Lyondell Reports Third-Quarter 2005 Results

* Lyondell reports net income of $10 million or 4 cents per share on a fully diluted basis vs. $50 million or 28 cents per share a year ago






HOUSTON, Oct. 27  /PRNewswire-FirstCall/ -- Lyondell Chemical Company (NYSE:LYO) today announced net income for the third quarter 2005 of $10 million, or 4 cents per share on a fully diluted basis, including third- quarter charges and hurricane impacts described below.  This compares with net income of $50 million, or 28 cents per share, for the third quarter 2004, and net income of $126 million, or 48 cents per share, for the second quarter 2005. For the first nine months of 2005, net income was $390 million, or $1.50 per share on a fully diluted basis, compared with net income of $38 million, or 21 cents per share, during the first nine months of 2004.

  Table 1 - Lyondell Earnings Summary (A)

  Millions of                                          1st Nine   1st Nine
   dollars except                                       Months     Months
   per share amounts    3Q 2005   3Q 2004   2Q 2005      2005       2004
  Sales and other
   operating revenues   $ 4,795   $ 1,307   $ 4,382   $ 13,623    $ 3,573
  Net income                 10        50       126        390         38
  Basic earnings
   per share               0.04      0.28      0.51       1.59       0.21
  Diluted earnings
   per share (B)           0.04      0.28      0.48       1.50       0.21
  Basic weighted average
   shares outstanding
   (millions)             246.5     178.1     245.9      245.6      177.5
  Diluted weighted
   average shares
   outstanding
   (millions) (B)         260.4     179.9     259.0      259.7      178.7

   (A) Results include the operations of Equistar and Millennium
       prospectively from December 1, 2004.  Prior to December 1, 2004,
       Lyondell's 70.5% interest in Equistar was accounted for as an equity
       investment.
   (B) Includes the dilutive effect of the convertible debentures and
       outstanding stock options and warrants.


  The third quarter 2005 includes several pre-tax charges:
   * $195 million for impairment of the carrying value of Lyondell's Lake
     Charles, La., toluene diisocyanate (TDI) facility, which is part of the
     Propylene Oxide and Related Products segment
   * $30 million related to an industry mutual insurance consortium,
     including the effects of both Hurricanes Katrina and Rita, which
     impacts all segments
   * $7 million related to the early retirement of debt



Also, net income in the third quarter 2005 reflects a benefit of $38 million due to a reduction in the estimated income tax rate for the year. This reflects primarily the finalization of income tax liabilities relating to prior years, partially offset by higher foreign earnings that are effectively taxed at higher rates.

The second quarter 2005 included pre-tax charges of $14 million related to a mutual insurance consortium and $9 million related to debt reduction.  The third quarter 2004 included pre-tax charges of $6 million related to debt reduction.

Other effects of Hurricanes Katrina and Rita on third-quarter 2005 results include the following:

   * Hurricane Katrina did not directly impact any assets, but did impact
     several suppliers and logistics providers.  While this did not manifest
     itself in reduced production of ethylene, propylene oxide or titanium
     dioxide at Lyondell, or reduced crude processing at LYONDELL-CITGO
     Refining (LCR), it did impact some derivative production.
   * Hurricane Rita's impact on both assets and production was more direct.
     All of Lyondell's Gulf Coast sites were shut down for the storm, and
     minor damage was sustained at several sites. In addition to shutdown
     and start-up costs at these facilities, the company experienced lost
     production during the down time.  Compared with nameplate capacity,
     estimated lost production for certain key products during the third
     quarter was approximately:
     -- Ethylene - 200 million pounds
     -- Propylene oxide - 60 million pounds
     -- LCR crude processing - 2.4 million barrels
   * Based on August prices and variable costs as reported by industry
     consultants, as well as internal estimates, the pre-tax value of
     Lyondell's lost production in late September caused by Hurricane Rita
     is estimated to be approximately $75 million to $100 million, or
     19 cents to 25 cents per share (after tax). Approximately half of this
     can be attributed to the Ethylene, Co-Products and Derivatives segment,
     with the balance split between the Propylene Oxide and Related Products
     segment and the Refining segment (Lyondell's share of LCR).



