Consumer Specialties is a global producer of specialty chemicals targeting the personal care, pharmaceutical and food and beverage industries. Key products in this segment include Carbopol acrylic thickeners, film formers, fixatives, emollients, silicones, botanicals, active pharmaceutical ingredients and intermediates, benzoate preservatives, fragrances, synthetic food dyes and natural colorants. The Company’s products serving the personal care and pharmaceutical end-use industries impart physical and sensory properties, such as texture, stability and thickness to products, including lotions, hair gels, cosmetics and pharmaceuticals. The Company’s products are an important component of the functionality and aesthetics of the end product, but typically represent a small portion of the customer's total product costs. The Company’s history of technological innovation includes the invention of Carbopol acrylic thickener, which is the global leader in synthetic thickeners due to its efficient stabilizing properties and superior thickening capabilities. The Company is a leading global producer of benzoate preservatives, the second largest U.S. supplier of synthetic colorants and an integrated producer of flavors, fragrances and other food additives to the food and beverage industry. Benzoates improve the shelf life of consumable goods and are the preservative of choice for manufacturers of soft drinks, bottled beverages, fruit-based products and prepared salads due to their anti-microbial properties. The Company also sells a full line of FDA-approved food, drug and cosmetic primary dyes (including blends of primary dyes), as well as lakes and natural colors.

Specialty Materials is the largest global supplier of chlorinated polyvinyl chloride (CPVC) resins and compounds and reactive liquid polymers (RLP), sold under the respective trademarks TempRite® and Hycar®. Specialty Materials is also a leading producer of thermoplastic polyurethane (TPU) and cross-linked polyethylene compounds (PEX) sold under the respective trademarks Estane and TempRite. Applications for TempRite resins and compounds include piping for residential and commercial plumbing and fire sprinkler systems. Applications for Estane® TPU include plastic film and sheet for various coatings processes. Applications for Hycar RLP include engineering adhesives. Specialty Materials is also a leading North American producer of rubber and lubricant antioxidants and rubber accelerators.

Performance Coatings is a leading global producer of high-performance polymers for specialty paper, printing and packaging, industrial and architectural specialty coatings and textile applications. Approximately 70% of Performance Coatings' sales are generated from the Company’s water-based acrylic polymers and compounds and polyurethane dispersions. The Company offers customized solutions to meet the specific needs of its customers sold under the trademarks Hycar, Sancure, Algan, Performax and Myflam. The Company’s product offerings include a broad range of water-based polymer emulsions, resins and auxiliaries used in the production of high-end paint and coatings for wood, paper, metal, concrete, plastic, textiles and other surfaces. The Company’s water-based polymers, which are environmentally attractive substitutes for solvent-based products, are valued for the superior gloss and durability properties they provide. The Company supplies acrylic emulsions used to improve the appearance, texture, durability and flame retardance of high-end specialty textiles sold to the home furnishings, technical fabrics and apparel industries.

Gross profit decreased $16.0 million, or 4.7%, to $326.5 million for the year ended December 31, 2003 from $342.5 million for the year ended December 31, 2002.

Operating income decreased by $25.9 million, or 21.6% to $93.8 million for the year ended December 31, 2003 from $119.7 million for the year ended December 31, 2002.

Interest expense, net, was $90.9 million for the year ended December 31, 2003 and $99.6 million for the year ended December 31, 2002.

Net income decreased by $31.6 million to a net loss of $7.9 million for the year ended December 31, 2003 from net income of $23.7 million for the year ended December 31, 2002.