As filed with the Securities and Exchange Commission on October 1, 2004

Registration No. 333-

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM S-1

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

NALCO COMPANY

(Exact name of registrant as specified in its charter)

SEE TABLE OF ADDITIONAL REGISTRANTS


Delaware	2890	36-1520480
(State of Incorporation)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)

1601 West Diehl Road
Naperville, Illinois 60563
(630) 305-1000

(Address, including zip code, and telephone number, including area code, of registrants' principal executive offices)

Stephen N. Landsman, Esq.
General Counsel
Nalco Company
1601 West Diehl Road
Naperville, Illinois 60563
(630) 305-1000
(Name, address, including zip code, and telephone number, including area code, of agent for service)

With a copy to:
Edward P. Tolley III, Esq.
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, New York 10017-3954
(212) 455-2000

Approximate date of commencement of proposed offer: As soon as practicable after this Registration Statement is declared effective.

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.

CALCULATION OF REGISTRATION FEE



Title of Each Class of Securities to be Registered	Amount to be Registered	Proposed Maximum Offering Price per Note	Proposed Maximum Aggregate Offering Price	Amount of Registration Fee
7¾% Senior Notes due 2011	$665,000,000	100%	$665,000,000	(3)
7¾% Senior Notes due 2011	€200,000,000	100%	€200,000,000	(3)
8 7/8% Senior Subordinated Notes due 2013	$465,000,000	100%	$465,000,000	(3)
9% Senior Subordinated Notes due 2013	€200,000,000	100%	€200,000,000	(3)
Guarantees of 7¾% Senior Notes due 2011(1)	N/A(2)	N/A(2)	N/A(2)	(2)
Guarantees of 8 7/8% Senior Subordinated Notes due 2013 (1)	N/A(2)	N/A(2)	N/A(2)	(2)
Guarantees of 9% Senior Subordinated Notes due 2013 (1)	N/A(2)	N/A(2)	N/A(2)	(2)


(1)	See inside facing page for additional registrant guarantors.


(2)	Pursuant to Rule 457(n) under the Securities Act, no separate filing fee is required for the guarantees.


	(3) Pursuant to Rule 457(q) under the Securities Act, no filing fee is required.

The registrants hereby amend this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrants shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

TABLE OF ADDITIONAL REGISTRANT GUARANTORS

Exact Name of Registrant
as Specified in its Charter

State or Other
Jurisdiction of
Incorporation or
Organization

I.R.S. Employer
Identification
Number

Address, Including Zip
Code and Telephone
Number, Including Area
Code, of Registrant's
Principal Executive Offices

ADX Corp.

Michigan

36-3112436

1601 West Diehl Road
Naperville, IL 60563-1198
(630) 305-1000

Board Chemistry Incorporated

Delaware

36-3282850

1602 West Diehl Road
Naperville, IL 60563-1198
(630) 305-1000

Calgon Corporation

Delaware

25-1711614

1603 West Diehl Road
Naperville, IL 60563-1198
(630) 305-1000

Nalco American Holding, Inc.
(f/k/a Degremont American Holding, Inc.)

Delaware

54-1887359

1604 West Diehl Road
Naperville, IL 60563-1198
(630) 305-1000

Nalco Company LLC
(f/k/a Ondeo Nalco Company LLC)

Delaware

36-1520480

1613 West Diehl Road
Naperville, IL 60563-1198
(630) 305-1000

Nalco Delaware Company

Delaware

36-3765301

1605 West Diehl Road
Naperville, IL 60563-1198
(630) 305-1000

Nalco Energy Services Equatorial Guinea LLC
(f/k/a ONES Equatorial Guinea LLC)

Delaware

76-0444295

1613 West Diehl Road
Naperville, IL 60563-1198
(630) 305-1000

Nalco Energy Services Holdings LLC
(f/k/a ONDEO Nalco Holdings LLC)

Delaware

36-1520480

1613 West Diehl Road
Naperville, IL 60563-1198
(630) 305-1000

Nalco Energy Services, Inc.
(f/k/a ONDEO Nalco Energy Services, Inc.)

Delaware

76-0444292

7702 Highway 90-A
Sugar Land, Texas 77478
(281) 263-7000

Nalco Energy Services, L.P.
(f/k/a ONDEO Nalco Energy Services, L.P.)

Delaware

76-0444295

7703 Highway 90-A
Sugar Land, Texas 77478
(281) 263-7000

Nalco Energy Services Middle East Holdings, Inc. (f/k/a ONDEO Nalco Energy Services Middle East Holdings, Inc.)

Delaware

22-2429311

7701 Highway 90-A
Sugar Land, Texas 77478
(281) 263-7000

Exact Name of Registrant
as Specified in its Charter

State or Other
Jurisdiction of
Incorporation or
Organization

I.R.S. Employer
Identification
Number

Address, Including Zip
Code and Telephone
Number, Including Area
Code, of Registrant's
Principal Executive Offices

Nalco FT, Inc.

Delaware

36-3690790

1606 West Diehl Road
Naperville, IL 60563-1198
(630) 305-1000

Nalco Global Holdings LLC
(f/k/a ONDEO Nalco Global Holdings LLC)

Delaware

36-1520480

1613 West Diehl Road
Naperville, IL 60563-1198
(630) 305-1000

Nalco Holdings LLC

Delaware

73-1683500

1601 West Diehl Road
Naperville, IL 60563-1198
(630) 305-1000

Nalco Industrial
Outsourcing Company

Delaware

36-4344205

1601 West Diehl Road
Naperville, IL 60563-1198
(630) 305-1000

Nalco International Holdings LLC
(f/k/a ONDEO Nalco International Holdings LLC)

Delaware

36-6114238

1613 West Diehl Road
Naperville, IL 60563-1198
(630) 305-1000

Nalco Leasing Corporation

Delaware

36-3308773

1607 West Diehl Road
Naperville, IL 60563-1198
(630) 305-1000

Nalco PWS, Inc.

Delaware

36-4466815

1608 West Diehl Road
Naperville, IL 60563-1198
(630) 305-1000

Nalco Resources Investment Company

Texas

36-6113527

1609 West Diehl Road
Naperville, IL 60563-1198
(630) 305-1000

Nalco TWO, Inc.

Delaware

36-4023948

1610 West Diehl Road
Naperville, IL 60563-1198
(630) 305-1000

Nalco U.S. Holdings LLC
(f/k/a ONDEO Nalco U.S. Holdings LLC)

Delaware

36-4402250

1613 West Diehl Road
Naperville, IL 60563-1198
(630) 305-1000

Nalco Worldwide Holdings LLC
(f/k/a ONDEO Nalco Worldwide Holdings LLC)

Delaware

36-6114100

1613 West Diehl Road
Naperville, IL 60563-1198
(630) 305-1000

Nalgreen, Inc.

Delaware

36-3650277

1611 West Diehl Road
Naperville, IL 60563-1198
(630) 305-1000

Exact Name of Registrant
as Specified in its Charter

State or Other
Jurisdiction of
Incorporation or
Organization

I.R.S. Employer
Identification
Number

Address, Including Zip
Code and Telephone
Number, Including Area
Code, of Registrant's
Principal Executive Offices

Naltech, Inc.

Delaware

51-0357514

1612 West Diehl Road
Naperville, IL 60563-1198
(630) 305-1000

ONES West Africa LLC

Delaware

57-1187680

1613 West Diehl Road
Naperville, IL 60563-1198
(630) 305-1000

Paper Chemicals, Inc.

Texas

75-1867607

P.O. Box 6837
Texarkana, Texas 75505-6837
(903) 832-7515

Pure-Chem Products Company, Inc.

California

95-3235235

8371 Monroe Ave
Stanton, California 90680
(714) 995-4141

Visco Products Company

Texas

36-3205037

1613 West Diehl Road
Naperville, IL 60563-1198
(630) 305-1000

The information in this prospectus is not complete and may not be changed. We may not sell the securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to Completion, dated October 1, 2004

PRELIMINARY PROSPECTUS

Nalco Company

$665,000,000 7¾% Senior Notes due 2011
€200,000,000 7¾% Senior Notes due 2011
$465,000,000 8 7/8% Senior Subordinated Notes due 2013
€200,000,000 9% Senior Subordinated Notes due 2013

The 7¾% senior notes due 2011 were issued on September 14, 2004 in exchange for the 7¾% senior notes due 2011 originally issued on November 4, 2003. The 7¾% senior notes due 2011 were issued on September 14, 2004 in exchange for the 7¾% senior notes due 2011 originally issued on November 4, 2003. The 8 7/8% senior subordinated notes due 2013 were issued on September 14, 2004 in exchange for the 8 7/8% senior subordinated notes due 2013 originally issued on November 4, 203. The 9% senior subordinated notes were issued on September 14, 2004 in exchange for the 9% senior subordinated notes originally issued on November 4, 2003.

The senior notes will mature on November 15, 2011 and the senior subordinated notes will mature on November 15, 2013.

Nalco Company may redeem some or all of the senior notes at any time prior to November 15, 2007 and some or all of the senior subordinated notes at any time prior to November 15, 2008, in each case, at a price equal to 100% of the principal amount of the notes, plus a "make-whole" premium. Thereafter, Nalco Company may redeem some or all of the senior notes and some or all of the senior subordinated notes, in each case, at the redemption prices described in this prospectus. In addition, on or prior to November 15, 2006, Nalco Company may redeem up to 35% of each of the senior notes and the senior subordinated notes with the proceeds from certain equity offerings.

The senior notes are Nalco Company's unsecured obligations and rank equally with all of Nalco Company's existing and future senior obligations and senior to Nalco Company's subordinated indebtedness. The senior subordinated notes are Nalco Company's unsecured senior subordinated obligations and are subordinated to all of its existing and future senior indebtedness including the senior notes. The notes are effectively subordinated to Nalco Company's existing and future secured indebtedness to the extent of the assets securing that indebtedness. The notes are guaranteed by Nalco Holdings LLC and Nalco Company's direct and indirect domestic subsidiaries that guarantee its obligations under the senior credit facilities. These guarantees are unsecured and, with respect to the senior notes, rank equally with all existing and future senior obligations of the guarantors and, with respect to the senior subordinated notes, are subordinated to all existing and future senior obligations of the guarantors. The guarantees are effectively subordinated to existing and future secured indebtedness of the guarantors to the extent of the assets securing that indebtedness.

The dollar notes are expected to be eligible for trading in the Private Offerings, Resales and Trading through Automated Linkages Market, commonly referred to as the Portal Market. We intend to apply to list the euro notes on the Luxembourg Stock Exchange.

See "Risk Factors" beginning on page 18 for a discussion of certain risks that you should consider in connection with an investment in the notes.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the notes or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

This prospectus may be used by Goldman, Sachs & Co., Goldman Sachs International, Spear, Leeds & Kellogg, L.P., The Hull Group, L.L.C. and other affiliates of The Goldman Sachs Group, Inc. in connection with offers and sales of the notes related to market-making transactions in the notes effected from time to time. Such affiliates of The Goldman Sachs Group, Inc. may act as principal or agent in such transactions, including as agent for the counterparty when acting as principal or as agent for both counterparties, and may receive compensation in the form of discounts and commissions, including from both counterparties, when it acts as agents for both. Such sales will be made at prevailing market prices at the time of sale, at prices related thereto or at negotiated prices.

Goldman, Sachs & Co.

The date of this prospectus is , 2004.

You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with different information. The prospectus may be used only for the purposes for which it has been published and no person has been authorized to give any information not contained herein. If you receive any other information, you should not rely on it. We are not, and the initial purchasers are not, making an offer of these securities in any state where the offer is not permitted.

TABLE OF CONTENTS


	Page
Summary		1
Risk Factors		18
Special Note Regarding Forward-Looking Statements		29
The Acquisition		30
Use of Proceeds		34
Capitalization		34
Unaudited Pro Forma Financial Information		35
Selected Historical Financial Data		40
Management's Discussion and Analysis of Financial Condition and Results of Operations		46
Industry Overview		71
Business		75
Management		89
Security Ownership of Certain Beneficial Owners		100
Certain Relationships and Related Party Transactions		102
Description of Other Indebtedness		105
Description of Senior Notes		110
Description of Senior Subordinated Notes		159
Book-Entry; Delivery and Form		211
Material United States Federal Income Tax Consequences		215
Certain ERISA Considerations		220
Plan of Distribution		222
Legal Matters		222
Experts		222
Where You Can Find Additional Information		222
Index to Financial Statements		F-1

MARKET AND INDUSTRY DATA AND FORECASTS

We derived the market and industry data we present in this prospectus from the following sources:

Market Size. We based the 2003 global market size for water treatment chemicals and services in the industrials and institutional sector on estimates of Kline & Company Inc., Lake View Associates and SRI International for the years 2000, 2001 and 2002. We adjusted these estimates by deducting results for the Paper and Energy Services water treatment chemicals markets based on estimates of Mars & Co. and internal estimates derived from discussion with our sales force and other industry participants. We further adjusted as necessary to reflect that certain of the third party sources included product lines, such as commodity chemicals, which are outside our relevant market.

We based the 2003 global market size for process improvement and water treatment to the petroleum and petrochemical market on our internal estimates for downstream chemical markets and estimates of SRI International and Business Communications Company, Inc. for 2000 and 2002 upstream chemical markets. We adjusted the upstream chemical results by adding results for the production chemicals and drag reducers submarkets and deducting results for the commodity chemical submarket.

We based the 2003 global market size for paper process specialty chemicals and services on estimates of Mars & Co., Kemira (a market participant), SRI International and Business Communications Company, Inc. for the years 1999, 2000 and 2002. We deducted from this market results for certain submarkets in which we do not operate.

We adjusted each of the historical market size estimates from prior years to 2003 by applying an assumed annual growth rate of 2% and by applying actual changes in foreign exchange rates against the U.S. dollar.

Market Share. We determined our market share and market position in each of the markets based on the sizes of the 2003 markets, our 2003 sales in each of the markets, publicly available information of sales by competitors and our internal estimates of competitors' sales based on discussion with our sales force and other industry participants. We also derived information about our market share and our competitors' market share of the Industrial and Institutional Services market from reports of SRI International and The Freedonia Group, Inc. for 2001 and 2002.

Market Growth. Our analysis of market growth information reflects historical growth patterns in our market researched by Mars & Co., Environmental Business International, Merrill Lynch, J.P. Morgan and Frost & Sullivan, along with our own historical market trends. The specific forecasts we prepared were primarily based on economic forecasts for general industrial production ("IP") and gross domestic production ("GDP") data through 2007 from Global Insight for different regions in the world and different industrial segments in North America. We believe the Global Insights forecast for GDP and IP were too aggressive on an overall basis and for the specific industrial segments, and adjusted our forecast downward. We also used the Global Insight North American industrial forecasts as a basis for our projections of industrial growth in North America, and extrapolated the Global Insight industrial North American numbers to industries in other regions of the world. We made further adjustments to these regional industrial forecasts in each region and industry based on our internal estimations of competitive pressures (both for us and our customers), pricing activities and other factors specific to the region or the industry.

TRADEMARKS AND SERVICEMARKS

AQUAMAX™, Core Shell™, Fiber NEU™, OptiLux™, ValueLine™, Vantage™, PROSPEC^SM, ACTRENE^®, BIO-MANAGE^®, Calgon^®, COKELESS^®, ELIMIN-OX^®, EN/ACT^®, ENERCEPT^®, ENERSPERSE^®, Fiber Brite^®, LAZON^®, Metrix^®, Nalco^®, Nalco ACT^®, NALMET^®, NEOSTAR^®, NexGuard^®, ODORtech^®, PORTA-FEED^®, Ultra POSITEK^®, Scale-Guard^®, SCORPION^® II, SheeTracker^®, SmartSoft^®, STA•BR•EX^®, SULFA-CHECK^®, SUR-GUARD^®, THERMOGAIN^®, TRA-CIDE^®, TRASAR^®, 3D TRASAR^®, Tri-ACT^®, ULTIMER^®, UltraTreat^®, ULTRAXOL^®, ULTRION^® and certain other products and services named in this prospectus are our registered trademarks and servicemarks.

SUMMARY

This summary highlights selected information in this prospectus, but it may not contain all of the information that you should consider before deciding to invest in the notes. You should read this entire prospectus carefully, including the "Risk Factors" section and the financial statements, which are included elsewhere in this prospectus.

All references in this prospectus to "we," "our" and "us" mean, unless the context indicates otherwise, Nalco Holdings LLC, or Nalco Holdings, including Nalco Holdings' subsidiaries and affiliates, after giving effect to the Transactions described below in this summary. Nalco Holdings LLC's subsidiaries include:


•	Nalco Company (formerly known as Ondeo Nalco Company) and its subsidiaries, which Suez S.A., or Suez, acquired in 1999; and

•

the subsidiaries of Nalco International SAS that we have operated, but that were held separately from Nalco Company, including Nalco Belgium NV/SA (formerly known as Ondeo Nalco Belgium NV/SA), Nalco France (formerly known as Ondeo Nalco France), Nalco (Shanghai) Trading Co. Ltd. (formerly known as Ondeo Nalco (Shanghai) Trading Co. Ltd), Nalco Dutch Holdings B.V., Nalco Portuguesa (Quimica Industrial) Ltd. and Wyss Wassertechnik AG and their subsidiaries. We refer to these subsidiaries as the "Nalco International SAS Subsidiaries" in this prospectus.

However, Nalco Holdings LLC's subsidiaries exclude Ondeo Industrial Solutions LLC, a former subsidiary of Nalco Company that was transferred to Suez in connection with the Acquisition described below.

Our Company

We are the leading global provider of integrated water treatment and process improvement services, chemicals and equipment programs for industrial and institutional applications. We are organized into three divisions which correspond to the end markets we serve: Industrial and Institutional Services, Energy Services and Paper Services. Our products and services are typically used in water treatment applications to prevent corrosion, contamination and the buildup of harmful deposits, or in production processes to enhance process efficiency and improve our customers' end products.

Through our sales, research and marketing team of more than 6,500 technically trained professionals, we serve more than 60,000 customer locations. We focus on providing our customers with technologically advanced engineered solutions and services. These technologically advanced engineered solutions and services enable our customers to improve their business by increasing production yields, lowering manufacturing costs, extending asset lives and maintaining environmental standards.

The cost of our technologically advanced engineering solutions and services represents a small share of our customers' overall production expense. We believe we offer the broadest product portfolio in our industry, including more than 5,000 products and 3,100 unique formulations.