"The third quarter was shaped by Hurricanes Katrina and Rita, rapid increases in raw material costs and tight refined product markets," said Dan F. Smith, president and CEO of Lyondell Chemical Company.  "While pricing trends were established in advance of the hurricanes, these changes accelerated and became far more pronounced as a result of the hurricane-related disruptions. Overall, I am happy to say that Lyondell's assets fared well through the storms. While third-quarter results were obviously reduced by the storms and impairment of our Lake Charles TDI plant, the breadth of our product portfolio served us well during the quarter."

OUTLOOK

Thus far in the fourth quarter, prices for most chemical products have increased rapidly in response to both increased costs and tight supply/demand balances.  Within the ethylene segment, elevated natural gas costs and strong co-product markets favor liquid raw material economics. The propylene oxide segment has continued to benefit from global MTBE margins that, although seasonally lower than the third quarter, are much stronger than typical for this time of year, while the inorganics segment has benefited from hurricane-related outages at two competitor facilities. In refining, problems encountered during start-up after Hurricane Rita have continued and currently are expected to reduce refining rates to between 30 percent and 50 percent until late November.

"At this time, with the exception of LCR and previously scheduled maintenance turnaround activity at one propylene oxide plant, all of our major plants are operating at or near full capacity, and we believe our chemical businesses are well positioned to respond to post-hurricane supply/demand tightness. The pressures and uncertainties caused by extremely high and volatile raw material costs continue to be a concern, but are somewhat mitigated by our greater reliance on crude oil-based raw materials rather than natural gas," said Smith.

LYONDELL BUSINESS RESULTS DISCUSSION BY BUSINESS SEGMENT

Lyondell's operations are reported in four segments: 1) Ethylene, co-products and derivatives; 2) Propylene oxide (PO) and related products; 3) Inorganic chemicals; and 4) Refining, which consists of Lyondell's 58.75 percent ownership of LYONDELL-CITGO Refining (LCR), a joint venture with CITGO Petroleum Corp.

Ethylene, Co-products and Derivatives Segment -- The primary products of this segment are ethylene, ethylene co-products (propylene, butadiene and benzene) and derivatives of ethylene (polyethylene, ethylene oxygenates and vinyl acetate monomer or VAM). Lyondell acquired Millennium on November 30, 2004; Millennium's acetyls products are included in this segment.

  Table 2 - Ethylene, Co-Products & Derivatives Financial Overview (A)

                                                      1st Nine   1st Nine
  Millions                                             Months     Months
   of dollars          3Q 2005   3Q 2004   2Q 2005      2005       2004
  Sales and other
   operating revenues  $ 2,988   $ 2,439   $ 2,849    $ 8,811    $ 6,500
  Operating income          22       129       201        618        289
  EBITDA (B)               116       208       294        896        519

   (A) For periods prior to January 1, 2005, the Ethylene, Co-Products and
       Derivatives information represents the historical operating results
       of Equistar on a 100% basis.  See Table 6 for additional segment
       information.
   (B) See Table 9 for reconciliations of segment EBITDA to net income of
       Lyondell and Equistar, respectively.




The following discussion addresses business results independent of ownership.

3Q05 v. 2Q05 -- Ethylene and ethylene derivative product sales volumes were relatively unchanged versus the second quarter 2005, while product margins declined.  The quarterly average ethylene sales price increased by approximately 5 cents per pound, while quarterly average prices for the major ethylene derivatives (polyethylene and ethylene glycol) were relatively unchanged versus the second quarter.

Raw material costs increased for both crude oil-based and natural gas-based raw materials.  Increases in fuel co-product prices, coupled with lower average chemical co-product prices, were insufficient to offset these cost increases, which led to an increase of approximately 7 cents per pound in our cost-of-ethylene-production metric (COE).

Acetyls results declined by approximately $20 million primarily due to lower margins related to significantly higher raw material costs.

3Q05 v. 3Q04 -- Excluding VAM, ethylene and ethylene derivative sales volumes were approximately 170 million pounds (or 6 percent) lower than strong third-quarter 2004 sales volumes. The quarterly average price of ethylene and polyethylene increased by approximately 7 cents per pound versus the year-ago quarter, while the average ethylene glycol price was relatively unchanged. Prices for performance derivatives such as ethylene oxide (EO), ethylene glycol ethers and vinyl acetate monomer (VAM) averaged 7 cents to 20 cents per pound higher than in the third quarter 2004.  Significantly higher raw material costs were only partially offset by increased co-product prices, resulting in an increase of approximately 7 cents per pound in our cost-of-ethylene-production metric (COE).

