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 June 30, 2011

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 þ No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ 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: þ	Accelerated filer: ¨
Non-accelerated filer: ¨  (Do not check if a 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 þ

Number of the registrant’s common shares, without par value, outstanding as of July 29, 2011: 64,459,817.

THE LUBRIZOL CORPORATION

Quarterly Report on Form 10-Q

Three and Six Months Ended June 30, 2011

Table of Contents

		Page Number
PART I. FINANCIAL INFORMATION
Item 1	Financial Statements (unaudited):
	Consolidated Statements of Income	1
	Consolidated Balance Sheets	2
	Consolidated Statements of Cash Flows	3
	Notes to Consolidated Financial Statements	4
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4	Controls and Procedures	32
PART II. OTHER INFORMATION
Item 1	Legal Proceedings	33
Item 1A	Risk Factors	33
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 6	Exhibits	34
	Signatures	35

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

THE LUBRIZOL CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

	Three Months Ended June 30,				Six Months Ended June 30,
(In Millions of Dollars Except Per Share Data)	2011		2010		2011		2010
Revenues	$	1,634.8	$	1,401.2	$	3,153.7	$	2,716.7
Cost of sales		1,133.3		927.6		2,170.0		1,792.4
Gross profit		501.5		473.6		983.7		924.3
Selling and administrative expenses		123.6		100.0		256.3		222.9
Research, testing and development expenses		58.7		52.9		112.5		105.7
Amortization of intangible assets		7.1		6.2		13.9		12.5
Berkshire Hathaway merger-related costs (Note 1)		0.8		-		10.7		-
Restructuring and impairment charges (credits)		0.3		0.5		(0.3)		1.4
Other income - net		(5.0)		(11.6)		(4.1)		(19.7)
Interest income		(1.9)		(1.4)		(3.5)		(2.7)
Interest expense		23.9		24.8		49.1		49.6
Income before income taxes		294.0		302.2		549.1		554.6
Provision for income taxes		97.2		95.6		178.4		181.0
Net income		196.8		206.6		370.7		373.6
Net income attributable to noncontrolling interests		5.5		5.2		9.9		9.9
Net income attributable to The Lubrizol Corporation	$	191.3	$	201.4	$	360.8	$	363.7
Net income per share attributable to The Lubrizol Corporation, basic	$	2.96	$	2.95	$	5.59	$	5.32
Net income per share attributable to The Lubrizol Corporation, diluted	$	2.90	$	2.88	$	5.47	$	5.21
Dividends paid per share	$	0.36	$	0.36	$	0.72	$	0.67

Amounts shown are unaudited.

The accompanying notes are an integral part of these consolidated financial statements.

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THE LUBRIZOL CORPORATION

CONSOLIDATED BALANCE SHEETS

(In Millions of Dollars Except Share Data)	June 30, 2011			December 31, 2010
ASSETS
Cash and cash equivalents	$	793.4		$	896.2
Receivables		921.9			723.5
Inventories		917.5			821.8
Deferred income taxes		87.8			81.5
Other current assets		36.1			27.1
Total current assets		2,756.7			2,550.1
Property and equipment - at cost		3,136.5			2,981.6
Less accumulated depreciation		1,855.0			1,798.1
Property and equipment - net		1,281.5			1,183.5
Goodwill		854.3			765.6
Intangible assets - net		390.5			299.4
Other assets		166.3			168.4
TOTAL	$	5,449.3		$	4,967.0
LIABILITIES AND TOTAL EQUITY
Current portion of long-term debt	$	0.6		$	0.4
Accounts payable		468.4			369.2
Accrued expenses and other current liabilities		310.6			351.3
Total current liabilities		779.6			720.9
Long-term debt		1,356.5			1,351.6
Pension obligations		277.3			298.8
Other postretirement benefit obligations		94.7			93.3
Noncurrent liabilities		157.2			151.6
Deferred income taxes		77.9			70.1
Total liabilities		2,743.2			2,686.3
Contingencies and commitments
Redeemable stock-based awards		10.6			9.6
Preferred stock without par value - unissued		-			-
Common shares without par value:
Authorized - 120,000,000 shares
Outstanding - 64,413,696 shares at June 30, 2011, after deducting 21,782,198 treasury shares; 64,034,811 shares at December 31, 2010, after deducting 22,161,083 treasury shares		841.5			813.6
Retained earnings		1,822.0			1,517.4
Accumulated other comprehensive loss		(44.6	)		(137.5	)
Total of The Lubrizol Corporation shareholders’ equity		2,618.9			2,193.5
Noncontrolling interests		76.6			77.6
Total equity		2,695.5			2,271.1
TOTAL	$	5,449.3		$	4,967.0

Amounts shown are unaudited.

The accompanying notes are an integral part of these consolidated financial statements.

2

THE LUBRIZOL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six Months Ended June 30,
(In Millions of Dollars)	2011		2010
CASH PROVIDED BY (USED FOR):
OPERATING ACTIVITIES
Net income	$	370.7	$	373.6
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		88.8		84.8
Deferred income taxes		(3.1)		10.3
Stock-based compensation		8.0		9.1
Restructuring and impairment (credits) charges		(0.6)		0.1
Gain from sale of assets		-		(0.9)
Change in current assets and liabilities, net of acquisitions:
Receivables		(179.5)		(187.9)
Inventories		(76.3)		(66.8)
Accounts payable, accrued expenses and other current liabilities		33.1		50.2
Other current assets		(10.3)		(0.4)
		(233.0)		(204.9)
Other items - net		(9.0)		1.1
Total operating activities		221.8		273.2
INVESTING ACTIVITIES
Capital expenditures		(139.2)		(63.2)
Acquisitions		(164.2)		(2.5)
Other items - net		5.0		4.1
Total investing activities		(298.4)		(61.6)
FINANCING ACTIVITIES
Dividends paid		(46.2)		(45.8)
Dividends paid to noncontrolling interests		(11.4)		(8.0)
Common shares purchased		-		(125.5)
Repayments of long-term debt		(0.1)		(45.8)
Other items - net		13.6		26.4
Total financing activities		(44.1)		(198.7)
Effect of exchange rate changes on cash		17.9		(31.7)
Net decrease in cash and cash equivalents		(102.8)		(18.8)
Cash and cash equivalents at the beginning of period		896.2		991.0
Cash and cash equivalents at the end of period	$	793.4	$	972.2

Amounts shown are unaudited.

The accompanying notes are an integral part of these consolidated financial statements.

3

THE LUBRIZOL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three and Six Months Ended June 30, 2011 and 2010

(Unaudited)

Note 1 – NATURE OF OPERATIONS

The Lubrizol Corporation (the company) is an innovative specialty chemical company that produces and supplies technologies that improve the quality, value and performance, and minimize the environmental impact of its customers’ products in the global transportation, industrial and consumer markets. These technologies include lubricant additives for engine oils, other transportation-related fluids and industrial lubricants, as well as additives for gasoline and diesel fuel. In addition, the company makes engineered polymers, including plastics technology; ingredients and additives for personal care products and pharmaceuticals; and performance coatings in the form of specialty resins and additives.

On March 13, 2011, Berkshire Hathaway Inc. (Berkshire Hathaway) and the company entered into an Agreement and Plan of Merger (Merger Agreement) whereby Berkshire Hathaway will acquire all of the outstanding shares of The Lubrizol Corporation for $135 per share in cash. After the close of the transaction, the company will operate as a subsidiary of Berkshire Hathaway. On April 8, 2011, the transaction received early termination under the Hart-Scott-Rodino Antitrust Improvements Act in the U.S. At a special meeting held on June 9, 2011, Lubrizol’s shareholders approved the transaction. The completion of the transaction is subject to the satisfaction of customary closing conditions, including the expiration of waiting periods and the receipt of approvals under applicable non-U.S. merger control regulations. All non-U.S. regulatory filings have been made and the reviews are proceeding in the ordinary course. The transaction is projected to close within the next one to three months.

Pursuant to the terms of the Merger Agreement, the company is permitted to conduct its business in the ordinary course. Until the closing of the merger, the company is restricted from engaging in certain business activities without permission from Berkshire Hathaway, including, among other things, declaring and paying dividends outside of the ordinary course, issuing any additional shares of stock, repurchasing shares and incurring additional indebtedness. See the Merger Agreement for a complete list of restrictions.

During the six months ended June 30, 2011, the company recorded $10.7 million of merger-related costs, primarily related to investment banking, legal, proxy solicitation and other fees incurred as part of the company’s agreement to be acquired by Berkshire Hathaway. Contingent upon the successful completion of the merger, additional investment banking fees of $45.0 million will become payable by the company.

Note 2 – SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting - 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 U.S. GAAP 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 six months ended June 30, 2011, are not necessarily indicative of the results that may be expected for the year ending December 31, 2011.

The consolidated balance sheet at December 31, 2010, 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 a complete set of financial statements.

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 year amounts have been reclassified to conform to the current year presentation.

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
Numerator (in millions):
Net income attributable to The Lubrizol Corporation	$	191.3	$	201.4	$	360.8	$	363.7
Denominator (in millions of shares):
Weighted-average common shares outstanding		64.6		68.2		64.5		68.4
Dilutive effect of stock options and awards		1.5		1.6		1.5		1.4
Denominator for net income per share, diluted		66.1		69.8		66.0		69.8
Net income per share attributable to The Lubrizol Corporation, basic	$	2.96	$	2.95	$	5.59	$	5.32
Net income per share attributable to The Lubrizol Corporation, diluted	$	2.90	$	2.88	$	5.47	$	5.21

Options to purchase 0.1 million shares were excluded from the diluted earnings per share calculations because they were antidilutive for both the three and six months ended June 30, 2011 and 2010.

New Accounting Standards

Accounting Standards Adopted in 2011

In October 2009, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2009-13, “Multiple-Deliverable Revenue Arrangements, a Consensus of the FASB Emerging Issues Task Force.” ASU 2009-13 allows companies to allocate consideration in multiple deliverable arrangements based on the company’s best estimate of selling price when vendor specific objective evidence or vendor objective evidence of the fair value of deliverables is not available. In addition, the residual method of allocating consideration to delivered items is no longer permitted. This update is effective for fiscal years beginning on or after June 15, 2010, with early application permitted. The company’s adoption of this update on January 1, 2011, had no effect on its consolidated financial statements.

Accounting Standards Not Yet Adopted

In May 2011, the FASB issued ASU 2011-04, “Fair Value Measurement.” This ASU clarifies the concepts related to highest and best use and valuation premise, blockage factors and other premiums and discounts, the fair value measurement of financial instruments held in a portfolio and of those instruments classified as a component of shareowners’ equity. This update includes enhanced disclosure requirements about recurring Level 3 fair value measurements, the use of nonfinancial assets, and the level in the fair value hierarchy of assets and liabilities not recorded at fair value. This update is effective prospectively for interim and annual periods beginning on or after December 15, 2011. The company is evaluating the impact of this update on its consolidated financial statements.

In June 2011, the FASB issued ASU 2011-05, “Comprehensive Income.” This ASU intends to enhance comparability and transparency of other comprehensive income components. This update provides an option to present total comprehensive income, the components of net income and the components of other comprehensive income in a single continuous statement or two separate but consecutive statements, and eliminates the option to present other comprehensive income components as part of the statement of changes in shareowners’ equity. This update will be applied retrospectively for interim and annual periods beginning after December 15, 2011. The company is evaluating the impact of this update on its consolidated financial statements.

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Note 3 – SEGMENT REPORTING

The company is organized into two operating and reportable segments: Lubrizol Additives and Lubrizol Advanced Materials. Lubrizol Additives consists of two product lines: (i) engine additives and (ii) driveline and industrial additives. Engine additives is comprised of additives for lubricating engine oils, such as for gasoline, diesel, marine and stationary gas engines, and additives for fuels, refinery and oil field chemicals. Driveline and industrial additives is comprised of additives for driveline oils, such as automatic transmission fluids, gear oils and tractor lubricants, and industrial additives, such as additives for hydraulic, grease and metalworking fluids, as well as compressor lubricants. Both product lines sell viscosity modifiers, as well as provide services for supply chain and knowledge center management.

The Lubrizol Advanced Materials segment consists of three product lines: (i) engineered polymers, (ii) Noveon^® consumer specialties and (iii) performance coatings. The engineered polymers product line includes products such as Estane^® thermoplastic polyurethane and TempRite^® engineered polymers. Engineered polymers products are sold to a diverse customer base comprised of major manufacturers in the construction, automotive, telecommunications, electronics and recreation industries. The Noveon consumer specialties product line includes acrylic thickeners, film formers, fixatives, emollients, silicones, specialty surfactants, conditioning polymers, methyl glucoside, lanolin derivatives and cassia hydrocolloids. The company markets products in the Noveon consumer specialties product line to major manufacturers of cosmetics, personal care and household products. The performance coatings product line includes high-performance polymers and additives for specialty paper, graphic arts, paints, textiles and coatings applications.

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

6

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

	Three Months Ended June 30,				Six Months Ended June 30,
(In Millions of Dollars)	2011		2010		2011		2010
Revenues from external customers:
Lubrizol Additives	$	1,201.0	$	1,008.4	$	2,284.4	$	1,956.4
Lubrizol Advanced Materials		433.8		392.8		869.3		760.3
Total revenues	$	1,634.8	$	1,401.2	$	3,153.7	$	2,716.7
Segment operating income:
Lubrizol Additives	$	282.4	$	271.5	$	542.3	$	517.9
Lubrizol Advanced Materials		52.2		62.5		123.3		123.1
Segment operating income		334.6		334.0		665.6		641.0
Corporate expenses		(19.4)		(15.3)		(57.6)		(50.8)
Corporate other income (expense) - net		1.9		7.4		(2.9)		12.7
Berkshire Hathaway merger-related costs		(0.8)		-		(10.7)		-
Restructuring and impairment (charges) credits		(0.3)		(0.5)		0.3		(1.4)
Interest expense - net		(22.0)		(23.4)		(45.6)		(46.9)
Income before income taxes	$	294.0	$	302.2	$	549.1	$	554.6

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

	June 30,		December 31,
(In Millions of Dollars)	2011		2010
Segment assets:
Lubrizol Additives	$	2,319.5	$	1,998.7
Lubrizol Advanced Materials		2,065.1		1,802.7
Total segment assets		4,384.6		3,801.4
Corporate assets		1,064.7		1,165.6
Total consolidated assets	$	5,449.3	$	4,967.0

Note 4 – ACQUISITIONS

On January 21, 2011, the company acquired the assets of the Performance Products Group of Nalco Company for $164.2 million in cash. The Performance Products Group is a supplier of value-added specialty polymers and formulation additives marketed to the global personal care and household care industries, with annual revenues in 2010 of approximately $45.0 million. This acquisition expanded the strategic portfolio of the Noveon consumer specialties personal and home care business. The agreement included all Nalco personal care dedicated technology, know-how, trade names and customer lists, as well as royalty-free access to the use of technology and intellectual property currently shared with other Nalco businesses. The purchase price allocation for this acquisition included amortizable intangible assets of $74.2 million, non-amortized trademarks of $22.9 million and goodwill of $67.1 million. The pro forma impacts of this acquisition were immaterial to the company’s consolidated financial statements.

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Note 5 – INVENTORIES

The company’s inventories were comprised of the following:

(In Millions of Dollars)	June 30, 2011		December 31, 2010
Finished products	$	532.4	$	462.4
Products in process		162.1		168.5
Raw materials		182.0		151.6
Supplies		41.0		39.3
Total inventory	$	917.5	$	821.8

Note 6 – GOODWILL AND INTANGIBLE ASSETS

Goodwill is tested for impairment at the reporting unit level as of October 1 of each year or if events or circumstances occur that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The company has determined that the Lubrizol Additives operating segment constitutes a reporting unit, and that the Noveon consumer specialties product line, Estane engineered polymers business, TempRite engineered polymers business and performance coatings product line within the Lubrizol Advanced Materials operating segment constitute separate reporting units. The carrying amount of goodwill by reporting segment follows:

(In Millions of Dollars)	Lubrizol Advanced   Materials		Lubrizol Additives		Total
Balance, December 31, 2010:
Goodwill	$	945.2	$	183.4	$	1,128.6
Accumulated impairment losses		(363.0)		-		(363.0)
		582.2		183.4		765.6
Goodwill acquired		67.1		-		67.1
Translation adjustments		19.9		1.7		21.6
Balance, June 30, 2011:
Goodwill		1,032.2		185.1		1,217.3
Accumulated impairment losses		(363.0)		-		(363.0)
	$	669.2	$	185.1	$	854.3

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The company’s indefinite-lived intangible assets include certain trademarks that are tested for impairment each year as of October 1 or more frequently if impairment indicators arise. The following table shows the components of identifiable intangible assets:

			June 30, 2011				December 31, 2010
(In Millions of Dollars)	Weighted- Average Useful Life		Gross Carrying   Amount		Accumulated   Amortization		Gross Carrying   Amount		Accumulated   Amortization
Amortized intangible assets:
Customer lists		18 years	$	253.7	$	76.4	$	189.5	$	68.1
Technology		15 years		148.8		63.6		133.8		58.2
Trademarks		16 years		31.0		13.0		29.7		11.6
Patents		11 years		11.1		7.6		10.8		6.9
Other		8 years		1.2		0.6		1.2		0.5
Total amortized intangible assets				445.8		161.2		365.0		145.3
Non-amortized trademarks				105.9		-		79.7		-
Total			$	551.7	$	161.2	$	444.7	$	145.3

Note 7 – DEBT

The company’s debt was comprised of the following:

(In Millions of Dollars)	June 30, 2011		December 31, 2010
5.5% notes, due 2014, net of original issue discount of $1.2 and $1.3 at June 30, 2011 and December 31, 2010, respectively, and fair value adjustments for unrealized gains on derivative instruments of $11.1 and $9.3 at June 30, 2011 and December 31, 2010, respectively	$	459.9	$	458.0
8.875% notes, due 2019, net of original issue discount of $3.1 and $3.3 at June 30, 2011 and December 31, 2010, respectively		496.9		496.7
7.25% debentures, due 2025		100.0		100.0
6.5% debentures, due 2034, net of original issue discount of $4.5 at both June 30, 2011 and December 31, 2010		295.5		295.5
Other		4.8		1.8
		1,357.1		1,352.0
Less: Current portion of long-term debt		0.6		0.4
Total long-term debt	$	1,356.5	$	1,351.6

The U.S. and euro bank credit agreements contain customary affirmative covenants including, among others, compliance with laws, payment of taxes, maintenance of insurance, conduct of business, keeping of books and records, maintenance of properties and ensuring the credit facilities receive the same rights and privileges as any future senior unsecured debt. The agreements also contain customary negative covenants including, among others, restrictions on: liens and encumbrances, sale of assets and affiliate transactions. Additionally, the company is required to comply with financial ratios of debt to consolidated earnings before interest, income taxes, depreciation and amortization, extraordinary, unusual or non-recurring non-cash gains or losses, including the sale of property and equipment and goodwill impairments, and non-cash gains or losses from less than wholly owned subsidiaries and investments (Consolidated EBITDA), as defined in the credit agreements, and Consolidated EBITDA to interest expense. At June 30, 2011, the credit agreements required that the ratio of debt to Consolidated EBITDA be less than 3.5:1 and the ratio of Consolidated EBITDA to interest expense be greater than 3.5:1. At June 30, 2011, the company maintained a ratio of debt to Consolidated EBITDA of 1.1:1 and a ratio of Consolidated EBITDA to interest expense of 12.5:1.

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The bank credit agreements also contain customary events of default including, among others, failure to make payment when due, materially incorrect representations and warranties, breach of covenants, events of bankruptcy, the occurrence of one or more unstayed judgments in excess of $25.0 million (under the euro bank credit agreement) or $50.0 million (under the U.S. bank credit agreement) that is not covered by an acceptable policy of insurance, a party obtaining a beneficial ownership in excess of 20% of the company’s voting stock, or the incurrence of $25.0 million of liabilities related to violations of employee benefit plan regulations or the withdrawal or termination of a multiemployer benefit plan. On July 18, 2011, the bank credit agreements were amended to waive the event of default for a change in beneficial ownership solely with respect to the anticipated merger with Berkshire Hathaway. At June 30, 2011, the company had no borrowings outstanding under its bank credit agreements, was in compliance with all of its covenants and had not committed any acts of default.

The estimated fair value of the company’s debt instruments at June 30, 2011, and December 31, 2010, was $1,616.3 million and $1,549.6 million, respectively. The fair value of the company’s debt instruments was estimated using prevailing market interest rates on long-term debt with similar creditworthiness, terms and maturities.

Note 8 – FAIR VALUE MEASUREMENTS

The company estimates the fair value of financial instruments using available market information and generally accepted valuation methodologies. Fair value is defined 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. The inputs used to measure fair value are classified into three levels: 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.

The following table shows the company’s financial assets and liabilities accounted for at fair value on a recurring basis at June 30, 2011:

(In Millions of Dollars)	June 30, 2011		Level 1		Level 2		Level 3
Assets:
Money market mutual funds (1)	$	589.5	$	589.5	$	-	$	-
Interest rate swaps (2)		11.1		-		11.1		-
	$	600.6	$	589.5	$	11.1	$	-
Liabilities:
Commodity purchase contracts (3)	$	1.3	$	-	$	1.3	$	-

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The following table shows the company’s financial assets and liabilities accounted for at fair value on a recurring basis at December 31, 2010:

(In Millions of Dollars)	December 31, 2010		Level 1		Level 2		Level 3
Assets:
Money market mutual funds (1)	$	681.2	$	681.2	$	-	$	-
Interest rate swaps (2)		9.6		-		9.6		-
	$	690.8	$	681.2	$	9.6	$	-
Liabilities:
Interest rate swaps (2)	$	0.3	$	-	$	0.3	$	-
Commodity purchase contracts (3)		2.2		-		2.2		-
	$	2.5	$	-	$	2.5	$	-

(1) The fair value of money market mutual funds is based on quoted prices reported on various U.S. and international stock exchanges.

(2) The fair value of interest rate swaps is calculated using models that discount the cash flows at each coupon adjustment date using the then-applicable forward interest rates.

(3) The fair value of commodity purchase contracts is based on market forward rates and reflects the present value of the amount that the company would pay or receive for contracts involving the same notional amounts and maturity dates.

Note 9 – EQUITY

The following table summarizes the changes in total equity since December 31, 2010:

(In Millions)	Number of Shares Outstanding		Common Shares		Retained Earnings		Accumulated Other Comprehensive (Loss) Income		Noncontrolling Interests		Total
Balance, December 31, 2010		64.0	$	813.6	$	1,517.4	$	(137.5)	$	77.6	$	2,271.1
Comprehensive income:
Net income				-		360.8		-		9.9		370.7
Other comprehensive income				-		-		92.9		0.5		93.4
Total comprehensive income												464.1
Stock-based compensation				7.2		-		-		-		7.2
Dividends declared				-		(46.5)		-		(11.4)		(57.9)
Adjustment to redeemable stock- based awards				-		(3.3)		-		-		(3.3)
Shares issued upon exercise of stock options and awards		0.5		9.1		-		-		-		9.1
Tax benefit from stock compensation				11.7		-		-		-		11.7
Shares purchased upon exercise of stock options and awards		(0.1)		(0.8)		(6.4)		-		-		(7.2)
Other - net				0.7		-		-		-		0.7
Balance, June 30, 2011		64.4	$	841.5	$	1,822.0	$	(44.6)	$	76.6	$	2,695.5

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Note 10 – COMPREHENSIVE INCOME

Total comprehensive income was comprised of the following:

	Three Months Ended June 30,				Six Months Ended June 30,
(In Millions of Dollars)	2011		2010		2011		2010
Net income	$	196.8	$	206.6	$	370.7	$	373.6
Foreign currency translation adjustment		22.5		(76.8)		87.6		(151.1)
Pension and other postretirement benefit plans		1.8		(0.3)		3.6		3.0
Commodity purchase contracts		0.2		0.9		0.6		(0.5)
Treasury rate lock agreements		0.8		0.8		1.6		1.6
Total comprehensive income	$	222.1	$	131.2	$	464.1	$	226.6
Less: Comprehensive income attributable to noncontrolling interests		5.9		4.2		10.4		9.9
Comprehensive income attributable to The Lubrizol Corporation	$	216.2	$	127.0	$	453.7	$	216.7

Note 11 – BENEFIT PLANS

The company has noncontributory defined benefit pension plans covering most employees. Pension benefits under these plans are based on years of service and compensation. The company also provides certain non-pension postretirement benefits, primarily health care and life insurance benefits, for retired employees. The company’s non-pension postretirement plan liabilities predominately relate to plans in the United States.