Our Divisions

Industrial and
Institutional Services

Energy Services

Paper Services

Market
Positions

#1 Market Position
$5.3 billion global market⁽¹⁾⁽²⁾

#1 Market Position
$2.9 billion global market⁽¹⁾

#2 Market Position
$7.1 billion global market⁽¹⁾

Market Share

19%

25%

2003
Net Sales⁽³⁾

$1,315 million⁽⁴⁾

$740 million

$617 million⁽⁵⁾

Representative
Markets

•    Food and Beverage
•    Buildings, Hotels, Hospitals
•    Chemicals, Pharmaceuticals
•    Manufacturing, Metals, Utilities,
  Mining

•    Exploration
•    Field Development
•    Production
•    Refining
•    Petrochemical Manufacturing

•    Fine Paper
•    Uncoated Free Sheet
•    Coated Free Sheet
•    Newsprint
•    Tissue
•    Containerboard


(1)	Approximate market size based on internal estimates and industry publications and surveys. See "Market and Industry Data and Forecasts" and "Industry Overview."


(2)	Industrial and Institutional Services market position and size represents the water treatment and services markets (excluding water treatment and services markets served by the Energy Services and Paper Services divisions), which accounted for approximately 78% of our Industrial and Institutional Services division's net sales in 2003.


(3)	Divisional net sales exclude approximately $95 million of sales not allocated among the divisions.


(4)	Includes approximately $129 million of sales realized in the Pacific region.


(5)	Includes approximately $55 million of sales realized in the Pacific region.

Industrial and Institutional Services

Our Industrial and Institutional Services division provides products and services that are principally utilized in water treatment applications such as raw water treatment, wastewater treatment, cooling programs and boiler treatment programs to control corrosion, the build up of scale and microbial fouling. Customers use our water treatment programs to extend the useful life of their assets, minimize downtime of their facilities and conserve water and energy. We serve companies across a broad spectrum of industries, including aerospace, chemical, pharmaceutical, steel, power, food and beverage, medium and light manufacturing, metalworking and institutions such as hospitals, universities and hotels. Six of our ten largest Industrial and Institutional Services customers in 2003 have been with us for more than ten years.

Energy Services

Our Energy Services division provides on-site, technology driven solutions to the global petroleum and petrochemical industries. In addition, we provide a full range of water treatment offerings to refineries and petrochemical plants. Our upstream process applications improve oil and gas production, extend production equipment life and decrease operating costs through services that include scale and corrosion control, oil and water separation, emulsion breakers and gas hydrate solutions. Our downstream process applications increase production efficiency and the useful lives of customer assets, while improving refining and petrochemical product quality and product yields. Our customers include the fifteen largest publicly traded oil companies. Our ten largest Energy Services customers in 2003 have been with us for more than twenty years.

Paper Services

Our Paper Services division offers a comprehensive portfolio of products and services that are used in all principal steps of the paper-making process and across all grades of paper, including fine paper, uncoated free sheet, coated free sheet, newsprint, tissue and containerboard. Some examples of our product applications include pulp digestion, microbial control, de-inking agents, retention and

drainage. In these applications, our products and services help our customers maximize production rates, optimize the quality of finished sheets and minimize down time. Our customers include the 20 largest paper companies in the world, which collectively accounted for approximately 45% of global production capacity in the paper industry in 2002. Eight of our ten largest Paper Services customers in 2003 have been with us for more than ten years.

Competitive Strengths

We have benefited from the following competitive strengths:

Leading Market Positions. We are the #1 provider of water treatment services to industrial and institutional end markets. We are also a leading provider of integrated water treatment and process improvement services, maintaining the #1 position in the petroleum and petrochemical markets and the #2 position in the pulp and paper market.

Diverse Customers and Industries Served. We provide products and services to more than 60,000 customer locations across a broad range of industries and institutions. Our customers include over 60% of the companies that comprise the S&P 500 index. In 2003, no single customer accounted for more than 3% of our net sales. Our business is also diversified geographically. In 2003, 51% of total sales were in North America, 31% in Europe, Africa and the Middle East, 7% in Latin America and 11% in the Pacific region. We believe this diversification minimizes the potential impact of volatility from any one customer, industry or geographic area.

Global Reach. We have a direct sales and marketing presence in 130 countries across six continents. This enables us to provide a consistently high level of service to local, regional and multinational customers. We believe our global presence offers us a competitive advantage in meeting the global needs of our multinational customers, which are increasingly seeking single-source suppliers and positions us to extend our reach to higher-growth markets.

World Class Sales Team. Through the expertise of our more than 5,000 sales professionals and engineers, we provide our customers with relevant industry knowledge and experience in order to solve technically challenging and dynamic problems. Our team of experts has significant experience, with approximately 40% of our approximately 2,100 person North American sales team having more than ten years of service with our company. We believe this contributes significantly to the number and strength of relationships with our customers. We also invest heavily in recruiting and continuously training our sales professionals. For example, new hires spend more than half of their first year on training.

Integrated Technology, Sales and Service. We combine on-site service, innovative technology and engineering excellence to create value for our customers. Our technical sales professionals identify problems and opportunities at the customer's plant and our research teams then work to develop effective solutions to these needs, often working jointly with our customers. Many of our customers specify our formulations into their processes and products. This approach has resulted in a high degree of customer loyalty.

Stable and Significant Cash Flow Generation. We have produced consistent cash flows and maintained high margins over a sustained period of time. We attribute this to (1) the diversity of our revenues, (2) the service nature of our business, (3) the high value we offer our customers, (4) the strength of our customer relationships, (5) our limited dependency on any single raw material and (6) our low capital expenditures relative to our net sales.

Premier Management Team. Our senior management team consists of professionals with significant experience within our company and the water treatment and industrial process improvement industry. Our seven executive officers have an average of over 11 years of service with our company and over 27 years of industry experience.

Business Strategy

We have historically experienced sales growth in excess of industrial production growth in our core markets. We are pursuing a strategy designed to continue this trend by expanding our market positions and increasing our revenues, as well as enhancing our cash flow. The key elements of this strategy are:

Build Upon Our Customer Base. We seek to strengthen our position with our existing customer base as well as pursue new customers by continuing to serve as the leading global provider of fully integrated water treatment services and industrial process solutions. We continually seek to add value for our customers by identifying those services, products and equipment that will enhance their profitability through reduced costs, improved yields and decreased capital spending.

Pursue High-Growth Markets. We intend to continue to focus on high-growth markets and segments. Geographically, we plan to leverage our global reach by capitalizing on our presence in high-growth emerging markets including Asia, Eastern Europe and Latin America. We also intend to continue to pursue high-growth segments in a variety of areas closely related to our core businesses and competencies.

Maintain Technological Leadership. We strive to develop new technologies and products through a focused commitment to technology, research and development. The evolution of our existing products and the development of new technologies have historically allowed us to sustain and enhance the profitability of our business and further penetrate our target markets, including our existing customer base. Our engineers will continue to work closely with our customers in an effort to identify new product opportunities and jointly develop new technologies.

Follow the Global Expansion of Multinational Customers. As one of a small number of companies that can provide turnkey water management solutions on a global basis, we seek to leverage our relationships with multinational companies by servicing them globally.

Continue to Reduce Costs. We have initiated a comprehensive cost reduction plan which we expect will yield savings in 2004 of at least $75 million compared to 2003. We expect our cost reduction plan to achieve incremental efficiencies through work process redesign and other targeted cost improvement programs, which address inefficiencies in our administrative and overhead functions, as well as other support functions around the world.

Maximize Cash Flow and Reduce Debt. We believe that there are significant opportunities to increase our cash flow. We believe that while the capital expenditures required to maintain our business are low relative to our sales, we can further reduce our capital expenditures from 2003 levels through enhanced management focus. We believe there is an opportunity to reduce our working capital needs. We intend to use our free cash flow to reduce indebtedness. During the six months ended June 30, 2004, we made $14.3 million of scheduled repayments and $90.0 million of optional prepayments on our indebtedness from operating cash flows.

Focus on Supply Chain Management. We have a dedicated global supply chain team that focuses on managing manufacturing, procurement, logistics, and customer service activities. We believe that by coordinating these functions, we achieve better inventory management and lower procurement costs. Sophisticated customer demand analyses and logistics strategies have contributed to a nine-day reduction in our investment in inventories as of June 30, 2004 compared to June 30, 2003. We believe that we will be able to make additional improvements in our inventory management and lower procurement costs.

The Transactions

On August 31, 2003, Nalco Holdings LLC, which was formed by The Blackstone Group, Apollo Management, L.P. and GS Capital Partners (the "Sponsors"), entered into a stock purchase agreement pursuant to which it agreed to purchase all of the outstanding shares of capital stock of Ondeo Nalco Company (which is now known as Nalco Company) and the Nalco International SAS Subsidiaries, which had been operated as a single business unit, from subsidiaries of Suez. The aggregate purchase price was $4,101.5 million in cash, after giving effect to direct costs of the Acquisition closing date working capital and indebtedness purchase price adjustments and a post-closing working capital and indebtedness purchase price adjustment which was agreed to by us and Suez on March 25, 2004. The Transactions closed on November 4, 2003. In this prospectus, we refer to this acquisition as the "Acquisition."

In connection with the Acquisition, funds controlled by The Blackstone Group ("Blackstone"), Apollo Management, L.P. ("Apollo") and GS Capital Partners ("GSCP" and together with Blackstone and Apollo, the "Sponsors") contributed $369.1 million, $369.1 million and $253.7 million, respectively, to Nalco Investment Holdings LLC, then the direct parent of Nalco Holdings and the indirect parent of Nalco Company, in each case, in exchange for a corresponding percentage of membership interests in Nalco Investment Holdings LLC. In connection with the Acquisition, Dr. William H. Joyce, our Chairman and Chief Executive Officer, contributed $10 million to Nalco Investment Holdings LLC in exchange for a corresponding percentage of membership interests in Nalco Investment Holdings LLC. Nalco Investment Holdings LLC contributed the Sponsors' and Dr. Joyce's equity received by it prior to the Acquisition to Nalco Holdings to partially fund the Acquisition. Following the Acquisition, the Sponsors and Dr. Joyce engaged in a series of transactions that ultimately resulted in the exchange of 100% of the membership interests in Nalco Investment Holdings LLC for membership interests in Nalco LLC, which is now the indirect parent of Nalco Investment Holdings LLC, Nalco Holdings and Nalco Company. In addition, in June 2004, William J. Roe, Bradley J. Bell, Mark L. Bosanko, Louis L. Loosbrock and certain other members of management invested approximately $8.6 million in Nalco LLC, which was contributed to Nalco Holdings in connection with the Nalco LLC Unit Plan, in exchange for certain membership interests in Nalco LLC. Dr. Joyce invested an additional $1.2 million in Nalco LLC in May 2004. For additional details about the Nalco LLC Unit Plan, see "Management—Nalco LLC Unit Plan." The Sponsors and members of management currently beneficially own 100% of the membership interests in Nalco Holdings as a result of their ownership of membership interests in Nalco LLC. See "The Acquisition" and "Security Ownership of Certain Beneficial Owners."

As used in this prospectus, the term "Transactions" means, collectively, the Acquisition and the related financings described in "The Acquisition."

We incorporated in the State of Delaware in 1928. Our principal executive offices are located at 1601 West Diehl Road, Naperville, Illinois 60563. Our main telephone number is (630) 305-1000. Our Internet address is www.nalco.com. Information contained on our website or that can be accessed through our website is not incorporated by reference in this prospectus and you should not rely on that information.

The Notes

The summary below describes the principal terms of the notes and is not intended to be complete. Some of the terms and conditions described below are subject to important limitations and exceptions. For a more detailed description of each issue of notes, see "Description of Senior Notes" and "Description of Senior Subordinated Notes."


Issuer		Nalco Company


Notes Offered		$665,000,000 aggregate principal amount of 7¾% Senior Notes due 2011.


		€200,000,000 aggregate principal amount of 7¾% Senior Notes due 2011.


		$465,000,000 aggregate principal amount of 8 7/8% Senior Subordinated Notes due 2013.


		€200,000,000 aggregate principal amount of 9 % Senior Subordinated Notes due 2013.


Maturity Date		Senior Notes: November 15, 2011. Senior Subordinated Notes: November 15, 2013.


Interest Payment Dates		Interest is payable in cash on May 15 and November 15 of each year.


Guarantees		Nalco Holdings and Nalco Company's direct and indirect domestic subsidiaries that guarantee its and its restricted subsidiaries' obligations under the senior credit facilities fully and unconditionally guarantee the notes on an unsecured basis. Additionally, subject to certain exceptions described in this prospectus, each of Nalco Holdings' domestic subsidiaries that guarantee any of its indebtedness or incur certain indebtedness in the future also guarantee the notes.


Ranking		The senior notes are Nalco Company's senior unsecured obligations and:


		•	rank equally in right of payment to all of Nalco Company's existing and future senior indebtedness;


		•	rank senior in right of payment to all of Nalco Company's existing and future senior subordinated indebtedness and subordinated indebtedness; and


		•	are effectively subordinated in right of payment to Nalco Company's secured indebtedness (including obligations under the senior credit facilities) to the extent of the value of the assets securing such indebtedness, and all obligations of each of Nalco Company's existing and future subsidiaries that are not guarantors.


		Similarly, the senior note guarantees are senior unsecured obligations of the guarantors and:


		•	rank equally in right of payment to all of the applicable guarantor's existing and future senior indebtedness;


		•	rank senior in right of payment to all of the applicable guarantor's existing and future senior subordinated indebtedness and subordinated indebtedness; and


		•	are effectively subordinated in right of payment to all of the applicable guarantor's existing and future secured indebtedness (including the applicable guarantor's guarantee under the senior credit facilities), to the extent of the value of the assets securing such indebtedness, and are structurally subordinated to all obligations of any subsidiary of a guarantor if that subsidiary is not also a guarantor.


		The senior subordinated notes are Nalco Company's senior subordinated unsecured obligations and:


		•	rank junior in right of payment to all of Nalco Company's existing and future senior indebtedness (including the senior notes and obligations under the senior credit facilities);


		•	rank equally in right of payment with all of Nalco Company's existing and future senior subordinated indebtedness;


		•	are effectively subordinated in right of payment to all of Nalco Company's existing and future secured indebtedness (including obligations under the senior credit facilities), to the extent of the value of the assets securing such indebtedness, and are structurally subordinated to all obligations of each of Nalco Company's subsidiaries that are not guarantors; and


		•	rank senior in right of payment to all of Nalco Company's future subordinated indebtedness.


		Similarly, the senior subordinated note guarantees are senior subordinated unsecured obligations of the guarantors and:


		•	rank junior in right of payment to all of the applicable guarantor's existing and future senior indebtedness;


		•	rank equally in right of payment with all of the applicable guarantor's future senior subordinated indebtedness;


		•	are effectively subordinated in right of payment to all of the applicable guarantor's existing and future secured indebtedness (including the applicable


			guarantor's guarantee under the senior credit facilities), to the extent of the value of the assets securing such indebtedness, and are structurally subordinated to all obligations of any subsidiary of a guarantor if that subsidiary is not a guarantor; and


		•	rank senior in right of payment to all of the applicable guarantor's existing and future subordinated indebtedness.


		As of June 30, 2004, Nalco Holdings and its subsidiaries had approximately $3,166.4 million of indebtedness, of which approximately $1,502.0 million was secured, $4.2 million of which was indebtedness of non-guarantor subsidiaries and structurally senior to the notes, approximately $708.2 million was subordinated to the senior notes and the senior note guarantees and approximately $2,458.2 million was senior to the senior subordinated notes and the senior subordinated note guarantees. The senior credit agreement and the indentures governing the notes contain restrictions on our ability to incur indebtedness based on, among other things, our compliance with financial tests contained in those agreements. As of June 30, 2004, the maximum amount of additional debt Nalco Holdings and its subsidiaries could have incurred in compliance with these covenants was $817.4 million. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources," "Description of Other Indebtedness—Senior Credit Facility," "Description of Senior Notes—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock" and "Description of Senior Subordinated Notes—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock."


		The notes are also structurally subordinated to all indebtedness and other obligations, including trade payables, of Nalco Company's non-guarantor subsidiaries. See "—Summary Historical and Pro Forma Financial Data" and "Capitalization."


Optional Redemption		Nalco Company may redeem some or all of the senior notes at any time prior to November 15, 2007 and Nalco Company may redeem some or all of the senior subordinated notes at any time prior to November 15, 2008 at a price equal to 100% of the principal amount of the notes plus a "make-whole" premium as set forth under "Description of Senior Notes—Optional Redemption" and "Description of Senior Subordinated Notes—Optional Redemption," respectively.


		Additionally, Nalco Company may redeem the senior notes, in whole or in part, at any time on and after November 15, 2007 and Nalco Company may redeem the senior subordinated notes, in whole or in part, at any time on and after November 15, 2008 at the redemption prices set forth under "Description of Senior Notes—Optional Redemption" and "Description of Senior Subordinated Notes—Optional Redemption," respectively.


		Nalco Company may redeem up to 35% of each of the senior notes and the senior subordinated notes on or prior to November 15, 2006 from the proceeds of certain equity offerings at 107.75 % of the principal amount of the dollar senior notes, in the case of a redemption of the dollar senior notes, 107.75% of the principal amount of the euro senior notes, in the case of a redemption of the euro senior notes, 108.875% of the principal amount of the dollar senior subordinated notes, in the case of a redemption of the dollar senior subordinated notes, and 109 % of the principal amount of the euro senior subordinated notes, in the case of a redemption of the euro senior subordinated notes, in each case plus accrued and unpaid interest, if any, to the date of redemption. Nalco Company may make that redemption only if, after the redemption, at least 65% of the aggregate principal amount of the applicable series of notes originally issued remains outstanding and the redemption occurs within 90 days of the date of the equity offering. See "Description of Senior Notes— Optional Redemption" and "Description of Senior Subordinated Notes—Optional Redemption," respectively.


Change of Control Offer		Upon the occurrence of a change of control, you will have the right, as holders of the notes, to require Nalco Company to repurchase some or all of your notes at 101% of their principal amount, plus accrued and unpaid interest, if any, to the repurchase date. We may not have sufficient funds to repurchase the notes upon the occurrence of a change in control. See "Description of Senior Notes—Change of Control" and "Description of Senior Subordinated Notes—Change of Control."