Acetyls results declined by approximately $15 million due to lower margins primarily resulting from increased natural gas costs.

Propylene Oxide and Related Products Segment -- The principal products of the propylene oxide and related products segment include propylene oxide (PO), PO derivatives (propylene glycol, propylene glycol ethers, butanediol and butanediol derivatives), styrene, MTBE, and toluene diisocyanate (TDI).

  Table 3 - PO & Related Products Financial Overview (A)

                                                      1st Nine   1st Nine
  Millions                                             Months     Months
   of dollars          3Q 2005   3Q 2004   2Q 2005      2005       2004
  Sales and other
   operating revenues  $ 1,848   $ 1,307   $ 1,562    $ 4,939    $ 3,573
  Operating income (B)      70        49       134        300         92
  EBITDA (C)               321       106       186        653        274

   (A) See Table 6 for additional segment information.
   (B) Operating income for the third quarter and first nine months of 2005
       included an impairment charge of $195 million, which is excluded from
       EBITDA.
   (C) See Table 9 for a reconciliation of segment EBITDA to net income of
       Lyondell.




Operating income in the third quarter 2005 includes a charge of $195 million for impairment of the carrying value of Lyondell's Lake Charles, La., toluene diisocyanate (TDI) facility.

3Q05 v. 2Q05 -- PO and PO derivative product results declined slightly based on moderately lower margins, which were partially offset by increased sales volumes.  MTBE margins increased significantly, contributing approximately $160 million to profit improvement.  Styrene and TDI results both declined slightly primarily due to higher costs.

3Q05 v. 3Q04 -- Versus the year-ago quarter, increased PO and PO derivative product margins contributed to an approximate $45 million improvement in segment results.  MTBE results improved by approximately $210 million as a result of higher raw material margins. Lower styrene margins resulted in a slight decline in profitability, while lower TDI margins led to a $20 million decline in results.

Inorganic Chemicals Segment -- The principal product of the inorganic chemicals segment is titanium dioxide (TiO2). Lyondell acquired Millennium, including this business, on November 30, 2004.

  Table 4 - Inorganic Chemicals Financial Overview (A)

                                                      1st Nine   1st Nine
  Millions                                             Months     Months
   of dollars          3Q 2005   3Q 2004   2Q 2005      2005       2004
  Sales and other
   operating revenues    $ 345       ---     $ 342    $ 1,005        ---
  Operating income
   (loss) (B)              (16)      ---        16         21        ---
  EBITDA (C)                 3       ---        52        102        ---

   (A) Includes the Inorganic Chemicals segment prospectively from
       December 1, 2004.  See Table 6 for additional segment information.
   (B) Operating income (loss) included impairment charges of $3 million for
       each of the third and second quarters of 2005 and $8 million for the
       first nine months of 2005 that are excluded from EBITDA.
   (C) See Table 9 for a reconciliation of segment EBITDA to net income of
       Lyondell.




The following discussion addresses the inorganics business independent of ownership.

3Q05 v. 2Q05 -- Sales volumes increased by approximately 6,000 metric tons to 160,000 metric tons while the average sales price decreased by approximately $50 per metric ton. Approximately half of the U.S. dollar reduction in prices was due to foreign exchange rates. Together, the price and volume changes had an approximately $10 million negative impact on results. Lower production rates related to inventory management early in the third quarter reduced results by approximately $20 million, and finished product inventories were reduced by approximately 30,000 metric tons during the third quarter.

3Q05 v. 3Q04 -- Sales volumes were approximately 10,000 metric tons less than the year-ago quarter.  Conversely, third-quarter 2005 prices were approximately $165 per metric ton higher than during the third quarter 2004. Reduced production rates related to inventory management lowered results by approximately $20 million.

Refining Segment -- Lyondell owns a 58.75 percent interest in LCR, a major refiner of heavy crude oil.  This investment is accounted for using the equity method.