The components of net periodic pension cost consisted of the following:

	Three Months Ended June 30, 2011						Three Months Ended June 30, 2010
(In Millions of Dollars)	U.S. Plans		Non- U.S. Plans		Total		U.S. Plans		Non- U.S. Plans		Total
Service cost	$	5.8	$	2.5	$	8.3	$	4.4	$	2.1	$	6.5
Interest cost on projected benefit obligation		7.7		3.9		11.6		6.8		3.6		10.4
Expected return on plan assets		(7.2)		(3.9)		(11.1)		(6.0)		(3.5)		(9.5)
Amortization of prior service costs		0.6		0.1		0.7		0.6		0.1		0.7
Recognized net actuarial loss		2.6		0.6		3.2		1.0		0.5		1.5
Net periodic pension cost	$	9.5	$	3.2	$	12.7	$	6.8	$	2.8	$	9.6

	Six Months Ended June 30, 2011						Six Months Ended June 30, 2010
(In Millions of Dollars)	U.S. Plans		Non- U.S. Plans		Total		U.S. Plans		Non- U.S. Plans		Total
Service cost	$	11.6	$	4.9	$	16.5	$	10.2	$	4.3	$	14.5
Interest cost on projected benefit obligation		15.4		7.8		23.2		13.9		7.4		21.3
Expected return on plan assets		(14.4)		(7.7)		(22.1)		(12.1)		(7.2)		(19.3)
Amortization of prior service costs		1.1		0.2		1.3		1.2		0.2		1.4
Recognized net actuarial loss		5.2		1.2		6.4		2.4		0.9		3.3
Net periodic pension cost	$	18.9	$	6.4	$	25.3	$	15.6	$	5.6	$	21.2

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

	Three Months Ended June 30,				Six Months Ended June 30,
(In Millions of Dollars)	2011		2010		2011		2010
Service cost	$	0.4	$	0.4	$	0.8	$	0.8
Interest cost on projected benefit obligation		1.3		1.4		2.6		2.8
Amortization of prior service credits		(1.4)		(1.4)		(2.9)		(2.8)
Amortization of initial net obligation		0.1		0.1		0.2		0.2
Recognized net actuarial loss		0.2		0.1		0.4		0.3
Net periodic non-pension postretirement benefit cost	$	0.6	$	0.6	$	1.1	$	1.3

Note 12 – STOCK-BASED COMPENSATION

On April 27, 2010, shareholders of the company approved the 2010 Stock Incentive Plan (2010 Plan) to provide equity awards to key employees and directors. The 2010 Plan provides for the granting of up to 3,000,000 common shares in the form of stock appreciation rights, restricted and unrestricted shares and share units (collectively referred to as “full-value awards”), and options to buy common shares, of which no more than 1,500,000 can be settled as full-value awards. After the 1,500,000 limit has been reached, full-value awards are counted in a 3-to-1 ratio against the 3,000,000 limit. Options become exercisable 50% one year after date of grant, 75% after two years, 100% after three years and expire 10 years after grant. The 2010 Plan terminates with respect to new grants by its own terms on April 1, 2015.

Previously, the company utilized the 2005 Stock Incentive Plan (2005 Plan) to provide equity awards to key employees and directors. The 2005 Plan provided for the granting of up to 4,000,000 common shares in the form of full-value awards and options to buy common shares. Options became exercisable 50% one year after date of grant, 75% after two years, 100% after three years and expire 10 years after grant. The 2005 Plan terminated with respect to new grants by its own terms on April 1, 2010.

Under the company’s long-term incentive program, dollar-based target awards for three-year performance periods are determined by the organization and compensation committee of the board of directors. The target awards correspond to pre-determined three-year cumulative earnings per share growth rates. The dollar-based target awards are converted into a combination of stock options and performance-based share units based on the fair value of the respective awards on the date of grant.

The fair value of stock options is estimated using the Black-Scholes option pricing model. There were 77,500 and 91,800 stock options granted during the six months ended June 30, 2011 and 2010, respectively. Options have been granted to employees at fair market value on the date of grant. The assumptions used to value the options granted were as follows:

	Six Months Ended June 30,
	2011		2010
Risk-free interest rate		2.4%		3.3%
Dividend yield		1.5%		1.6%
Expected volatility		31.7%		30.3%
Expected life (years)		5.4		6.5
Fair value per option	$	30.87	$	23.84

The fair value of performance-based share units is based on the closing price of the company’s common shares on the date of grant. The company granted 82,150 and 106,500 performance-based share units during the six months ended June 30, 2011 and 2010, respectively. There are no voting or dividend rights associated with the performance-based share units until the end of the performance period and a distribution of shares, if any, is made.

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Nonvested performance-based share units at June 30, 2011, and changes during the six months ended June 30, 2011, were as follows:

	Share     Units		Weighted- Average Grant Date Fair Value
Nonvested at December 31, 2010		855,134	$	43.25
Granted		82,150	$	109.35
Vested		(83,480)	$	58.45
Forfeited		(17,500)	$	51.29
Nonvested at June 30, 2011		836,304	$	48.06

The following table identifies the number of shares expected to be issued based on current expectations of performance and the fair value on the date of grant for the nonvested performance-based share units outstanding at June 30, 2011:

Performance Period	Expected Number of Units to be Issued		Grant Date Fair Value
2009-2011		550,394	$	27.77
2010-2012		203,900	$	78.18
2011-2013		82,010	$	109.35

The company uses previously purchased treasury shares for all shares issued for option exercises and performance-based and restricted share units. The company received $9.1 million and $16.7 million of proceeds from the exercise of stock options during the six months ended June 30, 2011 and 2010, respectively. The company realized $11.7 million and $9.7 million of excess tax benefits related to the exercise of stock options and awards during the six months ended June 30, 2011 and 2010, respectively. The award for the 2008-2010 performance period was distributed during the six months ended June 30, 2011, resulting in the issuance of 178,081 shares and the deferral of 26,179 shares into a deferred compensation plan. The award for the 2007-2009 performance period was distributed during the six months ended June 30, 2010, resulting in the issuance of 213,960 shares and the deferral of 20,576 shares into a deferred compensation plan.

The terms of the performance-based share units granted to international employees state that payment will be in cash at the end of the performance period. In addition, some international employees received stock-based awards in prior years that are similar to stock appreciation rights. As such, liability accounting is used for both of these awards and compensation expense is calculated based on the company’s common share price. Compensation expense recognized in the consolidated statements of income related to these stock-based liability awards was $0.8 million and $4.6 million for the three and six months ended June 30, 2011, respectively. Compensation (credit) expense recognized in the consolidated statements of income related to these stock-based liability awards was $(1.5) million and $1.9 million for the three and six months ended June 30, 2010, respectively.

Total stock-based compensation expense recognized in the consolidated statements of income was $4.7 million and $12.6 million for the three and six months ended June 30, 2011, respectively, compared with $3.7 million and $11.0 million for the three and six months ended June 30, 2010, respectively. The related tax benefit was $1.7 million and $4.4 million for the three and six months ended June 30, 2011, respectively, compared with $1.3 million and $3.8 million for the three and six months ended June 30, 2010, respectively. Based on the grant date fair value of the awards and the company’s common share price at June 30, 2011, there was $24.1 million of total pre-tax unrecognized compensation cost related to all unvested stock-based awards. That cost is expected to be recognized over a weighted-average period of 1.8 years.

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Note 13 – RESTRUCTURING AND IMPAIRMENT CHARGES (CREDITS)

During the three and six months ended June 30, 2011, the company recorded aggregate restructuring charges (credits) of $0.3 and $(0.3) million, respectively, related to the sale of the cross-linked polyethylene compound (PEX) business within the TempRite business. In the fourth quarter of 2010, the company sold its production facility in Peachtree City, Georgia, along with the related machinery and equipment, technology and know-how used to manufacture the PEX compound, for $15.0 million. The receipt of the full $15.0 million is contingent upon the machinery and equipment functioning as required by the acquirer. Through June 30, 2011, the company received $11.3 million of proceeds, and anticipates recording an additional gain in 2011 of approximately $3.0 million upon the satisfaction of the remaining contingencies.

During the three and six months ended June 30, 2010, the company recorded aggregate restructuring and impairment charges of $0.5 million and $1.4 million, respectively. Restructuring and impairment charges primarily related to the restructuring of the sales and marketing organization within the TempRite business in the engineered polymers product line, along with the discontinuation of a tolling arrangement to manufacture products and the closure of production facilities from previously announced programs within the performance coatings product line of the Lubrizol Advanced Materials segment.

Note 14 – CONTINGENCIES AND COMMITMENTS

General

There are pending or threatened claims, lawsuits and administrative proceedings against the company with respect to commercial, premises liability, product liability, employment and environmental matters arising from the ordinary course of business. Environmental matters and liabilities are addressed specifically below. The company believes that any liability that finally may be determined with respect to these 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 claimant involving contract, patent protection and other matters. Gain contingencies, if any, are recognized when they are realized.

Berkshire Hathaway Merger

Following the announcement of the Merger Agreement described in Note 1, several shareholder derivative and purported class action lawsuits were filed in the Court of Common Pleas for Lake County, Ohio. The lawsuits generally allege that the directors of the company breached their fiduciary duties to the company’s shareholders by agreeing to enter into the transaction for an allegedly unfair price and as a result of an allegedly unfair process, and that the shareholders have not been provided sufficient information about the proposed merger. The lawsuits also allege that the company and Berkshire Hathaway aided and abetted the directors’ breaches of fiduciary duties. The lawsuits as filed seek, among other things, an injunction against the consummation of the proposed merger and rescission of the Merger Agreement. The company believes that the allegations lack merit and intends to defend itself vigorously.

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Environmental

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

The company is a generator of both hazardous and non-hazardous wastes, the treatment, storage, transportation and disposal of which are governed by various laws and governmental regulations. These laws and regulations generally impose liability for costs to investigate and remediate contamination without regard to fault. Under certain circumstances, liability may be joint and several resulting in one party being held responsible for the entire obligation. Liability also may be imposed for damages to natural resources.

Although the company believes past operations were in substantial compliance with the then-applicable regulations, the company has been designated under a country’s laws and/or regulations as a potentially responsible party (PRP) in connection with several sites. The company participates in the remediation process for current operating facilities and for third-party 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, such as other 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 and remediation standards and evolving technologies for managing investigations and remediation. The company revises its estimates as events in this process occur and additional information is obtained.

The company’s environmental reserves, measured on an undiscounted basis, totaled $7.5 million at both June 30, 2011, and December 31, 2010. Of these amounts, $5.1 million and $4.8 million were included in accrued expenses and other current liabilities at June 30, 2011, and December 31, 2010, respectively. The company believes that its environmental accruals are adequate based on currently available information. However, it is reasonably possible that as a result of new information, newly discovered conditions, changes in remediation standards or technologies, or a change in the law, approximately $0.7 million in additional costs may be incurred beyond the amounts accrued.

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

This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the unaudited consolidated financial statements and the notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q. Historical results set forth in the consolidated financial statements, including trends and percentage relationships 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.

On March 13, 2011, we entered into an Agreement and Plan of Merger (Merger Agreement) with Berkshire Hathaway Inc. (Berkshire Hathaway) whereby Berkshire Hathaway will acquire all of our outstanding shares for $135 per share in cash. After the close of the transaction, we will operate as a subsidiary of Berkshire Hathaway. On April 8, 2011, the transaction received early termination under the Hart-Scott-Rodino Antitrust Improvements Act in the U.S. At a special meeting held on June 9, 2011, Lubrizol’s shareholders approved the transaction. The completion of the transaction is subject to the satisfaction of customary closing conditions, including the expiration of waiting periods and the receipt of approvals under applicable non-U.S. merger control regulations. All non-U.S. regulatory filings have been made and the reviews are proceeding in the ordinary course. The transaction is projected to close within the next one to three months.

Pursuant to the terms of the Merger Agreement, we are permitted to conduct our business in the ordinary course. Until the closing of the merger, we are restricted from engaging in certain business activities without permission from Berkshire Hathaway, including, among other things, declaring and paying dividends outside of the ordinary course, issuing any additional shares of stock, repurchasing shares and incurring additional indebtedness. See the Merger Agreement for a complete list of restrictions.

OVERVIEW

We are an innovative specialty chemical company that supplies technologies and produces additives, ingredients, resins and compounds that improve the quality, value and performance, and minimize the environmental impact 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 1,700 patents, we use our product development and formulation expertise to sustain our leading market positions and fuel our future growth.

Our products are used in a broad range of applications and are sold into relatively stable markets such as those for engine oils, specialty driveline lubricants and metalworking fluids, as well as higher-growth markets such as those for personal care and over-the-counter pharmaceutical products, performance coatings, medical products and compressor lubricants. Our specialty chemical products also are used in a variety of industries, including the construction, sporting goods, medical products and automotive industries.

We are diverse geographically, with an extensive global manufacturing, supply chain, technical and commercial infrastructure. We believe that our customers recognize and value our ability to provide customized, high quality, cost-effective performance formulations and solutions worldwide, and that our customers highly value our global supply chain capabilities. At June 30, 2011, through the efforts of approximately 7,000 employees, we operated facilities in 27 countries, including production facilities in 17 countries and laboratories in 14 countries, in key regions around the world.

We use a broad range of raw materials in our manufacturing processes. The majority of our raw materials are feedstocks derived from petroleum and petrochemicals, with lubricant base oil being our single largest raw material. The cost of our raw materials can be highly volatile. As a result, our financial performance is influenced significantly by how effectively we manage the margin between our selling prices and the cost of our raw materials.

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We are organized into two operating and reportable segments called Lubrizol Additives and Lubrizol Advanced Materials, and we are an industry leader in many of the markets in which our product lines compete. Lubrizol Additives consists of two product lines: (i) engine additives and (ii) driveline and industrial additives. Engine additives is comprised of additives for lubricating engine oils, such as for gasoline, diesel, marine and stationary gas engines, and additives for fuels, refinery and oil field chemicals. Driveline and industrial additives is comprised of additives for driveline oils, such as automatic transmission fluids, gear oils and tractor lubricants, and industrial additives, such as additives for hydraulic, grease and metalworking fluids, as well as compressor lubricants. Both product lines sell viscosity modifiers, as well as provide services for supply chain and knowledge center management.

The Lubrizol Advanced Materials segment consists of three product lines: (i) engineered polymers, (ii) Noveon^® consumer specialties and (iii) performance coatings. The engineered polymers product line includes products such as Estane^® thermoplastic polyurethane and TempRite^® engineered polymers used within the construction, automotive, telecommunications, electronics and recreation industries. The Noveon consumer specialties product line includes acrylic thickeners, film formers, fixatives, emollients, silicones, specialty surfactants, conditioning polymers, methyl glucoside, lanolin derivatives and cassia hydrocolloids used within cosmetics, personal care and household products. The performance coatings product line includes high-performance polymers and additives for specialty paper, graphic arts, paints, textiles and coatings applications.

The following factors most affected our performance during the six months ended June 30, 2011:

• Strengthening global customer demand, primarily within our Lubrizol Additives segment, led to a 4% increase in volume.

• Our ability to increase selling prices throughout 2010 and 2011 allowed us to recover higher raw material and manufacturing costs. However, our gross profit percentage decreased to 31.2% compared with 34.0% in the same period in 2010 as the increase in revenues from pricing improvements to recover these higher costs was sufficiently greater than the increase in gross profit dollars.

• Our reduced number of shares outstanding, as a result of the shares repurchased in 2010, improved our diluted earnings per share by $0.31 per share compared with the same period in 2010.

• Currency fluctuations were favorable to revenues by 2%, unfavorable to operating costs and favorable to net income attributable to The Lubrizol Corporation by an estimated $0.26 per share as compared with the same period in 2010.

• Our agreement to be acquired by Berkshire Hathaway resulted in the incurrence of $10.7 million, or $0.15 per diluted share, of investment banking, legal, proxy solicitation and other related fees.

• The acquisition of the Performance Products Group of Nalco Company, a supplier of value-added specialty polymers and formulation additives for the global personal care and household care industries, used $164.2 million of cash.

This Management’s Discussion and Analysis contains a presentation of earnings as adjusted, a non-GAAP financial measure. Earnings as adjusted is a measure of income that differs from earnings measured in accordance with generally accepted accounting principles (GAAP). Earnings as adjusted may not be comparable with similarly titled measures used by other companies and should not be considered in isolation or as a substitute for measures of income in accordance with GAAP, as non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations. We believe that earnings as adjusted for the exclusion of Berkshire Hathaway merger-related costs and restructuring and impairment charges (credits) assists the investor in evaluating the results of our core operating activities and provides greater comparability with historical results where such charges may be materially different. We use earnings as adjusted to measure and evaluate performance and to determine, in part, incentive compensation. We believe that the presentation of both GAAP and non-GAAP measures may assist investors in comparing our performance with that of peer companies presenting a similar non-GAAP measure.

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RESULTS OF OPERATIONS

Three Months Ended June 30, 2011 Compared With Three Months Ended June 30, 2010

	Three Months Ended June 30,
(In Millions of Dollars Except Per Share Data)	2011		2010		$ Change		% Change
Revenues	$	1,634.8	$	1,401.2	$	233.6	17%
Cost of sales		1,133.3		927.6		205.7	22%
Gross profit		501.5		473.6		27.9	6%
Selling and administrative expenses		123.6		100.0		23.6	24%
Research, testing and development expenses		58.7		52.9		5.8	11%
Amortization of intangible assets		7.1		6.2		0.9	15%
Berkshire Hathaway merger-related costs		0.8		-		0.8	*
Restructuring and impairment charges		0.3		0.5		(0.2)	*
Other income - net		(5.0)		(11.6)		6.6	(57%)
Interest expense - net		22.0		23.4		(1.4)	(6%)
Income before income taxes		294.0		302.2		(8.2)	(3%)
Provision for income taxes		97.2		95.6		1.6	2%
Net income		196.8		206.6		(9.8)	(5%)
Net income attributable to noncontrolling interests		5.5		5.2		0.3	6%
Net income attributable to The Lubrizol Corporation	$	191.3	$	201.4	$	(10.1)	(5%)
Basic earnings per share attributable to The Lubrizol Corporation	$	2.96	$	2.95	$	0.01	-
Diluted earnings per share attributable to The Lubrizol Corporation	$	2.90	$	2.88	$	0.02	1%

* Calculation not meaningful

Revenues The increase in revenues compared with the same quarter last year was due to a 13% improvement in the combination of price and product mix, a 3% favorable currency impact and a 1% increase in volume. The implementation of recent price increases primarily led to the improvement in the combination of price and product mix.

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The following table shows the geographic mix of our volume as well as the percentage changes compared with the same quarter last year:

	2011     Volume	2011 vs. 2010 % Change
North America	37%	(4%)
Europe	27%	1%
Asia-Pacific / Middle East	29%	9%
Latin America	7%	3%
Total	100%	1%

Segment volume variances by geographic zone, as well as the factors explaining the changes in segment revenues compared with the same quarter last year, are contained within the “Segment Analysis” section.

Cost of Sales The increase in cost of sales compared with the same quarter last year primarily was due to a 23% increase in average raw material cost and a 13% increase in manufacturing costs. Our average raw material cost has increased sequentially for the past eight consecutive quarters primarily due to tight supply conditions for some of our raw materials, and we anticipate that costs will continue to rise during the remainder of 2011, although at a slower rate compared with the first half of 2011. We implemented price increases in both segments throughout 2010 and have continued to implement price increases in 2011 in response to the significant rise in raw material costs. The increase in manufacturing expenses included an unfavorable currency impact of $9.3 million, increased salaries and wages of $4.5 million, increased repair and maintenance costs of $4.3 million and higher incentive compensation of $3.5 million.

Gross Profit Gross profit increased $27.9 million, or 6%, compared with the same quarter last year primarily due to improved price and product mix, a favorable currency impact and higher volume, partially offset by higher raw material and manufacturing costs. However, our gross profit percentage decreased to 30.7% compared with 33.8% in the same quarter last year as the increase in revenues from pricing improvements to recover higher raw material and manufacturing costs was sufficiently greater than the increase in gross profit dollars.

Selling and Administrative Expenses Selling and administrative expenses increased $23.6 million, or 24%, compared with the same quarter last year primarily due to increased salaries and wages of $6.6 million, an unfavorable currency impact of $4.3 million, higher incentive compensation expenses of $3.7 million and higher deferred compensation expense of $2.9 million. In addition, we made contributions of $2.5 million to The Lubrizol Foundation in the second quarter of both 2011 and 2010.

Research, Testing and Development Expenses Research, testing and development expenses increased $5.8 million, or 11%, primarily due to an unfavorable currency impact of $1.6 million.

Berkshire Hathaway Merger-Related Costs Berkshire Hathaway merger-related costs include legal and proxy solicitation fees incurred as part of our agreement to be acquired by Berkshire Hathaway Inc. Contingent upon the successful completion of the merger, additional investment banking fees of $45.0 million will become payable by us.

Restructuring and Impairment Charges During the second quarter of 2011, we recorded aggregate restructuring charges of $0.3 million related to the sale of the cross-linked polyethylene compound (PEX) business within our TempRite business. In the fourth quarter of 2010, we sold our production facility in Peachtree City, Georgia, along with the related machinery and equipment, technology and know-how used to manufacture the PEX compound, for $15.0 million. The receipt of the full $15.0 million is contingent upon the machinery and equipment functioning as required by the acquirer. Through June 30, 2011, we received $11.3 million of proceeds and anticipate recording an additional gain in 2011 of approximately $3.0 million upon the satisfaction of the remaining contingencies.

During the second quarter of 2010, restructuring and impairment charges of $0.5 million primarily related to the closure of production facilities from previously announced programs within the performance coatings product line of the Lubrizol Advanced Materials segment.

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Other Income – net Other income-net decreased $6.6 million, or 57%, compared with the same quarter last year primarily due to lower foreign currency gains of $5.4 million.

Provision for Income Taxes Our effective tax rate of 33.1% increased from 31.6% in the same quarter last year primarily due to a less favorable geographic earnings mix.

Net Income Attributable to The Lubrizol Corporation Primarily as a result of the above factors, net income attributable to The Lubrizol Corporation decreased to $191.3 million ($2.90 per diluted share) compared with $201.4 million ($2.88 per diluted share) in the same quarter last year. Excluding the effect of Berkshire Hathaway merger-related costs and restructuring and impairment charges, earnings as adjusted decreased to $191.9 million ($2.91 per diluted share) compared with $201.7 million ($2.88 per diluted share) in the same quarter last year. The following table provides a reconciliation of earnings to earnings as adjusted:

	Three Months Ended June 30, 2011						Three Months Ended June 30, 2010
(In Millions of Dollars Except Per Share Data)	Income Before Income Taxes		Net Income Attributable to Lubrizol		Diluted EPS		Income Before Income Taxes		Net Income Attributable to Lubrizol		Diluted EPS
Earnings	$	294.0		$  191.3	$	2.90	$	302.2	$	201.4	$	2.88
Adjustments:
Berkshire Hathaway merger-related costs		0.8		0.4		0.01		-		-		-
Restructuring and impairment charges		0.3		0.2		-		0.5		0.3		-
Earnings as adjusted (Non-GAAP)	$	295.1		$  191.9	$	2.91	$	302.7	$	201.7	$	2.88

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Six Months Ended June 30, 2011 Compared With Six Months Ended June 30, 2010

	Six Months Ended June 30,
(In Millions of Dollars Except Per Share Data)	2011		2010		$ Change		% Change
Revenues	$	3,153.7	$	2,716.7	$	437.0	16%
Cost of sales		2,170.0		1,792.4		377.6	21%
Gross profit		983.7		924.3		59.4	6%
Selling and administrative expenses		256.3		222.9		33.4	15%
Research, testing and development expenses		112.5		105.7		6.8	6%
Amortization of intangible assets		13.9		12.5		1.4	11%
Berkshire Hathaway merger-related costs		10.7		-		10.7	*
Restructuring and impairment (credits) charges		(0.3)		1.4		(1.7)	*
Other income - net		(4.1)		(19.7)		15.6	(79%)
Interest expense - net		45.6		46.9		(1.3)	(3%)
Income before income taxes		549.1		554.6		(5.5)	(1%)
Provision for income taxes		178.4		181.0		(2.6)	(1%)
Net income		370.7		373.6		(2.9)	(1%)
Net income attributable to noncontrolling interests		9.9		9.9		-	-
Net income attributable to The Lubrizol Corporation	$	360.8	$	363.7	$	(2.9)	(1%)
Basic earnings per share attributable to The Lubrizol Corporation	$	5.59	$	5.32	$	0.27	5%
Diluted earnings per share attributable to The Lubrizol Corporation	$	5.47	$	5.21	$	0.26	5%

* Calculation not meaningful

Revenues The increase in revenues compared with the same period in 2010 was due to a 10% improvement in the combination of price and product mix, a 4% increase in volume and a 2% favorable currency impact. The implementation of recent price increases along with the recovery in our driveline and industrial additives product line, which improved product mix, primarily led to the improvement in the combination of price and product mix.