Certain Covenants		The indentures governing the notes contain covenants limiting, among other things, Nalco Holdings' ability and the ability of its restricted subsidiaries (including, without limitation, Nalco Company) to:


		•	incur additional indebtedness;


		•	pay dividends on or make other distributions or repurchase Nalco Holdings' capital stock;


		•	make certain investments;


		•	enter into certain types of transactions with affiliates;


		•	limit dividends or other payments by its restricted subsidiaries to Nalco Holdings;


		•	use assets as security in other transactions; and


		•	sell certain assets or merge with or into other companies.


		These covenants are subject to important exceptions and qualifications. See "Description of Senior Notes" and "Description of Senior Subordinated Notes."


No Public Market		The notes are new securities for which there is not an established public market. Accordingly, we cannot assure you whether a market for the notes will develop or as to the liquidity of any market. The initial purchasers have advised us that they currently intend to make a market in the notes. The initial purchasers are not obligated, however, to make a market in the notes, and any such market-making may be discontinued by the initial purchasers in their discretion at any time without notice.


Listing		We intend to list the euro notes on the Luxembourg Stock Exchange.

Risk Factors

You should carefully consider all the information in this prospectus before deciding whether to invest in the notes. In particular, we urge you to consider carefully the factors set forth under the heading "Risk Factors."

Summary Historical and Pro Forma Financial Data

The financial statements referred to as the Successor financial statements include the consolidated audited financial statements of Nalco Holdings LLC and its subsidiaries and the unaudited consolidated and combined financial statements of Nalco Holdings LLC and its subsidiaries.

The financial statements referred to as the Predecessor financial statements include the combined financial statements of Ondeo Nalco Group which include the consolidated financial statements of Ondeo Nalco Company and the combined financial statements of the Nalco International SAS Subsidiaries.

The following summary historical financial data has been derived from the unaudited consolidated and combined financial statements of Nalco Holdings LLC and its subsidiaries as of and for the six months ended June 30, 2004 and 2003 and the audited consolidated and combined financial statements of Nalco Holdings LLC and its subsidiaries as of December 31, 2003 and 2002 and for the periods from January 1, 2001 to December 31, 2001, January 1, 2002 to December 31, 2002, January 1, 2003 to November 3, 2003 and November 4, 2003 to December 31, 2003 that (other than in the case of the unaudited consolidated and combined financial statements as of June 30, 2003) are included elsewhere in this prospectus. The summary historical financial data as of December 31, 2001 has been derived from our unaudited internal financial reporting to Suez.

The following summary unaudited pro forma financial data as of and for the year ended December 31, 2003 have been prepared to give pro forma effect to the Transactions as if they had occurred on January 1, 2003. The pro forma financial data are for informational purposes only and should not be considered indicative of actual results that would have been achieved had the Transactions actually been consummated on the date indicated and do not purport to indicate results of operations as of any future date or for any future period. You should read the following data in conjunction with "The Acquisition," "Unaudited Pro Forma Financial Information," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the consolidated and combined financial statements included elsewhere in this prospectus.


	Predecessor									Successor			Predecessor			Successor			Pro Forma Year Ended December 31, 2003
	Year Ended December 31,						January 1, 2003 through November 3, 2003			November 4, 2003 through December 31, 2003			Six Months Ended June 30, 2003			Six Months Ended June 30, 2004
	2001			2002			January 1, 2003 through November 3, 2003			November 4, 2003 through December 31, 2003			Six Months Ended June 30, 2003			Six Months Ended June 30, 2004
													(unaudited)			(unaudited)			(unaudited)
	(dollars in millions)
Statement of Operations Data:
Net sales	$	2,619.7		$	2,644.3		$	2,306.5		$	460.1		$	1,352.7		$	1,453.7		$	2,766.6
Operating costs and expenses:
Cost of product sold		1,283.8			1,281.8			1,128.0			250.5			654.9			733.7			1,358.4
Selling, administrative and research expenses		1,022.7			973.6			885.3			173.4			531.1			527.8			1,049.0
Impairment of goodwill (1)		—			—			244.4			—			244.4			—			244.4
Amortization of intangible assets (1)		171.3			89.2			68.9			15.4			41.3			49.1			93.5
Purchased in-process research and development		1.3			—			—			—			—			122.3			—
Business optimization expenses (2)		172.3			32.8			20.3			0.8			9.7			—			21.1
Operating expenses		2,651.4			2,377.4			2,346.9			440.1			1,481.4			1,432.9			2,766.4
Operating earnings (loss)		(31.7	)		266.9			(40.4	)		20.0			(128.7	)		20.8			0.2
Other income (expense), net (3)		(15.1	)		0.7			(19.3	)		(3.5	)		(0.2	)		(5.3	)		(19.9	)
Interest income		8.8			7.8			7.1			0.6			4.3			5.4			16.9
Interest expense		(44.4	)		(38.5	)		(32.7	)		(49.6	)		(19.5	)		(106.0	)		(209.4	)
Earnings (loss) before income taxes		(82.4	)		236.9			(85.3	)		(32.5	)		(144.1	)		(85.1	)		(212.2	)
Income tax (provision) benefit		1.8			(105.2	)		(68.7	)		8.3			(40.6	)		(19.6	)		(21.0	)
Minority interests		(3.4	)		(3.3	)		(4.2	)		0.1			(3.0	)		(1.9	)		(4.1	)
Net income (loss)	$	(84.0	)	$	128.4		$	(158.2	)	$	(24.1	)	$	(187.7	)	$	(106.6	)	$	(237.3	)
Statement of Cash Flows Data:
Net cash provided by (used for):
Operating activities	$	414.3		$	323.1		$	144.4		$	88.7		$	129.6		$	125.4		$	188.5
Investing activities		(463.5	)		(126.1	)		(12.3	)		(4,145.1	)		(79.9	)		(9.7	)		(4,157.4	)
Financing activities		133.9			(232.7	)		(234.2	)		4,130.3			(18.2	)		(115.4	)		3,896.1
Other Financial Data (unaudited):
EBITDA (4)	$	245.7		$	488.2		$	106.8		$	54.5		$	(29.9	)	$	119.6		$	184.2
Non-cash charges included in EBITDA (5)		33.5			33.6			271.2			23.9			262.1			153.0			273.9
Unusual items included in EBITDA (6)		9.9			(33.3	)		48.5			6.3			8.4			4.5			52.3
Capital expenditures, net (7)		114.8			108.3			85.6			15.6			40.4			34.9			101.2
Depreciation		124.6			134.7			101.8			22.5			60.7			56.9			114.5
Amortization		171.3			89.2			68.9			15.4			41.3			49.1			93.5
Ratio of earnings to fixed charges (8)		—			6.1	x		—			—			—			—			—


	Predecessor				Successor		Predecessor		Successor
	As of December 31,				As of December 31,		As of June 30,		As of June 30,
	2001		2002		2003		2003		2004
							(unaudited)		(unaudited)
	(dollars in millions)
Balance Sheet Data:
Cash and cash equivalents	$	146.0	$	120.5	$	100.0	$	159.7	$	97.2
Working capital (9)		208.0		240.8		398.7		326.7		389.2
Property, plant and equipment, net (10)		856.2		823.2		865.6		815.7		831.5
Total assets		6,512.2		6,486.4		6,163.8		6,262.1		5,851.8
Total debt (including lease obligation and current portion of long-term debt) (10)(11)		859.2		776.2		3,314.7		736.0		3,166.4
Total stockholders' investment		3,734.4		3,689.2		1,069.0		3,558.8		909.6


(1)	We adopted Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets, as of January 1, 2002. Under SFAS No. 142, goodwill and intangible assets

deemed to have indefinite lives are no longer amortized but are subject to annual impairment tests. We completed our transitional goodwill impairment evaluation and our first annual impairment evaluation in 2002 and determined that goodwill was not impaired at December 31, 2002. In the six-month period ended June 30, 2003, we took a goodwill impairment charge of $244.4 million based on the price paid in the Acquisition. See note 7 to the audited consolidated and combined financial statements of Nalco Holdings LLC included elsewhere in this prospectus.

(2)

We incurred significant business optimization expenses as a result of the global integration of the Nalco/Exxon Energy Chemicals, L.P. (Nalco/Exxon) joint venture and the implementation of global cost reduction programs in the sales, marketing, manufacturing and support services operations. The costs incurred include severance, asset write-offs, facility closing costs and other items. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Business Optimization Expenses."

(3)

Other income (expense), net consists of monitoring fees paid to affiliates of the Sponsors, management fees paid to Suez, capital gains/(losses) on the disposals of assets, franchise taxes, equity earnings of unconsolidated subsidiaries, recognized gains and losses on foreign currency transactions and other miscellaneous income (expense). See note 20 to the audited consolidated and combined financial statements of Nalco Holdings LLC included elsewhere in this prospectus and "Management's Discussion and Analysis of Financial Condition and Results of Operations."


(4)	EBITDA, a measure used by management to measure operating performance, is defined as net income plus interest, taxes, depreciation and amortization.

EBITDA is reconciled to net income (loss) in the following table. Our management believes EBITDA is useful to the investors because it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. EBITDA is not a recognized term under GAAP and does not purport to be an alternative to net income (loss) as an indicator of operating performance or to cash flows from operating activities as a measure of liquidity. Because not all companies use identical calculations, this presentation of EBITDA may not be comparable to other similarly titled measures of other companies. Additionally, EBITDA is not intended to be a measure of free cash flow for management's discretionary use, as it does not consider certain cash requirements such as interest payments, tax payments and debt service requirements. The amounts shown for EBITDA as presented herein differ from the amounts calculated under the definition of EBITDA used in our debt instruments. The definition of EBITDA used in our debt instruments is further adjusted for certain cash and non-cash charges and is used to determine compliance with financial covenants and our ability to engage in certain activities such as incurring additional debt and making certain payments.


	The following is a reconciliation of net income (loss) to EBITDA:


	Predecessor								Successor			Predecessor			Successor
	Year Ended December 31,					January 1, 2003 through November 3, 2003			November 4, 2003 through December 31, 2003			Six Months Ended June 30, 2003			Six Months Ended June 30, 2004			Pro Forma Year Ended December 31, 2003
	2001			2002		January 1, 2003 through November 3, 2003			November 4, 2003 through December 31, 2003			Six Months Ended June 30, 2003			Six Months Ended June 30, 2004			Pro Forma Year Ended December 31, 2003
												(unaudited)			(unaudited)			(unaudited)
	(dollars in millions)
Net income (loss)	$	(84.0	)	$	128.4	$	(158.2	)	$	(24.1	)	$	(187.7	)	$	(106.6	)	$	(237.3	)
Interest expense, net		35.6			30.7		25.6			49.0			15.2			100.6			192.5
Income tax (provision) benefit		(1.8	)		105.2		68.7			(8.3	)		40.6			19.6			21.0
Depreciation		124.6			134.7		101.8			22.5			60.7			56.9			114.5
Amortization of intangible assets		171.3			89.2		68.9			15.4			41.3			49.1			93.5
EBITDA	$	245.7		$	488.2	$	106.8		$	54.5		$	(29.9	)	$	119.6		$	184.2


(5)	EBITDA, as defined above, was reduced by the following non-cash charges, each of which is further discussed below:


	Predecessor						Successor			Predecessor		Successor
	Year Ended December 31,				January 1, 2003 through November 3, 2003		November 4, 2003 through December 31, 2003			Six Months Ended June 30, 2003		Six Months Ended June 30, 2004		Pro Forma Year Ended December 31, 2003
	2001		2002		January 1, 2003 through November 3, 2003		November 4, 2003 through December 31, 2003			Six Months Ended June 30, 2003		Six Months Ended June 30, 2004		Pro Forma Year Ended December 31, 2003
										(unaudited)		(unaudited)		(unaudited)
	(dollars in millions)
Impairment of goodwill	$	—	$	—	$	244.4	$	—		$	244.4	$	—	$	244.4
Purchased in-process research and development		1.3		—		—		—			—		122.3		—
Inventory step-up		—		—		—		21.2			—		14.5		—
Asset write-offs		17.8		18.3		4.2		—			3.9		—		4.2
Profit sharing and 401(k) expense funded by Suez		12.0		12.1		20.0		4.0			11.7		16.0		24.0
Other		2.4		3.2		2.6		(1.3	)		2.1		0.2		1.3
	$	33.5	$	33.6	$	271.2	$	23.9		$	262.1	$	153.0	$	273.9

Impairment of Goodwill

Goodwill impairment of $244.4 million was recorded by the Predecessor in accordance with Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets. Goodwill was evaluated for impairment based on the purchase price for the Predecessor.

In-process Research and Development

In-process research and development was a one-time charge of $122.3 million recorded during the six months ended June 30, 2004, as a result of purchase accounting entries related to the Acquisition. The Successor and pro forma statements of operations reflect the in-process research and development. In 2001, we recorded $1.3 million of purchased in-process research and development, resulting from the redemption of Exxon's 40% interest in the Nalco/Exxon joint venture.

Inventory Step Up

As a result of purchase accounting for the Acquisition, we wrote up our inventory to fair value and subsequently charged the write up to cost of sales as the inventory was sold. The Successor and pro forma statements of operations reflect the inventory step-up in cost of products sold.

Asset Write-Offs

In conjunction with our integration and process improvement initiatives, we wrote off assets consisting primarily of $17.8 million of PORTA-FEED stainless steel containers in 2001 as a result of a physical inventory, $9.6 million of assets related to obsolete software systems in 2002 and a $5.0 million investment in start up ventures in 2003.

Profit Sharing and 401(k) Expense Funded by Suez

In conjunction with the Acquisition, we entered into an agreement with Suez whereby Suez will reimburse us for certain profit sharing and 401(k) matching contributions made by us to the Profit-Sharing Trust. See note 9 to the audited consolidated and combined financial statements of Nalco Holdings LLC included elsewhere in this prospectus.

Other

Other non-cash charges include the non-cash impact on earnings of our equity investments and minority interests. Successor and pro forma non-cash charges includes the non-cash portion of rent expense under the sublease that we entered into with Suez in conjunction with the Acquisition. See note 14 to the audited consolidated and combined financial statements of Nalco Holdings LLC included elsewhere in this prospectus.


(6)	In addition to incurring non-cash charges and business optimization expenses, our EBITDA was impacted by the following unusual (income) expenses, each of which is further discussed below:


	Predecessor							Successor			Predecessor			Successor
	Year Ended December 31,					January 1, 2003 through November 3, 2003		November 4, 2003 through December 31, 2003			Six Months Ended June 30, 2003			Six Months Ended June 30, 2004		Pro Forma Year Ended December 31, 2003
	2001		2002			January 1, 2003 through November 3, 2003		November 4, 2003 through December 31, 2003			Six Months Ended June 30, 2003			Six Months Ended June 30, 2004		Pro Forma Year Ended December 31, 2003
											(unaudited)			(unaudited)		(unaudited)
	(dollars in millions)
Pension and OPEB settlement and curtailment	$	0.4	$	(47.6	)	$	7.9	$	(0.1	)	$	1.6		$	—	$	7.8
Loss (gain) on sales, net of expenses		0.9		(7.8	)		12.4		1.1			(0.1	)		—		13.5
Other unusual items		6.6		19.4			25.7		5.3			5.6			4.5		31.0
Suez management fees, net		2.0		2.7			2.5		—			1.3			—		—
	$	9.9	$	(33.3	)	$	48.5	$	6.3		$	8.4		$	4.5	$	52.3

Pension and Other Postretirement Benefits (OPEB) Settlement and Curtailment

In the second half of 2002 we amended our U.S. defined benefit pension plan and our postretirement medical and dental plans, resulting in a non-cash curtailment gain of $49.4 million, partially offset by $1.8 million of settlement charges. In 2003, we incurred $7.8 million of curtailment and settlement charges primarily as a result of the transfer of senior executives back to Suez prior to the Acquisition.

Loss (Gain) on Sales, Net of Expenses

In 2001, we incurred a $9.0 million loss on the sale of Calgon's former headquarters facility that was partially offset by a $7.0 million gain on the sale of our corporate aircraft. In 2002, we sold our performance additives business, resulting in a gain of $12.4 million, and incurred $1.5 million of disposal costs and losses associated with our divestiture of Hydrosan. In 2003, we recorded a loss of $5.3 million on the sale of our South African operations as well as $8.1 million of one-time costs associated with the Acquisition.

Other Unusual Items

Our results were also impacted by the effects of certain other unusual items relating primarily to executive severance and relocation expense of $5.8 million in 2001 and $3.0 million in the six months ended June 30, 2003, consultancy costs for process reengineering studies associated with our cost reduction programs and other consultancy services performed on behalf of Suez; one-time pension and benefit expenses primarily related to the redesign of our Australian benefit plan and the application of regulatory changes in Germany of $4.7 million in 2002; legal and environmental expenses of $6.5 million and $4.2 million in 2002 and 2003, respectively, mainly related to events that occurred prior to Suez's 1999 acquisition of Nalco Chemical Company and litigation costs not covered by our excess liability insurance policy; incremental commissions of $5.4 million in 2003 associated with the reorganization of our sales force incentives; and a $10.4 million termination charge for Ondeo Nalco Group's settlement of an interest rate swap in the period from January 1, 2003 through November 3, 2003. Our results for the six months ended June 30, 2004 were impacted by the effects of certain other unusual items, including $1.1 million of expenses associated with our changing the name of our operating company from Ondeo Nalco Company to Nalco Company, $1.1 million of expenses in connection with the re-audit of our 2001 financial statements, $1.0 million of expenses related to the registration of the notes and $1.3 million for other Transaction-related expenses.

Suez Management Fees, Net

In connection with the Acquisition, agreements under which fees were paid by the Predecessor to Suez, or received from Suez, have been terminated.


(7)	Capital expenditures are net of proceeds from disposal of assets.

(8)

For purposes of calculating the ratio of earnings to fixed charges, earnings represents earnings from continuing operations before income taxes, less income from equity method investments and capitalized interest, plus minority interest expense, income distributions from equity method investments, amortization of capitalized interest and fixed charges. Fixed charges include interest expense (including amortization of debt issuance costs), capitalized interest, and the portion of operating rental expense which management believes is representative of the interest component of rent expense. Earnings were insufficient to cover fixed charges by $84.2 million in 2001 primarily due to business optimization expenses incurred. Earnings were insufficient to cover fixed charges by $87.1 million, $32.9 million and $214.4 million in the period from January 1, 2003 through November 3, 2003, November 4, 2003 through December 31, 2003 and for the pro forma year ended December 31, 2003, respectively, as a result of a $244.4 million goodwill impairment charge and increase in interest expense as a result of the Transactions. Earnings were insufficient to cover fixed charges by $86.4 million in the six months ended June 30, 2004 primarily due to the $122.3 million and $14.7 million charges for in-process research and development and inventory step-up, respectively.