  Table 5 - Refining Financial Overview - 100% Basis (A)

                                                      1st Nine   1st Nine
  Millions                                             Months     Months
   of dollars          3Q 2005   3Q 2004   2Q 2005      2005       2004
  Sales and other
   operating revenues  $ 2,202   $ 1,546   $ 1,563    $ 5,301    $ 4,039
  Operating income         100       139        37        255        351
  EBITDA (B)               130       182        65        341        452

   (A) The Refining segment information presented above represents the
       historical operating results of LCR on a 100% basis.  See Table 6 for
       additional segment information.
   (B) See Table 9 for a reconciliation of segment EBITDA to net income of
       LCR.




3Q05 v. 2Q05 -- Total crude processing rates were approximately 52,000 barrels per day higher than second-quarter rates as the refinery processed 212,000 barrels per day under the Venezuelan crude supply contract and 33,000 barrels per day of spot crude. Second-quarter rates were lower than normal due to a combination of planned and unplanned outages while third-quarter rates were impacted by Hurricane Rita.  Higher natural gas prices and lower aromatic margins negatively impacted results.

3Q05 v. 3Q04 -- Total crude processing rates were approximately 27,000 barrels per day lower than third-quarter 2004 rates.  The shortfall was primarily related to Hurricane Rita.  Higher natural gas prices and lower aromatic margins negatively impacted results while spot crude oil margins increased.

Cash Distributions and Debt Reduction

During the third quarter 2005, net distributions from LCR to Lyondell were $97 million. (Distributions from LCR totaled $127 million and contributions to LCR totaled $30 million.)  Lyondell Chemical Company paid $200 million toward early debt reduction, while Millennium Chemicals reduced debt by a net $211 million through the combination of purchasing $311 million of debt and issuing $100 million of debt at its Australian subsidiary.

CONFERENCE CALL

Lyondell will host a conference call today, October 27, 2005, at 11:30 a.m. Eastern Time (ET).  Participating on the call will be: Dan F. Smith, President and CEO; Morris Gelb, Executive Vice President and COO; T. Kevin DeNicola, Senior Vice President and CFO; and Doug Pike, Vice President of Investor Relations.  The dial-in numbers are 888-391-2385 (U.S. - toll free) and 517-645-6239 (international).  The passcode for each is Lyondell. The call will be broadcast live on the Investor Relations page of the company's web site, http://www.lyondell.com/earnings .

A replay of the call will be available from 1:30 p.m. ET October 27 to 5 p.m. ET on November 4.  The dial-in numbers are 866-435-1326 (U.S.) and 203-369-1022 (international).  The passcode for each is 5549.  Web replay will be available at 2:30 p.m. ET October 27 on the Investor Relations page of the company's web site, http://www.lyondell.com/earnings .

Reconciliations of non-GAAP financial measures to GAAP financial measures, together with any other applicable disclosures, including this earnings release, will be available at 11:30 a.m. ET October 27 at http://www.lyondell.com/earnings .

ABOUT LYONDELL

Lyondell Chemical Company, headquartered in Houston, Texas, is North America's third-largest independent, publicly traded chemical company. Lyondell is a major global manufacturer of basic chemicals and derivatives including ethylene, propylene, titanium dioxide, styrene, polyethylene, propylene oxide and acetyls. It also is a significant producer of gasoline blending components. The company has a 58.75 percent interest in LYONDELL-CITGO Refining LP, a refiner of heavy, high-sulfur crude oil. As a result of Lyondell's November 30, 2004 acquisition of Millennium Chemicals Inc., Millennium and Equistar Chemicals, LP are wholly owned subsidiaries of Lyondell. Lyondell is a global company operating on five continents and employs approximately 10,000 people worldwide.

FORWARD-LOOKING STATEMENTS

The statements in this release and the related teleconference relating to matters that are not historical facts are forward-looking statements.  These forward-looking statements are based upon the current beliefs and expectations of management, and are subject to significant risks and uncertainties.  Actual results could differ materially based on factors including, but not limited to, costs associated with changes in plant status and related matters; availability, cost and price volatility of raw materials and utilities; supply/demand balances; industry production capacities and operating rates; operating interruptions; uncertainties associated with the U.S. and worldwide economies; current and potential governmental regulatory actions; terrorist acts; international political unrest; legal, tax and environmental proceedings; cyclical nature of the chemical and refining industries; competitive products and pricing; risks of doing business outside of the U.S.; access to capital markets; technological developments; and other risk factors. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the Lyondell, Equistar and Millennium Annual Reports on Form 10-K for the year ended December 31, 2004, and the Lyondell, Equistar and Millennium Quarterly Reports on Form 10-Q for the quarter ended September 30, 2005 which will be filed with the SEC in November 2005.

