The company has announced a net loss for fourth quarter of 2008 of $350.7 million or $7.39 per basic share on net sales of $698 million. Included in the quarter results is a goodwill impairment charge of $358.3 million after-tax or $7.55 per basic share and several other special items that total net $2.7 million after-tax income or $0.06 per basic share and are outlined further in this release. Excluding the goodwill impairment charge and these special items, net earnings were $4.9 million or $0.10 per diluted share.

Net earnings for the fourth quarter of 2007 were $47.6 million or $0.97 per diluted share on net sales of $901 million. Included in the 2007 quarter were several special items that totaled a net $0.5 million charge after-tax or $0.01 per diluted share. Excluding these special items, net earnings were $47.1 million or $0.96 per diluted share.

Shane Fleming, chairman, president and chief executive officer commented, “We experienced a significant decline in sales of our chemical products caused by the unprecedented downturn in the automotive, construction and general industrial markets made worse by destocking actions taken by many of our customers at year-end. Sales volumes declined in all regions and most of our chemical plants ran at significantly lower operating rates than the prior year period. Engineered Materials performed well in a difficult quarter. Selling volumes were down principally due to the strike at Boeing, although this was partially offset by improved sales in other commercial transport sectors. As previously announced, we have initiated actions to aggressively reduce our costs including consolidation of manufacturing facilities, reduction of excess manufacturing capacity, working capital reduction and the migration to regional shared services among others and will continue these efforts in light of our outlook for a continuing decline in demand.”

Cytec Surface specialties sales decreased 30% to $281 million; operating loss of $404.8 million.

In Cytec Surface Specialties, overall selling volumes were down by 32%, with depressed demand in industrial coatings markets, particularly automotive and construction, affecting all product lines. Selling prices increased by 4% and the impact of exchange rates decreased sales by 2%.

The operating loss includes a goodwill impairment charge of $385.0 million and a charge of $1.4 million of accelerated depreciation related to the planned exit of Radcure manufacturing at our Pampa, Texas site. Excluding these special items Surface Specialties had an operating loss of $18.4 million which is a significant decrease compared to the $20.0 million of operating earnings in the fourth quarter of 2007. This is principally due to the dramatic selling volume decline as well as the impact from higher raw material costs in inventory at the end of the third quarter flowing through cost of sales in the fourth quarter which were not completely covered by the selling price increases.

Cytec Performance Chemicals Sales decreased 17% to $159 million; Operating Earnings decreased to $15.0 million.

In Cytec Performance Chemicals, overall selling volumes decreased by 23% related to global economic weakness across all product lines. Selling prices increased by 9% and the impact of exchange rates decreased sales by 3%.

Operating earnings of $15.0 million were down compared to the $16.2 million in the fourth quarter of 2007 as a result of the selling volume decline due to weak economic conditions. In spite of the reduced selling volumes, the Mining Chemicals and Phosphine product lines significantly improved earnings in the fourth quarter 2008 versus the prior year quarter due to an improved product mix driven by new product sales and favorable pricing, which substantially offset earnings declines in the Polymer Additives and Pressure Sensitive Adhesives product lines.

Cytec Engineered Materials Sales decreased by 8% to $164 million; Operating Earnings of $30.5 million.

In Cytec Engineered Materials, selling volumes decreased by 9%, driven mainly by the impact of the strike at Boeing which was partially offset by increases in other commercial transport and rotorcraft sectors. Selling prices increased by 3% and the impact of exchange rates decreased sales by 2%.

Operating Earnings of $30.5 million were down versus $36.1 million in the fourth quarter of 2007, principally related to lower selling volumes.

Cytec Building Block Chemical Sales decreased by 27% to $94 million; Operating loss of $6.4 million.

In Building Block Chemicals, selling volumes decreased by 34% due to weak demand within the end markets for acrylonitrile and melamine products across all regions. Selling prices increased by 7%.

Operating loss was $6.4 million compared to operating earnings of $7.2 million in the fourth quarter of 2007. The reduced earnings resulted primarily from the lower selling volumes and the negative impact on earnings of the high raw materials in inventory at the end of the third quarter flowing through cost of sales in the fourth quarter not being completely recovered with higher selling prices.

Special Items:

David Drillock, vice president and chief financial officer commented, “The adverse impact of the current macroeconomic business environment on the long-term financial outlook for the Surface Specialties segment has led us to conclude that an impairment has occurred related to the carrying value of the segment’s goodwill. As a result we recorded a pre-tax non-cash special item charge of $385.0 million ($358.3 million after-tax or $7.55 per basic share) in fourth quarter results to reduce the carrying value of goodwill related to the Surface Specialties segment.”

“We also recorded a number of other special items in the fourth quarter of 2008 that result in a net pre-tax gain of $0.6 million ($0.3 million after tax or $0.01 per basic share) as follows:

Included in Corporate and unallocated is a pre-tax charge of $4.1 million ($2.8 million after-tax or $0.06 per basic share) principally for a reduction of about 31 employees mostly in our Specialty Chemical operations.

Included in manufacturing cost of sales in the Surface Specialties segment is a pre-tax charge of $1.4 million ($0.9 million after-tax or $0.02 per basic share) for accelerated depreciation in relation to the planned exit of Radcure manufacturing at our leased facility in Pampa, Texas.

Included in other income/expense in Corporate and Unallocated is a pre-tax gain of $6.1 million ($4.0 million after-tax or $0.09 per basic share) related to a legal settlement.

Finally, we recorded an income tax benefit of $2.4 million or $0.05 per basic share related to a favorable tax development from the sale of the water treatment business in 2007.”

Interest Expense:

Interest expense, net was reduced 28% from the prior year fourth quarter reflecting the lower cost of debt versus the prior year quarter.

Income Tax Expense:

The tax benefit for the fourth quarter of 2008 was $23.7 million, or 6.3%, on the loss before income taxes compared with a provision of $17.6 million, or 27%, on earnings before income taxes in the fourth quarter of 2007. Included in income tax benefit for the quarter is $26.7 million related to the goodwill impairment charge and a benefit of $2.4 million related to the aforementioned favorable tax development related to the sale of the water treatment business in 2007. Excluding all special items the overall underlying tax rate for 2008 was 32%. The increase over the prior year’s 30.3% is primarily due to a greater percent of earnings in higher tax jurisdictions.