean The Lubrizol Corporation Annual Incentive Pay Plan, effective January 1, 2008.

(o) “Plan Year” shall mean each twelve-month period commencing January 1 and ending December 31.

(p) “Subsidiary” shall mean any corporation, international or domestic, that is wholly or partially (but not less than 50%) owned directly or indirectly by the Corporation.

1.02 Construction. Where necessary or appropriate to the meaning of a word, the singular shall be deemed to include the plural, the plural to include the singular, the masculine to include the feminine, and the feminine to include the masculine.

ARTICLE II

ELIGIBILITY AND PARTICIPATION

2.01 Eligibility. All Employees and Officers shall be eligible to participate in the Plan.

2.02 Participation. All Officers shall participate in the Plan. In addition, the Committee shall determine which Employees shall participate in the Plan for each Plan Year. The Committee may also determine which Employees hired during the Plan Year shall participate in the Plan for such Plan Year. The Committee’s selection of Participants shall be after considering recommendations presented to it by the Chief Executive Officer.

ARTICLE III

INDIVIDUAL AWARDS

3.01 In General. At the time the Committee selects Participants for any Plan Year, the Committee shall, after consideration of the recommendations of the Chief Executive Officer, establish, for each Plan Year, an Individual Target Award for each Participant. After the end of the Plan Year Individual Awards are paid.

3.02 Calculation of Individual Award. The Individual Award shall be calculated in the following manner:

(a) The Participant’s Individual Target Award is determined by multiplying the Participant’s Pay by a designated target percentage, which shall take into account the Participant’s position in the Corporation. Such designated target, percentage, as well as maximum and threshold percentages, shall be determined by the Committee.

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(b) At the beginning of each Plan Year, the Committee approves annual performance scorecards at the corporate and segment level and specifies the scorecard(s) that apply to a Participant. The Chief Executive Office approves annual performance scorecards below the segment level.

(c) After the end of the Plan Year, the Board approves the Individual Awards based on actual performance for the Plan Year under the annual performance scorecard(s) that apply to the Participant.

Individual Target Awards may be either increased or decreased, at any time, or from time to time, during a Plan Year, for any Participant at the sole discretion of the Committee in order to reflect any change in the individual contribution under the formula set forth in this Section 3.02.

3.03 Time and Method of Payment of Individual Awards. In the event the Committee determines that a Participant is entitled to an Individual Award, the Corporation shall pay such Individual Award to that Participant between January 1 and March 15 following the close of the Plan Year. A Participant who separates from service or dies after the Plan Year but prior to the payment of an Individual Award shall be eligible to receive any payment under this Plan. A Participant who separates from service prior to the end the Plan Year will not be eligible for payment hereunder, unless otherwise specifically approved by the Committee, upon the recommendation of the Chief Executive Officer.

3.04 Conditions. Anything contained herein to the contrary notwithstanding, the payment of Individual Awards to Participants with respect to any Plan Year is conditioned upon the availability of adequate corporate profits for the Corporation’s fiscal year coinciding with any Plan Year. The determination of whether adequate corporate profits exist shall be made by the Board in its sole and unrestricted judgment and discretion and such determination shall be conclusive and binding.

ARTICLE IV

AWARDS FOR INTERNATIONAL EMPLOYEES

4.01 Participation. The Committee shall determine which International Employees shall participate in the Plan for each Plan Year. The Committee’s selection of International Participants shall be made after considering recommendations presented to it by the Chief Executive Officer.

4.02 Individual Awards. At the time the Individual Awards are determined for Participants, the Committee shall, in its discretion, after consideration of the recommendations of the Chief Executive Officer, establish for each Plan Year Individual Awards for each International Participant.

4.03 Payment of Awards. Individual Awards to each International Participant shall be paid by the international Subsidiary that is the employer of such International Participant at the same time and under the same conditions as payment is made to Participants under Sections 3.03 and 3.04. All payments shall be converted from the U.S. dollar measurement under the Plan to the currency of the

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country of such Subsidiary at the currency exchange rate in effect at the time the Individual Award is determined. All applicable withholding taxes shall be withheld from the distribution and remitted by the international subsidiary to the appropriate taxing authority.

ARTICLE V

CHANGE OF CONTROL

5.01 Effect of Change in Control. In the event a Change in Control of the Corporation (as defined in Section 5.02) occurs prior to final determination by the Committee of the amounts of Individual Awards to be paid under the Plan with respect to any Plan Year, the Committee shall calculate such Individual Awards as soon as practicable after such Change in Control. Individual Awards shall be based upon accruals by the Corporation up to the time of such Change in Control and Individual Awards shall be calculated in accordance with Sections 3.02 and 4.02 herein. Payment of such Individual Awards shall be made within sixty (60) days after the Change in Control.