  Table 6 - Selected Unaudited Segment Financial Information (A)

                                           For the three       For the nine
                                           months ended        months ended
                                      September 30,  June 30,  September 30,
    (Millions of dollars)             2005    2004    2005    2005    2004
    Sales and other operating
     revenues (B)
    Ethylene, Co-Products &
     Derivatives                     $2,988  $2,439  $2,849  $8,811  $6,500
    PO & Related Products             1,848   1,307   1,562   4,939   3,573
    Inorganic Chemicals                 345     ---     342   1,005     ---
    Refining                          2,202   1,546   1,563   5,301   4,039

    Operating income (loss)
    Ethylene, Co-Products &
     Derivatives                        $22    $129    $201    $618    $289
    PO & Related Products (C)            70      49     134     300      92
    Inorganic Chemicals (D)             (16)    ---      16      21     ---
    Refining                            100     139      37     255     351

    Depreciation and amortization
    Ethylene, Co-Products &
     Derivatives                        $95     $81     $96    $286    $234
    PO & Related Products                59      59      60     177     186
    Inorganic Chemicals                  26     ---      26      76     ---
    Refining                             30      29      28      86      87

    EBITDA (E)
    Ethylene, Co-Products &
     Derivatives                       $116    $208    $294    $896    $519
    PO & Related Products (C)           321     106     186     653     274
    Inorganic Chemicals (D)               3     ---      52     102     ---
    Refining                            130     182      65     341     452

    Capital expenditures
    Ethylene, Co-Products &
     Derivatives                        $34     $28     $32    $103     $69
    PO & Related Products                11      16      16      41      43
    Inorganic Chemicals                  13     ---      14      32     ---
    Refining                             38      13      49     121      42

   (A) The EC&D data for periods prior to January 1, 2005 represents
       Equistar results on a 100% basis.  Prior to December 1, 2004,
       Equistar was accounted for as an equity investment.  See Table 13 for
       additional Equistar financial information.  See Table 8 for a
       reconciliation of segment information for the three months and nine
       months ended September 30, 2005 and for the three months ended
       June 30, 2005 to consolidated Lyondell financial information.  See
       Table 10 for PO and Related Products data for the three and nine
       months ended September 30, 2004.  The Refining information presented
       above represents the historical operating results of LCR on a 100%
       basis.  See Table 19 for additional LCR financial information.  The
       Inorganic Chemicals segment is presented prospectively from
       December 1, 2004.
   (B) Sales include sales to affiliates and intersegment sales.
   (C) PO&RP operating income for the third quarter and first nine months of
       2005 included an impairment charge of $195 million, which is excluded
       from EBITDA.
   (D) Inorganic Chemicals operating income (loss) included impairment
       charges of $3 million in each of the third and second quarters of
       2005 and $8 million in the first nine months of 2005 that are
       excluded from EBITDA.
   (E) See Table 9 for reconciliation of segment EBITDA to net income.



  Table 7 - Selected Segment Sales Volumes (A) (B)

                                     For the three months   For the nine
                                           ended            months ended
                                    September 30, June 30,  September 30,
                                     2005   2004    2005    2005   2004
   Ethylene, Co-Products and
    Derivatives (in millions)
   Ethylene and derivatives
    (pounds)                        2,834  2,836   2,848   8,590  8,315
      Polyethylene included above
       (pounds)                     1,409  1,467   1,341   4,087  4,243
   Co-products, nonaromatic
    (pounds)                        1,899  2,038   1,862   5,795  5,914
   Aromatics (gallons)                100     99     107     309    272

   PO and Related Products
    (in millions)
   PO and derivatives (pounds)        790    794     731   2,405  2,445
   Co-products:
     Styrene monomer (pounds)         953    962   1,045   2,980  2,723
     MTBE and other TBA
      derivatives (gallons)           298    269     297     878    825

   Inorganic Chemicals (thousand
    metric tons)
     TiO2                             160    ---     154     456    ---