(9)	Working capital is defined as current assets (excluding cash and cash equivalents) less current liabilities (excluding short-term debt and current portion of long-term debt) and excluding intercompany balances and is calculated as follows:


	Predecessor						Successor			Predecessor			Successor
	As of December 31,						As of December 31, 2003			As of June 30, 2003			As of June 30, 2004
	2001			2002			As of December 31, 2003			As of June 30, 2003			As of June 30, 2004
										(unaudited)			(unaudited)
	(dollars in millions)
Current assets less current liabilities	$	(441.2	)	$	(275.0	)	$	446.8		$	(93.2	)	$	468.9
Less cash and cash equivalents		(146.0	)		(120.5	)		(100.0	)		(159.7	)		(97.2	)
Less related party receivables and payables		(33.3	)		48.4			—			29.1			—
Plus short-term debt		828.5			587.9			51.9			550.5			17.5
Working capital as defined	$	208.0		$	240.8		$	398.7		$	326.7		$	389.2

(10)

As a result of the Acquisition, we have engaged independent appraisers to assist in determining the fair value of property, plant and equipment in connection with our allocation of purchase price. We have received preliminary valuations from the appraisers, which have been included in 2003 and further modified in the six months ended June 30, 2004; however, the final appraisals are not yet complete. In December 2002, Ondeo Nalco Company entered into a sale-leaseback of our Naperville, Illinois headquarters and research facility that was treated as a financing lease for accounting purposes. See note 14 to the audited consolidated and combined financial statements of Nalco Holdings LLC. Concurrent with the Acquisition, on November 4, 2003, the lease was assigned to another Suez subsidiary that subleased the property back to us. We account for the sublease as an operating lease and have excluded the headquarters and research facility from property, plant and equipment.

(11)

Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. Our loss on the sale of the undivided interests in the receivables was $1.8 million in 2002 and is included in interest expense. The undivided interest in receivables that were transferred but not ultimately sold to the conduit ("retained interest") is classified in trade accounts receivable in the balance sheet. The retained interest was $49.0 million at December 31, 2001 and $56.6 million at December 31, 2002. This program was unwound prior to closing. We treat our new receivables facility as a general financing agreement resulting in the funding and related receivables being shown as liabilities and assets, respectively, on our consolidated balance sheet and the costs associated with the receivables facility being recorded as interest expense.

RISK FACTORS

You should carefully consider the risks described below, together with the other information in this prospectus, before deciding whether to invest in the notes. If any of the events described in the risk factors below actually occur, our business, financial condition, operating results and prospects could be materially adversely affected, which in turn could adversely affect our ability to repay the notes. In such case, you may lose all or part of your original investment.

Risks Related To Our Leverage


	Our substantial leverage could harm our business by limiting our available cash and our access to additional capital.

As a result of the Transactions, we are highly leveraged. As of June 30, 2004, our total consolidated indebtedness was $3,166.4 million and we had $250.0 million of borrowing capacity available under our revolving credit facility (excluding $34.7 million of outstanding standby letters of credit). The following chart shows our level of indebtedness and certain other information as of June 30, 2004.


	As of June 30, 2004
	(dollars in millions)
Revolving credit facility	$	—
Term loan A facility⁽¹⁾		224.0
Term loan B facility		1,186.0
Senior notes⁽²⁾		908.2
Senior subordinated notes⁽²⁾		708.2
Receivables facility		92.0
Assumed debt⁽³⁾		48.0
Total indebtedness	$	3,166.4


(1)	Includes the U.S. dollar equivalent of €64.2 million term loan A borrowings.


(2)	Includes the U.S. dollar equivalent of the euro notes.


(3)	Includes $27.8 million of aggregate principal amount of Nalco Company's 6¼% notes due 2008, $4.3 million of indebtedness of certain non-U.S. subsidiaries and $15.9 million of short-term bank overdrafts.

Our high degree of leverage could have important consequences for you, including the following:

•

It may limit our and our subsidiaries' ability to obtain additional financing for working capital, capital expenditures, product development, debt service requirements, acquisitions and general corporate or other purposes on favorable terms or at all;

•

A substantial portion of our cash flows from operations must be dedicated to the payment of principal and interest on our indebtedness and thus will not be available for other purposes, including operations, capital expenditures and future business opportunities;

•

The debt service requirements of our other indebtedness could make it more difficult for us to make payments on the notes;

•

It may limit our ability to adjust to changing market conditions and place us at a competitive disadvantage compared to those of our competitors that are less highly-leveraged;

•

It may restrict our ability to make strategic acquisitions or cause us to make non-strategic divestitures; and

•

We may be more vulnerable than a less leveraged company to a downturn in general economic conditions or in our business, or we may be unable to carry out capital spending that is important to our growth.

Our pro forma cash interest expense for the year ended December 31, 2003 was $199.2 million. At June 30, 2004, we had $1,516.4 million of variable rate debt. A 1% increase in the average interest rate would increase future interest expense by approximately $15.2 million per year.


	Our and our subsidiaries' debt agreements contain restrictions that limit our flexibility in operating our business.

Nalco Company's senior credit agreement and the indentures under which the notes were issued and other financing arrangements contain a number of significant covenants that, among other things, restrict our or our subsidiaries' ability to:

•

incur additional indebtedness;

•

pay dividends on or make other distributions or repurchase certain capital stock;

•

make certain investments;

•

enter into certain types of transactions with our affiliates;

•

limit dividends or other payments by restricted subsidiaries;

•

use assets as security in other transactions; and

•

sell certain assets or merge with or into other companies.

In addition, under the senior credit agreement, Nalco Holdings is required to satisfy and maintain specified financial ratios and tests. Events beyond our control may affect its ability to comply with those provisions and Nalco Holdings may not be able to meet those ratios and tests. The breach of any of these covenants would result in a default under the senior credit agreement and the lenders could elect to declare all amounts borrowed under the senior credit agreement, together with accrued interest, to be due and payable and could proceed against the collateral securing that indebtedness. Borrowings under the senior credit facilities are effectively senior in right of payment to the senior notes and the senior subordinated notes to the extent of the value of the collateral securing the senior credit facilities and are senior in right of payment to the senior subordinated notes. If any of our indebtedness were to be accelerated, our assets may not be sufficient to repay in full that indebtedness and the notes.


	Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.

Certain of our borrowings, primarily borrowings under our senior credit facilities, are at variable rates of interest and expose us to interest rate risk. If interest rates increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income and cash available for servicing our indebtedness, including the notes, would decrease. Our pro forma cash interest expense for the year ended December 31, 2003 was $199.2 million. At June 30, 2004, we had $1,516.4 million of variable rate debt. A 1% increase in the average interest rate would increase future interest expense by approximately $15.2 million per year.

Risks Related to Our Business


	If we are unable to respond to the changing needs of a particular industry and to anticipate, respond to or utilize changing technologies and develop new offerings , it could become more difficult for us to respond to our customers' needs and cause us to be less competitive.

We have historically been able to maintain our market positions and margins through continuous innovation of products and development of new offerings to create value for our customers. Recent innovations and development that we have relied on include our 3D TRASAR system for controlling and monitoring chemical feed and our recent relationship with US Filter, which permits us to sell equipment solutions as part of a bundled offering to our water treatment customers. We may not be successful in continuing to make similar innovations in the future. Our future operating results will depend to a significant extent on our ability to continue to introduce new products and applications

and to develop new offerings that offer distinct value for our customers. Many of our products may be affected by rapid technological change and new product introductions and enhancements. We expect to continue to enhance our existing products and identify, develop and manufacture new products with improved capabilities and make improvements in our productivity in order to maintain our competitive position. We intend to devote sizeable resources to the development of new technologically advanced products and systems and to continue to devote a substantial amount of expenditures to the research and development functions of our business. However, we cannot assure you that:

•

we will be successful in developing new products or systems or bringing them to market in a timely manner;

•

products or technologies developed by others will not render our offerings obsolete or non-competitive;

•

the market will accept our innovations;

•

our competitors will not be able to produce our core non-patented products at a lower cost;

•

we will have sufficient resources to research and develop all promising new technologies and products; or

•

significant research and development efforts and expenditures for products will ultimately prove successful.

Our ability to anticipate, respond to and utilize changing technologies is crucial because we compete with many companies in each of the markets in which we operate. For example, we compete with hundreds of companies in the water treatment chemicals market, including our primary global competitor, GE Water Technologies. Other companies, including Ecolab, Inc. are expected to enter or increase their presence in our markets. Our ability to compete effectively is based on a number of considerations, such as product and service innovation, product and service quality, distribution capability and price. Moreover, water treatment for industrial customers depends on the particular needs of the industry. For example, the paper industry requires a specific water quality for bleaching paper; certain industrial boilers require demineralized water; the pharmaceuticals industry requires ultra pure water for processing; and, in the case of municipal services, water treatment includes clarification for re-use, sludge dewatering and membrane ultra filtration. We may not have sufficient financial resources to respond to the changing needs of a particular industry and to continue to make investments in our business, which could cause us to become less competitive.


	Our significant non-U.S. operations expose us to global economic and political changes that could impact our profitability.

We have significant operations outside the United States, including joint ventures and other alliances. We conduct business in 130 countries and in 2003, approximately 52% of our net sales originated outside the United States. There are inherent risks in our international operations, including:

•

exchange controls and currency restrictions;

•

currency fluctuations and devaluations, such as the recent currency crisis in Argentina;

•

tariffs and trade barriers;

•

export duties and quotas;

•

changes in local economic conditions, such as the economic decline in Venezuela;

•

changes in laws and regulations;

•

difficulties in managing international operations and the burden of complying with foreign laws;

•

exposure to possible expropriation or other government actions;

•

restrictions on our ability to repatriate dividends from our subsidiaries; and

•

unsettled political conditions, such as those found in Nigeria, and possible terrorist attacks against American interests.

Our international operations also expose us to different local political and business risks and challenges. For example, in certain countries we are faced with periodic political issues which could result in currency risks or the risk that we are required to include local ownership or management in our businesses. We are also periodically faced with the risk of economic uncertainty, such as recent strikes and currency exchange controls in Venezuela, which has impacted our business in these countries. Other risks in international business also include difficulties in staffing and managing local operations, including our obligations to design local solutions to manage credit risk to local customers and distributors.

Our overall success as a global business depends, in part, upon our ability to succeed in differing economic, social and political conditions. We may not continue to succeed in developing and implementing policies and strategies that are effective in each location where we do business, which could negatively affect our profitability.


	Environmental, safety and production and product regulations or concerns could subject us to liability for fines or damages, require us to modify our operations and increase our manufacturing and delivery costs.

We are subject to the requirements of environmental and occupational safety and health laws and regulations in the United States and other countries. These include obligations to investigate and clean up environmental contamination on or from properties or at off-site locations where we are identified as a responsible party. For example, we are currently identified as a potentially responsible party at certain waste management sites. Additionally, the U.S. Environmental Protection Agency is conducting a civil and criminal investigation of environmental practices at our Louisiana manufacturing facility. No claims or charges have been issued and we are unable to predict the results of such investigation. We have also been named as a defendant in a series of multi-party and individual lawsuits based on claims of exposure to hazardous materials. We cannot predict with certainty the outcome of any such tort claims or the involvement we might have in such matters in the future and there can be no assurance that the discovery of previously unknown conditions will not require significant expenditures. In each of these chemical exposure cases, our insurance carriers have accepted the claims on our behalf and our financial exposure is limited to the amount of our deductible (not exceeding $1 million per occurrence); however, we cannot predict the number of claims that we may have to defend in the future and we may not be able to continue to maintain such insurance.

We have made and will continue to make capital and other expenditures to comply with environmental requirements. Although we believe we are in material compliance with environmental law requirements, we may not have been and will not at all times be in complete compliance with all of these requirements, and may incur material costs, including fines or damages, or liabilities in connection with these requirements in excess of amounts we have reserved. In addition, these requirements are complex, change frequently and have tended to become more stringent over time. In the future, we may discover previously unknown contamination that could subject us to additional expense and liability. In addition, future requirements could be more onerous than current requirements. For more information about our environmental compliance and potential environmental liabilities, see "Business—Environmental Matters."

The activities and plants at our production facilities are subject to a variety of federal, state, local and foreign laws and regulations ("production regulations"). Similarly, the solid, air and liquid waste streams produced from our production facilities are subject to a variety of regulations ("waste regulations") and many of our products and the handling of our products are governmentally regulated or registered ("product regulations"). Each of the production, waste and product regulations is subject to expansion or enhancement. Any new or tightened regulations could lead to increases in the direct and indirect costs we incur in manufacturing and delivering products to our customers. For example, the European Commission is currently considering imposing new chemical registration

requirements on the manufacturers and users of all chemicals, not just those which are considered to be harmful or hazardous. Should such regulations, referred to as REACH, be imposed, all chemical companies will be faced with additional costs to conduct their businesses in European Commission countries. Similarly, certain of our products are used to assist in the generation of tax credits for our customers, and the termination or expiration of such tax credits could impact the sale of these products. In addition to an increase in costs in manufacturing and delivering products, a change in production regulations or product regulations could result in interruptions to our business and potentially cause economic or consequential losses should we be unable to meet the demands of our customers for products.

We may not be able to achieve all of our expected cost savings.

We initiated a comprehensive cost reduction plan immediately upon consummation of the Acquisition. However, a variety of risks could cause us not to achieve the benefits of the expected cost savings, including, among others, the following:

•

higher than expected severance costs related to staff reductions;

•

higher than expected retention costs for employees that will be retained;

•

delays in the anticipated timing of activities related to our cost-saving plan, including the reduction of inefficiencies in our administrative and overhead functions; and

•

other unexpected costs associated with operating the business.

We have experienced, and may continue to experience, difficulties in securing the supply of certain raw materials we and our competitors need to manufacture some of our products.

During 2004, certain of the raw materials used by us and other chemical companies have faced supply limitation. In some cases because of unexpectedly large demand and in other instances because of plant and equipment problems, certain of our raw material vendors have placed us and their other customers "on allocation," proportionately reducing the amounts of raw materials supplied to us as against our past requirements. If these limitations continue or become more severe, we risk shortfalls in our sales and the potential of claims from our customers if we are unable to fully meet contractual requirements.


	Our pension plans are currently underfunded and we may have to make significant cash payments to the plans, reducing the cash available for our business.

We sponsor various pension plans worldwide that are underfunded and require significant cash payments. For example, in 2003, we contributed $31.2 million to our pension plans and in 2002, we contributed $100.9 million to our pension plans, including a $90.0 million voluntary contribution to our U.S. pension plan. We contributed $4.1 million to our U.S. pension plan in 2004 and do not currently plan to make additional contributions to that plan this year. We are required to contribute at least $21.0 million to the U.S. pension plan in 2005. We may also opt to make additional voluntary contributions to various pension plans worldwide in 2004 and 2005. Additionally, if the performance of the assets in our pension plans does not meet our expectations, or if other actuarial assumptions are modified, our contributions for those years could be even higher than we expect. For example, our U.S. pension assets had a fair value of $210.1 million as of December 31, 2003. We expect to earn an 8.5% investment return on our U.S. pension assets. In the event actual investment returns are 1% lower than expected for one year, we expect our long-term cash requirements to increase by $2.1 million. If our cash flow from operations is insufficient to fund our worldwide pension liability, we may be forced to reduce or delay capital expenditures, seek additional capital or seek to restructure or refinance our indebtedness, including the notes.

As of December 31, 2003, our worldwide pension plans were underfunded by $359.6 million (based on the actuarial assumptions used for FAS 87 purposes). Our U.S. pension plans are subject to the Employee Retirement Income Security Act of 1974, or ERISA. Under ERISA, the Pension Benefit Guaranty Corporation, or PBGC, has the authority to terminate an underfunded pension plan under limited circumstances. In the event our U.S. pension plans are terminated for any reason while

the plans are underfunded, we will incur a liability to the PBGC that may be equal to the entire amount of the underfunding. Prior to the closing of the Acquisition, the PBGC requested and received information from us regarding our business, the Transactions and our pension plans. The PBGC took no further action with respect to their inquiry.


	We have recorded a significant amount of goodwill and other identifiable intangible assets, and we may never realize the full value of our intangible assets.

In connection with the Acquisition, we have recorded a significant amount of goodwill and other identifiable intangible assets, including customer relationships, trademarks and developed technologies. Goodwill and other net identifiable intangible assets were approximately $3.7 billion as of June 30, 2004, or 63% of our total assets. Goodwill, which represents the excess of cost over the fair value of the net assets of the businesses acquired, was approximately $2.3 billion as of June 30, 2004, or 39% of our total assets. Goodwill and net identifiable intangible assets are recorded at fair value on the date of acquisition and, in accordance with Financial Accounting Standards Board Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets, will be reviewed at least annually for impairment. Impairment may result from, among other things, deterioration in our performance, adverse market conditions, adverse changes in applicable laws or regulations, including changes that restrict the activities of or affect the products and services sold by our business, and a variety of other factors. The amount of any quantified impairment must be expensed immediately as a charge to results of operations. Depending on future circumstances, it is possible that we may never realize the full value of our intangible assets. Any future determination of impairment of a significant portion of goodwill or other identifiable intangible assets would have an adverse effect on our financial condition and results of operations.


	Our future success will depend in part on our ability to protect our intellectual property rights, and our inability to enforce these rights could permit others to offer products competitive with ours, which could reduce our ability to maintain our market position and maintain our margins.

We rely on the patent, trademark, copyright and trade secret laws of the United States and other countries to protect our intellectual property rights. However, we may be unable to prevent third parties from using our intellectual property without authorization. The use of our intellectual property by others could reduce any competitive advantage we have developed or otherwise harm our business. If we had to litigate to protect these rights, any proceedings could be costly, and we may not prevail.

We have obtained and applied for several U.S. and foreign trademark registrations, and will continue to evaluate the registration of additional service marks and trademarks, as appropriate. Our pending applications may not be approved by the applicable governmental authorities and, even if the applications are approved, third parties may seek to oppose or otherwise challenge these registrations. A failure to obtain trademark registrations in the United States and in other countries could limit our ability to protect our trademarks and impede our marketing efforts in those jurisdictions.

Our Sponsors control us and may have conflicts of interest with us or you in the future.