5.02 For all purposes of the Plan, a “Change in Control of the Corporation” shall have occurred if any of the following events shall occur:

(a) The date that any one person, or more than one person acting as a group, acquires ownership of stock of the corporation that, together with the stock held by such person or group, constitutes more than 50 percent of the total fair market value or total voting power of the stock of the Corporation.

(b) The date any person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Corporation possessing 30% or more of the total voting power of the stock of the Corporation.

(c) The date a majority of members of the Corporation’s Board of Directors is replaced during any 12-month period by Directors whose appointment or election is not endorsed by a majority of the members of the Corporation’s Board of Directors before the date of the appointment or election.

(d) The date that any one person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Corporation that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets of the Corporation immediately before the acquisition or acquisitions.

Notwithstanding the foregoing, a Change of Control shall have only occurred in accordance with the regulations promulgated under Section 409A of the Internal Revenue Code of 1986, as amended.

ARTICLE VI

ADMINISTRATION

6.01 Plan Administrator. The Committee shall be the Plan administrator.

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6.02 Duties of Plan Administrator.

(a) The Committee shall administer the Plan in accordance with its terms and shall have all powers necessary to carry out the provisions of the Plan including, but not limited to, the following:

(1) Determination of Employees and International Employees who are eligible for Plan participation; and

(2) Determination of the Individual Awards to be paid to Participants for each Plan Year.

(b) The Committee shall interpret the Plan and shall resolve all questions arising in the administration, interpretation, and application of the Plan. Any such determination of the Committee shall be conclusive and binding on all persons.

(c) The Committee shall establish such procedures and keep such records or other data as the Committee in its discretion determines necessary or proper for the administration of the Plan.

(d) The Committee may delegate administrative responsibilities to such person or persons as the Committee deems necessary or desirable in connection with the administration of the Plan.

ARTICLE VII

MISCELLANEOUS

7.01 Unfunded Plan. The Corporation shall be under no obligation to segregate or reserve any funds or other assets for purposes relating to this Plan and no Participant or International Participant shall have any rights whatsoever in or with respect to any funds or assets of the Corporation.

7.02 Non-Alienation. No anticipated payment of any Individual Award shall be subject in any manner to alienation, sale, transfer, assignment, pledge, attachment, garnishment or encumbrance of any kind.

7.03 No Employment Rights. Nothing herein contained shall be construed as a commitment or agreement upon the part of any Participant, International Participant, Employee or International Employee hereunder to continue his employment with the Corporation or a Subsidiary, and nothing herein contained shall be construed as a commitment on the part of the Corporation or any Subsidiary to continue the employment or rate of compensation of any Participant or International Participant hereunder or any Employee or International Employee for any period.

7.04 Amendment of the Plan. The Corporation reserves the right, to be exercised by instruction from the Committee, to modify or amend this Plan at any time.

7.05 Duration and Termination of the Plan. The Corporation also reserves the right, to be exercised by action of the Board, to discontinue or terminate the Plan; provided that, and subject to all the provisions of this plan, any termination shall be effective only for all Plan Years following December 31 of the Plan Year in which the decision to terminate occurs.

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EX-31.1

Exhibit 31.1

THE LUBRIZOL CORPORATION

Rule 13a-14(a) Certification

I, James L. Hambrick, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of The Lubrizol Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based upon such evaluation; and

(d) disclosed in this report any change in registrant’s internal control over financial reporting that occurred during registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ James L. Hambrick

James L. Hambrick

Chief Executive Officer and President

November 7, 2008

EX-31.2

Exhibit 31.2

THE LUBRIZOL CORPORATION

Rule 13a-14(a) Certification

I, Charles P. Cooley, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of The Lubrizol Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based upon such evaluation; and

(d) disclosed in this report any change in registrant’s internal control over financial reporting that occurred during registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Charles P. Cooley

Charles P. Cooley

Chief Financial Officer

November 7, 2008

EX-32.1

Exhibit 32.1

THE LUBRIZOL CORPORATION

Certification of Chief Executive Officer and Chief Financial Officer of

The Lubrizol Corporation Pursuant to 18 U.S.C. Section 1350

I certify that, to the best of my knowledge and belief, the Quarterly Report on Form 10-Q of The Lubrizol Corporation for the period ending September 30, 2008:

(1) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of The Lubrizol Corporation.

/s/ James L. Hambrick

James L. Hambrick

Chief Executive Officer and President

November 7, 2008

I certify that, to the best of my knowledge and belief, the Quarterly Report on Form 10-Q of The Lubrizol Corporation for the period ending September 30, 2008:

(1) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of The Lubrizol Corporation.

/s/ Charles P. Cooley

Charles P. Cooley

Chief Financial Officer

November 7, 2008