The following table shows the geographic mix of our volume as well as the percentage changes compared with the same period in 2010:

	2011     Volume	2011 vs. 2010 % Change
North America	38%	(1%)
Europe	27%	6%
Asia-Pacific / Middle East	28%	6%
Latin America	7%	7%
Total	100%	4%

Segment volume variances by geographic zone, as well as the factors explaining the changes in segment revenues compared with the same period in 2010, are contained within the “Segment Analysis” section.

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Cost of Sales The increase in cost of sales compared with the same period in 2010 primarily was due to a 19% increase in average raw material cost and a 13% increase in manufacturing costs. The increase in manufacturing expenses included higher production supplies and services of $13.0 million, an unfavorable currency impact of $9.2 million, increased repair and maintenance costs of $8.9 million, increased salaries and wages of $8.6 million and higher utilities of $6.4 million.

Gross Profit Gross profit increased $59.4 million, or 6%, compared with the same period in 2010 primarily due to improved price and product mix, a favorable currency impact and higher volume, partially offset by higher raw material and manufacturing costs. However, our gross profit percentage decreased to 31.2% compared with 34.0% in the same period in 2010 as the increase in revenues from pricing improvements to recover higher raw material and manufacturing costs was sufficiently greater than the increase in gross profit dollars.

Selling and Administrative Expenses Selling and administrative expenses increased $33.4 million, or 15%, compared with the same period in 2010 primarily due to increased salaries and wages of $11.4 million, an unfavorable currency impact of $5.1 million, higher deferred compensation expense of $3.5 million and increased travel expenses of $2.9 million. In addition, we made contributions of $5.0 million to The Lubrizol Foundation in the first half of both 2011 and 2010.

Research, Testing and Development Expenses Research, testing and development expenses increased $6.8 million, or 6%, primarily due to an unfavorable currency impact of $1.8 million.

Berkshire Hathaway Merger-Related Costs Berkshire Hathaway merger-related costs include investment banking, legal, proxy solicitation and other fees incurred as part of our agreement to be acquired by Berkshire Hathaway Inc.

Restructuring and Impairment Charges (Credits) During the six months ended June 30, 2011, we recorded aggregate restructuring credits of $0.3 million related to the gain from the sale of the cross-linked polyethylene compound (PEX) business within our TempRite business.

During the six months ended June 30, 2010, restructuring and impairment charges of $1.4 million primarily related to the restructuring of the sales and marketing organization within our TempRite business in the engineered polymers product line, along with the discontinuation of a tolling arrangement to manufacture products and the closure of production facilities from previously announced programs within our performance coatings product line of the Lubrizol Advanced Materials segment.

Other Income – net Other income-net decreased $15.6 million, or 79%, compared with the same period in 2010 primarily due to the incurrence of foreign currency losses of $3.1 million compared with foreign currency gains of $12.3 million in the same period in 2010.

Provision for Income Taxes Our effective tax rate of 32.5% was comparable with our effective tax rate of 32.6% in the same period in 2010.

Net Income Attributable to The Lubrizol Corporation Primarily as a result of the above factors, net income attributable to The Lubrizol Corporation decreased to $360.8 million ($5.47 per diluted share) compared with $363.7 million ($5.21 per diluted share) in the same period in 2010. Excluding the effect of Berkshire Hathaway merger-related costs and restructuring and impairment charges (credits), earnings as adjusted increased to $370.5 million ($5.62 per diluted share) compared with $364.6 million ($5.22 per diluted share) in the same period in 2010.

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The following table provides a reconciliation of earnings to earnings as adjusted:

	Six Months Ended June 30, 2011						Six Months Ended June 30, 2010
(In Millions of Dollars Except Per Share Data)	Income Before Income Taxes		Net Income Attributable to Lubrizol		Diluted EPS		Income Before Income Taxes		Net Income Attributable to Lubrizol		Diluted EPS
Earnings	$	549.1		$  360.8	$	5.47	$	554.6	$	363.7	$	5.21
Adjustments:
Berkshire Hathaway merger-related costs		10.7		9.9		0.15		-		-		-
Restructuring and impairment (credits) charges		(0.3)		(0.2)		-		1.4		0.9		0.01
Earnings as adjusted (Non-GAAP)	$	559.5		$  370.5	$	5.62	$	556.0	$	364.6	$	5.22

SEGMENT ANALYSIS

We primarily evaluate performance and allocate resources based on segment operating income as well as projected future performance. Segment operating income is defined as revenues less expenses identifiable to the product lines included within each segment. Segment operating income will reconcile to consolidated income before income taxes by deducting corporate expenses and other income (expense) that are not attributed to the segments, Berkshire Hathaway merger-related costs, restructuring and impairment charges (credits) and net interest expense.

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
Revenues:
Lubrizol Additives		73	%		72	%		72	%		72	%
Lubrizol Advanced Materials		27	%		28	%		28	%		28	%
Segment Operating Income:
Lubrizol Additives		84	%		81	%		81	%		81	%
Lubrizol Advanced Materials		16	%		19	%		19	%		19	%

Lubrizol Additives Segment

	Three Months Ended June 30,						%		Six Months Ended June 30,						%
(In Millions of Dollars)	2011		2010		$ Change		Change		2011		2010		$ Change		Change
Revenues	$	1,201.0	$	1,008.4	$	192.6		19%	$	2,284.4	$	1,956.4	$	328.0		17%
Gross profit		376.5		347.3		29.2		8%		720.7		672.4		48.3		7%
STAR Expenses		95.4		77.6		17.8		23%		181.5		156.9		24.6		16%
Segment operating income		282.4		271.5		10.9		4%		542.3		517.9		24.4		5%

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Three Months Ended June 30, 2011 Compared With Three Months Ended June 30, 2010

Revenues The increase in revenues compared with the same quarter last year was due to a 13% improvement in the combination of price and product mix, a 4% favorable currency impact and a 2% increase in volume. The implementation of recent price increases primarily led to the improvement in the combination of price and product mix.

The following table shows the geographic mix of our volume as well as the percentage changes compared with the same quarter last year:

	2011     Volume	2011 vs. 2010 % Change
North America	30%	(5%)
Europe	31%	3%
Asia-Pacific / Middle East	32%	10%
Latin America	7%	1%
Total	100%	2%

The increase in the Asia-Pacific / Middle East market resulted from stronger customer demand, particularly in China, and favorable customer order patterns, particularly in the Middle East. The increase in the European market was driven by business gains as well as further market recovery primarily in our driveline and industrial additives product line. The decrease in the North America market was due in part to changes in product mix and business losses in the engine additives product line combined with unfavorable customer order patterns and the resourcing of product sales to Asia Pacific / Middle East. Volume increased 4% in our driveline and industrial additives product line compared with the same quarter last year due to stronger demand. Volume increased 2% in our engine additives product line compared with the same quarter last year due to stronger demand and favorable customer order patterns in the Asia-Pacific / Middle East market.

Gross Profit Gross profit increased $29.2 million, or 8%, compared with the same quarter last year primarily due to improved price and product mix, a favorable currency impact and higher volume, partially offset by higher raw material and manufacturing costs. Average raw material cost increased 25% compared with the same quarter last year and 11% sequentially from the first quarter of 2011. Our average raw material cost has increased sequentially for the past eight consecutive quarters primarily due to tight supply conditions for some of our raw materials, and we anticipate that costs will continue to rise during the remainder of 2011, although at a slower rate compared with the first half of 2011. In response to the significant rise in raw material costs, we announced two price increases in the first quarter of 2011; one in mid-January that largely has been implemented and another at the end of March that is expected to be implemented fully in the third quarter. We announced a third price increase in June that will be implemented during the third and fourth quarters. Total manufacturing costs increased 12% compared with the same quarter last year primarily due to an unfavorable currency impact, increased production supplies and services, higher salaries and benefits due to annual merit increases, additional headcount and higher incentive compensation, and higher repair and maintenance costs. The increase in revenues from pricing improvements to recover higher raw material and manufacturing costs was sufficiently greater than the increase in gross profit dollars such that our gross profit percentage decreased to 31.4% from 34.4% in the same quarter last year.

Selling, Testing, Administrative and Research (STAR) Expenses STAR expenses increased $17.8 million, or 23%, compared with the same quarter last year, which included the impact of certain expenses that previously were classified as manufacturing costs. Excluding this reclassification, STAR expenses increased 19%. This increase primarily was driven by an unfavorable currency impact, increased salaries and benefits, including higher incentive compensation, and higher travel expenses.

Segment Operating Income Segment operating income increased 4% compared with the same quarter last year primarily due to the factors discussed above.

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Six Months Ended June 30, 2011 Compared With Six Months Ended June 30, 2010

Revenues The increase in revenues compared with the same period in 2010 was due to a 12% improvement in the combination of price and product mix, a 3% increase in volume and a 2% favorable currency impact. The implementation of recent price increases along with the recovery in our driveline and industrial additives product line, which improved product mix, primarily led to the improvement in the combination of price and product mix.

The following table shows the geographic mix of our volume as well as the percentage changes compared with the same period in 2010:

	2011     Volume	2011 vs. 2010 % Change
North America	30%	(2%)
Europe	32%	7%
Asia-Pacific / Middle East	30%	5%
Latin America	8%	5%
Total	100%	3%

Volume increased compared with the same period in 2010 primarily due to stronger demand in the Europe and Asia-Pacific / Middle East markets. The decrease in the North America market was due in part to changes in product mix and business losses in the engine additives product line combined with unfavorable customer order patterns and the resourcing of product sales to Asia Pacific / Middle East. Volume increased 10% in our driveline and industrial additives product line and 1% in our engine additives product line compared with the same period in 2010.

Gross Profit Gross profit increased $48.3 million, or 7%, compared with the same period in 2010 primarily due to improved price and product mix, a favorable currency impact and higher volume, partially offset by higher raw material and manufacturing costs. Average raw material cost increased 20% compared with the same period in 2010. Total manufacturing costs increased 13% compared with the same period in 2010 primarily due to increased production supplies and services, an unfavorable currency impact, higher salaries and benefits due to annual merit increases, additional headcount and higher incentive compensation and higher repair and maintenance costs. The increase in revenues from pricing improvements to recover higher raw material and manufacturing costs was sufficiently greater than the increase in gross profit dollars such that our gross profit percentage decreased to 31.5% from 34.4% in the same period in 2010.

Selling, Testing, Administrative and Research (STAR) Expenses STAR expenses increased $24.6 million, or 16%, compared with the same period in 2010, which included the impact of certain expenses that previously were classified as manufacturing costs. Excluding this reclassification, STAR expenses increased 12%. This increase primarily was driven by an unfavorable currency impact, increased salaries and benefits, including higher incentive compensation, and higher travel expenses.

Segment Operating Income Segment operating income increased 5% compared with the same period in 2010 primarily due to the factors discussed above.

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Lubrizol Advanced Materials Segment

	Three Months Ended June 30,							%			Six Months Ended June 30,						%
(In Millions of Dollars)	2011		2010		$ Change			Change			2011		2010		$ Change		Change
Revenues	$	433.8	$	392.8	$	41.0			10	%	$	869.3	$	760.3	$	109.0		14	%
Gross profit		125.0		126.3		(1.3	)		(1	%)		263.0		251.9		11.1		4	%
STAR Expenses		67.5		60.0		7.5			13	%		129.7		120.9		8.8		7	%
Segment operating income		52.2		62.5		(10.3	)		(16	%)		123.3		123.1		0.2		-

Three Months Ended June 30, 2011 Compared With Three Months Ended June 30, 2010

Revenues The increase in revenues compared with the same quarter last year was due to a 9% improvement in the combination of price and product mix and a 2% favorable currency impact, partially offset by a 1% decrease in volume. The implementation of recent price increases, which partially were offset by an unfavorable product mix from the decline in our Noveon consumer specialties product line, primarily led to the improvement in the combination of price and product mix.

The following table shows the geographic mix of our volume as well as the percentage changes compared with the same quarter last year:

	2011     Volume	2011 vs. 2010 % Change
North America	59%	(4%)
Europe	15%	(5%)
Asia-Pacific / Middle East	23%	6%
Latin America	3%	18%
Total	100%	(1%)

The decrease in the North America and Europe markets primarily was due to weaker customer demand in our Noveon consumer specialties and performance coatings product lines. The increase in our Asia-Pacific / Middle East and Latin America markets primarily was due to strong customer demand in our TempRite business, particularly in India and the Middle East. Volume increased 10% in our engineered polymers product line, but decreased 7% in both our performance coatings and Noveon consumer specialties product lines compared with the same quarter last year.

Gross Profit Gross profit decreased $1.3 million, or 1%, compared with the same quarter last year primarily due to lower volume and higher raw material and manufacturing costs, offset by improved price and product mix, the benefit from acquisitions and a favorable currency impact. Average raw material cost increased 18% compared with the same quarter last year and 8% sequentially from the first quarter of 2011. Our average raw material cost has increased sequentially for the past eight consecutive quarters primarily due to tight supply conditions for some of our raw materials, and we anticipate that costs will continue to rise during the remainder of 2011, although at a slower rate compared with the first half of 2011. In response to the significant rise in raw material costs, all product lines implemented several price increases in 2011 that recovered the increase in raw material costs. Total manufacturing costs increased 15% compared with the same quarter last year primarily due to increased salaries and benefits, repair and maintenance costs and utilities, along with an unfavorable currency impact. The higher manufacturing costs and unfavorable product mix from the decline in our Noveon consumer specialties product line resulted in a decrease in our gross profit percentage to 28.8% from 32.2% in the same quarter last year.

Selling, Testing, Administrative and Research (STAR) Expenses STAR expenses increased $7.5 million, or 13%, compared with the same quarter last year primarily as a result of increased salaries and benefits and an unfavorable currency impact.

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Segment Operating Income Segment operating income decreased 16% compared with the same quarter last year primarily due to the factors discussed above.

Six Months Ended June 30, 2011 Compared With Six Months Ended June 30, 2010

Revenues The increase in revenues compared with the same period in 2010 was due to an 8% improvement in the combination of price and product mix, a 5% increase in volume and a 1% favorable currency impact. The implementation of recent price increases primarily led to the improvement in the combination of price and product mix.

The following table shows the geographic mix of our volume as well as the percentage changes compared with the same period in 2010:

	2011     Volume	2011 vs. 2010 % Change
North America	59%	1%
Europe	16%	4%
Asia-Pacific / Middle East	22%	13%
Latin America	3%	25%
Total	100%	5%

The increase in the Asia-Pacific / Middle East and Latin America markets primarily was due to strong customer demand in our TempRite business, particularly in India and the Middle East. The increase in the Europe market primarily was due to stronger customer demand in our engineered polymers and performance coatings product lines. Volume increased 15% in our engineered polymers product line and 1% in our performance coatings product line, but decreased 3% in our Noveon consumer specialties product line compared with the same period in 2010.

Gross Profit Gross profit increased $11.1 million, or 4%, compared with the same period in 2010 primarily due to higher volume, improved price and product mix, the benefit from acquisitions and a favorable currency impact, partially offset by higher raw material and manufacturing costs. Average raw material cost increased 17% compared with the same period in 2010. Total manufacturing costs increased 13% compared with the same period in 2010 primarily due to increased salaries and benefits, repair and maintenance costs and utilities, along with an unfavorable currency impact. The increase in revenues from pricing improvements to recover higher raw material and manufacturing costs was sufficiently greater than the increase in gross profit dollars such that our gross profit percentage decreased to 30.3% from 33.1% in the same period in 2010.

Selling, Testing, Administrative and Research (STAR) Expenses STAR expenses increased $8.8 million, or 7%, compared with the same period in 2010 primarily as a result of increased salaries and benefits and an unfavorable currency impact.

Segment Operating Income Segment operating income remained level with the same period in 2010 primarily due to the factors discussed above.

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WORKING CAPITAL, LIQUIDITY AND CAPITAL RESOURCES

Summary of Cash Flows

The following table summarizes the major components of cash flow:

	Six Months Ended June 30,
(In Millions of Dollars)	2011		2010
Cash provided by (used for):
Operating activities	$	221.8	$	273.2
Investing activities		(298.4)		(61.6)
Financing activities		(44.1)		(198.7)
Effect of exchange rate changes on cash		17.9		(31.7)
Net decrease in cash and cash equivalents	$	(102.8)	$	(18.8)

Operating Activities

The decrease in cash provided by operating activities compared with the same period in 2010 primarily was attributable to an increase in working capital and the acceleration of funding payments for our U.S. defined benefit pension plans.

We manage receivables and inventories on the basis of average days sales in receivables and average days sales in inventory. Our average days sales in receivables remained relatively unchanged at 46.5 days during the six months ended June 30, 2011, compared with 46.3 days for the year ended December 31, 2010. Our average days sales in inventory increased to 86.9 days during the six months ended June 30, 2011, from 81.6 days for the year ended December 31, 2010, primarily due to the increase in average raw material cost.

Investing Activities

Cash used for investing activities increased primarily due to the acquisition of the Performance Products Group of Nalco Company for $164.2 million, along with higher capital expenditures of $76.0 million. Capital expenditures increased primarily due to the construction of a new additives facility in China, which now is targeted to be operational in the second half of 2012. We estimate that capital expenditures will be between $340.0 million and $360.0 million in 2011 primarily due to the accelerated construction of the China facility, along with the expansion of our Carbopol^® production capabilities in the U.S. and resumption of infrastructure spending that was deferred during the recession.

Financing Activities

Cash used for financing activities of $44.1 million primarily consisted of the payment of dividends. Cash used for financing activities of $198.7 million during the same period in 2010 primarily consisted of the repurchase of common shares, repayment of the balance outstanding under the euro revolving credit facility and the payment of dividends.

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Capitalization, Liquidity and Credit Facilities

At June 30, 2011, our total debt outstanding of $1,357.1 million consisted of 85% fixed-rate debt and 15% variable-rate debt that includes $200.0 million of fixed-rate debt swapped for a variable rate. Our weighted-average interest rate at June 30, 2011, was approximately 7.0%.

Total debt as a percent of capitalization was 33% at June 30, 2011. Our net debt as a percent of capitalization at June 30, 2011, was 17%. Net debt represents total short-term and long-term debt, excluding 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 total equity plus net debt.

The $500.0 million revolving credit facility, which expires in July 2015, permits us to borrow at variable rates based upon LIBOR or the lenders’ base rate, as defined in the credit agreement, plus a specified spread. The spread is dependent on our long-term unsecured senior debt rating from Standard and Poor’s and Moody’s Investors Service. We may request an increase of $25.0 million or more to the facility amount once each year, up to an aggregate maximum of $750.0 million, subject to approval by the lenders. We had no borrowings outstanding under this facility at June 30, 2011, or at any other time during the year.

The €150.0 million revolving credit facility, which expires in July 2012, allows us to borrow at variable rates based on EURIBOR for euro borrowings or LIBOR for dollar or pound sterling borrowings plus a specified credit spread. We may elect to increase the euro facility amount once each year in increments of €10.0 million, up to an aggregate maximum of €200.0 million, subject to approval by the lenders. We had no borrowings outstanding under this facility at June 30, 2011, or at any other time during the year.

Under the U.S. and euro bank credit agreements, we are required to comply with financial ratios of debt to Consolidated EBITDA and Consolidated EBITDA to interest expense. As defined in the credit agreements, Consolidated EBITDA represents consolidated earnings before interest, income taxes, depreciation and amortization, extraordinary, unusual or non-recurring non-cash gains or losses, including the sale of property and equipment and goodwill impairments, and non-cash gains or losses from less than wholly owned subsidiaries and investments. The credit agreements require that the ratio of debt to Consolidated EBITDA be less than 3.5:1 and the ratio of Consolidated EBITDA to interest expense be greater than 3.5:1. At June 30, 2011, we maintained a ratio of debt to Consolidated EBITDA of 1.1:1 and a ratio of Consolidated EBITDA to interest expense of 12.5:1.

The bank credit agreements also contain customary events of default including, among others, a party obtaining a beneficial ownership in excess of 20% of the company’s voting stock. On July 18, 2011, the bank credit agreements were amended to waive the event of default for a change in beneficial ownership solely with respect to the anticipated merger with Berkshire Hathaway.

We believe that our cash flow from operations, borrowing capacity under the credit facilities and our current cash and cash equivalents provide sufficient liquidity to maintain our current operations and capital expenditure requirements, service our debt, pay dividends, pursue acquisitions, and repurchase shares.

Contractual Cash Obligations

There were no material changes in contractual cash obligations from December 31, 2010 to June 30, 2011.

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, share repurchases and other obligations, and we have untapped borrowing capacity that can provide us with additional financial resources. We currently have a shelf registration statement filed with the Securities and Exchange Commission (SEC) pursuant to which debt securities, preferred or common shares, and warrants may be issued. Under the terms of the Merger Agreement, we may not issue securities under this shelf registration. In addition, at June 30, 2011, we maintained a balance of cash and cash equivalents of $793.4 million and had $500.0 million available under the U.S. revolving credit facility and €150.0 million (approximately $214.3 million) available under the euro revolving credit facility.

30

Off-Balance Sheet Arrangements

At June 30, 2011, we had $47.8 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

Refer to Note 2 to the consolidated financial statements for a discussion of accounting standards we recently adopted or will be required to adopt.

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 relate to anticipated trends and expectations rather than historical matters. Although they reflect our current expectations, these statements involve a number of risks, uncertainties, and assumptions relating to our operations and business environment that are difficult to predict and may be beyond our control. Such uncertainties and factors may cause actual results to differ materially from those expressed or implied by 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 feedstocks derived from petroleum and petrochemicals, and the cost and availability of energy, especially natural gas and electricity, and our ability to sustain profitability through our pricing in a competitive market.

• The demand for our products as influenced by such factors as the global economy and the development of replacement technology.

• The uncertainties related to our proposed merger with Berkshire Hathaway, including the expected timing of completion of the transaction and whether the merger will be approved by government regulatory authorities.

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

• Our success at continuing to develop, safeguard and benefit from, proprietary technology to meet or exceed new industry performance standards and to create new products to meet changing customer expectations.

• The potential disruption or interruption of our or our suppliers’ production facilities due to accidents, terrorism, political events, civil unrest, or weather-related disruptions to facilities located near the U.S. Gulf Coast.

• Our ability to execute effectively our capacity expansion plans, including the construction of our new facility in southern China.

• Our ability to continue to maximize efficiencies in our procurement and manufacturing processes and manage our cost structure.

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

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• The risks of conducting business in various countries, including general economic conditions, inflation and foreign currency exchange rates, foreign investment and repatriation restrictions, legal, environmental and other regulatory constraints and other social and political factors.

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

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

There were no material changes in our market risk exposure from December 31, 2010 to June 30, 2011. For a discussion of our market risks associated with interest rates, foreign currencies and commodities, see Item 7A “Quantitative and Qualitative Disclosures about Market Risk” in our Annual Report on Form 10-K for the year ended December 31, 2010.

Item 4.  Controls and Procedures

At the end of the period covered by this quarterly report (June 30, 2011), 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 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.