Our Sponsors beneficially own approximately 97% of the equity interests of Nalco LLC, the ultimate parent company of Nalco Holdings, Nalco Company's direct parent. As a result, our Sponsors have control over our decisions to enter into any corporate transaction and have the ability to prevent any transaction that requires the approval of equityholders regardless of whether or not other equityholders or noteholders believe that any such transactions are in their own best interests. For example, our Sponsors could cause us to make acquisitions that increase the amount of indebtedness that is secured or senior to the senior subordinated notes or sell revenue-generating assets, impairing our ability to make payments under the notes. Additionally, our Sponsors are in the business of making investments in companies and may from time to time acquire and hold interests in businesses that compete directly or indirectly with us. Our Sponsors may also pursue acquisition opportunities that may be complementary to our business, and as a result, those acquisition opportunities may not be available to us. So long as our Sponsors continue to own a significant amount of the equity of our parent, Nalco Holdings, even if such amount is less than 50%, they will continue to be able to significantly influence or effectively control our decisions.

Risks Related To The Notes


	We may not be able to generate sufficient cash to service all of our indebtedness, including the notes, and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.

Our ability to make scheduled payments or to refinance our debt obligations depends on our financial and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond our control. We may not be able to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources."

If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures, seek additional capital or seek to restructure or refinance our indebtedness, including the notes. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations. In the absence of such operating results and resources, we could face substantial liquidity problems and might be required to sell material assets or operations to attempt to meet our debt service and other obligations. The senior credit facilities and the indentures under which the notes were issued restrict our ability to use the proceeds from asset sales. We may not be able to consummate those asset sales to raise capital or sell assets at prices that we believe are fair and proceeds that we do receive may not be adequate to meet any debt service obligations then due. See "Description of Other Indebtedness—Senior Credit Facilities," "Description of Senior Notes" and "Description of Senior Subordinated Notes."


	Despite our current leverage, we may still be able to incur substantially more debt. This could further exacerbate the risks related to significant leverage that we and our subsidiaries face.

We and our subsidiaries may be able to incur substantial additional indebtedness in the future. The terms of the indentures do not fully prohibit us or our subsidiaries from doing so. Our revolving credit facility provides borrowing capacity of up to $250.0 million. As of June 30, 2004, there were no outstanding borrowings under the revolving credit facility (excluding $34.7 million of outstanding standby letters of credit). All of those borrowings would be secured, and as a result, would be effectively senior to the notes and the guarantees of the notes by our subsidiary guarantors. If we incur any additional indebtedness that ranks equally with the senior notes or senior subordinated notes, the holders of that debt will be entitled to share ratably with the holders of the senior notes or the holders of the senior subordinated notes, respectively, in any proceeds distributed in connection with any insolvency, liquidation, reorganization, dissolution or other winding-up of us. This may have the effect of reducing the amount of proceeds paid to you. If new debt is added to our current debt levels, the related risks that we and our subsidiaries now face could intensify.


	Your right to receive payments on each issue of notes is effectively junior to those lenders who have a security interest in our assets and, as a result, in the event of a foreclosure on those assets, we may not be able to satisfy your claims after satisfying the claims of secured lenders.

Our obligations under the notes and our guarantors' obligations under their guarantees of the notes are unsecured, but our obligations under our senior credit facilities and each guarantor's obligations under their respective guarantees of the senior credit facilities are secured by a security interest in substantially all of our domestic tangible and intangible assets and the assets and a portion of the stock of certain of our non-U.S. subsidiaries. If we are declared bankrupt or insolvent, or if we default under our senior credit facilities, the lenders could declare all of the funds borrowed thereunder, together with accrued interest, immediately due and payable. If we were unable to repay such indebtedness, the lenders could foreclose on the pledged assets to the exclusion of holders of the notes, even if an event of default exists under the indentures under which the notes were issued at such time. Furthermore, if the lenders foreclose and sell the pledged equity interests in any subsidiary guarantor under the notes, then that guarantor will be released from its guarantee of the notes automatically and immediately upon such sale. In any such event, because the notes will not be secured by any of our assets or the equity interests in subsidiary guarantors, it is possible that there

would be no assets remaining from which your claims could be satisfied or, if any assets remained, they might be insufficient to satisfy your claims fully. Additionally, after any such foreclosure, it is likely that we would not continue operating our business, in which case we could not generate any additional funds to satisfy your claims. See "Description of Other Indebtedness."

As of June 30, 2004, we had $1,502.0 million of senior secured indebtedness (of which $1,410.0 million was indebtedness under our senior credit facilities and which did not include the undrawn portion under the revolving credit facility of $250.0 million, and $92.0 million of which was indebtedness under our receivables facility). The indentures permit the incurrence of substantial additional indebtedness by us and our restricted subsidiaries in the future, including secured indebtedness.


	Claims of noteholders will be structurally subordinate to claims of creditors of all of our non-U.S. subsidiaries and some of our U.S. subsidiaries and, as a result, in the event of our dissolution or similar event, we may not be able to satisfy your claims after satisfying the claims of our non-guarantor subsidiaries.

The notes are not guaranteed by any of our non-U.S. subsidiaries, our less than wholly-owned U.S. subsidiaries or certain other U.S. subsidiaries. Accordingly, claims of holders of the notes will be structurally subordinate to the claims of creditors of these non-guarantor subsidiaries, including trade creditors. Without limiting the generality of the foregoing, claims of holders of the notes will also be structurally subordinate to claims of the lenders under our senior credit facilities to the extent of the guarantees by non-U.S. subsidiaries of the senior credit facilities. All obligations of our non-guarantor subsidiaries will have to be satisfied before any of the assets of such subsidiaries would be available for distribution, upon a liquidation or otherwise, to us or a guarantor of the notes.

We also have joint ventures and subsidiaries in which we own less than 100% of the equity so that, in addition to the structurally senior claims of creditors of those entities, the equity interests of our joint venture partners or other shareholders in any dividend or other distribution made by these entities would need to be satisfied on a proportionate basis with us. These joint ventures and less than wholly-owned subsidiaries may also be subject to restrictions on their ability to distribute cash to us in their financing or other agreements and, as a result, we may not be able to access their cash flow to service our debt obligations, including in respect of the notes.


	Your right to receive payments on the senior subordinated notes is junior to all of Nalco Company's and the guarantors' senior indebtedness, including Nalco Company's and the guarantors' obligations under the senior credit facilities, the senior notes and other existing and future senior debt.

The senior subordinated notes are general unsecured obligations that are junior in right of payment to all our existing and future senior indebtedness. The senior subordinated guarantees are general unsecured obligations of the guarantors that are junior in right of payment to all of the applicable guarantor's existing and future senior indebtedness.

Nalco Company and the guarantors may not pay principal, premium, if any, interest or other amounts on account of the senior subordinated notes or the senior subordinated guarantees in the event of a payment default or certain other defaults in respect of certain of our senior indebtedness, including debt under the senior credit facilities and senior notes, unless the senior indebtedness has been paid in full or the default has been cured or waived. In addition, in the event of certain other defaults with respect to the senior indebtedness, Nalco Company or the guarantors may not be permitted to pay any amount on account of the senior subordinated notes or the senior subordinated guarantees for a designated period of time.

Because of the subordination provisions in the senior subordinated notes and the senior subordinated guarantees, in the event of a bankruptcy, liquidation or dissolution of Nalco Company or any guarantor, Nalco Company's or the guarantor's assets will not be available to pay obligations under the senior subordinated notes or the applicable senior subordinated guarantee until Nalco Company or the guarantor has made all payments on its respective senior indebtedness. Nalco Company and the guarantors may not have sufficient assets after all these payments have been made to make any payments on the senior subordinated notes or the applicable senior subordinated guarantee, including payments of principal or interest when due.

As of June 30, 2004, we had $956.2 million of senior indebtedness. The senior subordinated note indenture permits the incurrence of substantial additional indebtedness, including senior debt, by Nalco Company and our restricted subsidiaries in the future.


	If we default on our obligations to pay our other indebtedness, we may not be able to make payments on the notes.

Any default under the agreements governing our indebtedness, including a default under our senior credit facilities that is not waived by the required lenders, and the remedies sought by the holders of such indebtedness could make us unable to pay principal, premium, if any, and interest on the notes and substantially decrease the market value of the notes. If we are unable to generate sufficient cash flow and are otherwise unable to obtain funds necessary to meet required payments of principal, premium, if any, and interest on our indebtedness, or if we otherwise fail to comply with the various covenants, including financial and operating covenants, in the instruments governing our indebtedness (including our senior credit facilities), we could be in default under the terms of the agreements governing such indebtedness. In the event of such default, the holders of such indebtedness could elect to declare all the funds borrowed thereunder to be due and payable, together with accrued and unpaid interest, the lenders under our revolving credit facility could elect to terminate their commitments, cease making further loans and institute foreclosure proceedings against our assets, and we could be forced into bankruptcy or liquidation. If our operating performance declines, we may in the future need to seek to obtain waivers from the required lenders under our senior credit facilities to avoid being in default. If we breach our covenants under our senior credit facilities and seek a waiver, we may not be able to obtain a waiver from the required lenders. If this occurs, we would be in default under our senior credit facilities, the lenders could exercise their rights as described above, and we could be forced into bankruptcy or liquidation. See "Description of Other Indebtedness—Senior Credit Facilities," "Description of Senior Notes" and "Description of Senior Subordinated Notes."

Although Nalco Company will be required to offer to repurchase the notes upon a change of control, it may not have sufficient financial resources to purchase all notes that are tendered.

Upon the occurrence of specific kinds of change of control events, including the sale, lease or transfer of "all or substantially" all the assets of Nalco Holdings and its subsidiaries taken as a whole, Nalco Company will be required to offer to repurchase all outstanding notes at 101% of their principal amount, plus accrued and unpaid interest, unless such notes have been previously called for redemption. However, Nalco Company may not have sufficient financial resources to purchase all of the notes that are tendered upon a change of control offer. Any such failure to repurchase the notes could constitute a default under the indentures governing the notes.

As mentioned above, under the indentures governing the notes, the sale, lease or transfer of "all or substantially all" the assets of Nalco Holdings and its subsidiaries taken as a whole constitutes a change of control that will require Nalco Company to offer to repurchase the notes. Although there is a developing body of case law interpreting the phrase "substantially all," there is no precise established definition of the phrase under applicable law. Accordingly, the ability of a holder of senior notes to require Nalco Company to repurchase such senior notes as a result of a sale, lease or transfer of less than all of the assets of Nalco Holdings and its subsidiaries taken as a whole to another person or group may be uncertain. See "Description of Senior Notes—Change of Control" and "Description of Senior Subordinated Notes—Change of Control."

In addition, it is possible that we could, in the future, enter into certain transactions, including acquisitions, refinancings or other recapitalizations or highly leveraged transactions, that would not constitute a change of control under the indentures, but that could increase the amount of indebtedness outstanding at such time or otherwise affect our capital structure or credit ratings or otherwise adversely affect holders of the notes. Furthermore, because of the potential restrictions on a change of control, we could be prevented from completing a transaction which might otherwise benefit the noteholders.

The occurrence of a change of control could also constitute an event of default under our senior credit facilities. Our bank lenders may have the right to prohibit any such purchase or redemption, in which event we will seek to obtain waivers from the required lenders under the senior credit facilities, but may not be able to do so.

You may face foreign exchange risks or tax consequences as a result of investing in the euro notes.

A portion of each of the senior notes and the senior subordinated notes will be denominated and payable in euros. If you are a U.S. investor, an investment in the euro notes will entail foreign exchange-related risks due to, among other factors, possible significant changes in the value of the euro relative to the U.S. dollar because of economic, political and other factors over which we have no control. Depreciation of the euro against the U.S. dollar could cause a decrease in the effective yield of the euro notes below their stated coupon rates and could result in a loss to you on a U.S. dollar basis. Investing in the euro notes by U.S. investors may also have important tax consequences.


	Federal and state fraudulent transfer laws may permit a court to void the notes and the guarantees, and, if that occurs, you may not receive any payments on the notes.

The issuance of the notes and the guarantees may be subject to review under federal and state fraudulent transfer and conveyance statutes. While the relevant laws may vary from state to state, under such laws the payment of consideration will be a fraudulent conveyance if (1) Nalco Company paid the consideration with the intent of hindering, delaying or defrauding creditors or (2) Nalco Company or any of the guarantors, as applicable, received less than reasonably equivalent value or fair consideration in return for issuing either the notes or a guarantee, and, in the case of (2) only, one of the following is also true:

•

Nalco Company or any of the guarantors was insolvent or rendered insolvent by reason of the incurrence of the indebtedness; or

•

payment of the consideration left Nalco Company or any of the guarantors with an unreasonably small amount of capital to carry on the business; or

•

Nalco Company or any of the guarantors intended to, or believed that it would, incur debts beyond its ability to pay as they mature.

If a court were to find that the issuance of the notes or a guarantee was a fraudulent conveyance, the court could void the payment obligations under the notes or such guarantee or further subordinate the notes or such guarantee to presently existing and future indebtedness of Nalco Company or such guarantor, or require the holders of the notes to repay any amounts received with respect to the notes or such guarantee. In the event of a finding that a fraudulent conveyance occurred, you may not receive any repayment on the notes. Further, the voidance of the notes could result in an event of default with respect to our and our subsidiaries' other debt that could result in acceleration of such debt.

Generally, an entity would be considered insolvent if, at the time it incurred indebtedness:

•

the sum of its debts, including contingent liabilities, was greater than the fair salable value of all its assets; or

•

the present fair salable value of its assets was less than the amount that would be required to pay its probable liability on its existing debts and liabilities, including contingent liabilities, as they become absolute and mature; or

•

it could not pay its debts as they become due.

We cannot be certain as to the standards a court would use to determine whether or not Nalco Company or the guarantors were solvent at the relevant time, or regardless of the standard that a court uses, that the issuance of the notes and the guarantees would not be further subordinated to our or any of our guarantors' other debt.

If the guarantees were legally challenged, any guarantee could also be subject to the claim that, since the guarantee was incurred for our benefit, and only indirectly for the benefit of the applicable guarantor, the obligations of the applicable guarantor were incurred for less than fair consideration. A

court could thus void the obligations under the guarantees, subordinate them to the applicable guarantor's other debt or take other action detrimental to the holders of the notes.


	Your ability to transfer the notes may be limited by the absence of an active trading market, and there is no assurance that any active trading market will develop for the notes.

The notes are new issues of securities for which there is no established public market. We expect the euro notes to be listed on the Luxembourg Stock Exchange. The initial purchasers have advised us that they intend to make a market in the notes as permitted by applicable laws and regulations; however, the initial purchasers are not obligated to make a market in the notes, and they may discontinue their market-making activities at any time without notice. Therefore, we cannot assure you that an active market for the notes will develop or, if developed, that it will continue. Historically, the market for noninvestment grade debt has been subject to disruptions that have caused substantial volatility in the prices of securities similar to the notes. The market, if any, for the notes may experience similar disruptions and any such disruptions may adversely affect the prices at which you may sell your notes. In addition, subsequent to their initial issuances, the notes may trade at discounts from their initial offering prices, depending upon prevailing interest rates, the market for similar notes, our financial and operating performance and other factors.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus includes "forward-looking statements." These forward-looking statements include statements concerning our plans, objectives, goals, strategies, future events, future revenue or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions, business trends and other information that is not historical information and, in particular, appear under the headings "Summary," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Industry Overview" and "Business." When used in this prospectus, the words "estimates," "expects," "anticipates," "projects," "plans," "intends," "believes," "forecasts," or future or conditional verbs, such as "will," "should," "could" or "may," and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements, including, without limitation, management's examination of historical operating trends and data are based upon our current expectations and various assumptions. Our expectations, beliefs and projections are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that management's expectations, beliefs and projections will be achieved.

There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements contained in this prospectus. Important factors that could cause our actual results to differ materially from the forward-looking statements we make in this prospectus are set forth in this prospectus, including under the heading "Risk Factors." As stated elsewhere in this prospectus, such risks, uncertainties and other important factors include, among others:

•

our substantial leverage;

•

limitations on flexibility in operating our business contained in our debt agreements;

•

increases in interest rates as a result of our variable rate indebtedness;

•

pricing pressure from our customers;

•

technological change and innovation;

•

risks associated with our non-U.S. operations;

•

fluctuations in currency exchange rates;

•

high competition in the markets in which we operate;

•

adverse changes to environmental, health and safety regulations;

•

operating hazards in our production facilities;

•

inability to achieve expected cost savings;

•

difficulties in securing the raw materials we use;

•

our significant pension benefit obligations and the current underfunding of our pension plans;

•

our ability to realize the full value of our intangible assets;

•

our ability to attract and retain skilled employees, particularly research scientists, technical sales professionals and engineers;

•

our ability to protect our intellectual property rights; and

•

the possibility that our owners' interests will conflict with ours or yours.

There may be other factors that may cause our actual results to differ materially from the forward-looking statements.

All forward-looking statements attributable to us or persons acting on our behalf apply only as of the date of this prospectus and are expressly qualified in their entirety by the cautionary statements included in this prospectus. We undertake no obligation to update or revise forward-looking statements which may be made to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events.

THE ACQUISITION

The following contains summaries of certain agreements between affiliates of Suez and Nalco Holdings that were entered into in connection with the Acquisition. Our current ownership structure is summarized on page 33.

General

On August 31, 2003, Nalco Holdings entered into a stock purchase agreement with two wholly-owned subsidiaries of Suez ("Sellers"), a French company. The stock purchase agreement provided for the acquisition by Nalco Holdings of all shares of stock in Ondeo Nalco Company and the Nalco International SAS Subsidiaries, for $4,101.5 million in cash, after giving effect to direct costs of the Acquisition, closing date working capital and indebtedness purchase price adjustments and a post-closing working capital and indebtedness purchase price adjustment which was agreed to by us and Suez on March 25, 2004. The Transactions closed on November 4, 2003.

In connection with the Acquisition, funds controlled by The Blackstone Group ("Blackstone"), Apollo Management, L.P. ("Apollo") and GS Capital Partners ("GSCP" and together with Blackstone and Apollo, the "Sponsors") contributed $369.1 million, $369.1 million and $253.7 million, respectively, in exchange for a corresponding percentage of membership interests in Nalco Investment Holdings LLC. In connection with the Acquisition, Dr. William H. Joyce, our Chairman and Chief Executive Officer, contributed $10 million of cash equity to Nalco Investment Holdings LLC in exchange for a corresponding percentage of membership interests in Nalco Investment Holdings LLC. Following the Acquisition, the Sponsors and Dr. Joyce engaged in a series of transactions that ultimately resulted in the exchange of 100% of the membership interests in Nalco Investment Holdings LLC for membership interests in Nalco LLC, which is now the indirect parent of Nalco Investment Holdings LLC, Nalco Holdings and Nalco Company. In addition, in June 2004, William J. Roe, Bradley J. Bell, Mark L. Bosanko, Louis L. Loosbrock and certain other members of management invested approximately $8.6 million in Nalco LLC, which was contributed to Nalco Holdings in connection with the Nalco LLC 2004 Unit Plan, in exchange for certain membership interests in Nalco LLC. Dr. Joyce invested an additional $1.2 million in Nalco LLC in May 2004. See "Management—Nalco LLC Unit Plan." The Sponsors and members of management currently beneficially own 100% of the membership interests in Nalco Holdings as a result of their ownership of membership interests in Nalco LLC . Nalco Investment Holdings LLC contributed the Sponsors' and Dr. Joyce's equity received by it prior to the Acquisition to Nalco Holdings to partially fund the Acquisition.

