60751--2/26/2010--LUBRIZOL

related topics

{condition, economic, financial}

{cost, regulation, environmental}

{operation, international, foreign}

{operation, natural, condition}

{cost, operation, labor}

{debt, indebtedness, cash}

{system, service, information}

{cost, contract, operation}

{property, intellectual, protect}

{acquisition, growth, future}

{capital, credit, financial}

{product, market, service}

RISKS RELATING TO OUR BUSINESS Volatility in raw material prices could reduce our profitability, and reductions in the availability of raw material supplies could disrupt our operations. Some of our businesses are cyclical and demand by our customers for our products weakens during economic downturns. As a majority of our revenues are concentrated in the transportation and industrial lubricant industries, changes in economic and industry conditions could affect adversely our results of operations. We face competition from other chemical companies, which could affect adversely our business, financial condition and results of operations. Failure to make continued improvements in our technology and productivity could hurt our competitive position. Our and our suppliers production facilities are subject to operating risks that could affect adversely our business or results of operations. If we are unable to protect our intellectual property rights or to successfully resolve claims of infringement brought against us, our product sales and financial performance could be affected adversely. We may not be able to complete future acquisitions or successfully integrate future acquisitions into our business, which could affect adversely our business or results of operations. We face numerous risks relating to our foreign operations, including exchange rate fluctuations, exchange controls and currency devaluations, which may affect adversely our results of operations or cash flow. Failure to implement our common information system platform successfully could impact negatively our ability to conduct business, particularly in our Lubrizol Advanced Materials segment. International social, political and economic conditions could affect adversely our operating performance. Our production facilities could be targets for terrorism, and any attack could disrupt our operations and cause us to incur significant costs and liabilities. We could incur costs and liabilities as a result of the numerous environmental laws applicable to our operations that are greater than we anticipate, which could affect adversely our results of operations and cash flows. Some of our employees are covered by collective bargaining agreements or participate in work councils, and the failure to renew these agreements or maintain these relationships could result in labor disruptions and increased labor costs. We may not have access to capital in the future due to changes in general economic conditions. We could be affected adversely if our debt is downgraded. The limits imposed on us by the restrictive covenants contained in our credit facilities could prevent us from making acquisitions or capital improvements or cause us to lose access to these facilities, and if we are unable to obtain necessary waivers and our debt is accelerated, our financial condition could be affected adversely. We may be impacted adversely by increased costs related to our defined benefit pension plans.

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60751--2/26/2010--LUBRIZOL_CORP