There were no changes in our internal control over financial reporting identified in the evaluation described in the preceding paragraph that occurred during the second quarter of 2011 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

32

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Following the announcement of the Merger Agreement described in Note 1 to the consolidated financial statements, several shareholder derivative and purported class action lawsuits were filed in the Court of Common Pleas for Lake County, Ohio. The lawsuits generally allege that the directors of the company breached their fiduciary duties to our shareholders by agreeing to enter into the transaction for an allegedly unfair price and as a result of an allegedly unfair process, and that the shareholders have not been provided sufficient information about the proposed merger. The lawsuits also allege that Lubrizol and Berkshire Hathaway aided and abetted the directors’ breaches of fiduciary duties. The lawsuits as filed seek, among other things, an injunction against the consummation of the proposed merger and rescission of the Merger Agreement. We believe that the allegations lack merit and intend to defend our self vigorously.

Item 1A. Risk Factors

The following risk factor has arisen since the beginning of the fiscal year. For a complete discussion of events that could affect adversely our business, results of operation and financial condition, if they were to occur, see Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2010.

Failure to complete the transaction with Berkshire Hathaway Inc. could impact negatively our stock price, future business and financial results.

On March 13, 2011, we entered into an Agreement and Plan of Merger with Berkshire Hathaway whereby Berkshire Hathaway will acquire all of our outstanding shares for $135 per share in cash. After the close of the transaction, we will operate as a subsidiary of Berkshire Hathaway. The Merger Agreement, as amended, requires a consummation of the transaction by September 15, 2011, which only may be extended on a day-to-day basis to December 31, 2011, to obtain regulatory approval if, on September 15, 2011, all other closing conditions have been fulfilled or are then capable of being fulfilled; otherwise, the Merger Agreement will be subject to termination.

If the merger is not completed, we will be subject to certain risks including the following:

• A decline in the price of our common stock, as the current price may reflect a market assumption that we will complete the merger; and

• Payment of a termination fee to Berkshire Hathaway under certain circumstances if the Merger Agreement is terminated.

Further, the pending merger and related matters may divert management’s attention from day-to-day business matters and require substantial commitments of time and resources, and may also impair our relations with our employees, customers, suppliers and other constituencies.

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

(a) We issued the following common shares to employees pursuant to various employee benefit plans sponsored by a wholly owned foreign subsidiary, exempt from registration under Regulation S of the Securities Act of 1933, as amended: 302 on April 14, 2011; 500 on May 9, 2011; 1,087 to June 2, 2011; 1,000 on June 13, 2011 and 300 on June 20, 2011.

(b) Not applicable.

33

(c) During the quarter ended June 30, 2011, we did not purchase any Lubrizol common shares under the 5.0 million share repurchase program authorized by our board of directors on June 29, 2010. At June 30, 2011, there were 3,443,918 Lubrizol common shares that may yet be purchased under the program. Under the terms of the Merger Agreement, we are prohibited from purchasing any shares under this program.

Under the terms of the Merger Agreement, we may not declare, set aside or pay any dividend or distribution with respect to our common shares, other than our ordinary course quarterly dividends to holders of shares in an amount no greater than $0.36 per share, with record and payment dates in accordance with our customary dividend schedule.

Item 6. Exhibits

Refer to the exhibit index following the signature page.

34

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

Principal Accounting Officer and Duly Authorized

Signatory of The Lubrizol Corporation

Date: August 5, 2011

35

Exhibit Index

2.1	Agreement and Plan of Merger by and among Berkshire Hathaway Inc., The Lubrizol Corporation and Ohio Merger Sub, Inc. dated as of March 13, 2011 (incorporated by reference to Exhibit 2.1 to the company’s current report on Form 8-K filed with the SEC on March 15, 2011).
2.2	Amendment to Agreement and Plan of Merger, dated as of June 9, 2011, by and among Berkshire Hathaway Inc., Ohio Merger Sub, Inc., and The Lubrizol Corporation (incorporated by reference to Exhibit 2.1 to the company’s current report on Form 8-K filed with the SEC on June 13, 2011).
3.1	Second Amended and Restated Articles of Incorporation of The Lubrizol Corporation, effective as of May 6, 2009 (incorporated by reference to Exhibit 3.1 to the company’s quarterly report on Form 10-Q filed with the SEC on May 8, 2009).
3.2	Second Amended and Restated Regulations of The Lubrizol Corporation, effective as of June 23, 2009 (incorporated by reference to Exhibit 3.1 to the company’s current report on Form 8-K filed with the SEC on June 24, 2009).
10.1	The Lubrizol Corporation 2005 Stock Incentive Plan, as amended and restated June 28, 2011.
10.2	Waiver No. 1, dated as of July 18, 2011, to the Credit Agreement among The Lubrizol Corporation, the lenders parties thereto and Citibank N.A. as administrative agent.
10.3	Waiver No. 1, dated as of July 18, 2011, to the Three Year Credit Agreement among Lubrizol Holdings France SAS, Lubrizol Advanced Materials BVBA, Lubrizol (Gibraltar) Limited and Lubrizol Coordination Center BVBA as borrowers, The Lubrizol Corporation as guarantor, the lenders parties thereto, and The Royal Bank of Scotland plc as administrative agent.
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 pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS**	XBRL Instance Document
101.SCH**	XBRL Taxonomy Extension Schema
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase
101.DEF**	XBRL Taxonomy Extension Definition Linkbase
101.LAB**	XBRL Taxonomy Extension Label Linkbase
101.PRE**	XBRL Taxonomy Extension Presentation Linkbase

** In accordance with Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, and shall not be part of any registration statement or other document filed under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as shall be expressly set forth by specific reference in such filing.

36

EX-10.1

Exhibit 10.1

THE LUBRIZOL CORPORATION 2005 STOCK INCENTIVE PLAN

(As Amended June 28, 2011)

Section 1. Purpose.

The purposes of The Lubrizol Corporation 2005 Stock Incentive Plan are to encourage selected employees of The Lubrizol Corporation and its Subsidiaries and Outside Directors of the Company to acquire a proprietary and vested interest in the growth and performance of the Company, to generate an increased incentive to contribute to the Company’s future success and prosperity, thus enhancing the value of the Company for the benefit of shareholders, and to enhance the ability of the Company and its Subsidiaries to attract and retain individuals of exceptional talent upon whom, in large measure, the sustained progress, growth and profitability of the Company depends.

Section 2. Definitions.

As used in the Plan, the following terms have the meanings set forth below:

(a) “Award” means any Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit Award, or Stock Award granted pursuant to the provisions of the Plan.

(b) “Award Agreement” means a written document evidencing any Award granted hereunder, signed by the Company and delivered to the Participant or Outside Director, as the case may be.

(c) “Board” means the Board of Directors of the Company.

(d) “Code” means the Internal Revenue Code of 1986, as amended from time to time.

(e) “Committee” means a committee of not less than three (3) Outside Directors of the Board, each of whom must be a “disinterested person” within the meaning of Rule 16b-3(d)(3) promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or any successor rule or statute; provided, however, that with respect to Awards granted to non-Section 16 officers, “Committee” may mean the Chair of the Organization and Compensation Committee of the Board of Directors and at least one other member of the Organization and Compensation Committee.

(f) “Company” means The Lubrizol Corporation.

(g) “Employee” means any employee of the Company or of any Subsidiary.

(h) “Fair Market Value” means the closing price of a Share on the New York Stock Exchange on the Grant Date (in the case of a Grant), or any other relevant date.

(i) “Full-value Awards” means Awards that result in the Company transferring the full value of any underlying Share issued in the transaction. Full-value Awards will include all Restricted Stock Awards, performance shares, performance rights, Stock-settled SARs, and certain other stock based Awards.

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2005 STOCK INCENTIVE PLAN

(j) “Grant Date” means the date on which the Board approves the grant of an Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit Award or Stock Award, and, with respect to a Restricted Stock Unit Award granted to an Outside Director, the date specified pursuant to Section 10 on which such Award is granted.

(k) “Incentive Stock Option” means an Option that is intended to meet the requirements of Section 422A of the Code or any successor provision thereto.

(l) “Non-Statutory Stock Option” means an Option that is not intended to be an Incentive Stock Option.

(m) “Option” means an option to purchase Shares granted hereunder.

(n) “Option Price” means the purchase price of each Share under an Option.

(o) “Outside Director” means a member of the Board who is not an employee of the Company or of any Subsidiary.

(p) “Participant” means an Employee who is selected by the Committee to receive an Award under the Plan.

(q) “Plan” means The Lubrizol Corporation 2005 Stock Incentive Plan.

(r) “Restricted Stock Award” means an award of restricted Shares under Section 8 hereof.

(s) “Restricted Stock Unit Award” means an award of restricted stock units under Section 10 hereof.

(t) “Restriction Period” means the period of time specified in an Award Agreement during which the following conditions remain in effect: (i) certain restrictions on the sale or other disposition of Shares awarded under the Plan, (ii) subject to the terms of the applicable Award Agreement, the continued employment of the Participant, and (iii) other conditions forth in the applicable Award Agreement.

(u) “Shareholders’ Meeting” means the annual meeting of shareholders of the Company in each year.

(v) “Shares” means common shares without par value of the Company.

(w) “Stock Appreciation Right” means the right to receive a payment in cash or in Shares, or in any combination thereof, from the Company equal to the excess of the Fair Market Value of a stated number of Shares at the exercise date over a fixed price for such Shares.

(x) “Stock Award” means the grant of Shares under the Plan.

(y) “Stock-settled SAR” means the grant of a Stock Appreciation Right whereby the appreciation of the underlying Shares (the value to the Employee from the exercise of any Stock Appreciation Right grant) is settled in Shares, either for the full number of Shares or the appreciation net of any tax obligation.

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2005 STOCK INCENTIVE PLAN

(z) “Subsidiary” means a corporation which is at least 80% owned, directly or indirectly, by the Company.

(aa) “Voting Stock” means the then-outstanding securities entitled to vote generally in the election of directors of the Company.

Section 3. Administration.

The Plan is administered by the Committee. Members of the Committee are appointed by and serve at the pleasure of the Board, and may resign by written notice filed with the Chairman of the Board or the Secretary of the Company. A vacancy on the Committee will be filled by the appointment of a successor member by the Board. Subject to the express provisions of this Plan, the Committee has conclusive authority to select Employees to be Participants for Awards and determine the type and number of Awards to be granted, to construe and interpret the Plan, any Award granted hereunder, and any Award Agreement entered into hereunder, and to establish, amend, and rescind rules and regulations for the administration of this Plan and has additional authority as the Board may from time to time determine to be necessary or desirable. Notwithstanding the foregoing, the Committee does not have the discretion with respect to Restricted Stock Awards granted to Outside Directors pursuant to Section 10 as to prevent any Award granted under this Plan from meeting the requirements for exemption from Section 16(b) of the Exchange Act, as set forth in Rule 16b-3 thereunder or any successor rule or statute.

Section 4. Shares Subject to the Plan.

(a) Subject to adjustment as provided in the Plan, the maximum number of shares as to which Awards may be granted under this Plan is 4,000,000 Shares, of which no more than 2,000,000 Shares can be settled as full-value Awards; provided, however, that no more than 500,000 Shares will be available for grant to any Participant during a calendar year. In addition to the stated maximums described above, this Plan provides the Committee with the flexibility to convert the Shares reserved solely for Options and the grant of Stock Appreciation Rights into “full value” awards (e.g., restricted stock, performance shares, etc.). Specifically:

(i) For every Option or Stock Appreciation Right granted, the number of Shares available for grant shall be reduced by one Share for every one Share granted;

(ii) For each of the first 2,000,000 Shares granted as Awards other than Options or the grant of a Stock Appreciation Right, the number of Shares available for grant shall be reduced by one Share for every one Share granted;

(iii) For any Awards settled as a full-value Award in excess of the 2,000,000 Share limit, the number of Shares available for grant shall be reduced by three Shares for every one Share granted

For example, if we issue 2,000,000 Shares as performance shares prior to exhausting our pool of shares for Options, the Committee has the flexibility to convert a portion of the remaining options into other Award types, but it must be consistent with the 3-to-1 ratio described above.

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2005 STOCK INCENTIVE PLAN

The Company believes this provision provides for the maximum equity plan design flexibility while continuing to protect the long-term interests of shareholders.

(b) Any Shares issued hereunder may consist, in whole or in part, of authorized and unissued Shares or treasury shares. If: (i) any Shares subject to any Award granted hereunder are forfeited, (ii) any Award otherwise terminates without the issuance of Shares or payment of other consideration in lieu of Shares; (iii) Shares are used to pay the exercise price of an Option; or (iv) Shares are withheld from issuance to pay withholding taxes, the Shares subject to the Award, to the extent of any such forfeiture, termination or withholding, will not again be available for issuance under the Plan.

(c) The number of Shares which remain available for issuance pursuant to this Plan, together with Shares subject to outstanding Awards, at the time of any change in the Company’s capitalization, including stock splits, stock dividends, mergers, reorganizations, consolidations, recapitalizations, or other changes in corporate structure will be appropriately and proportionately adjusted to reflect such change in capitalization.

Section 5. Eligibility.

Any Employee is eligible to be selected as a Participant.

Section 6. Stock Options.

Non-Statutory Stock Options and Incentive Stock Options may be granted hereunder to Participants either separately or in conjunction with other Awards granted under the Plan. Any Option granted to a Participant under the Plan will be evidenced by an Award Agreement in the form as the Committee may from time to time approve. Any Option will be subject to the following terms and conditions and to any additional terms and conditions, not inconsistent with the provisions of the Plan, as the Committee deems desirable.

(a) Option Price. The purchase price per Share under an Option will be fixed by the Committee in its sole discretion; provided that the purchase price will not be less than one hundred percent (100%) of the Fair Market Value of the Share on the Grant Date of the Option. Payment of the Option Price may be made in cash, Shares, or a combination of cash and Shares, as provided in the Award Agreement relating thereto.

(b) Option Period. The term of each Option will be fixed by the Committee in its sole discretion; provided that no Incentive Stock Option may be exercisable after the expiration of ten years from the Grant Date.

(c) Exercise of Option. Options may be exercisable to the extent of fifty percent (50%) of the Shares subject thereto after one year from the Grant Date, seventy-five percent (75%) of such Shares after two years from the Grant Date, and one hundred percent (100%) of such Shares after three years from the Grant Date, subject to any provisions respecting the exercisability of Options that may be contained in an Award Agreement.

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2005 STOCK INCENTIVE PLAN

(d) Incentive Stock Options. The aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options held by any Participant which are exercisable for the first time by such Participant during any calendar year under the Plan (and under any other benefit plans of the Company, of any parent corporation, or Subsidiary) will not exceed $100,000 or, if different, the maximum limitation in effect at the Grant Date under Section 422A of the Code, or any successor provision, and any regulations promulgated thereunder. The terms of any Incentive Stock Option granted hereunder will comply in all respects with the provisions of Section 422A of the Code, or any successor provision, and any regulations promulgated thereunder.

Section 7. Stock Appreciation Rights.

Stock Appreciation Rights may be granted hereunder to Participants either separately or in conjunction with other Awards granted under the Plan and may, but need not, relate to a specific Option granted under Section 6. The provisions of Stock Appreciation Rights need not be the same with respect to each Participant. Any Stock Appreciation Right related to a Non-Statutory Stock Option may be granted at the same time such Option is granted or at any time thereafter before exercise or expiration of such Option. Any Stock Appreciation Right related to an Incentive Stock Option must be granted at the same time such Option is granted. Any Stock Appreciation Right related to an Option will be exercisable only to the extent the related Option is exercisable. In the case of any Stock Appreciation Right related to any Option, the Stock Appreciation Right or applicable portion thereof terminates and is no longer exercisable upon the termination or exercise of the related Option. Similarly, upon exercise of a Stock Appreciation Right as to some or all of the Shares covered by a related Option, the related Option will be canceled automatically to the extent of the Stock Appreciation Rights exercised, and such Shares will not thereafter be eligible for grant under Section 4(a). The Committee may impose any conditions or restrictions on the exercise of any Stock Appreciation Right as it deems appropriate.

Section 8. Restricted Stock Awards.

(a) Issuance. Restricted Stock Awards may be issued hereunder to Participants, either separately or in conjunction with other Awards granted under the Plan. Each Award under this Section 8 will be evidenced by an Award document from the Company which will specify the vesting schedule, any rights of acceleration and such other terms and conditions as the Board determines, which need not be the same with respect to each Participant.

(b) Registration. Shares issued under this Section 8 will be evidenced by issuance of a stock certificate or certificates registered in the name of the Participant bearing the following legend and any other legend required by, or deemed appropriate under, any federal or state securities laws:

The sale or other transfer of the common shares represented by this certificate is subject to certain restrictions set forth in the Award document granted to                                 (the registered owner) by The Lubrizol Corporation dated                                 , under The Lubrizol Corporation 2005 Stock Incentive Plan. A copy of the Plan and Award document may be obtained from the Secretary of The Lubrizol Corporation.

Unless otherwise provided in the Award document from the Company, the certificates will be retained by the Company until the expiration of the Restriction Period. Upon the expiration of the Restriction Period, the Company will (i) have the legend removed from the certificates for the Shares to which a Participant is entitled in accordance with the Award document from the Company and (ii) release the Shares to the custody of the Participant.

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2005 STOCK INCENTIVE PLAN

(c) Forfeiture. Except as otherwise determined by the Committee at the Grant Date, upon separation of service of the Participant for any reason during the Restriction Period, all Shares still subject to restriction will be forfeited by the Participant and retained by the Company; provided that in the event of a Participant’s retirement, permanent disability, death, or in cases of special circumstances, the Committee may, in its sole discretion, when it finds that a waiver would be in the best interests of the Company, waive in whole or in part any or all remaining restrictions with respect to the Participant’s Shares. In such case, unrestricted Shares will be issued to the Participant at the time determined by the Committee.

(d) Rights as Shareholders. At all times during the Restriction Period, Participants will be entitled to full voting rights with respect to all Shares awarded under this Section 8 and will be entitled to dividends with respect to the Shares.

Section 9. Stock Awards.

Awards of Shares may be granted hereunder to Participants, either separately or in conjunction with other Awards granted under the Plan. Subject to the provisions of the Plan, the Committee has the sole and complete authority to determine (i) the Employees to whom Awards will be granted, (ii) the time or times at which the Awards will be granted, (iii) the number of Shares to be granted pursuant to the Awards, and (iv) all other conditions of the Awards. Conditions may include issuance of Shares at the time of the Award is granted or issuance of Shares at a time or times subsequent to the time the Award is granted, which subsequent times may be specifically established by the Committee and/or may be determined by reference to the satisfaction of one or more performance measures specified by the Committee. The provisions of Stock Awards need not be the same with respect to each Participant.

Section 10. Outside Directors’ Restricted Stock Unit Awards.

On the close of business on the date of each Annual Meeting of Shareholders, each Outside Director will automatically be granted a number of Restricted Stock Units equal to an amount calculated by dividing $75,000 by the Fair Market Value of a Share on the Grant Date, which will be subject to the following terms and conditions and to any additional terms and conditions, not inconsistent with the provisions of the Plan, as are contained in the applicable Award Agreement. For Outside Directors who are appointed to the Board of Directors on a date other than an Annual Meeting of Shareholders, there will be automatically granted a number of Restricted Stock Units equal to an amount calculated by dividing $75,000 by 12 and multiplying the result by the number of remaining full months until the next Annual Meeting of Shareholders and then dividing that result by the Fair Market Value of a Share on the date the Outside Director is appointed to the Board of Directors.

(a) Vesting. Restricted Stock Unit Awards granted pursuant to this Section 10 will vest upon the earliest to occur of the following dates:

(i) the earlier of (A) one year after the Grant Date or (B) the next Annual Meeting of Shareholders;

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2005 STOCK INCENTIVE PLAN

(ii) separation from service under a retirement plan or policy of the Company;

(iii) death while serving as a director; or

(iv) Change in Control pursuant to Section 11.

Section 11. Change in Control.

(a) Notwithstanding any provision in this Plan to the contrary, in the event of an occurrence of a Change in Control of the Company (as defined paragraph (b)), the portion of outstanding Performance Share Unit Awards and performance-based Restricted Stock Awards that may be paid to a Participant will be determined based on performance as of the date of the Change in Control, subject to the terms of the Award agreement, and outstanding Options and Stock Appreciation Rights will become 100% exercisable, and any other outstanding Awards (other than Restricted Stock Unit Awards, Performance Share Unit Awards and performance-based Restricted Stock Awards) will become fully vested without any restrictions, upon the occurrence of one or more of the following events (regardless of whether any other reason, other than Cause (as defined below), for such separation from service exists or has occurred, including without limitation other employment):

(i) Any separation from service of the Participant by the Company within three years following the Change in Control of the Company, which separation from service is for any reason other than for Cause, or is as a result of the death of the Participant, or is by reason of the Participant’s disability and the actual receipt of disability benefits pursuant to the long-term disability plan in effect for Employees immediately prior to the Change in Control of the Company; or

(ii) Separation from service by the Participant of his employment with the Company and any Subsidiary within three years after the Change in Control of the Company upon the occurrence of any of the following events:

(A) Failure to elect or reelect or otherwise to maintain the Participant in the office or the position, or a substantially equivalent office or position, of or with the Company and/or a Subsidiary, as the case may be, which the Participant held immediately prior to a Change in Control of the Company.

(B) A significant adverse change in the nature or scope of the authorities, powers, functions, responsibilities or duties attached to the position with the Company and any Subsidiary that the Participant held immediately prior to the Change in Control of the Company, a reduction in the aggregate of the Participant’s base and incentive pay opportunities, any of which is not remedied within 10 calendar days after receipt by the Company of written notice from the Participant of the change or reduction, as the case may be;

(C) A determination by the Participant made in good faith that as a result of a Change in Control of the Company and a change in circumstances thereafter significantly affecting his position, including without limitation a change in the scope of the business or other activities for which he was responsible immediately prior to a Change in Control of the Company, he has been rendered substantially unable to carry out, has been substantially hindered in the performance of, or has suffered a substantial reduction in, any of the authorities,

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powers, functions, responsibilities or duties attached to the position held by the Participant immediately prior to the Change in Control of the Company, which situation is not remedied within 10 calendar days after written notice to the Company from the Participant of such determination;

(D) The liquidation, dissolution, merger, consolidation or reorganization of the Company or transfer of all or a significant portion of its business and/or assets, unless the successor or successors (by liquidation, merger, consolidation, reorganization or otherwise) to which all or a significant portion of its business and/or assets have been transferred (directly or by operation of law) assumes all the duties and obligations of the Company under this Agreement;

(E) The Company relocates its principal executive offices, or requires the Participant to have his principal location of work changed, to any location which is in excess of 25 miles from the location thereof immediately prior to the Change of Control of the Company or to travel away from his office in the course of discharging his responsibilities or duties hereunder significantly more (in terms of either consecutive days or aggregate days in any calendar year) than was required of him prior to the Change of Control of the Company without, in either case, his prior written consent.

(b) For purposes of this Plan, a “Change in Control of the Company” means the occurrence of any of the following events:

(i) The date that any one person, or more than one person acting as a group, acquires ownership of stock of the Company 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 Company.

(ii) 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 person) ownership of stock of the Company possessing 30 percent or more of the total voting power of the stock of the Company.

(iii) The date a majority of members of the Company’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 Company’s board of directors before the date of the appointment or election.

(iv) The date that 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) assets from the Company that have a total gross fair market value equal to or more than 40 percent of the total gross fair market value of all of the assets of the Company immediately before the acquisition or acquisitions.

For purposes of this Section 11(b) of the Plan, the terms “person” and “group” have the same meaning as provided in Section 13(d)(3) or 14(d)(2) of the Exchange Act.

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(c) For purposes of this Section 11 of the Plan, “Cause” means that, prior to any separation from service pursuant to Section 11(a) hereof, the Participant committed:

(i) an intentional act of fraud, embezzlement or theft in connection with his duties or in the course of his employment with the Company and/or any Subsidiary;

(ii) intentional wrongful damage to property of the Company and/or any Subsidiary;

(iii) intentional wrongful disclosure of secret processes or confidential information of the Company and/or any Subsidiary; or

(iv) intentional wrongful engagement in any Competitive Activity (as defined below);

and any such act materially is harmful to the Company. For purposes of this Agreement, no act, or failure to act, on the part of the Participant will be deemed “intentional” if it was due primarily to an error in judgment or negligence, but will be deemed “intentional” only if done, or omitted to be done, by the Participant not in good faith and without reasonable belief that his action or omission was in the best interest of the Company. Notwithstanding the foregoing, the Participant will not be deemed to have been separated from service for “Cause” hereunder unless and until there is delivered to the Participant a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the Board then in office at a meeting of the Board called and held for such purpose (after reasonable notice to the Participant and an opportunity for the Participant, together with his counsel, to be heard before the Board), finding that, in the good faith opinion of the Board, the Participant had committed an act set forth above in this Section 11(c) and specifying the particulars thereof in detail. Nothing herein will limit the right of the Participant or his beneficiaries to contest the validity or propriety of any such determination.