As part of the Acquisition, Nalco Holdings made a cash contribution to a newly formed Delaware corporation, NI Acquisition Co., in exchange for 100% of NI Acquisition Co.'s capital stock, and purchased a portion of the common stock of Ondeo Nalco Company from a subsidiary of Suez and a portion of the capital stock of an existing U.S. subsidiary of Nalco Company that is a holding company for certain non-U.S. subsidiaries ("Non-U.S. Holdco"). Nalco Holdings used the remainder of the Sponsors' equity to pay a portion of the Acquisition transaction fees and related expenses. Ondeo Nalco Company used (1) borrowings under its new revolving credit facility, (2) borrowings under its new term loan A senior credit facility, (3) borrowings under its new term loan B senior credit facility and (4) proceeds from the offering of senior notes and senior subordinated notes to redeem all shares of common stock of Ondeo Nalco Company not held by Nalco Holdings, to redeem all shares of Ondeo Nalco Company's preferred stock and to pay all remaining fees and expenses related to the Transactions. The redeemed shares of preferred stock and common stock of Ondeo Nalco Company were cancelled, and as a result, Nalco Holdings became the direct owner of 100% of the outstanding capital stock of Ondeo Nalco Company. Ondeo Nalco Company was renamed Nalco Company in connection with the Transactions.

Immediately following the acquisition of Nalco Company, NI Acquisition Co. made a cash contribution to Non-U.S. Holdco in exchange for substantially all of the capital stock of Non-U.S. Holdco (excluding a small percentage that was retained by Nalco Company and a small percentage that is held by Nalco Holdings). Non-U.S. Holdco then purchased 100% of the capital stock of the Nalco International SAS Subsidiaries. In connection with the Acquisition, certain of Nalco Company's non-U.S. subsidiaries were contributed to Non-U.S. Holdco such that, after completion of the steps of the Acquisition, Nalco Company owns approximately 78% of the equity of Non-U.S. Holdco with NI Acquisition Co. owning the remaining approximately 22%.

The Stock Purchase Agreement

The stock purchase agreement contains customary seller representations and warranties of the Sellers, customary buyer representations and warranties of Nalco Holdings and customary covenants and other agreements between the Sellers and Nalco Holdings.

The stock purchase agreement provides for indemnification for losses relating to specified events, circumstances and matters. The Sellers and Suez, as a guarantor of the Sellers' respective obligations, have agreed to indemnify us from certain liabilities, including:

•

any losses or damages arising from the inaccuracy or breach of any representation or warranty of the Sellers contained in the stock purchase agreement;

•

any losses or damages arising from breaches of the covenants and agreements made or to be performed by the Sellers pursuant to the stock purchase agreement;

•

losses or damages related to specified contingent earn-out liabilities and a specified contractual dispute;

•

specified tax losses or liabilities, including, among others, those associated with the business of the companies being acquired relating to specified tax amounts incurred on or prior to the Acquisition; and

•

losses or damages arising from the failures of the Sellers or their affiliates to comply with certain regulatory requirements in India.

The stock purchase agreement does not allow us to make a claim for indemnification for any loss or damage relating to a breach of a representation or warranty unless the losses or damages for any claim or series of related claims exceed $150,000 (other than for losses relating to specified representations and warranties). The Sellers' indemnification obligations with respect to breaches of representations and warranties are subject to a deductible for the first $30 million in damages (other than for losses relating to specified representations and warranties not subject to the deductible).

If we incur $30 million in damages as a result of breaches of representations and warranties contained in the stock purchase agreement that are subject to the deductible, the Sellers are required to indemnify us for half of the damages between $30 million and $60 million. The Sellers are required to indemnify us for the full amount of all such damages in excess of $60 million up to a $420 million cap (other than for losses arising from breaches of specified representations and warranties to which this cap does not apply). Suez has guaranteed the payment obligations of the Sellers under the indemnification provisions.

Nalco Holdings is also required to indemnify the Sellers from liabilities arising from specified matters, including the inaccuracy or breach of representations or warranties, other than certain specified representations and warranties, by Nalco Holdings in the stock purchase agreement and breaches by Nalco Holdings of its covenants and agreements in the stock purchase agreement. Nalco Holdings' indemnification obligations for breaches of representations and warranties are subject to the same minimum claim threshold, deductible mechanism and cap as the Sellers' indemnification obligations.

Some of these indemnification obligations for each of the Sellers and Nalco Holdings expire as early as April 2005, while others remain indefinitely.

Ancillary Agreements

In addition to the stock purchase agreement, the parties entered into agreements governing certain relationships among the parties after the closing of the Acquisition. These agreements include a noncompetition agreement, a reimbursement agreement relating to the Contribution Agreement between us and The Northern Trust Company, dated November 2, 1999, as amended, a guarantee by Suez of Nalco Company's obligations to The Northern Trust Company, a sublease agreement relating to the sale-leaseback transaction of our headquarters in Naperville, Illinois, a transaction fee agreement and a monitoring fee agreement. See "Certain Relationships and Related Party Transactions" for descriptions of these agreements.

Our Sponsors

The Blackstone Group

The Blackstone Group is a leading investment and advisory firm founded in 1985, with offices in New York, London and Hamburg. Blackstone manages the largest institutional private equity fund ever raised, a $6.5 billion fund raised in 2002. Since it began private equity investing in 1987, Blackstone has raised more than $14 billion in five funds and has invested in over 70 companies. In addition to private equity investments, Blackstone's core businesses include real estate investments, corporate debt investments, asset management, merger and acquisition advisory services, and restructuring and reorganization advisory services.

Apollo Management

Apollo Management, L.P., a private investment firm founded in 1990, has over 30 professionals in New York, Los Angeles and London. Since its inception, Apollo has managed the investment of an aggregate of approximately $17 billion in equity capital, including $13 billion invested in corporate transactions, in a wide variety of industries, both domestically and internationally. Current corporate investments are being made out of Apollo Investment Fund V, a $3.8 billion fund raised in 2002.

GS Capital Partners

GS Capital Partners, 2000 L.P. is the current primary investment vehicle of Goldman, Sachs & Co. for making privately negotiated equity investments. Since 1982, private equity funds affiliated with Goldman, Sachs & Co. have invested or committed to invest over $14 billion in over 500 companies. In total, Goldman, Sachs & Co. has raised approximately $28 billion for equity and mezzanine investments in corporate and real estate opportunities worldwide. The current GS Capital Partners fund and its family of funds was formed in July 2000 with total committed capital of $5.25 billion, $1.6 billion of which was committed by Goldman, Sachs & Co. and its employees, with the remainder committed by institutional and individual investors.

Ownership Structure

The chart below summarizes our ownership and corporate structure.


(1)	The guarantors of the notes also guarantee our senior credit facilities on a senior secured basis. Certain U.S. subsidiaries do not provide guarantees of Nalco Company's indebtedness.

(2)

The revolving credit facility provides for borrowings of up to $250.0 million. As of June 30, 2004, we had no outstanding borrowings under the revolving credit facility. As of June 30, 2004, $34.7 million of standby letters of credit were outstanding under the revolving credit facility. $100.0 million of the revolving credit facility can be made available for borrowings by certain non-U.S. subsidiaries in euros.


(3)	As of June 30, 2004, $1,410.0 million of term loan borrowings were outstanding under our senior credit facilities, including the dollar equivalent of €64.2 million of term loan A borrowings. On June 25, 2004, we repaid $92.0 million of term loan borrowings with proceeds from our new receivables facility.


(4)	Includes the dollar notes and the U.S. dollar equivalent of the euro notes.

(5)

On June 25, 2004 Nalco Company entered into a receivables facility that provides up to $100 million in funding from a commercial paper conduit sponsored by one of the lenders under the senior credit facility. At closing, we received $92.0 million of proceeds, which we used to repay term loans under the senior credit facilities. As of June 30, 2004, Nalco Company had $92.0 million of borrowings outstanding under the receivables facility.

USE OF PROCEEDS

This prospectus is delivered in connection with the sale of notes by Goldman, Sachs & Co. in market-making transactions. We will not receive any of the proceeds from such transaction.

CAPITALIZATION

The following table sets forth our capitalization as of June 30, 2004. The information in this table should be read in conjunction with "The Acquisition," "Unaudited Pro Forma Financial Information," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the consolidated and combined financial statements of Nalco Holdings included elsewhere in this prospectus.


	June 30, 2004
	(unaudited) (dollars in millions)
Cash and cash equivalents	$	97.2
Debt:
Senior credit facilities:
Revolving credit facility⁽¹⁾	$	—
Term loan A facility⁽²⁾		224.0
Term loan B facility		1,186.0
Senior notes⁽³⁾		908.2
Senior subordinated notes⁽³⁾		708.2
Receivables facility⁽⁴⁾		92.0
Other debt⁽⁵⁾		48.0
Total debt		3,166.4
Sponsors' equity⁽⁶⁾:		909.6
Total capitalization	$	4,076.0

(1)

The revolving credit facility provides for borrowings of up to $250.0 million. As of June 30, 2004, $34.7 million of standby letters of credit were outstanding under the revolving credit facility. $100 million of the revolving credit facility can be made available for borrowings by certain non-U.S. subsidiaries in euros. There were no borrowings under the revolving credit facility at the closing of the Transactions and there were no borrowings outstanding under the revolving credit facility as of June 30, 2004.


(2)	Includes the U.S. dollar equivalent of €64.2 million of term loan A borrowings.


(3)	Includes the U.S. dollar equivalent of the euro notes.

(4)


(5)	Includes $27.8 million aggregate principal amount of 6¼% notes due 2008 issued by Nalco Chemical Company (which is now known as Nalco Company), $4.3 million of indebtedness of certain non-U.S. subsidiaries and $15.9 million of short-term bank overdrafts.

(6)

Equity contributed at the date of closing consisted of an indirect cash equity contribution of $369.1 million from each of Blackstone and Apollo, $253.7 million from GSCP and $10 million from Dr. William H. Joyce, Chairman and Chief Executive Officer. During the six months ended June 30, 2004, we received additional capital contributions of $9.8 million from our direct parent company, Nalco Finance Holdings LLC. This resulted from capital contributions received by our ultimate parent company, Nalco LLC, comprised of an additional equity investment of $1.2 million by Dr. William H. Joyce and $8.6 million in proceeds from the sale of equity interests to certain officers and key employees under the Nalco LLC 2004 Unit Plan.

UNAUDITED PRO FORMA FINANCIAL INFORMATION

The following unaudited pro forma financial information is based on the audited consolidated and combined financial statements of Nalco Holdings LLC and its subsidiaries and the unaudited consolidated and combined financial statements of Nalco Holdings LLC and its subsidiaries appearing elsewhere in this prospectus as adjusted to illustrate the estimated pro forma effects of the Transactions and the preliminary application of purchase accounting. The unaudited pro forma financial information should be read in conjunction with the consolidated and combined financial statements of Nalco Holdings LLC and other financial information appearing elsewhere in this prospectus, including "Management's Discussion and Analysis of Financial Condition and Results of Operations."

The unaudited pro forma statements of operations data give effect to the Transactions as if they had occurred on January 1, 2003.

The unaudited pro forma adjustments are based upon available information and certain assumptions that we believe are reasonable. We have engaged independent appraisers to assist in determining the fair values of tangible and intangible assets acquired in the Acquisition; including property, plant and equipment, purchased in-process research and development, tradenames, trademarks, developed technology and customer relationships. We have received preliminary values from the appraisers; however, the final appraisals are not yet complete. We have allocated the total purchase price to the assets and liabilities using estimates of their fair values, based on work performed to date by independent appraisers and actuaries assisting us in determining the fair value of a significant portion of these assets and liabilities, including property, plant and equipment, intangible assets and pension and other post-retirement benefit (OPEB) assets and liabilities. Thus, we have not yet completed the allocation of purchase price and may make further adjustments to the preliminary allocations in subsequent periods.

The unaudited pro forma statements of operations data do not reflect certain charges that we have recorded following the closing of the Transactions. These charges include (1) a non-cash charge for the manufacturing profit added to inventory under purchase accounting which was charged to cost of sales as this inventory was sold in the first three quarters after closing and (2) the one-time costs related to the unused financing commitments which were charged to expense immediately upon closing of the Transactions. The unaudited pro forma statements of operations data do reflect the one-time charges for purchased in-process research and development of $122.3 million that was charged to expense in the six months ended June 30, 2004. In addition, the unaudited pro forma statements of operations data reflect the results of Ondeo Nalco South Africa. In October 2003, Ondeo Nalco Group sold its majority interest in this entity to the minority shareholder for $14.0 million. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Business Combinations, Acquisitions and Divestitures."

The unaudited pro forma financial information is for informational purposes only and is not intended to represent or be indicative of the consolidated results of operations or financial position that we would have reported had the Transactions been completed as of the dates presented, and should not be taken as representative of our future consolidated results of operations or financial position.

NALCO HOLDINGS LLC
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS DATA
FOR THE YEAR ENDED DECEMBER 31, 2003


	Predecessor Historical			Successor Historical			Transaction Adjustments			Nalco Holdings Pro Forma
	(dollars in millions)
Net sales	$	2,306.5		$	460.1		$	—		$	2,766.6

Operating Costs and Expenses:
Cost of products sold		(1,128.0	)		(250.5	)		(20.1	)(a)		(1,358.4	)
Selling, administrative and research expenses		(885.3	)		(173.4	)		(9.7	)(b)		(1,049.0	)
Impairment of goodwill		(244.4	)		—			—			(244.4	)
Amortization of intangible assets		(68.9	)		(15.4	)		9.2	(c)		(93.5	)
Business optimization expenses		(20.3	)		(0.8	)		—			(21.1	)
Operating expenses		(2,346.9	)		(440.1	)		(20.6	)		(2,766.4	)

Operating earnings (loss)		(40.4	)		20.0			20.6			0.2
Other income (expense), net		(19.3	)		(3.5	)		2.9	(d)		(19.9	)
Interest income		7.1			0.6			9.2	(e)		16.9
Interest expense		(32.7	)		(49.6	)		(127.1)	(f)		(209.4	)
Earnings (loss) before income taxes		(85.3	)		(32.5	)		(94.4	)		(212.2	)

Income tax (provision) benefit		(68.7	)		8.3			39.4	(g)		(21.0	)
Minority interests		(4.2	)		0.1			—			(4.1	)
Net income (loss)	$	(158.2	)	$	(24.1	)	$	(55.0	)	$	(237.3	)


	See accompanying notes to unaudited pro forma statement of operations data.

NALCO HOLDINGS LLC
NOTES TO UNAUDITED PRO FORMA STATEMENT OF OPERATIONS


(a)	Reflects the net adjustment to cost of products sold resulting from non-recurring adjustments to inventory value and increased depreciation costs resulting from purchase accounting as follows (in millions):



	Year Ended December 31, 2003
Inventory step-up (1)	$	21.2
Depreciation expense (2)		(1.1	)
Net adjustment to cost of products sold	$	20.1


	(1)	Reflects the $21.2 million ($13.1 million after tax) one-time non-cash charge to cost of sales that we incurred as a portion of the capitalized manufacturing profit added to inventory under purchase accounting and was sold in the period November 4 to December 31, 2003.


	(2)	Represents the increase in depreciation expense for the year ended December 31, 2003 from our preliminary allocation of purchase price to property, plant and equipment acquired based on preliminary independent appraisals as follows (in millions):



	Cost of Products Sold			Selling, Administrative and Research Expenses			Total
Pro forma depreciation	$	70.6		$	43.9		$	114.5
Less historical depreciation		(69.5	)		(54.8	)		(124.3	)
Pro forma adjustment	$	1.1		$	(10.9	)	$	(9.8	)

Buildings are depreciated over estimated average remaining useful lives of 20 years, machinery and equipment over estimated average remaining useful lives of 8 years and computer software over estimated average remaining useful lives of 2 years.


(b)	Reflects the net adjustment to selling, administrative and research expenses for the sublease that we entered into with Suez in November 2003, decreased depreciation and pensions and other postretirement benefits (OPEB) expenses resulting from purchase accounting, and the elimination of charges to Suez as follows (in millions):



	Year Ended December 31, 2003
Sublease rent expense (1)	$	(8.7	)
Depreciation expense (2)		10.9
Pension and OPEB expense reduction (3)		7.9
Charges to Suez (4)		(0.4	)
Net adjustment to selling, administrative and research expenses	$	9.7


	(1)	In December 2002, we entered into a sale-leaseback of our Naperville, Illinois headquarters and research facility that was treated as a financing lease for accounting purposes. Concurrent with the Acquisition, on November 4, 2003, we assigned the lease to another Suez subsidiary that subleased the property back to us. We account for the sublease as an operating lease. This adjustment represents the increase in rent expense that we would have incurred had the sublease of our Naperville, Illinois headquarters and research facility been in place at January 1, 2003.


	(2)	Represents the decrease in depreciation expense from our preliminary allocation of purchase price to the property, plant and equipment acquired based on preliminary independent appraisals. See note (a)(2) above.


	(3)	Reflects the decrease to pension and other postretirement benefits (OPEB) expense resulting from the elimination of amortization of unrecognized actuarial losses, prior service costs and transition obligations and assets under purchase accounting. See note 15 to the audited consolidated and combined financial statements of Nalco Holdings LLC and Subsidiaries for the year ended December 31, 2003.


	(4)	Represents amounts charged to Suez and its affiliates for tax planning and compliance and treasury administration in North America that reduced our administrative expenses on a historical basis. These fees were terminated as a result of the Transactions.


(c)	Represents the increase in amortization expense from our preliminary allocation of purchase price to the intangible assets acquired based on preliminary independent appraisals.


(d)	Represents $2.9 million of management fees that Suez and its affiliates charged to us on a historical basis for general corporate overhead. These fees were terminated as a result of the Transactions.