   Refined products (thousand
    barrels per day)
     Gasoline                         125    117     110     117    118
     Diesel and heating oil            85     99      85      86     96
     Jet fuel                          16     20       8      15     17
     Aromatics                          7      9      10       8      9
     Other refined products            92     99      70      83     92
       Total refined products
        volumes                       325    344     283     309    332
   Refinery Runs
   Crude processing rates (thousand
    barrels per day)
     Crude Supply Agreement           212    243     165     199    238
     Other crude oil                   33     29      28      34     29
       Total crude oil                245    272     193     233    267

   (A) The EC&D data for periods prior to January 1, 2005 represent Equistar
       results on  a 100% basis. Prior to December 1, 2004, Equistar was
       accounted for as an equity investment.  The Refining information
       presented above represents the historical operating results of LCR
       on a 100% basis.
   (B) Sales volumes include sales to affiliates and intersegment sales.



  Table 8 - Reconciliation of Segment Information to Consolidated Lyondell
   Financial Information

                              Sales and
                                other    Operating Depreciation
                              operating   income       and         Capital
  (Millions of dollars)       revenues    (loss)   amortization expenditures

  For the three months ended
   September 30, 2005:

  Segment Data
    Ethylene, Co-Products &
     Derivatives               $2,988       $22        $95          $34
    PO & Related Products       1,848        70         59           11
    Inorganic Chemicals           345       (16)        26           13
    Other (A)                    (386)       (4)         2          ---
  Total                        $4,795       $72       $182          $58

  For the nine months ended
   September 30, 2005:

  Segment Data
    Ethylene, Co-Products &
     Derivatives               $8,811      $618       $286         $103
    PO & Related Products       4,939       300        177           41
    Inorganic Chemicals         1,005        21         76           32
    Other (A)                  (1,132)       (9)         6            2
  Total                       $13,623      $930       $545         $178

  For the three months ended
   June 30, 2005:

  Segment Data
    Ethylene, Co-Products &
     Derivatives               $2,849      $201        $96          $32
    PO & Related Products       1,562       134         60           16
    Inorganic Chemicals           342        16         26           14
    Other (A)                    (371)       (3)         3          ---
  Total                        $4,382      $348       $185          $62

   (A) Includes elimination of intersegment transactions and items not
       allocated to segments.



  Table 9 - Reconciliation of Segment EBITDA to Net Income

                                     For the three months   For the nine
                                           ended            months ended
                                    September 30, June 30,  September 30,
    (Millions of dollars)            2005   2004    2005    2005   2004

    LYONDELL
    Segment EBITDA:
    Ethylene, Co-Products &
     Derivatives (A)                 $116   $---    $294    $896   $---
    PO & Related Products             321    106     186     653    274
    Inorganic Chemicals (B)             3    ---      52     102    ---
    Other                              (1)   ---      (2)     (2)   ---
    Add:
      Income from equity investment
       in Equistar                    ---     54     ---     ---     93
      Income from equity investment
       in LCR                          53     89      19     139    208
    Deduct:
      Depreciation and amortization  (182)   (59)   (185)   (545)  (186)
      Interest expense, net          (149)  (108)   (155)   (462)  (325)
      Benefit from (provision for)
       income taxes                    54    (26)    (71)   (160)   (20)
      Asset impairment charges       (198)   ---      (3)   (203)   ---
      Debt prepayment premiums and
       charges                         (7)    (6)     (9)    (28)    (6)
    Lyondell net income               $10    $50    $126    $390    $38

    Equistar EBITDA (C)                     $208                   $519
    Deduct:
      Depreciation and amortization          (81)                  (234)
      Interest expense, net                  (55)                  (165)
    Equistar net income                      $72                   $120

    Refining EBITDA (D)              $130   $182     $65    $341   $452
    Deduct:
      Depreciation and amortization   (30)   (29)    (28)    (86)   (87)
      Interest expense, net            (9)    (6)     (9)    (26)   (24)
    LCR net income                    $91   $147     $28    $229   $341

   (A) The EC&D segment information reflects the consolidation of Millennium
       and Equistar prospectively from December 1, 2004.  For periods prior
       to December 1, 2004, Equistar was accounted for as an equity
       investment.  See Tables 13 and 16 for additional Equistar and
       Millennium financial information, respectively.
   (B) The Inorganic Chemicals segment information reflects the
       consolidation of Millennium prospectively from December 1, 2004.
   (C) The Equistar information presented represents the historical
       operating results of Equistar on a 100% basis.  See Table 13 for
       additional Equistar financial information.
   (D) The Refining information presented represents the historical
       operating results of LCR on a 100% basis.  See Table 19 for
       additional LCR financial information.