(d) For purposes of this Section 11 of the Plan, the term “Competitive Activity” means the Participant’s participation, without the written consent of an officer of the Company, in the management of any business enterprise if such enterprise engages in substantial and direct competition with the Company and such enterprise’s sales of any product or service competitive with any product or service of the Company amounted to 25% of such enterprise’s net sales for its most recently completed fiscal year and if the Company’s net sales of said product or service amounted to 25% of the Company’s net sales for its most recently completed fiscal year. “Competitive Activity” does not include (i) the mere ownership of securities in any such enterprise and exercise of rights appurtenant thereto or (ii) participation in management of any such enterprise other than in connection with the competitive operations of such enterprise.

Section 12. Amendments and Termination.

The Board may, at any time, amend, alter or terminate the Plan, but no amendment, alteration, or termination may be made that would impair the rights of an Outside Director or Participant under an Award previously granted, without the Outside Director’s or Participant’s consent, or that without the approval of the shareholders would:

(a) except as is provided in Sections 4(b) and 13(c) of the Plan, increase the total number of Shares which may be issued under the Plan;

(b) change the class of employees eligible to participate in the Plan; or

(c) materially increase the benefits accruing to Participants under the Plan;

THE LUBRIZOL CORPORATION	Page 10
2005 STOCK INCENTIVE PLAN

so long as such approval is required by law or regulation; provided that, as long as required by law or regulation, the provisions of Section 10 hereof may not be amended or altered more than once every six (6) months, other than to comport with changes in the Code, the Employee Retirement Income Security Act, or the rules thereunder.

The Committee may amend the terms of any Award heretofore granted (except, with respect to Restricted Stock Awards granted pursuant to Section 10 hereof, only to the extent not inconsistent with Rule 16b-3 under the Exchange Act or any successor rule or statute), prospectively or retroactively, but no such amendment may impair the rights of any Participant or Outside Director without his consent.

Section 13. General Provisions.

(a) No Option or other Award may be assignable or transferable by a Participant or an Outside Director otherwise than by will or the laws of descent and distribution, and Options and Stock Appreciation Rights may be exercised during the Participant’s lifetime only by the Participant, or, if permissible under applicable law, by the guardian or legal representative of the Participant.

(b) The term of each Award will be for a period of months or years from its Grant Date as may be determined by the Committee or as set forth in the Plan; provided that in no event may the term of any Incentive Stock Option or any Stock Appreciation Right related to any Incentive Stock Option exceed a period of ten (10) years from the Grant Date.

(c) In the event of a merger, reorganization, consolidation, recapitalization, stock dividend or other change in corporate structure such that Shares are changed into or become exchangeable for a larger or smaller number of Shares, thereafter the number of Shares subject to outstanding Awards granted to Participants and to any Shares subject to Awards to be granted to Participants pursuant to this Plan will be increased or decreased, as the case may be, in direct proportion to the increase or decrease in the number of Shares by reason of such change in corporate structure; provided, however, that the number of Shares will always be a whole number, and the purchase price per Share of any outstanding Options will, in the case of an increase in the number of Shares, be proportionately reduced, and, in the case of a decrease in the number of Shares, be proportionately increased. The above adjustment will also apply to any Shares subject to Restricted Stock Awards granted to Outside Directors pursuant to the provisions of Section 10.

(d) No Employee may have any claim to be granted any Award under the Plan and there is no obligation for uniformity of treatment of Employees or Participants under the Plan.

(e) The prospective recipient of any Award under the Plan will not, with respect to the Award, be deemed to have become a Participant, or to have any rights with respect to the Award, until and unless the recipient complies with the then applicable terms and conditions.

(f) All certificates for Shares delivered under the Plan pursuant to any Award will be subject to any stock-transfer orders and other restrictions as the Committee deems advisable under the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which the Shares are then listed, and

THE LUBRIZOL CORPORATION	Page 11
2005 STOCK INCENTIVE PLAN

any applicable federal or state securities law, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.

(g) Except as otherwise required in any applicable Award document or by the terms of the Plan, Participants will not be required, under the Plan, to make any payment other than the rendering of services.

(h) The Company is authorized to withhold from any payment under the Plan, whether the payment is in Shares or cash, all withholding taxes due in respect of the payment hereunder and to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for the payment of such taxes.

(i) Nothing contained in this Plan prevents the Board from adopting other or additional compensation arrangements, subject to shareholder approval if such approval is required; and such arrangements may be either generally applicable or applicable only in specific cases.

(j) Nothing in the Plan interferes with or limits in any way the right of the Company or any Subsidiary to terminate any Participant’s employment at any time, nor does the Plan confer upon any Participant any right to continued employment with the Company or any Subsidiary.

(k) For Awards granted on or after February 22, 2010, the Committee may cause to be forfeited any outstanding Award and may seek to recoup any economic gains from any Participant who engages in conduct that was not in good faith and that disrupts, damages, impairs or interferes with the business, reputation or employees of the Company or its Subsidiaries, including, but limited to, conduct that leads to a restatement of the Company’s financial statements.

Section 14. Effective Date of the Plan.

The Plan will be effective upon adoption of the Plan by the Board of Directors of the Company. The Plan will be submitted to the shareholders of the Company for approval within one year after its adoption by the Board of Directors, and if the Plan is not approved by the shareholders, the Plan will be void and of no effect. Any Awards granted under the Plan prior to the date the Plan is submitted for approval by the shareholders will be void if the shareholders do not approve the Plan.

Section 15. Expiration of the Plan.

Awards may be granted under this Plan at any time prior to April 1, 2010, on which date the Plan will expire but without affecting any outstanding awards.

Section 16. Amendments Related to Agreement and Plan of Merger

Reference is hereby made to the Agreement and Plan of Merger, dated as of March 13, 2011, as amended from time to time, by and among the Company, Berkshire Hathaway, Inc. and Ohio Merger Sub, Inc. (the “Merger Agreement”). Each capitalized term used in the following sections but not defined in the Plan shall have the meaning set forth in the Merger Agreement.

THE LUBRIZOL CORPORATION	Page 12
2005 STOCK INCENTIVE PLAN

All Awards subject to performance-based vesting conditions and granted to a Participant with respect to the 2009-2011 LTIP cycle (a “2009 LTIP Award”) or the 2010 – 2012 LTIP Cycle (a “2010 LTIP Award”) shall be settled by way of a Cash Payment, and shall not be settled in, or otherwise entitle Participant to receive any Shares or any other non-cash consideration. The “Cash Payment” is defined as an amount in cash equal to the product of (x) the number of Shares or Units that were granted to a Participant under a 2009 LTIP Award or a 2010 LTIP award and (y) $135.

Section 17. 2009 LTIP Awards and Payments

Notwithstanding the terms of any Award, payments with respect to each 2009 LTIP Award shall be made only as set forth in these Sections 17 and 18. For the avoidance of doubt, the Company hereby determines that after the Effective Time, no awards or other payments with respect to a 2009 LTIP Award shall be made pursuant to Sections 2, 3, or Exhibit A of any such Award, which provisions shall be null and void and of no further force or effect as of the Effective Time. These Sections 17 and 18 are only applicable to 2009 LTIP Awards.

A. Participant Retirement On or After the Effective Time. If a Participant separates from service due to retirement (either normal or early retirement) on or after the Effective Time but prior to December 30, 2011, Participant will receive a pro-rata Cash Payment in respect of Participant’s 2009 LTIP Award within 60 days after retirement, but, as to Participants subject to United States income taxation (“U.S. Participants”), no later than December 30, 2011. The amount of such Cash Payment will be based on: (a) the number of full months between January 1, 2009 and the date of retirement during which Participant was an active employee (not on a long term disability leave of absence); and (b) the Company’s performance, determined as of the date of retirement in accordance with Section 18 of the Plan.

B. Participant Death On or After the Effective Time. If a Participant separates from service due to death on or after the Effective Time but prior to December 30, 2011, Participant’s beneficiary will receive a pro-rata Cash Payment in respect of Participant’s 2009 LTIP Award within 60 days after Participant’s death, but, as to U.S. Participants, no later than December 30, 2011. The amount of such Cash Payment will be based on: (a) the number of full months between January 1, 2009 and the date of death during which Participant was an active employee (not on a long term disability leave of absence); and (b) the Company’s performance, determined as of the date of death in accordance with Section 18 of the Plan. If the Company does not have a beneficiary election on file on the date of Participant’s death, the Cash Payment will be distributed to Participant’s spouse, or if no spouse is living at the time of the distribution of the Cash Payment, to Participant’s children who are living, or if Participant has no living children at the time of the distribution of the Cash Payment, to Participant’s estate.

C. Other Participant Separation From Service On or After the Effective Time. If Participant separates from service (voluntarily or involuntarily) for any reason not specified in subsection A. or B. of this Section 17 on or after the Effective Time but prior to December 30, 2011, Participant will not be entitled

THE LUBRIZOL CORPORATION	Page 13
2005 STOCK INCENTIVE PLAN

to receive the Cash Payment or any other consideration in respect of the 2009 LTIP Award, unless otherwise specifically approved by the Company’s Chief Executive Officer. If approved by the Company’s Chief Executive Officer, Participant will receive a pro-rata Cash Payment in respect of Participant’s 2009 LTIP Award within 60 days after separation from service, but, as to U.S. Participants, no later than December 30, 2011. The amount of such Cash Payment will be based on: (a) the number of full months between January 1, 2009 and the date of separation from service during which Participant was an active employee (not on a long term disability leave of absence); and (b) the Company’s performance, determined as of the date of separation from service in accordance with Section 18 of the Plan.

D. Participant Employed By the Company on December 30, 2011. If a Participant has not separated from service as of December 30, 2011, Participant will receive a Cash Payment in respect of Participant’s 2009 LTIP Award as to U.S. Participants, on December 30, 2011, and as to non-U.S. Participants within 60 days of December 30, 2011. The amount of such cash payment will be based on: (a) the number of full months between January 1, 2009 and December 30, 2011 during which Participant was an active employee (not on a long term disability leave of absence); and (b) the Company’s performance, determined as of December 30, 2011 in accordance with Section 18 of the Plan.

Section 18. 2009 LTIP Award Performance Targets.

On and after the Effective Time, the Company’s performance with respect to 2009 LTIP Awards shall be determined by the Chief Executive Officer as follows. This Section 18 is only applicable to 2009 LTIP Awards.

A. For the time period between January 1, 2009 and the Effective Time, the Chief Executive Officer or his designee shall calculate the Company’s actual cumulative adjusted earnings per share, which shall be compared to the target for 2009 LTIP Awards as previously approved by the Committee to determine the Part A Payout Percentage.

B. For the period between the Effective Time and the relevant determination date (i.e., the date of Participant’s retirement, death, other separation from service, or December 30, 2011), the Chief Executive Officer or his designee shall calculate the Company’s actual average daily earnings before interest and taxes, which shall be compared to the Part B target described below to determine the Part B Payout Percentage.

C. The Part B target for the 2009 LTIP Award is as follows:

Average Daily Earnings (in $$MM)	Part B Payout Percentage
1.029	25%
1.068	50%
1.112	100%
1.174	150%
1.195	200%

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2005 STOCK INCENTIVE PLAN

D. Both the Part A and Part B Payout Percentages shall be determined without regard to: costs associated with acquisitions and divestitures, restructuring and impairment, accounting changes, tax expenses, or any costs or expenses incurred by the Company relating to the Merger Agreement, the transactions contemplated thereby, or any resulting reorganizations.

E. The Chief Executive Officer or his designee shall determine the total of the prorated Part A and Part B Payout Percentages, which shall not exceed 200%, and based on such percentage, shall calculate the Cash Payment to be made to a Participant or beneficiary with respect to a 2009 LTIP Award. The prorated Part A and Part B Payout Percentages will be calculated by multiplying each period’s Payout Percentage by the percentage of that period’s duration within the three year measurement period.

EX-10.2

Exhibit 10.2

EXECUTION COPY

WAIVER NO. 1 TO THE

CREDIT AGREEMENT

Dated as of July 18, 2011

WAIVER NO. 1 TO THE CREDIT AGREEMENT among The Lubrizol Corporation (the “Borrower”), the banks, financial institutions and other institutional lenders parties to the Credit Agreement referred to below (collectively, the “Lenders”) and Citibank, N.A., as administrative agent (the “Agent”) for the Lenders.

PRELIMINARY STATEMENTS:

(1) The Borrower, the Lenders and the Agent have entered into a Credit Agreement dated as of July 19, 2010 (such Credit Agreement, as so modified, the “Credit Agreement”). Capitalized terms not otherwise defined in this Waiver have the same meanings as specified in the Credit Agreement.

(2) The Borrower has announced that it has entered into the Agreement and Plan of Merger, dated March 13, 2011 with Berkshire Hathaway Inc. (“Berkshire”) and Ohio Merger Sub, Inc., pursuant to which the Borrower shall be acquired by Berkshire (the “Merger Agreement”), and has therefore requested that the Required Lenders agree to waive Sections 5.02(b) and 6.01(g) of the Credit Agreement as hereinafter set forth.

SECTION 1. Waivers. Effective as of the date hereof and subject to the satisfaction of the conditions precedent set forth in Section 2 below, Sections 5.02(b) and 6.01(g) of the Credit Agreement are hereby waived, solely with respect to (x) the acquisition by Berkshire, directly or indirectly, of 100% of the Voting Stock of the Borrower and (y) the election or designation by Berkshire of individuals who collectively would constitute a majority of the board of directors of the Borrower as directors of the Borrower.

SECTION 2. Conditions of Effectiveness. This Waiver shall become effective as of the date first above written when, and only when the Agent shall have received counterparts of this Waiver executed by the Borrower and the Required Lenders. This Waiver is subject to the provisions of Section 9.01 of the Credit Agreement.

SECTION 3. Representations and Warranties of the Borrower. The Borrower represents and warrants that the representations and warranties contained in Section 4.01 of the Credit Agreement are correct on and as of the date hereof and, other than as specifically waived in this Waiver, no event has occurred and is continuing that constitutes a Default.

SECTION 4. Effect on the Credit Agreement and the Loan Documents. (a) The Credit Agreement and the Loan Documents, except to the extent of the waiver specifically provided above, are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed.

(b) The execution, delivery and effectiveness of this Waiver shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of any Lender or the Agent under the Credit Agreement, nor constitute a waiver of any provision of the Credit Agreement.

SECTION 5. Costs and Expenses. The Borrower agrees to pay on demand all costs and expenses of the Agent in connection with the preparation, execution, delivery and administration, modification and amendment of this Waiver and the other instruments and documents to be delivered hereunder (including, without limitation, the reasonable fees and expenses of counsel for the Agent) in accordance with the terms of Section 9.04 of the Credit Agreement.

SECTION 6. Execution in Counterparts. This Waiver may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement. Delivery of an executed counterpart of a signature page to this Waiver by facsimile or electronic transmission shall be effective as delivery of a manually executed counterpart of this Waiver.

SECTION 7. Governing Law. This Waiver shall be governed by, and construed in accordance with, the laws of the State of New York.

2

IN WITNESS WHEREOF, the parties hereto have caused this Waiver to be executed by their respective officers thereunto duly authorized, as of the date first above written.

THE LUBRIZOL CORPORATION
By	/s/    Charles P. Cooley
Name:	Charles P. Cooley
Title:	Senior VP and CFO
By	/s/    Brian A. Valentine
Name:	Brian A. Valentine
Title:	Treasurer

Accepted and Agreed:

CITIBANK, N.A.,

as Administrative Agent and as Lender

By	/s/    David Jaffe
	Name: David Jaffe
	Title: Vice President

KEYBANK NATIONAL ASSOCIATION
By
	Name:
	Title:

THE ROYAL BANK OF SCOTLAND PLC
By	/s/    Paul Chisholm Attorney in Fact
	Name: Paul Chisholm
	Title: Vice President

DEUTSCHE BANK AG NEW YORK BRANCH
By	/s/    Philippe Sandmeier
	Name: Philippe Sandmeier
	Title: Managing Director
By	/s/    Ross Levitsky
	Name: Ross Levitsky
	Title: Managing Director

3

JPMORGAN CHASE BANK, N.A
By	/s/    Robert S. Sheppard
	Name: Robert S. Sheppard
	Title: Vice President

PNC BANK, NATIONAL ASSOCIATION
By
	Name:
	Title:

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.
By	/s/    Victor Pierzchalski
	Name: Victor Pierzchalski
	Title: Authorized Signatory
By
	Name:
	Title:

U.S. BANK NATIONAL ASSOCIATION
By
	Name:
	Title:

WELLS FARGO BANK, NATIONAL ASSOCIATION
By	/s/    Peter R. Martinets
	Name: Peter R. Martinets
	Title: Managing Director

BNP PARIBAS
By	/s/    Michael Pearce
	Name: Michael Pearce
	Title: Managing Director
By	/s/    Michael Hoffman
	Name: Michael Hoffman
	Title: Associate

4

CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK

By
	Name:
	Title:

FIFTH THIRD BANK
By	/s/    R. C. Lanctot
	Name: Roy C. Lanctot
	Title: Vice President

MIZUHO CORPORATE BANK, LTD.
By	/s/    Yasuo Imaizumi
	Name: Yasuo Imaizumi
	Title: Deputy General Manager

THE NORTHERN TRUST COMPANY
By	/s/    Michael A. Houlihan
	Name: Michael A. Houlihan
	Title: Vice President

5

EX-10.3

Exhibit 10.3

EXECUTION COPY

WAIVER NO. 1 TO THE

THREE YEAR CREDIT AGREEMENT

Dated as of July 18, 2011

WAIVER NO. 1 TO THE THREE YEAR CREDIT AGREEMENT among Lubrizol Holdings France S.A.S., Lubrizol Advanced Materials Europe BVBA, Lubrizol (Gibraltar) Limited and Lubrizol Europe Coordination Center BVBA (collectively, the “Borrowers”), The Lubrizol Corporation (the “Guarantor”), the banks, financial institutions and other institutional lenders parties to the Credit Agreement referred to below (collectively, the “Lenders”) and The Royal Bank of Scotland plc, as administrative agent (the “Agent”) for the Lenders.

PRELIMINARY STATEMENTS:

(1) The Borrowers, the Guarantor, the Lenders and the Agent have entered into an Three Year Credit Agreement dated as of July 21, 2009 (such Credit Agreement, as so modified, the “Credit Agreement”). Capitalized terms not otherwise defined in this Waiver have the same meanings as specified in the Credit Agreement.

(2) The Guarantor has announced that it has entered into the Agreement and Plan of Merger, dated March 13, 2011 with Berkshire Hathaway Inc. (“Berkshire”) and Ohio Merger Sub, Inc., pursuant to which the Guarantor shall be acquired by Berkshire (the “Merger Agreement”), and has therefore requested that the Required Lenders agree to waive Sections 5.02(b) and 6.01(g) of the Credit Agreement as hereinafter set forth.

SECTION 1. Waivers. Effective as of the date hereof and subject to the satisfaction of the conditions precedent set forth in Section 2 below, Sections 5.02(b) and 6.01(g) of the Credit Agreement are hereby waived, solely with respect to (x) the acquisition by Berkshire, directly or indirectly, of 100% of the Voting Stock of the Guarantor and (y) the election or designation by Berkshire of individuals who collectively would constitute a majority of the board of directors of the Guarantor as directors of the Guarantor.

SECTION 2. Conditions of Effectiveness. This Waiver shall become effective as of the date first above written when, and only when the Agent shall have received counterparts of this Waiver executed by the Guarantor and the Required Lenders. This Waiver is subject to the provisions of Section 9.01 of the Credit Agreement.

SECTION 3. Representations and Warranties of the Guarantor. The Guarantor represents and warrants that the representations and warranties contained in Section 4.01 of the Credit Agreement are correct on and as of the date hereof and, other than as specifically waived in this Waiver, no event has occurred and is continuing that constitutes a Default.

SECTION 4. Effect on the Credit Agreement and the Loan Documents. (a) The Credit Agreement and the Loan Documents, except to the extent of the waiver specifically provided above, are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed.

(b) The execution, delivery and effectiveness of this Waiver shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of any Lender or the Agent under the Credit Agreement, nor constitute a waiver of any provision of the Credit Agreement.

SECTION 5. Costs and Expenses. The Guarantor agrees to pay on demand all costs and expenses of the Agent in connection with the preparation, execution, delivery and administration, modification and amendment of this Waiver and the other instruments and documents to be delivered hereunder (including, without limitation, the reasonable fees and expenses of counsel for the Agent) in accordance with the terms of Section 9.04 of the Credit Agreement.

SECTION 6. Execution in Counterparts. This Waiver may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement. Delivery of an executed counterpart of a signature page to this Waiver by facsimile or electronic transmission shall be effective as delivery of a manually executed counterpart of this Waiver.

SECTION 7. Governing Law. This Waiver shall be governed by, and construed in accordance with, the laws of the State of New York.

2

IN WITNESS WHEREOF, the parties hereto have caused this Waiver to be executed by their respective officers thereunto duly authorized, as of the date first above written.