(e)

We are currently obligated to make contributions pursuant to a contribution agreement between us and the Northern Trust Company, dated as of November 2, 1999. Contributions that we make to our Profit Sharing and Savings Plan satisfy these contribution obligations. The contribution agreement contains a change of control provision that would have been triggered by the Acquisition. Suez executed a guarantee in favor of the trustee of the trust so that the contributions under the contribution agreement were not accelerated. As of the closing of the Acquisition, Suez executed a reimbursement agreement with us that provides that Suez will reimburse us for all profit sharing and 401(k) matching contributions that we or one of our affiliates makes to our Profit Sharing and Savings Plan trust that satisfy its obligations under the contribution agreement. The reimbursement agreement further provides that if the credit rating of Suez falls below a level that is acceptable to the trustee of the trust, Suez or one of its affiliates will provide a letter of credit or other additional financial support acceptable to the trustee in addition to the guarantee. At December 31, 2003 the present value of the contribution obligations receivable was $112.7 million using the 8.5% discount rate specified in the contribution agreement. This adjustment represents interest income on the reimbursement receivable from Suez using the specified 8.5% rate.


(f)	Reflects pro forma interest expense resulting from the Transactions as follows (in millions):



	Year Ended December 31, 2003
Senior credit facility (1)	$	60.2
Senior notes (2)		71.1
Senior subordinated notes (2)		64.0
Assumed debt (3)		2.7
Commitment fees (4)		1.2
Total cash interest expense		199.2

Amortization of capitalized debt issuance costs (5)		10.2

Total pro forma interest expense		209.4
Less historical interest expense - Predecessor		(32.7	)
Less historical interest expense - Successor		(49.6	)
Net adjustment to interest expense	$	127.1


	(1)	Reflects pro forma cash interest expense on our new senior credit facility at an assumed interest rate of LIBOR (assumed 1.20%) plus 2.5%.


	(2)	Reflects pro forma interest expense on the dollar and euro senior notes at a fixed interest rate of 7.75%, on the dollar senior subordinated notes at a fixed interest rate of 8.875% and on the euro senior subordinated notes at a fixed interest rate of 9.0%.


	(3)	Reflects pro forma cash interest expense on our $27.8 million aggregate principal amount of 6¼% notes using a fixed interest rate of 6.25% and on $25.3 million of other assumed debt (including bank overdrafts) of non-U.S. subsidiaries at an assumed blended rate of 3.8%.


	(4)	Reflects commitment fees of 0.50% on an assumed $235.0 million average undrawn balance under the revolving credit facility.


	(5)	Reflects non-cash amortization of capitalized debt issuance costs over the term of the related facility (six years for the revolving credit facility and term loan A facility, seven years for term loan B facility, eight years for the senior notes and ten years for the senior subordinated notes).


		A 1/8% change in interest rates would have an approximately $2 million effect on pro forma interest expense under the senior credit facility:


(g)	Represents the tax effect of the taxable pro forma adjustments, calculated at a 38% effective statutory rate.

Pro Forma Ratio of Earnings to Fixed Charges

For purposes of calculating the pro forma ratio of earnings to fixed charges, earnings represents pro forma earnings from continuing operations before income taxes, less income from equity method investments and capitalized interest, plus minority interest expense, income distributions from equity method investments, amortization of capitalized interest and fixed charges. Fixed charges include interest expense (including amortization of debt issuance costs), capitalized interest, and the portion of operating rental expense which management believes is representative of the interest component of rent expense. Primarily as a result of the goodwill impairment charge of $244.4 million taken by our Predecessor in the period January 1, 2003 to November 3, 2003, pro forma earnings were insufficient to cover fixed charges by $214.4 million for the year ended December 31, 2003.

Pro Forma EBITDA

EBITDA is not a recognized term under GAAP and does not purport to be an alternative to net income as a measure of operating performance or to cash flows from operating activities as a measure of liquidity. Additionally, EBITDA is not intended to be a measure of free cash flow for management's discretionary use, as it does not consider certain cash requirements such as interest payments, tax payments and debt service requirements. Because not all companies use identical calculations, this presentation of EBITDA may not be comparable to other similarly titled measures of other companies.

EBITDA

EBITDA, a measure used by management to measure operating performance, is defined as net income plus interest, taxes, depreciation and amortization. Pro forma EBITDA is calculated as follows (in millions):



Pro forma net (loss)	$	(237.3	)
Interest expense, net		192.5
Income taxes		21.0
Depreciation		114.5
Amortization		93.5
Pro forma EBITDA	$	184.2

SELECTED HISTORICAL FINANCIAL DATA

The Successor financial statements include the consolidated audited financial statements of Nalco Holdings LLC and its subsidiaries and the unaudited consolidated and combined financial statements of Nalco Holdings LLC and its subsidiaries.

The Predecessor financial statements include the combined financial statements of Ondeo Nalco Group, which include the consolidated financial statements of Ondeo Nalco Company and the combined financial statements of the Nalco International SAS Subsidiaries.

The following selected historical financial data has been derived from the unaudited consolidated and combined financial statements of Nalco Holdings LLC and its subsidiaries as of and for the six months ended June 30, 2004 and 2003 and the audited consolidated and combined financial statements of Nalco Holdings LLC and its subsidiaries as of December 31, 2003 and 2002 and for the periods from January 1, 2001 to December 31, 2001, January 1, 2002 to December 31, 2002, January 1, 2003 to November 3, 2003 and November 4, 2003 to December 31, 2003 that (other than in the case of the unaudited consolidated and combined financial statements as of June 30, 2003) are included elsewhere in this prospectus. The selected historical financial data as of December 31, 2001 and as of and for the years ended December 31, 2000 and December 31, 1999 has been derived from our unaudited internal financial reporting to Suez.

You should read the following data in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the consolidated and combined financial statements included elsewhere in this prospectus.


	Predecessor															Successor			Predecessor			Successor
	Year Ended December 31,												January 1 through November 3, 2003			November 4, 2003 through December 31, 2003			Six Months Ended June 30, 2003			Six Months Ended June 30, 2004
	1999 (1)			2000 (1)			2001			2002			January 1 through November 3, 2003			November 4, 2003 through December 31, 2003			Six Months Ended June 30, 2003			Six Months Ended June 30, 2004
	(unaudited)			(unaudited)															(unaudited)			(unaudited)
	(dollars in millions)
Statement of Operations Data:
Net sales	$	601.2		$	2,147.1		$	2,619.7		$	2,644.3		$	2,306.5		$	460.1		$	1,352.7		$	1,453.7
Operating costs and expenses:
Cost of product sold								1,283.8			1,281.8			1,128.0			250.5			654.9			733.7
Selling, administrative, and research expenses								1,022.7			973.6			885.3			173.4			531.1			527.8
Impairment of goodwill (2)								—			—			244.4			—			244.4			—
Amortization of intangible assets (2)								171.3			89.2			68.9			15.4			41.3			49.1
Purchased in-process research and development								1.3			—			—			—			—			122.3
Business optimization expenses (3)								172.3			32.8			20.3			0.8			9.7			—
Operating expenses		868.4			2,156.5			2,651.4			2,377.4			2,346.9			440.1			1,481.4			1,432.9
Operating earnings (loss)		(267.2	)		(9.4	)		(31.7	)		266.9			(40.4	)		20.0			(128.7	)		20.8
Other income (expense), net (4)								(15.1	)		0.7			(19.3	)		(3.5	)		(0.2	)		(5.3	)
Interest income								8.8			7.8			7.1			0.6			4.3			5.4
Interest expense								(44.4	)		(38.5	)		(32.7	)		(49.6	)		(19.5	)		(106.0	)
Earnings (loss) before income taxes								(82.4	)		236.9			(85.3	)		(32.5	)		(144.1	)		(85.1	)
Income tax (provision) benefit								1.8			(105.2	)		(68.7	)		8.3			(40.6	)		(19.6	)
Minority interests								(3.4	)		(3.3	)		(4.2	)		0.1			(3.0	)		(1.9	)
Net income (loss)	$	(213.6	)	$	(58.4	)	$	(84.0	)	$	128.4		$	(158.2	)	$	(24.1	)	$	(187.7	)	$	(106.6	)
Statement of Cash Flows Data:
Net cash provided by (used for):
Operating activities							$	414.3		$	323.1		$	144.4		$	88.7		$	129.6		$	125.4
Investing activities								(463.5	)		(126.1	)		(12.3	)		(4,145.1	)		(79.9	)		(9.7	)
Financing activities								133.9			(232.7	)		(234.2	)		4,130.3			(18.2	)		(115.4	)

Other Financial Data (unaudited):
EBITDA (5)							$	245.7		$	488.2		$	106.8		$	54.5		$	(29.9	)	$	119.6
Non-cash charges included in EBITDA (6)								33.5			33.6			271.2			23.9			262.1			153.0
Unusual items included in EBITDA (7)								9.9			(33.3	)		48.5			6.3			8.4			4.5
Capital expenditures, net (8)								114.8			108.3			85.6			15.6			40.4			34.9
Depreciation								124.6			134.7			101.8			22.5			60.7			56.9
Amortization								171.3			89.2			68.9			15.4			41.3			49.1


	Predecessor								Successor		Predecessor		Successor
	As of December 31,								As of December 31, 2003		As of June 30, 2003		As of June 30, 2004
	1999		2000		2001		2002		As of December 31, 2003		As of June 30, 2003		As of June 30, 2004
	(unaudited)		(unaudited)								(unaudited)		(unaudited)
	(dollars in millions)
Balance Sheet Data:
Cash and cash equivalents	$	80.0	$	71.6	$	146.0	$	120.5	$	100.0	$	159.7	$	97.2
Working capital (9)		298.6		193.8		208.0		240.8		398.7		326.7		389.2
Property, plant and equipment, net (10)		573.0		821.6		856.2		823.2		865.6		815.7		831.5
Total assets		5,529.3		6,406.6		6,512.2		6,486.4		6,163.8		6,262.1		5,851.8
Total debt (including lease obligation and current portion of long-term debt) (10)(11)		500.0		526.1		859.2		776.2		3,314.7		736.0		3,166.4
Total stockholders' investment		4,264.0		4,011.8		3,734.4		3,689.2		1,069.0		3,558.8		909.6
Off balance sheet receivables facility (11)		—		—		101.0		87.0		—		—		—


(1)	Pursuant to a tender offer completed on November 9, 1999, Suez, through its subsidiary, H2O Acquisition Co., or H2O, acquired virtually all of the outstanding shares of Nalco Chemical Company. In June 1999, Degremont, a Suez subsidiary, acquired Calgon Corporation. The acquisitions are included in Predecessor's operations from the dates of acquisition. Results from


	2000 forward reflect the Suez push down of purchase accounting to Nalco Chemical Company. In March 2001, Nalco Chemical Company's name was changed to Ondeo Nalco Company. Because Predecessor reported to Suez in French GAAP in 1999 and 2000, combined US GAAP financial information in a format similar to 2001-2003 is not available.

(2)

We adopted Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets, as of January 1, 2002. Under SFAS No. 142, goodwill and intangible assets deemed to have indefinite lives are no longer amortized but are subject to annual impairment tests. We completed our transitional goodwill impairment evaluation and our first annual impairment evaluation in 2002 and determined that goodwill was not impaired at December 31, 2002. In the six-month period ended June 30, 2003, we took a goodwill impairment charge of $244.4 million based on the price paid in the Acquisition. See note 7 to the audited consolidated and combined financial statements of Nalco Holdings LLC included elsewhere in this prospectus.

(3)

(4)

Other income (expense), net consists of monitoring fees paid to affiliates of the Sponsors, management fees paid to Suez, capital gains/(losses) on the disposals of assets, franchise taxes, equity earnings of unconsolidated subsidiaries, recognized gains and losses on foreign currency transactions and other miscellaneous income (expense). See note 20 to the audited consolidated and combined financial statements of Nalco Holdings LLC and "Management's Discussion and Analysis of Financial Condition and Results of Operations."


(5)	EBITDA, a measure used by management to measure operating performance, is defined as net income plus interest, taxes, depreciation and amortization.


	The following is a reconciliation of net income (loss) to EBITDA:


	Predecessor								Successor			Predecessor			Successor
	Year Ended December 31,					January 1, 2003 through November 3, 2003			November 4, 2003 through December 31, 2003			Six Months Ended June 30, 2003			Six Months Ended June 30, 2004
	2001			2002		January 1, 2003 through November 3, 2003			November 4, 2003 through December 31, 2003			Six Months Ended June 30, 2003			Six Months Ended June 30, 2004
												(unaudited)			(unaudited)
	(dollars in millions)
Net income (loss)	$	(84.0	)	$	128.4	$	(158.2	)	$	(24.1	)	$	(187.7	)	$	(106.6	)
Interest expense, net		35.6			30.7		25.6			49.0			15.2			100.6
Income tax (provision) benefit		(1.8	)		105.2		68.7			(8.3	)		40.6			19.6
Depreciation		124.6			134.7		101.8			22.5			60.7			56.9
Amortization of intangible assets		171.3			89.2		68.9			15.4			41.3			49.1
EBITDA	$	245.7		$	488.2	$	106.8		$	54.5		$	(29.9	)	$	119.6


(6)	EBITDA, as defined above, was reduced by the following non-cash charges, each of which is further discussed below:



	Predecessor						Successor			Predecessor		Successor
	Year Ended December 31,				January 1, 2003 through November 3, 2003		November 4, 2003 through December 31, 2003			Six Months Ended June 30, 2003		Six Months Ended June 30, 2004
	2001		2002		January 1, 2003 through November 3, 2003		November 4, 2003 through December 31, 2003			Six Months Ended June 30, 2003		Six Months Ended June 30, 2004
										(unaudited)		(unaudited)
	(dollars in millions)
Impairment of goodwill	$	—	$	—	$	244.4	$	—		$	244.4	$	—
Purchased in-process research and development		1.3		—		—		—			—		122.3
Inventory step-up		—		—		—		21.2			—		14.5
Asset write-offs		17.8		18.3		4.2		—			3.9		—
Profit sharing and 401(k) expense funded by Suez		12.0		12.1		20.0		4.0			11.7		16.0
Other		2.4		3.2		2.6		(1.3	)		2.1		0.2
	$	33.5	$	33.6	$	271.2	$	23.9		$	262.1	$	153.0

Impairment of Goodwill


	Goodwill impairment of $244.4 million was recorded by the Predecessor in accordance with Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets. Goodwill was evaluated for impairment based on the purchase price for the Predecessor.

In-process Research and Development

Inventory Step Up


	As a result of purchase accounting for the Acquisition, we wrote up our inventory to fair value and subsequently charged the write up to cost of sales as the inventory was sold. The Successor statements of operations reflect the inventory step-up in cost of products sold.

Asset Write-Offs


	In conjunction with our integration and process improvement initiatives, we wrote off assets consisting primarily of $17.8 million of PORTA-FEED stainless steel containers in 2001 as a result of a physical inventory, $9.6 million of assets related to obsolete software systems in 2002 and a $5.0 million investment in start up ventures in 2003.

Profit Sharing and 401(k) Expense Funded by Suez


	In conjunction with the Acquisition, we entered into an agreement with Suez whereby Suez will reimburse us for certain profit-sharing and 401(k) matching contributions made by us to the Profit-Sharing Trust. See note 9 to the audited consolidated and combined financial statements of Nalco Holdings LLC included elsewhere in this prospectus.

Other

Other non-cash charges include the non-cash impact on earnings of our equity investments and minority interests. Successor non-cash charges includes the non-cash portion of rent expense under the sublease that we entered into with Suez in conjunction with the Acquisition. See note 14 to the audited consolidated and combined financial statements of Nalco Holdings LLC included elsewhere in this prospectus.


(7)	In addition to incurring non-cash charges and business optimization expenses, our EBITDA was impacted by the following unusual (income) expenses, each of which is further discussed below:


	Predecessor							Successor			Predecessor			Successor
	Year Ended December 31,					January 1, 2003 through November 3, 2003		November 4, 2003 through December 31, 2003			Six Months Ended June 30, 2003			Six Months Ended June 30, 2004
	2001		2002			January 1, 2003 through November 3, 2003		November 4, 2003 through December 31, 2003			Six Months Ended June 30, 2003			Six Months Ended June 30, 2004
											(unaudited)			(unaudited)
	(dollars in millions)
Pension and OPEB settlement and curtailment	$	0.4	$	(47.6	)	$	7.9	$	(0.1	)	$	1.6		$	—
Loss (gain) on sales, net of expenses		0.9		(7.8	)		12.4		1.1			(0.1	)		—
Other unusual items		6.6		19.4			25.7		5.3			5.6			4.5
Suez management fees, net		2.0		2.7			2.5		—			1.3			—
	$	9.9	$	(33.3	)	$	48.5	$	6.3		$	8.4		$	4.5

Pension and Other Postretirement Benefits (OPEB) Settlement and Curtailment

Loss (Gain) on Sales, Net of Expenses

Other Unusual Items

Suez Management Fees, Net


	In connection with the Acquisition, agreements under which fees were paid by the Predecessor to Suez, or received from Suez, have been terminated.


(8)	Capital expenditures are net of proceeds from disposal of assets.


(9)	Working capital is defined as current assets (excluding cash and cash equivalents) less current liabilities (excluding short-term debt and current portion of long-term debt) and excluding intercompany balances and is calculated as follows:


	Predecessor						Successor			Predecessor			Successor
	As of December 31,						As of December 31, 2003			As of June 30, 2003			As of June 30, 2004
	2001			2002			As of December 31, 2003			As of June 30, 2003			As of June 30, 2004
										(unaudited)			(unaudited)
	(dollars in millions)
Current assets less current liabilities	$	(441.2	)	$	(275.0	)	$	446.8		$	(93.2	)	$	468.9
Less cash and cash equivalents		(146.0	)		(120.5	)		(100.0	)		(159.7	)		(97.2	)
Less related party receivables and payables		(33.3	)		48.4			—			29.1			—
Plus short-term debt		828.5			587.9			51.9			550.5			17.5
Working capital as defined	$	208.0		$	240.8		$	398.7		$	326.7		$	389.2

(10)

(11)

Our total debt does not include our historical off balance sheet receivables facility. In December 2001, Ondeo Nalco Company entered into an agreement that allowed it to periodically transfer undivided percentage ownership interests in a revolving pool of most of our U.S. trade receivables to a multi-seller conduit administered by an independent financial institution. The agreement was subject to renewal annually. We account for the transfer of undivided percentage ownership interest in the receivables to the conduit as sales under SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. Our loss on the sale of the undivided interests in the receivables was $1.8 million in 2002 and is included in interest expense. The undivided interest in receivables that were transferred but not ultimately sold to the conduit ("retained interest") is classified in trade accounts receivable in the balance sheet. The retained interest was $49.0 million at December 31, 2001 and $56.6 million at December 31, 2002. This program was unwound prior to closing. We treat our new receivables facility as a general financing agreement resulting in the funding and related receivables being shown as liabilities and assets, respectively, on our consolidated balance sheet and the costs associated with the receivables facility being recorded as interest expense.