  Table 10 - Lyondell Unaudited Income Statement Information (A)

                                          For the three        For the nine
                                           months ended        months ended
                                      September 30,  June 30,  September 30,
    (Millions of dollars, except
     per share data)                  2005    2004    2005     2005    2004
    Sales and other operating
     revenues                       $4,795  $1,307  $4,382  $13,623  $3,573
    Cost of sales                    4,350   1,195   3,876   12,008   3,308
    Asset impairments                  198     ---       3      203     ---
    Selling, general and
     administrative expenses           152      55     133      414     149
    Research and development
     expenses                           23       8      22       68      24
      Operating income                  72      49     348      930      92
    Income from equity investment
     in Equistar                       ---      54     ---      ---      93
    Income from equity investment
     in LCR                             53      89      19      139     208
    Income (loss) from other equity
     investments                         2       1      (1)       2       3
    Interest expense, net             (149)   (108)   (155)    (462)   (325)
    Other expense, net                 (22)     (9)    (14)     (59)    (13)
      Income (loss) before income
       taxes                           (44)     76     197      550      58
    Provision for (benefit from)
     income taxes                      (54)     26      71      160      20
    Net income                         $10     $50    $126     $390     $38

    Basic earnings per share:        $0.04   $0.28   $0.51    $1.59   $0.21
    Diluted earnings per share:      $0.04   $0.28   $0.48    $1.50   $0.21

    Weighted average shares
     (in millions):
       Basic                         246.5   178.1   245.9    245.6   177.5
       Diluted                       260.4   179.9   259.0    259.7   178.7

   (A) Results of operations include the operations of Equistar and
       Millennium prospectively from December 1, 2004.  Prior to
       December 1, 2004, Equistar was accounted for as an equity investment.



  Table 11 - Lyondell Unaudited Cash Flow Information (A)

                                                  For the nine months ended
                                                         September 30,
  (Millions of dollars)                              2005             2004
  Net income                                         $390              $38
  Adjustments:
    Depreciation and amortization                     545              186
    Asset impairments                                 203              ---
    Income from equity investments                   (141)            (304)
    Distributions of earnings from
     affiliates                                       140              281
    Deferred income taxes                             112               16
    Debt prepayment charges and
     premiums                                          28                6
  Changes in assets and liabilities:
    Accounts receivable                              (358)             (98)
    Inventories                                      (142)             (24)
    Accounts payable                                  323               47
    Accrued interest                                   42               74
    Other, net                                        (51)              34
      Cash provided by operating
       activities                                   1,091              256

  Expenditures for property, plant and
   equipment                                         (178)             (43)
  Distributions from affiliates in
   excess of earnings                                 123              105
  Contributions and advances to
   affiliates                                         (90)             (32)
  Other                                                 3              ---
      Cash provided by (used in)
       investing activities                          (142)              30

  Repayment of long-term debt                      (1,072)            (105)
  Issuance of long-term debt                           99              ---
  Dividends paid                                     (166)             (95)
  Exercise of stock options                            46                9
  Other                                                 3               (1)
      Cash used in financing
       activities                                  (1,090)            (192)

  Effect of exchange rate changes on
   cash                                               (11)              (1)

  Increase (decrease) in cash and cash
   equivalents                                      $(152)             $93

   (A) Equistar and Millennium became wholly owned subsidiaries as of
       December 1, 2004.  Prior to December 1, 2004, Lyondell's investment
       in Equistar was accounted for on an equity basis.