THE LUBRIZOL CORPORATION, as Guarantor
By	/s/    Charles P. Cooley
Name:	Charles P. Cooley
Title:	Senior VP and CFO
By	/s/    Brian A. Valentine
Name:	Brian A. Valentine
Title:	Treasurer

Accepted and Agreed:

THE ROYAL BANK OF SCOTLAND PLC, as Administrative Agent and as Lender
By	/s/    Paul Chisholm
	Name: Paul Chisholm
	Title: Vice President

DEUTSCHE BANK AG NEW YORK BRANCH

By	/s/    Philippe Sandmeier
	Name: Philippe Sandmeier
	Title: Managing Director
By	/s/    Ross Levitsky
	Name: Ross Levitsky
	Title: Managing Director

CITIBANK, N.A. (LONDON BRANCH)
By	/s/    Thomas Lambourn
	Name: Thomas Lambourn
	Title: Vice President

CITIBANK INTERNATIONAL PLC
By	/s/    Thomas Lambourn
	Name: Thomas Lambourn
	Title: Vice President

3

JPMORGAN CHASE BANK, N.A
By	/s/    Robert S. Sheppard
	Name: Robert S. Sheppard
	Title: Vice President

JPMORGAN EUROPE LIMITED
By	/s/    Alastair Stevenson
	Name: Alastair Stevenson
	Title: Managing Director

CALYON CRÉDIT AGRICOLE CIB
By	/s/    Alexis Quiot
	Name: Alexis Quiot
	Title: Normandy Branch
By	/s/    Michele Garbe
	Name: Michele Garbe
	Title: Agency Manager

FORTIS BANK SA/NV
By	/s/    Jean-Pierre Wenseleers	/s/    Herman Sonck
	Name: Jean-Pierre Wenseleers	Herman Sonck
	Title: Director	Senior Manager Sophisticated Contracting

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.
By	/s/    Rupert Dougall
	Name: Rupert Dougall
	Title: S.V.P. E.B.D.
By	/s/    Victor Pierzchalski
	Name: Victor Pierzchalski
	Title: Authorized Signatory

4

EX-31.1

Exhibit 31.1

THE LUBRIZOL CORPORATION

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 reasonable 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

August 5, 2011

EX-31.2

Exhibit 31.2

THE LUBRIZOL CORPORATION

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 reasonable 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

August 5, 2011

EX-32.1

Exhibit 32.1

THE LUBRIZOL CORPORATION

Certification of the Chief Executive Officer

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 June 30, 2011:

(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

August 5, 2011

EX-32.2

Exhibit 32.2

THE LUBRIZOL CORPORATION

Certification of the Chief Financial Officer

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 June 30, 2011:

(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

August 5, 2011

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Nonvested Performance Based Share Units and Changes (Detail) (USD $)	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Share Units
Nonvested Share Units Beginning Balance	855,134
Granted	82,150	106,500
Vested	(83,480)
Forfeited	(17,500)
Nonvested Share Units Ending Balance	836,304
Weighted-Average Grant Date Fair Value
Nonvested Weighted-Average Grant Date Fair Value Beginning Balance	$ 43.25
Granted	$ 109.35
Vested	$ 58.45
Forfeited	$ 51.29
Nonvested Weighted-Average Grant Date Fair Value Ending Balance	$ 48.06

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CONSOLIDATED BALANCE SHEETS (USD $) In Millions	Jun. 30, 2011	Dec. 31, 2010
ASSETS
Cash and cash equivalents	$ 793.4	$ 896.2
Receivables	921.9	723.5
Inventories	917.5	821.8
Deferred income taxes	87.8	81.5
Other current assets	36.1	27.1
Total current assets	2,756.7	2,550.1
Property and equipment - at cost	3,136.5	2,981.6
Less accumulated depreciation	1,855.0	1,798.1
Property and equipment - net	1,281.5	1,183.5
Goodwill	854.3	765.6
Intangible assets - net	390.5	299.4
Other assets	166.3	168.4
TOTAL	5,449.3	4,967.0
LIABILITIES AND TOTAL EQUITY
Current portion of long-term debt	0.6	0.4
Accounts payable	468.4	369.2
Accrued expenses and other current liabilities	310.6	351.3
Total current liabilities	779.6	720.9
Long-term debt	1,356.5	1,351.6
Pension obligations	277.3	298.8
Other postretirement benefit obligations	94.7	93.3
Noncurrent liabilities	157.2	151.6
Deferred income taxes	77.9	70.1
Total liabilities	2,743.2	2,686.3
Contingencies and commitments
Redeemable stock-based awards	10.6	9.6
Preferred stock without par value - unissued
Common shares without par value: Authorized - 120,000,000 shares Outstanding - 64,413,696 shares at June 30, 2011, after deducting 21,782,198 treasury shares; 64,034,811 shares at December 31, 2010, after deducting 22,161,083 treasury shares	841.5	813.6
Retained earnings	1,822.0	1,517.4
Accumulated other comprehensive loss	(44.6)	(137.5)
Total of The Lubrizol Corporation shareholders' equity	2,618.9	2,193.5
Noncontrolling interests	76.6	77.6
Total equity	2,695.5	2,271.1
TOTAL	$ 5,449.3	$ 4,967.0

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Jun. 30, 2011	Dec. 31, 2010
Preferred stock, without par value	$ 0	$ 0
Preferred stock, issued	0	0
Common shares, without par value	$ 0	$ 0
Common shares, Authorized	120,000,000	120,000,000
Common shares, Outstanding	64,413,696	64,034,811
Common shares, treasury shares	21,782,198	22,161,083

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CONTINGENCIES AND COMMITMENTS - Additional Information (Detail) (USD $) In Millions	6 Months Ended
	Jun. 30, 2011	Dec. 31, 2010
Loss Contingencies [Line Items]
Environmental reserves, measured on an undiscounted basis	$ 7.5	$ 7.5
Environmental reserves, measured on an undiscounted basis, current	5.1	4.8
Reasonably possible additional environmental costs estimated to be incurred beyond the amounts accrued	$ 0.7

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INVENTORIES (Tables)

6 Months Ended

Jun. 30, 2011

Schedule of Inventory, Current

The company’s inventories were comprised of the following:

(In Millions of Dollars)	June 30, 2011		December 31, 2010
Finished products	$	532.4	$	462.4
Products in process		162.1		168.5
Raw materials		182.0		151.6
Supplies		41.0		39.3
Total inventory	$	917.5	$	821.8

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Document and Entity Information	6 Months Ended
	Jun. 30, 2011	Jul. 29, 2011
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2011
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q2
Trading Symbol	LZ
Entity Registrant Name	LUBRIZOL CORP
Entity Central Index Key	0000060751
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		64,459,817

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STOCK-BASED COMPENSATION - Additional Information (Detail) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended				6 Months Ended			3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011 Year	Jun. 30, 2010	Jun. 30, 2011 Stock Incentive Plan 2010	Apr. 27, 2010 Stock Incentive Plan 2010	Jun. 30, 2011 2005 Stock Incentive Plan	Jun. 30, 2011 Long Term Performance Plan 2008-2010	Jun. 30, 2010 Long Term Performance Plan 2007 to 2009	Jun. 30, 2011 Share Based Liability Awards	Jun. 30, 2010 Share Based Liability Awards	Jun. 30, 2011 Share Based Liability Awards	Jun. 30, 2010 Share Based Liability Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Incentive Plan, common shares authorized						3,000,000	4,000,000
Stock Incentive Plan, maximum number of shares can be settled as full-value awards						1,500,000
Stock Incentive Plan, arrangement description					The 2010 Plan provides for the granting of up to 3,000,000 common shares in the form of stock appreciation rights, restricted and unrestricted shares and share units (collectively referred to as “full-value awards”), and options to buy common shares, of which no more than 1,500,000 can be settled as full-value awards. After the 1,500,000 limit has been reached, full-value awards are counted in a 3-to-1 ratio against the 3,000,000 limit.
Options exercising percentage one year after date of grant						50.00%	50.00%
Options exercising percentage two year after date of grant						75.00%	75.00%
Options exercising percentage three year after date of grant						100.00%	100.00%
Options expiration duration (in years)					10 years after grant		10 years after grant
Stock Incentive Plan termination date					2015-04-01		2010-04-01
Stock options granted			77,500	91,800
Performance-based share units			82,150	106,500
Share based Compensation Policy for Issuing Shares upon Exercise			The company uses previously purchased treasury shares for all shares issued for option exercises and performance-based and restricted share units.
Proceeds from the exercise of stock options			$ 9.1	$ 16.7
Excess tax benefit from the exercise of stock options and awards			11.7	9.7
Performance based plan, issuance of shares								178,081	213,960
Performance based plan, deferral of shares into deferred compensation plan								26,179	20,576
Performance-based share units granted to international employees description			The terms of the performance-based share units granted to international employees state that payment will be in cash at the end of the performance period. In addition, some international employees received stock-based awards in prior years that are similar to stock appreciation rights. As such, liability accounting is used for both of these awards and compensation expense is calculated based on the company’s common share price.
Total stock-based compensation expense recognized in the consolidated statements of operations	4.7	3.7	12.6	11.0
Total stock-based compensation expense recognized in the consolidated statements of operations, related tax benefit	1.7	1.3	4.4	3.8
Total pre-tax unrecognized compensation cost related to all stock-based awards that were not vested	24.1		24.1
Total pre-tax unrecognized compensation cost related to all stock-based awards that were not vested, expected weighted-average period to be recognized			1.8
Total stock-based compensation (credit) expense recognized in the consolidated statements of operations										$ 0.8	$ (1.5)	$ 4.6	$ 1.9

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FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Jun. 30, 2011

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following table shows the company’s financial assets and liabilities accounted for at fair value on a recurring basis at June 30, 2011:

(In Millions of Dollars)	June 30, 2011		Level 1		Level 2		Level 3
Assets:
Money market mutual funds (1)	$	589.5	$	589.5	$	-	$	-
Interest rate swaps (2)		11.1		-		11.1		-
	$	600.6	$	589.5	$	11.1	$	-
Liabilities:
Commodity purchase contracts (3)	$	1.3	$	-	$	1.3	$	-

The following table shows the company’s financial assets and liabilities accounted for at fair value on a recurring basis at December 31, 2010:

(In Millions of Dollars)	December 31, 2010		Level 1		Level 2		Level 3
Assets:
Money market mutual funds (1)	$	681.2	$	681.2	$	-	$	-
Interest rate swaps (2)		9.6		-		9.6		-
	$	690.8	$	681.2	$	9.6	$	-
Liabilities:
Interest rate swaps (2)	$	0.3	$	-	$	0.3	$	-
Commodity purchase contracts (3)		2.2		-		2.2		-
	$	2.5	$	-	$	2.5	$	-

(1) The fair value of money market mutual funds is based on quoted prices reported on various U.S. and international stock exchanges.

(2) The fair value of interest rate swaps is calculated using models that discount the cash flows at each coupon adjustment date using the then-applicable forward interest rates.

(3) The fair value of commodity purchase contracts is based on market forward rates and reflects the present value of the amount that the company would pay or receive for contracts involving the same notional amounts and maturity dates.

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Components of Net Periodic Non-pension Postretirement Benefit Cost (Detail) (Other Postretirement Benefit Plans, Defined Benefit, USD $) In Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Other Postretirement Benefit Plans, Defined Benefit
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 0.4	$ 0.4	$ 0.8	$ 0.8
Interest cost on projected benefit obligation	1.3	1.4	2.6	2.8
Amortization of prior service credits	(1.4)	(1.4)	(2.9)	(2.8)
Amortization of initial net obligation	0.1	0.1	0.2	0.2
Recognized net actuarial loss	0.2	0.1	0.4	0.3
Net periodic cost	$ 0.6	$ 0.6	$ 1.1	$ 1.3

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DEBT

6 Months Ended

Jun. 30, 2011

DEBT

Note 7 – DEBT

The company’s debt was comprised of the following:

(In Millions of Dollars)	June 30, 2011		December 31, 2010
5.5% notes, due 2014, net of original issue discount of $1.2 and $1.3 at June 30, 2011 and December 31, 2010, respectively, and fair value adjustments for unrealized gains on derivative instruments of $11.1 and $9.3 at June 30, 2011 and December 31, 2010, respectively	$	459.9	$	458.0
8.875% notes, due 2019, net of original issue discount of $3.1 and $3.3 at June 30, 2011 and December 31, 2010, respectively		496.9		496.7
7.25% debentures, due 2025		100.0		100.0
6.5% debentures, due 2034, net of original issue discount of $4.5 at both June 30, 2011 and December 31, 2010		295.5		295.5
Other		4.8		1.8
		1,357.1		1,352.0
Less: Current portion of long-term debt		0.6		0.4
Total long-term debt	$	1,356.5	$	1,351.6

The U.S. and euro bank credit agreements contain customary affirmative covenants including, among others, compliance with laws, payment of taxes, maintenance of insurance, conduct of business, keeping of books and records, maintenance of properties and ensuring the credit facilities receive the same rights and privileges as any future senior unsecured debt. The agreements also contain customary negative covenants including, among others, restrictions on: liens and encumbrances, sale of assets and affiliate transactions. Additionally, the company is required to comply with financial ratios of debt to consolidated earnings before interest, income taxes, depreciation and amortization, extraordinary, unusual or non-recurring non-cash gains or losses, including the sale of property and equipment and goodwill impairments, and non-cash gains or losses from less than wholly owned subsidiaries and investments (Consolidated EBITDA), as defined in the credit agreements, and Consolidated EBITDA to interest expense. At June 30, 2011, the credit agreements required that the ratio of debt to Consolidated EBITDA be less than 3.5:1 and the ratio of Consolidated EBITDA to interest expense be greater than 3.5:1. At June 30, 2011, the company maintained a ratio of debt to Consolidated EBITDA of 1.1:1 and a ratio of Consolidated EBITDA to interest expense of 12.5:1.

The bank credit agreements also contain customary events of default including, among others, failure to make payment when due, materially incorrect representations and warranties, breach of covenants, events of bankruptcy, the occurrence of one or more unstayed judgments in excess of $25.0 million (under the euro bank credit agreement) or $50.0 million (under the U.S. bank credit agreement) that is not covered by an acceptable policy of insurance, a party obtaining a beneficial ownership in excess of 20% of the company’s voting stock, or the incurrence of $25.0 million of liabilities related to violations of employee benefit plan regulations or the withdrawal or termination of a multiemployer benefit plan. On July 18, 2011, the bank credit agreements were amended to waive the event of default for a change in beneficial ownership solely with respect to the anticipated merger with Berkshire Hathaway. At June 30, 2011, the company had no borrowings outstanding under its bank credit agreements, was in compliance with all of its covenants and had not committed any acts of default.

The estimated fair value of the company’s debt instruments at June 30, 2011, and December 31, 2010, was $1,616.3 million and $1,549.6 million, respectively. The fair value of the company’s debt instruments was estimated using prevailing market interest rates on long-term debt with similar creditworthiness, terms and maturities.

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EQUITY (Tables)

6 Months Ended

Jun. 30, 2011

Schedule of Stockholders Equity

The following table summarizes the changes in total equity since December 31, 2010:

(In Millions)	Number of Shares Outstanding		Common Shares		Retained Earnings		Accumulated Other Comprehensive (Loss) Income		Noncontrolling Interests		Total
Balance, December 31, 2010		64.0	$	813.6	$	1,517.4	$	(137.5)	$	77.6	$	2,271.1
Comprehensive income:
Net income				-		360.8		-		9.9		370.7
Other comprehensive income				-		-		92.9		0.5		93.4
Total comprehensive income												464.1
Stock-based compensation				7.2		-		-		-		7.2
Dividends declared				-		(46.5)		-		(11.4)		(57.9)
Adjustment to redeemable stock- based awards				-		(3.3)		-		-		(3.3)
Shares issued upon exercise of stock options and awards		0.5		9.1		-		-		-		9.1
Tax benefit from stock compensation				11.7		-		-		-		11.7
Shares purchased upon exercise of stock options and awards		(0.1)		(0.8)		(6.4)		-		-		(7.2)
Other - net				0.7		-		-		-		0.7
Balance, June 30, 2011		64.4	$	841.5	$	1,822.0	$	(44.6)	$	76.6	$	2,695.5

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Financial Assets and Liabilities Accounted for at Fair Value on a Recurring Basis (Detail) (Fair Value, Measurements, Recurring, USD $) In Millions	Jun. 30, 2011		Dec. 31, 2010
Assets:
Money market mutual funds	$ 589.5	[1]	$ 681.2	[1]
Interest rate swaps	11.1	[2]	9.6	[2]
Assets, Fair Value Disclosure, Total	600.6		690.8
Liabilities:
Interest rate swaps			0.3	[2]
Commodity purchase contracts	1.3	[3]	2.2	[3]
Liabilities, Fair Value Disclosure, Total			2.5
Level 1
Assets:
Money market mutual funds	589.5	[1]	681.2	[1]
Assets, Fair Value Disclosure, Total	589.5		681.2
Level 2
Assets:
Interest rate swaps	11.1	[2]	9.6	[2]
Assets, Fair Value Disclosure, Total	11.1		9.6
Liabilities:
Interest rate swaps			0.3	[2]
Commodity purchase contracts	1.3	[3]	2.2	[3]
Liabilities, Fair Value Disclosure, Total			$ 2.5

[1] The fair value of money market mutual funds is based on quoted prices reported on various U.S. and international stock exchanges.

[2] The fair value of interest rate swaps is calculated using models that discount the cash flows at each coupon adjustment date using the then-applicable forward interest rates.

[3] The fair value of commodity purchase contracts is based on market forward rates and reflects the present value of the amount that the company would pay or receive for contracts involving the same notional amounts and maturity dates.

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Carrying Amount of Goodwill by Reporting Segment (Detail) (USD $) In Millions	6 Months Ended
	Jun. 30, 2011
Goodwill [Line Items]
Goodwill	$ 1,128.6
Accumulated impairment losses	(363.0)
Goodwill	765.6
Goodwill acquired	67.1
Translation adjustments	21.6
Goodwill	1,217.3
Accumulated impairment losses	(363.0)
Goodwill	854.3
Lubrizol Advanced Materials
Goodwill [Line Items]
Goodwill	945.2
Accumulated impairment losses	(363.0)
Goodwill	582.2
Goodwill acquired	67.1
Translation adjustments	19.9
Goodwill	1,032.2
Accumulated impairment losses	(363.0)
Goodwill	669.2
Lubrizol Additives
Goodwill [Line Items]
Goodwill	183.4
Goodwill	183.4
Translation adjustments	1.7
Goodwill	185.1
Goodwill	$ 185.1

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DEBT (Tables)

6 Months Ended

Jun. 30, 2011

Schedule of Long-term Debt Instruments

The company’s debt was comprised of the following:

(In Millions of Dollars)	June 30, 2011		December 31, 2010
5.5% notes, due 2014, net of original issue discount of $1.2 and $1.3 at June 30, 2011 and December 31, 2010, respectively, and fair value adjustments for unrealized gains on derivative instruments of $11.1 and $9.3 at June 30, 2011 and December 31, 2010, respectively	$	459.9	$	458.0
8.875% notes, due 2019, net of original issue discount of $3.1 and $3.3 at June 30, 2011 and December 31, 2010, respectively		496.9		496.7
7.25% debentures, due 2025		100.0		100.0
6.5% debentures, due 2034, net of original issue discount of $4.5 at both June 30, 2011 and December 31, 2010		295.5		295.5
Other		4.8		1.8
		1,357.1		1,352.0
Less: Current portion of long-term debt		0.6		0.4
Total long-term debt	$	1,356.5	$	1,351.6

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STOCK-BASED COMPENSATION

6 Months Ended

Jun. 30, 2011

STOCK-BASED COMPENSATION

Note 12 – STOCK-BASED COMPENSATION

On April 27, 2010, shareholders of the company approved the 2010 Stock Incentive Plan (2010 Plan) to provide equity awards to key employees and directors. The 2010 Plan provides for the granting of up to 3,000,000 common shares in the form of stock appreciation rights, restricted and unrestricted shares and share units (collectively referred to as “full-value awards”), and options to buy common shares, of which no more than 1,500,000 can be settled as full-value awards. After the 1,500,000 limit has been reached, full-value awards are counted in a 3-to-1 ratio against the 3,000,000 limit. Options become exercisable 50% one year after date of grant, 75% after two years, 100% after three years and expire 10 years after grant. The 2010 Plan terminates with respect to new grants by its own terms on April 1, 2015.

Previously, the company utilized the 2005 Stock Incentive Plan (2005 Plan) to provide equity awards to key employees and directors. The 2005 Plan provided for the granting of up to 4,000,000 common shares in the form of full-value awards and options to buy common shares. Options became exercisable 50% one year after date of grant, 75% after two years, 100% after three years and expire 10 years after grant. The 2005 Plan terminated with respect to new grants by its own terms on April 1, 2010.

Under the company’s long-term incentive program, dollar-based target awards for three-year performance periods are determined by the organization and compensation committee of the board of directors. The target awards correspond to pre-determined three-year cumulative earnings per share growth rates. The dollar-based target awards are converted into a combination of stock options and performance-based share units based on the fair value of the respective awards on the date of grant.

The fair value of stock options is estimated using the Black-Scholes option pricing model. There were 77,500 and 91,800 stock options granted during the six months ended June 30, 2011 and 2010, respectively. Options have been granted to employees at fair market value on the date of grant. The assumptions used to value the options granted were as follows:

	Six Months Ended June 30,
	2011		2010
Risk-free interest rate		2.4%		3.3%
Dividend yield		1.5%		1.6%
Expected volatility		31.7%		30.3%
Expected life (years)		5.4		6.5
Fair value per option	$	30.87	$	23.84

The fair value of performance-based share units is based on the closing price of the company’s common shares on the date of grant. The company granted 82,150 and 106,500 performance-based share units during the six months ended June 30, 2011 and 2010, respectively. There are no voting or dividend rights associated with the performance-based share units until the end of the performance period and a distribution of shares, if any, is made.

Nonvested performance-based share units at June 30, 2011, and changes during the six months ended June 30, 2011, were as follows:

	Share     Units		Weighted- Average Grant Date Fair Value
Nonvested at December 31, 2010		855,134	$	43.25
Granted		82,150	$	109.35
Vested		(83,480)	$	58.45
Forfeited		(17,500)	$	51.29
Nonvested at June 30, 2011		836,304	$	48.06

The following table identifies the number of shares expected to be issued based on current expectations of performance and the fair value on the date of grant for the nonvested performance-based share units outstanding at June 30, 2011:

Performance Period	Expected Number of Units to be Issued		Grant Date Fair Value
2009-2011		550,394	$	27.77
2010-2012		203,900	$	78.18
2011-2013		82,010	$	109.35

The company uses previously purchased treasury shares for all shares issued for option exercises and performance-based and restricted share units. The company received $9.1 million and $16.7 million of proceeds from the exercise of stock options during the six months ended June 30, 2011 and 2010, respectively. The company realized $11.7 million and $9.7 million of excess tax benefits related to the exercise of stock options and awards during the six months ended June 30, 2011 and 2010, respectively. The award for the 2008-2010 performance period was distributed during the six months ended June 30, 2011, resulting in the issuance of 178,081 shares and the deferral of 26,179 shares into a deferred compensation plan. The award for the 2007-2009 performance period was distributed during the six months ended June 30, 2010, resulting in the issuance of 213,960 shares and the deferral of 20,576 shares into a deferred compensation plan.

The terms of the performance-based share units granted to international employees state that payment will be in cash at the end of the performance period. In addition, some international employees received stock-based awards in prior years that are similar to stock appreciation rights. As such, liability accounting is used for both of these awards and compensation expense is calculated based on the company’s common share price. Compensation expense recognized in the consolidated statements of income related to these stock-based liability awards was $0.8 million and $4.6 million for the three and six months ended June 30, 2011, respectively. Compensation (credit) expense recognized in the consolidated statements of income related to these stock-based liability awards was $(1.5) million and $1.9 million for the three and six months ended June 30, 2010, respectively.

Total stock-based compensation expense recognized in the consolidated statements of income was $4.7 million and $12.6 million for the three and six months ended June 30, 2011, respectively, compared with $3.7 million and $11.0 million for the three and six months ended June 30, 2010, respectively. The related tax benefit was $1.7 million and $4.4 million for the three and six months ended June 30, 2011, respectively, compared with $1.3 million and $3.8 million for the three and six months ended June 30, 2010, respectively. Based on the grant date fair value of the awards and the company’s common share price at June 30, 2011, there was $24.1 million of total pre-tax unrecognized compensation cost related to all unvested stock-based awards. That cost is expected to be recognized over a weighted-average period of 1.8 years.

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SEGMENT REPORTING

6 Months Ended

Jun. 30, 2011

SEGMENT REPORTING

Note 3 – SEGMENT REPORTING

The company is organized into two operating and reportable segments: Lubrizol Additives and Lubrizol Advanced Materials. Lubrizol Additives consists of two product lines: (i) engine additives and (ii) driveline and industrial additives. Engine additives is comprised of additives for lubricating engine oils, such as for gasoline, diesel, marine and stationary gas engines, and additives for fuels, refinery and oil field chemicals. Driveline and industrial additives is comprised of additives for driveline oils, such as automatic transmission fluids, gear oils and tractor lubricants, and industrial additives, such as additives for hydraulic, grease and metalworking fluids, as well as compressor lubricants. Both product lines sell viscosity modifiers, as well as provide services for supply chain and knowledge center management.

The Lubrizol Advanced Materials segment consists of three product lines: (i) engineered polymers, (ii) Noveon^® consumer specialties and (iii) performance coatings. The engineered polymers product line includes products such as Estane^® thermoplastic polyurethane and TempRite^® engineered polymers. Engineered polymers products are sold to a diverse customer base comprised of major manufacturers in the construction, automotive, telecommunications, electronics and recreation industries. The Noveon consumer specialties product line includes acrylic thickeners, film formers, fixatives, emollients, silicones, specialty surfactants, conditioning polymers, methyl glucoside, lanolin derivatives and cassia hydrocolloids. The company markets products in the Noveon consumer specialties product line to major manufacturers of cosmetics, personal care and household products. The performance coatings product line includes high-performance polymers and additives for specialty paper, graphic arts, paints, textiles and coatings applications.