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

The following discussion and analysis of our financial condition and results of operations includes periods prior to the consummation of the Transactions. Accordingly, the discussion and analysis of periods prior to the Transactions do not reflect the significant impact that the Transactions have had on us. In addition, the statements in the discussion and analysis regarding industry outlook, our expectations regarding the performance of our business and the other non-historical statements in the discussion and analysis are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described in "Risk Factors." Our actual results may differ materially from those contained in or implied by any forward-looking statements. You should read the following discussion together with the sections entitled "Risk Factors," "Unaudited Pro Forma Financial Information," "Selected Historical Financial Data" and the historical consolidated and combined financial statements of Nalco Holdings LLC and its subsidiaries included elsewhere in this prospectus.

Overview

We currently serve more than 60,000 customer locations, representing a broad range of end markets, including aerospace, paper, chemical, pharmaceutical, petroleum, steel, power, food and beverage, medium and light manufacturing, metalworking and institutions such as hospitals, universities and hotels.

Our sales come from three principal sources: the delivery of water treatment and process services; the sale of chemicals; and the sale and rental of equipment. We segregate our sales into two categories for management purposes: contract and non-contract. Contract sales can be in the form of various billing arrangements with our customers, including fixed billings, variable billings based on usage of chemicals or variable billings based on customer production. Pricing for our contract customers is bundled, combining service, chemicals, freight and equipment components. Non-contract sales are derived from sales of services, chemicals and equipment that are billed separately as such products or equipment are shipped or as services are rendered.

Our cost of product sold consists of variable and fixed components. Our variable and fixed costs approximate 84% and 16% of cost of product sold, respectively. Variable costs are proportional to volume and mix and consist principally of materials, overtime, temporary labor, utilities, and gas to manufacture our products. Our fixed costs are not significantly influenced by production volume, in the short term, and consist principally of administrative salaries, wages, benefits, depreciation and other facility-related costs.

Our selling, administrative and research expenses consist of costs incurred in our selling, research and marketing departments and for administrative functions necessary to run the global business such as information systems, human resources, finance, legal and tax.

Business optimization expenses consist of severance, asset write-offs, facility closing costs and other nonrecurring items related to the global integration of the Nalco/Exxon Energy Chemicals, L.P., or Nalco/Exxon, joint venture partnership formed in 1994 between Nalco Chemical Company and the Exxon Chemical division of what is now Exxon Mobil Corporation and the implementation of global cost reduction programs in the sales, marketing, manufacturing and support service functions.

Other income (expense), net consists of monitoring fees paid to the Sponsors, management fees paid to Suez, capital gains (losses) on the disposals of assets, franchise taxes, equity in earnings of unconsolidated subsidiaries, gains and losses on foreign currency transactions, and other miscellaneous income (expense).

Business Environment

Our Markets

Water treatment chemicals and services represented approximately 78% of our Industrial and Institutional Services net sales in 2003. We estimate that the 2003 global market for water treatment chemicals and services in the Institutional and Industrial Services sector was approximately $5.3 billion. Overall, Industrial and Institutional Services' water treatment market growth rates tend to track gross domestic product; however, growth rates vary by end-use segment and region.

We estimate that the global market for Energy Services was approximately $2.9 billion in 2003. The Energy Services market is divided into upstream and downstream segments. We expect that the global Energy Services market will grow at approximately 1% to 2% per year through 2007, with Latin America, Eastern Europe and Asia growing at faster rates than North America and Western Europe.

We estimate that the global market for Paper Services, including water treatment applications, was approximately $7.1 billion in 2003. We expect the global Paper Services market to grow at approximately 1%, with flat growth in North America offset by higher growth in Europe, Asia and Latin America.

We believe that select global participants such as our company will grow at a faster rate than the underlying end markets they serve as they continue to take share from smaller regional participants.

Global Exposure

We conduct business in 130 countries and are exposed to global economic and political changes that could significantly impact our profitability. Historically, however, we have not been significantly impacted by currency fluctuations on a combined global basis. Revenues and costs tend to be incurred in the same currency and therefore substantially mitigate local currency risks. Given our global reach, positive impacts in one region have tended to offset negative impacts in another region. For example, in 2003, the negative impact of the political unrest in Nigeria and the economic decline in Venezuela were offset by a strong euro. In 2002, we were impacted by the unfavorable changes in the euro to dollar exchange rate, but benefited from the currency crisis in Argentina where we increased sales due to our competitors' exit from that market. Our historical performance is not indicative of future performance; however, management is continuously focused on balancing region-specific risks with opportunities. See "—Quantitative and Qualitative Disclosures about Market Risk."

Raw Materials and Commodity Prices

No single raw material accounted for more than 3.5% of our total purchases in 2003. Our performance is not significantly impacted by market price fluctuations of raw materials and commodities we rely on, such as natural gas, propylene, ethylene and crude oil.

Seasonality

Historically, seasonality has not had a significant impact on our net sales.

Impact of the Acquisition and Related Financing Transactions

On November 4, 2003, pursuant to a Stock Purchase Agreement between Nalco Holdings LLC, a Delaware limited liability company, and Suez ("Suez") and certain of its affiliates, Nalco Holdings LLC (the "Successor") acquired the net assets of Ondeo Nalco Group (the "Predecessor"). The aggregate purchase price was $4,101.5 million in cash, after giving effect to direct costs of the Acquisition, closing date working capital and indebtedness purchase price adjustments, and a post-closing working capital and indebtedness purchase price adjustment which was agreed to by us

and Suez on March 25, 2004. The purchase price was financed by equity investments totaling $991.9 million from a consortium of private equity funds controlled by The Blackstone Group, Apollo Management, L.P., and investment partnerships affiliated with The Goldman Sachs Group, Inc.; an equity investment of $10.0 million from Dr. William H. Joyce, our Chairman and Chief Executive Officer; term loans of approximately $1,600 million; and the issuance of $665 million aggregate principal amount of 7¾% senior notes due 2011; €200 million aggregate principal amount of 7¾% senior notes due 2011, $465 million aggregate principal amount of 8 7/8% senior subordinated notes due 2013 and €200 million aggregate principal amount of 9% senior subordinated notes due 2013. As a result, our interest expense currently is, and will continue to be, higher than it was prior to the Acquisition.

The Stock Purchase Agreement provided for certain adjustments of the purchase price, including adjustments based on the closing working capital and indebtedness (as both are defined in the Stock Purchase Agreement) of Ondeo Nalco Group at the date of the Acquisition. On March 25, 2004, the company and Suez agreed to a $25.6 million working capital adjustment payable to the company plus interest. This adjustment has not been reflected in the consolidated financial statements as of December 31, 2003. We recorded the purchase price adjustment in 2004 by decreasing goodwill.

We accounted for the Acquisition using the purchase method of accounting and, accordingly, the Acquisition resulted in a new basis of accounting for us. We have allocated the purchase price on the basis of our current estimate of the fair value of the underlying assets acquired and liabilities assumed. We retained third party professionals to assist in the determination of a fair value of our pension and post retirement obligations. We have also engaged independent appraisers to assist in determining the fair values of property, plant and equipment and intangible assets acquired, including purchased in-process research and development, tradenames, trademarks, developed technology and customer relationships. We have received preliminary values from the appraisers; however, the final appraisals are not yet complete. Thus, we have not yet completed our allocation of purchase price and may make further adjustments to the preliminary allocations in subsequent periods. We expect to receive final valuations from the independent appraisals and complete our purchase accounting in the second half of 2004. The excess of the total purchase price over the estimated fair value of the net assets acquired at closing has been allocated to goodwill, and this indefinite lived asset is subject to annual impairment review. Goodwill in the transaction, based on the preliminary allocation of the purchase price, totaled $2,273.1 million. An allocation has been made for the fair value of research and development activities that, as of the date of the Acquisition, had commenced, but had not yet been completed, and have no alternative future use (in-process research and development). In conjunction with the independent appraisers, we have estimated the fair value of in-process research and development and recorded a one-time charge of $122.3 million during the six months ended June 30, 2004 as a result of these preliminary purchase accounting entries related to the Acquisition.

In conjunction with the Acquisition, we are in the process of formulating a plan to exit or restructure certain activities. We have not completed this analysis, but have recorded initial liabilities of $31.6 million, primarily for employee severance and related costs in connection with our preliminary plan to exit or restructure certain activities. As of June 30, 2004, $23.1 million has been charged against this accrual. We expect that we will complete these initial activities by the end of 2004. We also expect to finalize any further plans to exit or restructure activities in 2004, at which time we may record additional liabilities related to these plans.

Business Combinations, Acquisitions and Divestitures

Effective January 1, 2001 Nalco/Exxon redeemed Exxon's interests in the joint venture. As a result of the redemption, Ondeo Nalco Company's interest in Nalco/Exxon increased from 60% to 100%. The purchase price of the acquisition, net of cash acquired, was approximately $359.9 million. Prior to the 40% redemption, Nalco/Exxon was accounted for using the equity method of accounting. We now operate Nalco/Exxon as part of our Energy Services division, and consolidate it in our financial statements. In 2001, Nalco/Exxon's annual sales were approximately $551.3 million.

Since 2001, in line with our strategic plan and investment criteria, we have acquired 14 businesses and disposed of three businesses. Our investment criteria include strategic fit, profitability, estimated

return on investment and our ability to integrate the acquired businesses into our organization in order to maximize efficiencies and costs. These 14 recently acquired businesses, net of the three divestitures, had approximately $39.4 million of annual sales based upon the year of acquisition and divestiture.

In October 2003, we sold our majority (50% plus 1 share) interest in our South African subsidiary to the minority shareholder, resulting in a net loss on the sale of $8.6 million.

Business Optimization Expenses

We incurred significant, nonrecurring business optimization expenses as a result of the global integration of our businesses and the implementation of global cost reduction programs in sales, marketing, manufacturing and support service functions, as follows:


	Predecessor						Successor
	Year Ended December 31,				January 1, 2003 through November 3, 2003		November 4, 2003 through December 31, 2003
	2001		2002		January 1, 2003 through November 3, 2003		November 4, 2003 through December 31, 2003
	(dollars in millions)
2002 business realignment	$	—	$	8.9	$	18.8	$	0.8
Nalco/Exxon integration		1.8		7.7		1.5		—
2001 cost reduction and efficiency improvement		33.0		10.6		—		—
Integration – Nalco Chemical Company, Aquazur and Calgon		62.0		5.6		—		—
North American manufacturing process		75.5		—		—		—
	$	172.3	$	32.8	$	20.3	$	0.8

Nalco Chemical Company, Aquazur and Calgon Integration

In November 1999, Suez acquired Nalco Chemical Company and combined Nalco Chemical Company with Aquazur and Calgon, two other subsidiaries of Suez and historical competitors of Nalco Chemical Company. In June 1999, Degremont, a Suez subsidiary, acquired Calgon Corporation for $425.0 million. Aquazur was developed over a ten-year period through organic growth and acquisitions in Europe. At the time of Nalco Chemical Company's acquisition by Suez, Nalco Chemical Company had annual sales of $1,606.0 million.

Beginning in 2000, we implemented a strategic plan to integrate the global operations of Nalco Chemical Company, Calgon and Aquazur resulting in significant nonrecurring business optimization expenses. This integration entailed the combination and realignment of the manufacturing, selling, research and administrative support functions of the three businesses to achieve optimum efficiencies and synergies. Charges incurred consisted of consulting and other outside services, certain severance expenses, retention payments, training, travel, advertising, the integration of data processing and information systems and facility closure costs. Activities related to the integration were completed at the end of 2002.

2001 Headcount Reduction

We also implemented a plan during the second half of 2001 to reduce costs and improve efficiency throughout our organization and eliminated approximately 200 positions at Ondeo Nalco Company. Charges incurred included severance and outside consulting costs.

Nalco/Exxon Integration

As a result of acquiring Exxon's interest in the Nalco/Exxon joint venture in 2001, we incurred costs related to integrating the operations of the joint venture with our other operations, including severance, legal and tax fees.

Sales and Marketing Integration

During 2002, we realigned our support for the petroleum, petrochemical, pulp and paper industries to provide integrated process improvement and water treatment sales and service to key customers, primarily in North America. As a result, we incurred expenses for severance, outplacement, and employee relocations for about 100 personnel.

North American Manufacturing Optimization Process

In March 2001, we announced a plan to optimize our manufacturing operations in North America. Among the more significant actions taken as a result of this plan, we shifted a significant amount of production from our Clearing plant in Chicago, Illinois to our Garyville, Louisiana and Ellwood City, Pennsylvania plants. We closed plants in Bayport, Texas; Greer, South Carolina; Jonesboro, Georgia; and Paulsboro, New Jersey. Nearly 170 positions were eliminated as a result of these actions. Charges incurred as a result of plan implementation included asset write-offs, provisions for asset impairments, severance and other related costs. Except for selling the properties that were closed, the plan to optimize North American manufacturing operations was completed as of the end of 2001.

Critical Accounting Policies and Estimates

Revenue Recognition

Non-Contract Billings. We use a variety of shipping terms that determine the passage of title for our products. We have a policy of monitoring delivery terms and cut-off dates to ensure that revenue is properly recorded. In specific cases, when title passage is based upon ultimate receipt by the customer (FOB destination) using a third-party carrier, it is necessary to estimate the delivery time and the corresponding impact on revenue recognition.

We issue credit memos for a variety of reasons, including product returns, billing and price adjustments. The credit memos are often related to a previous billing event and may impact the amount of revenue recorded. We monitor credit memo activity levels and include an estimate as a component of the revenue recognition reserve.

Contract Billings. Contract billings are also reviewed as part of the revenue recognition process to align the periodic billings with services performed.

Impairment of Long-Lived Assets Other Than Intangibles

We conduct periodic reviews for idle and under-utilized equipment, and review business plans for possible impairment implications. PORTA-FEED stainless steel containers, utilized to ship chemicals, represent approximately 10% of our property, plant and equipment and are managed globally to optimize the delivery of chemicals to customer and company sites around the world. Due to their high mobility, there is a risk that PORTA-FEEDs could be damaged or lost in transit. We perform continuous cycle counts of our PORTA-FEEDs and when such counts are inconsistent with our tracking system, we investigate the discrepancy in order to locate the container. If the PORTA-FEED is not found, we write off the asset immediately.

Goodwill and Other Intangible Assets

Carrying values of goodwill, customer relationships, trademarks, trade names, patents, developed technology and other intangible assets are reviewed periodically for possible impairment using a discounted cash flow approach. The estimates and assumptions we use are consistent with the business plans and estimates we use to manage operations and to make acquisition and divestiture decisions. The use of different assumptions would increase or decrease the estimated value of future cash flows and would have increased or decreased any impairment charge taken. Future outcomes may also differ. If we fail to achieve estimated volume and pricing targets, experience unfavorable market conditions or achieve results that differ from our estimates, then revenue and cost forecasts may not be achieved, and we may be required to recognize additional impairment charges.

Recoverability of Capitalized Software Costs

We capitalize qualifying costs incurred in the acquisition and development of software for internal use, including the costs of the software, materials, consultants, interest, and payroll and payroll-related

costs for employees dedicated to the development. We must use our judgment in determining whether the direct costs of materials and services consumed in developing or obtaining internal-use computer software and an employee's time and travel expenses directly associated with developing software are recoverable and should be capitalized. We base our determination on the nature and the extent of the activity that the employee is performing. A significant portion of our capitalized software costs relates to our SAP implementation and is subject to our expectation that the acquired and developed software will be completed and placed in service as anticipated.

Pensions

Accounting for pensions involves the selection of a discount rate and an expected rate of return that we apply to a market-related value of plan assets. This methodology generally reduces the volatility of pension expense that would have otherwise resulted from changes in the value of the pension plan assets and pension liability discount rates. In estimating the discount rate, we look to rates of return on high quality, fixed-income investments that are expected to be available through the maturity dates of the pension benefits and receive one of the two highest ratings given by a recognized ratings agency, and we review the assumption with our actuary.

The assets in the principal domestic pension plan are diversified across equity and fixed income investments. The investment portfolio has target allocations of approximately 64% equity and 36% fixed income. Other assets such as real estate, hedge funds and private equity may be used judiciously to enhance portfolio returns and diversification.

The expected long-term rate of return is established using historical market data for each asset class as well as the target allocation. Historical markets are analyzed and long-term historical relationships between equity and fixed income investments are preserved consistent with the widely accepted capital market principle that assets with higher volatility will generate a greater return over the long run. Active management is employed in most asset classes, which also contributes to the return assumption. The total weighted-average return on each asset class supports our long-term expected rate of return assumption.

We review our long-term rate of return assumptions annually through comparison of our historical actual rates of return with our expectations, consultation with our actuaries regarding the assumptions used by other large companies and consultation with our investment managers regarding their expectations for future returns. While we believe our assumptions of future returns are reasonable and appropriate, significant differences in our actual experience or significant changes in our assumptions may materially affect our pension obligations and our future pension expense. The expected long-term rate of return is applied to a calculated value of plan assets, which recognizes changes in the fair value of plan assets in a systematic manner over three years in determining pension expense.

The net effect of changes in actuarial assumptions and experience has been deferred historically. As a result of the Acquisition and the application of purchase accounting, all unamortized deferrals were eliminated.


	Predecessor		Successor					Attributable to Changes in the Following Factors
	Six Months Ended							Attributable to Changes in the Following Factors
(dollars in millions)	June 30, 2003		June 30, 2004		% Change			Currency Translation			Acquisitions/ Divestitures			Organic
Industrial & Institutional Services	$	580.4	$	637.3		9.8	%		4.7	%		—			5.1	%
Energy Services		350.3		392.1		11.9	%		4.2	%		(0.4	)%		8.1	%
Paper Services		277.0		295.8		6.8	%		4.0	%		3.2	%		(0.4	)%
Other		145.0		128.5		(11.4	)%		5.2	%		(12.6	)%		(4.0	)%
Net sales	$	1,352.7	$	1,453.7		7.5	%		4.5	%		(0.8	)%		3.8	%

Nalco CO S-1