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

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

	Three Months Ended June 30,				Six Months Ended June 30,
(In Millions of Dollars)	2011		2010		2011		2010
Revenues from external customers:
Lubrizol Additives	$	1,201.0	$	1,008.4	$	2,284.4	$	1,956.4
Lubrizol Advanced Materials		433.8		392.8		869.3		760.3
Total revenues	$	1,634.8	$	1,401.2	$	3,153.7	$	2,716.7
Segment operating income:
Lubrizol Additives	$	282.4	$	271.5	$	542.3	$	517.9
Lubrizol Advanced Materials		52.2		62.5		123.3		123.1
Segment operating income		334.6		334.0		665.6		641.0
Corporate expenses		(19.4)		(15.3)		(57.6)		(50.8)
Corporate other income (expense) - net		1.9		7.4		(2.9)		12.7
Berkshire Hathaway merger-related costs		(0.8)		-		(10.7)		-
Restructuring and impairment (charges) credits		(0.3)		(0.5)		0.3		(1.4)
Interest expense - net		(22.0)		(23.4)		(45.6)		(46.9)
Income before income taxes	$	294.0	$	302.2	$	549.1	$	554.6

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

	June 30,		December 31,
(In Millions of Dollars)	2011		2010
Segment assets:
Lubrizol Additives	$	2,319.5	$	1,998.7
Lubrizol Advanced Materials		2,065.1		1,802.7
Total segment assets		4,384.6		3,801.4
Corporate assets		1,064.7		1,165.6
Total consolidated assets	$	5,449.3	$	4,967.0

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Company's Total Asset by Segement (Detail) (USD $) In Millions	Jun. 30, 2011	Dec. 31, 2010
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	$ 5,449.3	$ 4,967.0
Lubrizol Additives
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	2,319.5	1,998.7
Lubrizol Advanced Materials
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	2,065.1	1,802.7
Total Segment Assets
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	4,384.6	3,801.4
Corporate
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	$ 1,064.7	$ 1,165.6

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EQUITY

6 Months Ended

Jun. 30, 2011

EQUITY

Note 9 – EQUITY

The following table summarizes the changes in total equity since December 31, 2010:

(In Millions)	Number of Shares Outstanding		Common Shares		Retained Earnings		Accumulated Other Comprehensive (Loss) Income		Noncontrolling Interests		Total
Balance, December 31, 2010		64.0	$	813.6	$	1,517.4	$	(137.5)	$	77.6	$	2,271.1
Comprehensive income:
Net income				-		360.8		-		9.9		370.7
Other comprehensive income				-		-		92.9		0.5		93.4
Total comprehensive income												464.1
Stock-based compensation				7.2		-		-		-		7.2
Dividends declared				-		(46.5)		-		(11.4)		(57.9)
Adjustment to redeemable stock- based awards				-		(3.3)		-		-		(3.3)
Shares issued upon exercise of stock options and awards		0.5		9.1		-		-		-		9.1
Tax benefit from stock compensation				11.7		-		-		-		11.7
Shares purchased upon exercise of stock options and awards		(0.1)		(0.8)		(6.4)		-		-		(7.2)
Other - net				0.7		-		-		-		0.7
Balance, June 30, 2011		64.4	$	841.5	$	1,822.0	$	(44.6)	$	76.6	$	2,695.5

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CONTINGENCIES AND COMMITMENTS

6 Months Ended

Jun. 30, 2011

CONTINGENCIES AND COMMITMENTS

Note 14 – CONTINGENCIES AND COMMITMENTS

General

There are pending or threatened claims, lawsuits and administrative proceedings against the company with respect to commercial, premises liability, product liability, employment and environmental matters arising from the ordinary course of business. Environmental matters and liabilities are addressed specifically below. The company believes that any liability that finally may be determined with respect to these 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 claimant involving contract, patent protection and other matters. Gain contingencies, if any, are recognized when they are realized.

Berkshire Hathaway Merger

Following the announcement of the Merger Agreement described in Note 1, several shareholder derivative and purported class action lawsuits were filed in the Court of Common Pleas for Lake County, Ohio. The lawsuits generally allege that the directors of the company breached their fiduciary duties to the company’s shareholders by agreeing to enter into the transaction for an allegedly unfair price and as a result of an allegedly unfair process, and that the shareholders have not been provided sufficient information about the proposed merger. The lawsuits also allege that the company and Berkshire Hathaway aided and abetted the directors’ breaches of fiduciary duties. The lawsuits as filed seek, among other things, an injunction against the consummation of the proposed merger and rescission of the Merger Agreement. The company believes that the allegations lack merit and intends to defend itself vigorously.

Environmental

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

The company is a generator of both hazardous and non-hazardous wastes, the treatment, storage, transportation and disposal of which are governed by various laws and governmental regulations. These laws and regulations generally impose liability for costs to investigate and remediate contamination without regard to fault. Under certain circumstances, liability may be joint and several resulting in one party being held responsible for the entire obligation. Liability also may be imposed for damages to natural resources.

Although the company believes past operations were in substantial compliance with the then-applicable regulations, the company has been designated under a country’s laws and/or regulations as a potentially responsible party (PRP) in connection with several sites. The company participates in the remediation process for current operating facilities and for third-party 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, such as other 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 and remediation standards and evolving technologies for managing investigations and remediation. The company revises its estimates as events in this process occur and additional information is obtained.

The company’s environmental reserves, measured on an undiscounted basis, totaled $7.5 million at both June 30, 2011, and December 31, 2010. Of these amounts, $5.1 million and $4.8 million were included in accrued expenses and other current liabilities at June 30, 2011, and December 31, 2010, respectively. The company believes that its environmental accruals are adequate based on currently available information. However, it is reasonably possible that as a result of new information, newly discovered conditions, changes in remediation standards or technologies, or a change in the law, approximately $0.7 million in additional costs may be incurred beyond the amounts accrued.

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COMPREHENSIVE INCOME

6 Months Ended

Jun. 30, 2011

COMPREHENSIVE INCOME

Note 10 – COMPREHENSIVE INCOME

Total comprehensive income was comprised of the following:

	Three Months Ended June 30,				Six Months Ended June 30,
(In Millions of Dollars)	2011		2010		2011		2010
Net income	$	196.8	$	206.6	$	370.7	$	373.6
Foreign currency translation adjustment		22.5		(76.8)		87.6		(151.1)
Pension and other postretirement benefit plans		1.8		(0.3)		3.6		3.0
Commodity purchase contracts		0.2		0.9		0.6		(0.5)
Treasury rate lock agreements		0.8		0.8		1.6		1.6
Total comprehensive income	$	222.1	$	131.2	$	464.1	$	226.6
Less: Comprehensive income attributable to noncontrolling interests		5.9		4.2		10.4		9.9
Comprehensive income attributable to The Lubrizol Corporation	$	216.2	$	127.0	$	453.7	$	216.7

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Computation of Per Share Amounts (Detail) (USD $) In Millions, except Per Share data	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Numerator (in millions):
Net income attributable to The Lubrizol Corporation	$ 191.3	$ 201.4	$ 360.8	$ 363.7
Denominator (in millions of shares):
Weighted-average common shares outstanding	64.6	68.2	64.5	68.4
Dilutive effect of stock options and awards	1.5	1.6	1.5	1.4
Denominator for net income per share, diluted	66.1	69.8	66.0	69.8
Net income per share attributable to The Lubrizol Corporation, basic	$ 2.96	$ 2.95	$ 5.59	$ 5.32
Net income per share attributable to The Lubrizol Corporation, diluted	$ 2.90	$ 2.88	$ 5.47	$ 5.21

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FAIR VALUE MEASUREMENTS

6 Months Ended

Jun. 30, 2011

FAIR VALUE MEASUREMENTS

Note 8 – FAIR VALUE MEASUREMENTS

The company estimates the fair value of financial instruments using available market information and generally accepted valuation methodologies. Fair value is defined 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. The inputs used to measure fair value are classified into three levels: 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.

The following table shows the company’s financial assets and liabilities accounted for at fair value on a recurring basis at June 30, 2011:

(In Millions of Dollars)	June 30, 2011		Level 1		Level 2		Level 3
Assets:
Money market mutual funds (1)	$	589.5	$	589.5	$	-	$	-
Interest rate swaps (2)		11.1		-		11.1		-
	$	600.6	$	589.5	$	11.1	$	-
Liabilities:
Commodity purchase contracts (3)	$	1.3	$	-	$	1.3	$	-

The following table shows the company’s financial assets and liabilities accounted for at fair value on a recurring basis at December 31, 2010:

(In Millions of Dollars)	December 31, 2010		Level 1		Level 2		Level 3
Assets:
Money market mutual funds (1)	$	681.2	$	681.2	$	-	$	-
Interest rate swaps (2)		9.6		-		9.6		-
	$	690.8	$	681.2	$	9.6	$	-
Liabilities:
Interest rate swaps (2)	$	0.3	$	-	$	0.3	$	-
Commodity purchase contracts (3)		2.2		-		2.2		-
	$	2.5	$	-	$	2.5	$	-

(1) The fair value of money market mutual funds is based on quoted prices reported on various U.S. and international stock exchanges.

(2) The fair value of interest rate swaps is calculated using models that discount the cash flows at each coupon adjustment date using the then-applicable forward interest rates.

(3) The fair value of commodity purchase contracts is based on market forward rates and reflects the present value of the amount that the company would pay or receive for contracts involving the same notional amounts and maturity dates.

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RESTRUCTURING AND IMPAIRMENT CHARGES (CREDITS) - Additional Information (Detail) (USD $) In Millions	3 Months Ended			6 Months Ended
	Jun. 30, 2011	Dec. 31, 2010	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Restructuring and Related Cost [Abstract]
Restructuring (credits) charges	$ 0.3		$ 0.5	$ (0.3)	$ 1.4
Description of production facility divestiture		The company sold its production facility in Peachtree City, Georgia, along with the related machinery and equipment, technology and know-how used to manufacture the PEX compound, for $15.0 million. The receipt of the full $15.0 million is contingent upon the machinery and equipment functioning as required by the acquirer.
Sale of production facility		15.0
Proceed from sale of production facility				11.3
Sale of production facility, anticipated gain	$ 3.0			$ 3.0

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NATURE OF OPERATIONS

6 Months Ended

Jun. 30, 2011

NATURE OF OPERATIONS

Note 1 – NATURE OF OPERATIONS

The Lubrizol Corporation (the company) is an innovative specialty chemical company that produces and supplies technologies that improve the quality, value and performance, and minimize the environmental impact of its customers’ products in the global transportation, industrial and consumer markets. These technologies include lubricant additives for engine oils, other transportation-related fluids and industrial lubricants, as well as additives for gasoline and diesel fuel. In addition, the company makes engineered polymers, including plastics technology; ingredients and additives for personal care products and pharmaceuticals; and performance coatings in the form of specialty resins and additives.

On March 13, 2011, Berkshire Hathaway Inc. (Berkshire Hathaway) and the company entered into an Agreement and Plan of Merger (Merger Agreement) whereby Berkshire Hathaway will acquire all of the outstanding shares of The Lubrizol Corporation for $135 per share in cash. After the close of the transaction, the company will operate as a subsidiary of Berkshire Hathaway. On April 8, 2011, the transaction received early termination under the Hart-Scott-Rodino Antitrust Improvements Act in the U.S. At a special meeting held on June 9, 2011, Lubrizol’s shareholders approved the transaction. The completion of the transaction is subject to the satisfaction of customary closing conditions, including the expiration of waiting periods and the receipt of approvals under applicable non-U.S. merger control regulations. All non-U.S. regulatory filings have been made and the reviews are proceeding in the ordinary course. The transaction is projected to close within the next one to three months.

Pursuant to the terms of the Merger Agreement, the company is permitted to conduct its business in the ordinary course. Until the closing of the merger, the company is restricted from engaging in certain business activities without permission from Berkshire Hathaway, including, among other things, declaring and paying dividends outside of the ordinary course, issuing any additional shares of stock, repurchasing shares and incurring additional indebtedness. See the Merger Agreement for a complete list of restrictions.

During the six months ended June 30, 2011, the company recorded $10.7 million of merger-related costs, primarily related to investment banking, legal, proxy solicitation and other fees incurred as part of the company’s agreement to be acquired by Berkshire Hathaway. Contingent upon the successful completion of the merger, additional investment banking fees of $45.0 million will become payable by the company.

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ACQUISITIONS

6 Months Ended

Jun. 30, 2011

ACQUISITIONS

Note 4 – ACQUISITIONS

On January 21, 2011, the company acquired the assets of the Performance Products Group of Nalco Company for $164.2 million in cash. The Performance Products Group is a supplier of value-added specialty polymers and formulation additives marketed to the global personal care and household care industries, with annual revenues in 2010 of approximately $45.0 million. This acquisition expanded the strategic portfolio of the Noveon consumer specialties personal and home care business. The agreement included all Nalco personal care dedicated technology, know-how, trade names and customer lists, as well as royalty-free access to the use of technology and intellectual property currently shared with other Nalco businesses. The purchase price allocation for this acquisition included amortizable intangible assets of $74.2 million, non-amortized trademarks of $22.9 million and goodwill of $67.1 million. The pro forma impacts of this acquisition were immaterial to the company’s consolidated financial statements.

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Company's Debt (Detail) (USD $) In Millions	Jun. 30, 2011	Dec. 31, 2010
Debt Instrument [Line Items]
Total Debt	$ 1,357.1	$ 1,352.0
Less: Current portion of long-term debt	0.6	0.4
Total long-term debt	1,356.5	1,351.6
Notes 5 Point 5 Percent Due 2014
Debt Instrument [Line Items]
Total Debt	459.9	458.0
Notes 8 Point 875 Percent Due 2019
Debt Instrument [Line Items]
Total Debt	496.9	496.7
Debentures 7 Point 25 Percent Due 2025
Debt Instrument [Line Items]
Total Debt	100.0	100.0
Debentures 6 Point 5 Percent Due 2034
Debt Instrument [Line Items]
Total Debt	295.5	295.5
Debt, Other
Debt Instrument [Line Items]
Total Debt	$ 4.8	$ 1.8

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NATURE OF OPERATIONS - Additional Information (Detail) (USD $) In Millions, except Per Share data	3 Months Ended	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2011
Business Acquisition [Line Items]
Merger agreement with Berkshire Hathaway, Price per share	$ 135	$ 135
Berkshire Hathaway merger-related costs	$ 0.8	$ 10.7
Additional investment banking fees payable	$ 45.0	$ 45.0

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Share Based Compensation Arrangement by Share Based Payment Award Equity Instruments Other than Options Expected to Vest (Detail) (USD $)	Jun. 30, 2011	Dec. 31, 2010
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Grant Date Fair Value	$ 48.06	$ 43.25
Long Term Performance Plan 2009-2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected Number of Units to be Issued	550,394
Grant Date Fair Value	$ 27.77
Long Term Performance Plan 2010-2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected Number of Units to be Issued	203,900
Grant Date Fair Value	$ 78.18
Long Term Performance Plan 2011-2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected Number of Units to be Issued	82,010
Grant Date Fair Value	$ 109.35

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INVENTORIES

6 Months Ended

Jun. 30, 2011

INVENTORIES

Note 5 – INVENTORIES

The company’s inventories were comprised of the following:

(In Millions of Dollars)	June 30, 2011		December 31, 2010
Finished products	$	532.4	$	462.4
Products in process		162.1		168.5
Raw materials		182.0		151.6
Supplies		41.0		39.3
Total inventory	$	917.5	$	821.8

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DEBT - Additional Information (Detail) (USD $) In Millions, unless otherwise specified			6 Months Ended
	Jun. 30, 2011	Dec. 31, 2010	Jun. 30, 2011 US And Euro Bank Credit Agreement	Jun. 30, 2011 US And Euro Bank Credit Agreement Minimum	Jun. 30, 2011 Euro Bank Credit Agreement Minimum	Jun. 30, 2011 US Bank Credit Agreement Minimum
Debt Instrument [Line Items]
Required ratio of debt to Consolidated EBITDA			3.5
Required ratio of Consolidated EBITDA to interest expense			3.5
Maintained ratio of debt to Consolidated EBITDA			1.1
Maintained ratio of Consolidated EBITDA to interest expense			12.5
Debt instrument, debt default					$ 25.0	$ 50.0
Debt default, beneficial ownership percentage of voting stock				20.00%
Debt default, liabilities related to violations of employee benefit plan				25.0
Line of credit facility covenant compliance			At June 30, 2011, the company had no borrowings outstanding under its bank credit agreements, was in compliance with all of its covenants and had not committed any acts of default.
Debt instruments, fair value	$ 1,616.3	$ 1,549.6

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COMPREHENSIVE INCOME (Tables)

6 Months Ended

Jun. 30, 2011

Schedule of Comprehensive Income (Loss)

Total comprehensive income was comprised of the following:

	Three Months Ended June 30,				Six Months Ended June 30,
(In Millions of Dollars)	2011		2010		2011		2010
Net income	$	196.8	$	206.6	$	370.7	$	373.6
Foreign currency translation adjustment		22.5		(76.8)		87.6		(151.1)
Pension and other postretirement benefit plans		1.8		(0.3)		3.6		3.0
Commodity purchase contracts		0.2		0.9		0.6		(0.5)
Treasury rate lock agreements		0.8		0.8		1.6		1.6
Total comprehensive income	$	222.1	$	131.2	$	464.1	$	226.6
Less: Comprehensive income attributable to noncontrolling interests		5.9		4.2		10.4		9.9
Comprehensive income attributable to The Lubrizol Corporation	$	216.2	$	127.0	$	453.7	$	216.7

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SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Detail) In Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Earnings Per Share Disclosure [Line Items]
Options to purchase shares, excluded from the diluted earnings per share calculations	0.1	0.1	0.1	0.1

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Company's Debt (Parenthetical) (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended	12 Months Ended
	Jun. 30, 2011	Dec. 31, 2010
Notes 5 Point 5 Percent Due 2014
Debt Instrument [Line Items]
Original issue discount	$ 1.2	$ 1.3
Fair value adjustments for unrealized gains on derivative instruments	11.1	9.3
Debt, interest rate	5.50%	5.50%
Debt, due date	Due 2014	Due 2014
Notes 8 Point 875 Percent Due 2019
Debt Instrument [Line Items]
Original issue discount	3.1	3.3
Debt, interest rate	8.875%	8.875%
Debt, due date	Due 2019	Due 2019
Debentures 7 Point 25 Percent Due 2025
Debt Instrument [Line Items]
Debt, interest rate	7.25%	7.25%
Debt, due date	Due 2025	Due 2025
Debentures 6 Point 5 Percent Due 2034
Debt Instrument [Line Items]
Original issue discount	$ 4.5	$ 4.5
Debt, interest rate	6.50%	6.50%
Debt, due date	Due 2034	Due 2034

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STOCK-BASED COMPENSATION (Tables)

6 Months Ended

Jun. 30, 2011

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

The assumptions used to value the options granted were as follows:

	Six Months Ended June 30,
	2011		2010
Risk-free interest rate		2.4%		3.3%
Dividend yield		1.5%		1.6%
Expected volatility		31.7%		30.3%
Expected life (years)		5.4		6.5
Fair value per option	$	30.87	$	23.84

Schedule of Nonvested Performance-based Units Activity

Nonvested performance-based share units at June 30, 2011, and changes during the six months ended June 30, 2011, were as follows:

	Share     Units		Weighted- Average Grant Date Fair Value
Nonvested at December 31, 2010		855,134	$	43.25
Granted		82,150	$	109.35
Vested		(83,480)	$	58.45
Forfeited		(17,500)	$	51.29
Nonvested at June 30, 2011		836,304	$	48.06

Schedule of Nonvested Performance Based Units Expected to be Issued

The following table identifies the number of shares expected to be issued based on current expectations of performance and the fair value on the date of grant for the nonvested performance-based share units outstanding at June 30, 2011:

Performance Period	Expected Number of Units to be Issued		Grant Date Fair Value
2009-2011		550,394	$	27.77
2010-2012		203,900	$	78.18
2011-2013		82,010	$	109.35

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RESTRUCTURING AND IMPAIRMENT CHARGES (CREDITS)

6 Months Ended

Jun. 30, 2011

RESTRUCTURING AND IMPAIRMENT CHARGES (CREDITS)

Note 13 – RESTRUCTURING AND IMPAIRMENT CHARGES (CREDITS)

During the three and six months ended June 30, 2011, the company recorded aggregate restructuring charges (credits) of $0.3 and $(0.3) million, respectively, related to the sale of the cross-linked polyethylene compound (PEX) business within the TempRite business. In the fourth quarter of 2010, the company sold its production facility in Peachtree City, Georgia, along with the related machinery and equipment, technology and know-how used to manufacture the PEX compound, for $15.0 million. The receipt of the full $15.0 million is contingent upon the machinery and equipment functioning as required by the acquirer. Through June 30, 2011, the company received $11.3 million of proceeds, and anticipates recording an additional gain in 2011 of approximately $3.0 million upon the satisfaction of the remaining contingencies.

During the three and six months ended June 30, 2010, the company recorded aggregate restructuring and impairment charges of $0.5 million and $1.4 million, respectively. Restructuring and impairment charges primarily related to the restructuring of the sales and marketing organization within the TempRite business in the engineered polymers product line, along with the discontinuation of a tolling arrangement to manufacture products and the closure of production facilities from previously announced programs within the performance coatings product line of the Lubrizol Advanced Materials segment.

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GOODWILL AND INTANGIBLE ASSETS

6 Months Ended

Jun. 30, 2011

GOODWILL AND INTANGIBLE ASSETS

Note 6 – GOODWILL AND INTANGIBLE ASSETS

Goodwill is tested for impairment at the reporting unit level as of October 1 of each year or if events or circumstances occur that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The company has determined that the Lubrizol Additives operating segment constitutes a reporting unit, and that the Noveon consumer specialties product line, Estane engineered polymers business, TempRite engineered polymers business and performance coatings product line within the Lubrizol Advanced Materials operating segment constitute separate reporting units. The carrying amount of goodwill by reporting segment follows:

(In Millions of Dollars)	Lubrizol Advanced   Materials		Lubrizol Additives		Total
Balance, December 31, 2010:
Goodwill	$	945.2	$	183.4	$	1,128.6
Accumulated impairment losses		(363.0)		-		(363.0)
		582.2		183.4		765.6
Goodwill acquired		67.1		-		67.1
Translation adjustments		19.9		1.7		21.6
Balance, June 30, 2011:
Goodwill		1,032.2		185.1		1,217.3
Accumulated impairment losses		(363.0)		-		(363.0)
	$	669.2	$	185.1	$	854.3

The company’s indefinite-lived intangible assets include certain trademarks that are tested for impairment each year as of October 1 or more frequently if impairment indicators arise. The following table shows the components of identifiable intangible assets:

			June 30, 2011				December 31, 2010
(In Millions of Dollars)	Weighted- Average Useful Life		Gross Carrying   Amount		Accumulated   Amortization		Gross Carrying   Amount		Accumulated   Amortization
Amortized intangible assets:
Customer lists		18 years	$	253.7	$	76.4	$	189.5	$	68.1
Technology		15 years		148.8		63.6		133.8		58.2
Trademarks		16 years		31.0		13.0		29.7		11.6
Patents		11 years		11.1		7.6		10.8		6.9
Other		8 years		1.2		0.6		1.2		0.5
Total amortized intangible assets				445.8		161.2		365.0		145.3
Non-amortized trademarks				105.9		-		79.7		-
Total			$	551.7	$	161.2	$	444.7	$	145.3

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SIGNIFICANT ACCOUNTING POLICIES (Tables)

6 Months Ended

Jun. 30, 2011

Schedule of Earnings Per Share, Basic and Diluted

Per share amounts are computed as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
Numerator (in millions):
Net income attributable to The Lubrizol Corporation	$	191.3	$	201.4	$	360.8	$	363.7
Denominator (in millions of shares):
Weighted-average common shares outstanding		64.6		68.2		64.5		68.4
Dilutive effect of stock options and awards		1.5		1.6		1.5		1.4
Denominator for net income per share, diluted		66.1		69.8		66.0		69.8
Net income per share attributable to The Lubrizol Corporation, basic	$	2.96	$	2.95	$	5.59	$	5.32
Net income per share attributable to The Lubrizol Corporation, diluted	$	2.90	$	2.88	$	5.47	$	5.21

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Components of Identifiable Intangible Assets (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2011 Year	Dec. 31, 2010
Intangible Assets by Major Class [Line Items]
Gross Carrying Amount, Amortizable	$ 445.8	$ 365.0
Accumulated Amortization	161.2	145.3
Intangible Assets, Gross (Excluding Goodwill)	551.7	444.7
Total Accumulated Amortization	161.2	145.3
Customer Lists
Intangible Assets by Major Class [Line Items]
Weighted Average Useful Life	18
Gross Carrying Amount, Amortizable	253.7	189.5
Accumulated Amortization	76.4	68.1
Technology
Intangible Assets by Major Class [Line Items]
Weighted Average Useful Life	15
Gross Carrying Amount, Amortizable	148.8	133.8
Accumulated Amortization	63.6	58.2
Trademarks
Intangible Assets by Major Class [Line Items]
Weighted Average Useful Life	16
Gross Carrying Amount, Amortizable	31.0	29.7
Accumulated Amortization	13.0	11.6
Gross Carrying Amount, Non-Amortizable	105.9	79.7
Patents
Intangible Assets by Major Class [Line Items]
Weighted Average Useful Life	11
Gross Carrying Amount, Amortizable	11.1	10.8
Accumulated Amortization	7.6	6.9
Other
Intangible Assets by Major Class [Line Items]
Weighted Average Useful Life	8
Gross Carrying Amount, Amortizable	1.2	1.2
Accumulated Amortization	$ 0.6	$ 0.5

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BENEFIT PLANS (Tables)

6 Months Ended

Jun. 30, 2011

Pension Plans, Defined Benefit

Schedule of Net Benefit Costs

The components of net periodic pension cost consisted of the following:

	Three Months Ended June 30, 2011						Three Months Ended June 30, 2010
(In Millions of Dollars)	U.S. Plans		Non- U.S. Plans		Total		U.S. Plans		Non- U.S. Plans		Total
Service cost	$	5.8	$	2.5	$	8.3	$	4.4	$	2.1	$	6.5
Interest cost on projected benefit obligation		7.7		3.9		11.6		6.8		3.6		10.4
Expected return on plan assets		(7.2)		(3.9)		(11.1)		(6.0)		(3.5)		(9.5)
Amortization of prior service costs		0.6		0.1		0.7		0.6		0.1		0.7
Recognized net actuarial loss		2.6		0.6		3.2		1.0		0.5		1.5
Net periodic pension cost	$	9.5	$	3.2	$	12.7	$	6.8	$	2.8	$	9.6

	Six Months Ended June 30, 2011						Six Months Ended June 30, 2010
(In Millions of Dollars)	U.S. Plans		Non- U.S. Plans		Total		U.S. Plans		Non- U.S. Plans		Total
Service cost	$	11.6	$	4.9	$	16.5	$	10.2	$	4.3	$	14.5
Interest cost on projected benefit obligation		15.4		7.8		23.2		13.9		7.4		21.3
Expected return on plan assets		(14.4)		(7.7)		(22.1)		(12.1)		(7.2)		(19.3)
Amortization of prior service costs		1.1		0.2		1.3		1.2		0.2		1.4
Recognized net actuarial loss		5.2		1.2		6.4		2.4		0.9		3.3
Net periodic pension cost	$	18.9	$	6.4	$	25.3	$	15.6	$	5.6	$	21.2

Other Postretirement Benefit Plans, Defined Benefit

Schedule of Net Benefit Costs

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

	Three Months Ended June 30,				Six Months Ended June 30,
(In Millions of Dollars)	2011		2010		2011		2010
Service cost	$	0.4	$	0.4	$	0.8	$	0.8
Interest cost on projected benefit obligation		1.3		1.4		2.6		2.8
Amortization of prior service credits		(1.4)		(1.4)		(2.9)		(2.8)
Amortization of initial net obligation		0.1		0.1		0.2		0.2
Recognized net actuarial loss		0.2		0.1		0.4		0.3
Net periodic non-pension postretirement benefit cost	$	0.6	$	0.6	$	1.1	$	1.3

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Millions	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
OPERATING ACTIVITIES
Net income	$ 370.7	$ 373.6
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	88.8	84.8
Deferred income taxes	(3.1)	10.3
Stock-based compensation	8.0	9.1
Restructuring and impairment (credits) charges	(0.6)	0.1
Gain from sale of assets		(0.9)
Change in current assets and liabilities, net of acquisitions:
Receivables	(179.5)	(187.9)
Inventories	(76.3)	(66.8)
Accounts payable, accrued expenses and other current liabilities	33.1	50.2
Other current assets	(10.3)	(0.4)
Increase Decrease In Current Operating Capital	(233.0)	(204.9)
Other items - net	(9.0)	1.1
Total operating activities	221.8	273.2
INVESTING ACTIVITIES
Capital expenditures	(139.2)	(63.2)
Acquisitions	(164.2)	(2.5)
Other items - net	5.0	4.1
Total investing activities	(298.4)	(61.6)
FINANCING ACTIVITIES
Dividends paid	(46.2)	(45.8)
Dividends paid to noncontrolling interests	(11.4)	(8.0)
Common shares purchased		(125.5)
Repayments of long-term debt	(0.1)	(45.8)
Other items - net	13.6	26.4
Total financing activities	(44.1)	(198.7)
Effect of exchange rate changes on cash	17.9	(31.7)
Net decrease in cash and cash equivalents	(102.8)	(18.8)
Cash and cash equivalents at the beginning of period	896.2	991.0
Cash and cash equivalents at the end of period	$ 793.4	$ 972.2

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SEGMENT REPORTING (Tables)

6 Months Ended

Jun. 30, 2011

Reconciliation of Operating Profit (Loss) from Segments to Consolidated

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

	Three Months Ended June 30,				Six Months Ended June 30,
(In Millions of Dollars)	2011		2010		2011		2010
Revenues from external customers:
Lubrizol Additives	$	1,201.0	$	1,008.4	$	2,284.4	$	1,956.4
Lubrizol Advanced Materials		433.8		392.8		869.3		760.3
Total revenues	$	1,634.8	$	1,401.2	$	3,153.7	$	2,716.7
Segment operating income:
Lubrizol Additives	$	282.4	$	271.5	$	542.3	$	517.9
Lubrizol Advanced Materials		52.2		62.5		123.3		123.1
Segment operating income		334.6		334.0		665.6		641.0
Corporate expenses		(19.4)		(15.3)		(57.6)		(50.8)
Corporate other income (expense) - net		1.9		7.4		(2.9)		12.7
Berkshire Hathaway merger-related costs		(0.8)		-		(10.7)		-
Restructuring and impairment (charges) credits		(0.3)		(0.5)		0.3		(1.4)
Interest expense - net		(22.0)		(23.4)		(45.6)		(46.9)
Income before income taxes	$	294.0	$	302.2	$	549.1	$	554.6

Reconciliation of Assets from Segment to Consolidated

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

	June 30,		December 31,
(In Millions of Dollars)	2011		2010
Segment assets:
Lubrizol Additives	$	2,319.5	$	1,998.7
Lubrizol Advanced Materials		2,065.1		1,802.7
Total segment assets		4,384.6		3,801.4
Corporate assets		1,064.7		1,165.6
Total consolidated assets	$	5,449.3	$	4,967.0

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Changes in Equity (Detail) (USD $) In Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Class of Stock [Line Items]
Beginning Balance			$ 2,271.1
Comprehensive income:
Net income	196.8	206.6	370.7	373.6
Other comprehensive income			93.4
Total comprehensive income	222.1	131.2	464.1	226.6
Stock-based compensation			7.2
Dividends declared			(57.9)
Adjustment to redeemable stock- based awards			(3.3)
Shares issued upon exercise of stock options and awards			9.1
Tax benefit from stock compensation			11.7
Shares purchased upon exercise of stock options and awards			(7.2)
Other - net			0.7
Ending Balance	2,695.5		2,695.5
Common Shares
Class of Stock [Line Items]
Beginning Balance (in shares)			64.0
Beginning Balance			813.6
Comprehensive income:
Stock-based compensation			7.2
Shares issued upon exercise of stock options and awards (in shares)			0.5
Shares issued upon exercise of stock options and awards			9.1
Tax benefit from stock compensation			11.7
Shares purchased upon exercise of stock options and awards (in shares)			(0.1)
Shares purchased upon exercise of stock options and awards			(0.8)
Other - net			0.7
Ending Balance (in shares)	64.4		64.4
Ending Balance	841.5		841.5
Retained Earnings
Class of Stock [Line Items]
Beginning Balance			1,517.4
Comprehensive income:
Net income			360.8
Dividends declared			(46.5)
Adjustment to redeemable stock- based awards			(3.3)
Shares purchased upon exercise of stock options and awards			(6.4)
Ending Balance	1,822.0		1,822.0
Accumulated Other Comprehensive (Loss) Income
Class of Stock [Line Items]
Beginning Balance			(137.5)
Comprehensive income:
Other comprehensive income			92.9
Ending Balance	(44.6)		(44.6)
Noncontrolling Interests
Class of Stock [Line Items]
Beginning Balance			77.6
Comprehensive income:
Net income			9.9
Other comprehensive income			0.5
Dividends declared			(11.4)
Ending Balance	$ 76.6		$ 76.6

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GOODWILL AND INTANGIBLE ASSETS (Tables)

6 Months Ended

Jun. 30, 2011

Schedule of Goodwill

The carrying amount of goodwill by reporting segment follows:

(In Millions of Dollars)	Lubrizol Advanced   Materials		Lubrizol Additives		Total
Balance, December 31, 2010:
Goodwill	$	945.2	$	183.4	$	1,128.6
Accumulated impairment losses		(363.0)		-		(363.0)
		582.2		183.4		765.6
Goodwill acquired		67.1		-		67.1
Translation adjustments		19.9		1.7		21.6
Balance, June 30, 2011:
Goodwill		1,032.2		185.1		1,217.3
Accumulated impairment losses		(363.0)		-		(363.0)
	$	669.2	$	185.1	$	854.3

Schedule of Intangible Assets by Major Class

The following table shows the components of identifiable intangible assets:

			June 30, 2011				December 31, 2010
(In Millions of Dollars)	Weighted- Average Useful Life		Gross Carrying   Amount		Accumulated   Amortization		Gross Carrying   Amount		Accumulated   Amortization
Amortized intangible assets:
Customer lists		18 years	$	253.7	$	76.4	$	189.5	$	68.1
Technology		15 years		148.8		63.6		133.8		58.2
Trademarks		16 years		31.0		13.0		29.7		11.6
Patents		11 years		11.1		7.6		10.8		6.9
Other		8 years		1.2		0.6		1.2		0.5
Total amortized intangible assets				445.8		161.2		365.0		145.3
Non-amortized trademarks				105.9		-		79.7		-
Total			$	551.7	$	161.2	$	444.7	$	145.3

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SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2011

SIGNIFICANT ACCOUNTING POLICIES

Note 2 – SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting - 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 U.S. GAAP 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 six months ended June 30, 2011, are not necessarily indicative of the results that may be expected for the year ending December 31, 2011.

The consolidated balance sheet at December 31, 2010, 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 a complete set of financial statements.

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 year amounts have been reclassified to conform to the current year presentation.

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
Numerator (in millions):
Net income attributable to The Lubrizol Corporation	$	191.3	$	201.4	$	360.8	$	363.7
Denominator (in millions of shares):
Weighted-average common shares outstanding		64.6		68.2		64.5		68.4
Dilutive effect of stock options and awards		1.5		1.6		1.5		1.4
Denominator for net income per share, diluted		66.1		69.8		66.0		69.8
Net income per share attributable to The Lubrizol Corporation, basic	$	2.96	$	2.95	$	5.59	$	5.32
Net income per share attributable to The Lubrizol Corporation, diluted	$	2.90	$	2.88	$	5.47	$	5.21

Options to purchase 0.1 million shares were excluded from the diluted earnings per share calculations because they were antidilutive for both the three and six months ended June 30, 2011 and 2010.

New Accounting Standards

Accounting Standards Adopted in 2011

In October 2009, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2009-13, “Multiple-Deliverable Revenue Arrangements, a Consensus of the FASB Emerging Issues Task Force.” ASU 2009-13 allows companies to allocate consideration in multiple deliverable arrangements based on the company’s best estimate of selling price when vendor specific objective evidence or vendor objective evidence of the fair value of deliverables is not available. In addition, the residual method of allocating consideration to delivered items is no longer permitted. This update is effective for fiscal years beginning on or after June 15, 2010, with early application permitted. The company’s adoption of this update on January 1, 2011, had no effect on its consolidated financial statements.

Accounting Standards Not Yet Adopted

In May 2011, the FASB issued ASU 2011-04, “Fair Value Measurement.” This ASU clarifies the concepts related to highest and best use and valuation premise, blockage factors and other premiums and discounts, the fair value measurement of financial instruments held in a portfolio and of those instruments classified as a component of shareowners’ equity. This update includes enhanced disclosure requirements about recurring Level 3 fair value measurements, the use of nonfinancial assets, and the level in the fair value hierarchy of assets and liabilities not recorded at fair value. This update is effective prospectively for interim and annual periods beginning on or after December 15, 2011. The company is evaluating the impact of this update on its consolidated financial statements.

In June 2011, the FASB issued ASU 2011-05, “Comprehensive Income.” This ASU intends to enhance comparability and transparency of other comprehensive income components. This update provides an option to present total comprehensive income, the components of net income and the components of other comprehensive income in a single continuous statement or two separate but consecutive statements, and eliminates the option to present other comprehensive income components as part of the statement of changes in shareowners’ equity. This update will be applied retrospectively for interim and annual periods beginning after December 15, 2011. The company is evaluating the impact of this update on its consolidated financial statements.

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BENEFIT PLANS

6 Months Ended

Jun. 30, 2011

BENEFIT PLANS

Note 11 – BENEFIT PLANS

The company has noncontributory defined benefit pension plans covering most employees. Pension benefits under these plans are based on years of service and compensation. The company also provides certain non-pension postretirement benefits, primarily health care and life insurance benefits, for retired employees. The company’s non-pension postretirement plan liabilities predominately relate to plans in the United States.

The components of net periodic pension cost consisted of the following:

	Three Months Ended June 30, 2011						Three Months Ended June 30, 2010
(In Millions of Dollars)	U.S. Plans		Non- U.S. Plans		Total		U.S. Plans		Non- U.S. Plans		Total
Service cost	$	5.8	$	2.5	$	8.3	$	4.4	$	2.1	$	6.5
Interest cost on projected benefit obligation		7.7		3.9		11.6		6.8		3.6		10.4
Expected return on plan assets		(7.2)		(3.9)		(11.1)		(6.0)		(3.5)		(9.5)
Amortization of prior service costs		0.6		0.1		0.7		0.6		0.1		0.7
Recognized net actuarial loss		2.6		0.6		3.2		1.0		0.5		1.5
Net periodic pension cost	$	9.5	$	3.2	$	12.7	$	6.8	$	2.8	$	9.6

	Six Months Ended June 30, 2011						Six Months Ended June 30, 2010
(In Millions of Dollars)	U.S. Plans		Non- U.S. Plans		Total		U.S. Plans		Non- U.S. Plans		Total
Service cost	$	11.6	$	4.9	$	16.5	$	10.2	$	4.3	$	14.5
Interest cost on projected benefit obligation		15.4		7.8		23.2		13.9		7.4		21.3
Expected return on plan assets		(14.4)		(7.7)		(22.1)		(12.1)		(7.2)		(19.3)
Amortization of prior service costs		1.1		0.2		1.3		1.2		0.2		1.4
Recognized net actuarial loss		5.2		1.2		6.4		2.4		0.9		3.3
Net periodic pension cost	$	18.9	$	6.4	$	25.3	$	15.6	$	5.6	$	21.2

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

	Three Months Ended June 30,				Six Months Ended June 30,
(In Millions of Dollars)	2011		2010		2011		2010
Service cost	$	0.4	$	0.4	$	0.8	$	0.8
Interest cost on projected benefit obligation		1.3		1.4		2.6		2.8
Amortization of prior service credits		(1.4)		(1.4)		(2.9)		(2.8)
Amortization of initial net obligation		0.1		0.1		0.2		0.2
Recognized net actuarial loss		0.2		0.1		0.4		0.3
Net periodic non-pension postretirement benefit cost	$	0.6	$	0.6	$	1.1	$	1.3

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Summary of the Results of the Company's Reportable Segments (Detail) (USD $) In Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Segment Reporting Information [Line Items]
Revenues	$ 1,634.8	$ 1,401.2	$ 3,153.7	$ 2,716.7
Segment operating income	334.6	334.0	665.6	641.0
Corporate expenses	(19.4)	(15.3)	(57.6)	(50.8)
Corporate other income (expense) - net	1.9	7.4	(2.9)	12.7
Berkshire Hathaway merger - related costs	(0.8)		(10.7)
Restructuring and impairment (charges) credits	(0.3)	(0.5)	0.3	(1.4)
Interest expense - net	(22.0)	(23.4)	(45.6)	(46.9)
Income before income taxes	294.0	302.2	549.1	554.6
Lubrizol Additives
Segment Reporting Information [Line Items]
Revenues	1,201.0	1,008.4	2,284.4	1,956.4
Segment operating income	282.4	271.5	542.3	517.9
Lubrizol Advanced Materials
Segment Reporting Information [Line Items]
Revenues	433.8	392.8	869.3	760.3
Segment operating income	$ 52.2	$ 62.5	$ 123.3	$ 123.1

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SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2011

Basis Of Accounting, Policy

Basis of Accounting - 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 U.S. GAAP 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 six months ended June 30, 2011, are not necessarily indicative of the results that may be expected for the year ending December 31, 2011.

The consolidated balance sheet at December 31, 2010, 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 a complete set of financial statements.

Use of Estimates, Policy

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 Policy

Reclassifications - Certain prior year amounts have been reclassified to conform to the current year presentation.

Earnings Per Share, Policy

Net Income per Share Attributable to The Lubrizol Corporation - Net income per share attributable to The Lubrizol Corporation is computed by dividing net income attributable to The Lubrizol Corporation by the weighted-average common shares of The Lubrizol Corporation outstanding during the period, including contingently issuable shares. Net income per diluted share attributable to The Lubrizol Corporation includes the dilutive impact resulting from outstanding stock options and awards.

New Accounting Pronouncements Policy

New Accounting Standards

Accounting Standards Adopted in 2011

In October 2009, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2009-13, “Multiple-Deliverable Revenue Arrangements, a Consensus of the FASB Emerging Issues Task Force.” ASU 2009-13 allows companies to allocate consideration in multiple deliverable arrangements based on the company’s best estimate of selling price when vendor specific objective evidence or vendor objective evidence of the fair value of deliverables is not available. In addition, the residual method of allocating consideration to delivered items is no longer permitted. This update is effective for fiscal years beginning on or after June 15, 2010, with early application permitted. The company’s adoption of this update on January 1, 2011, had no effect on its consolidated financial statements.

Accounting Standards Not Yet Adopted

In May 2011, the FASB issued ASU 2011-04, “Fair Value Measurement.” This ASU clarifies the concepts related to highest and best use and valuation premise, blockage factors and other premiums and discounts, the fair value measurement of financial instruments held in a portfolio and of those instruments classified as a component of shareowners’ equity. This update includes enhanced disclosure requirements about recurring Level 3 fair value measurements, the use of nonfinancial assets, and the level in the fair value hierarchy of assets and liabilities not recorded at fair value. This update is effective prospectively for interim and annual periods beginning on or after December 15, 2011. The company is evaluating the impact of this update on its consolidated financial statements.

In June 2011, the FASB issued ASU 2011-05, “Comprehensive Income.” This ASU intends to enhance comparability and transparency of other comprehensive income components. This update provides an option to present total comprehensive income, the components of net income and the components of other comprehensive income in a single continuous statement or two separate but consecutive statements, and eliminates the option to present other comprehensive income components as part of the statement of changes in shareowners’ equity. This update will be applied retrospectively for interim and annual periods beginning after December 15, 2011. The company is evaluating the impact of this update on its consolidated financial statements.

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CONSOLIDATED STATEMENTS OF INCOME (USD $) In Millions, except Per Share data	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Revenues	$ 1,634.8	$ 1,401.2	$ 3,153.7	$ 2,716.7
Cost of sales	1,133.3	927.6	2,170.0	1,792.4
Gross profit	501.5	473.6	983.7	924.3
Selling and administrative expenses	123.6	100.0	256.3	222.9
Research, testing and development expenses	58.7	52.9	112.5	105.7
Amortization of intangible assets	7.1	6.2	13.9	12.5
Berkshire Hathaway merger-related costs (Note 1)	0.8		10.7
Restructuring and impairment charges (credits)	0.3	0.5	(0.3)	1.4
Other income - net	(5.0)	(11.6)	(4.1)	(19.7)
Interest income	(1.9)	(1.4)	(3.5)	(2.7)
Interest expense	23.9	24.8	49.1	49.6
Income before income taxes	294.0	302.2	549.1	554.6
Provision for income taxes	97.2	95.6	178.4	181.0
Net income	196.8	206.6	370.7	373.6
Net income attributable to noncontrolling interests	5.5	5.2	9.9	9.9
Net income attributable to The Lubrizol Corporation	$ 191.3	$ 201.4	$ 360.8	$ 363.7
Net income per share attributable to The Lubrizol Corporation, basic	$ 2.96	$ 2.95	$ 5.59	$ 5.32
Net income per share attributable to The Lubrizol Corporation, diluted	$ 2.90	$ 2.88	$ 5.47	$ 5.21
Dividends paid per share	$ 0.36	$ 0.36	$ 0.72	$ 0.67

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ACQUISITIONS - Additional Information (Detail) (Performance Products Group, USD $) In Millions	12 Months Ended
	Dec. 31, 2010	Jan. 21, 2011
Performance Products Group
Business Acquisition [Line Items]
Business acquisition, purchase price		$ 164.2
Annual revenues	45.0
Business acquisition, purchase price allocation, amortizable intangible assets		74.2
Business acquisition, purchase price allocation, non-amortized trademarks		22.9
Business acquisition, purchase price allocation, goodwill		$ 67.1

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Assumptions Used to Value Options Granted (Detail) (USD $)	6 Months Ended
	Jun. 30, 2011 Year	Jun. 30, 2010 Year
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate	2.40%	3.30%
Dividend yield	1.50%	1.60%
Expected volatility	31.70%	30.30%
Expected life (years)	5.4	6.5
Fair value per option	$ 30.87	$ 23.84

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Total Comprehensive Income (Detail) (USD $) In Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Net income	$ 196.8	$ 206.6	$ 370.7	$ 373.6
Foreign currency translation adjustment	22.5	(76.8)	87.6	(151.1)
Pension and other postretirement benefit plans	1.8	(0.3)	3.6	3.0
Commodity purchase contracts	0.2	0.9	0.6	(0.5)
Treasury rate lock agreements	0.8	0.8	1.6	1.6
Total comprehensive income	222.1	131.2	464.1	226.6
Less: Comprehensive income attributable to noncontrolling interests	5.9	4.2	10.4	9.9
Comprehensive income attributable to The Lubrizol Corporation	$ 216.2	$ 127.0	$ 453.7	$ 216.7

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Components of Net Periodic Pension Cost (Detail) (USD $) In Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
United States Pension Plans of US Entity, Defined Benefit
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 5.8	$ 4.4	$ 11.6	$ 10.2
Interest cost on projected benefit obligation	7.7	6.8	15.4	13.9
Expected return on plan assets	(7.2)	(6.0)	(14.4)	(12.1)
Amortization of prior service costs	0.6	0.6	1.1	1.2
Recognized net actuarial loss	2.6	1.0	5.2	2.4
Net periodic cost	9.5	6.8	18.9	15.6
Foreign Pension Plans, Defined Benefit
Defined Benefit Plan Disclosure [Line Items]
Service cost	2.5	2.1	4.9	4.3
Interest cost on projected benefit obligation	3.9	3.6	7.8	7.4
Expected return on plan assets	(3.9)	(3.5)	(7.7)	(7.2)
Amortization of prior service costs	0.1	0.1	0.2	0.2
Recognized net actuarial loss	0.6	0.5	1.2	0.9
Net periodic cost	3.2	2.8	6.4	5.6
Pension Plans, Defined Benefit
Defined Benefit Plan Disclosure [Line Items]
Service cost	8.3	6.5	16.5	14.5
Interest cost on projected benefit obligation	11.6	10.4	23.2	21.3
Expected return on plan assets	(11.1)	(9.5)	(22.1)	(19.3)
Amortization of prior service costs	0.7	0.7	1.3	1.4
Recognized net actuarial loss	3.2	1.5	6.4	3.3
Net periodic cost	$ 12.7	$ 9.6	$ 25.3	$ 21.2

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Inventories (Detail) (USD $) In Millions	Jun. 30, 2011	Dec. 31, 2010
Inventory Disclosure [Line Items]
Finished products	$ 532.4	$ 462.4
Products in process	162.1	168.5
Raw materials	182.0	151.6
Supplies	41.0	39.3
Total inventory	$ 917.5	$ 821.8