  Table 12 - Lyondell Unaudited Balance Sheet Information

                                                September 30,   December 31,
    (Millions of dollars)                           2005           2004
    Cash and cash equivalents                       $652           $804
    Accounts receivable, net                       1,869          1,569
    Inventories                                    1,713          1,619
    Prepaid expenses and other current
     assets                                          150            189
    Deferred tax assets                              416            276
      Total current assets                         4,800          4,457
    Property, plant and equipment, net             6,619          7,215
    Investments and long-term
     receivables:
      Investment in PO joint ventures                788            838
      Investment in and receivable
       from LCR                                      143            192
      Other investments and long-term
       receivables                                   160            160
    Goodwill, net                                  2,219          2,175
    Other assets, net                                844            924
      Total assets                               $15,573        $15,961

    Accounts payable                              $1,472         $1,202
    Current maturities of long-term debt             256            308
    Accrued liabilities                              801            785
      Total current liabilities                    2,529          2,295
    Long-term debt                                 6,617          7,555
    Other liabilities                              1,791          1,780
    Deferred income taxes                          1,671          1,477
    Minority interest                                182            181
    Stockholders' equity (246,918,784
     and 243,684,998 shares outstanding at
     September 30, 2005 and December 31,
     2004, respectively)                           2,783          2,673
       Total liabilities and stockholders'
        equity                                   $15,573        $15,961



       Tables 13 through 21 represent additional financial information
             on a 100% basis for Equistar, Millennium and LCR.

  Table 13 - Equistar Unaudited Income Statement Information (A)

                                           For the three       For the nine
                                           months ended        months ended
                                      September 30,  June 30,  September 30,
    (Millions of dollars)              2005    2004    2005    2005    2004
    Sales and other operating
     revenues (B)                    $2,867  $2,439  $2,700  $8,428  $6,500
    Cost of sales                     2,776   2,255   2,447   7,640   6,063
    Selling, general and
     administrative expenses             52      47      47     146     129
    Research and development
     expenses                             8       8       9      25      23
    Gain on asset dispositions          ---     ---     ---     ---      (4)
      Operating income                   31     129     197     617     289
    Interest expense, net               (56)    (55)    (54)   (164)   (165)
    Other expense, net                   (3)     (2)     (1)     (7)     (4)
    Net (loss) income (C)              $(28)    $72    $142    $446    $120

   (A) Represents information for Equistar on a stand-alone basis and does
       not reflect purchase accounting adjustments.
   (B) Sales and other operating revenues include sales to affiliates.
   (C) As a partnership, Equistar is not subject to federal income taxes.



  Table 14 - Equistar Unaudited Balance Sheet Information (A)

                                                September 30,   December 31,
    (Millions of dollars)                           2005           2004

     Cash and cash equivalents                      $132            $39
     Accounts receivable, net                      1,017            826
     Inventories                                     682            582
     Prepaid expenses and other
      current assets                                  49             43
       Total current assets                        1,880          1,490
     Property, plant and equipment, net            3,079          3,167
     Investments                                      59             60
     Other assets, net                               364            357
       Total assets                               $5,382         $5,074

     Accounts payable                               $879           $532
     Current maturities of long-term debt            150              1
     Accrued liabilities                             254            273
       Total current liabilities                   1,283            806
     Long-term debt                                2,161          2,312
     Other liabilities and deferred revenues         408            395
     Partners' capital                             1,530          1,561
       Total liabilities and partners' capital    $5,382         $5,074

   (A) Represents information for Equistar on a stand-alone basis and does
       not reflect purchase accounting adjustments.



  Table 15 - Equistar Unaudited Cash Flow Information (A)

                                                   For the nine months ended
                                                          September 30,
      (Millions of dollars)                          2005              2004
      Net income                                     $446              $120
      Adjustments:
        Depreciation and amortization                 238               234
        Deferred maintenance
         turnaround expenditures                      (51)              (55)
        Gain on asset dispositions                    ---                (4)
      Changes in assets and liabilities:
        Accounts receivable (B)                      (191)             (205)
        Inventories                                   (94)              (89)
        Accounts payable                              340                80
        Accrued interest                              (17)              (16)
        Other, net                                     (9)               11
          Cash provided by operating activities       662                76

      Expenditures for property, plant
       and equipment                                 (103)              (69)
      Proceeds from sales of assets                     3                41
          Cash used in investing activities          (100)              (28)

      Distributions to owners                        (475)             (100)
      Repayment of long-term debt                      (1)              ---
      Other                                             7               ---
          Cash used in financing activities          (469)             (100)

      Increase (decrease) in cash and cash
       equivalents                                    $93              $(52)

  (A) Represents information for Equistar on a stand-alone basis and does
      not reflect purchase accounting adjustments.
  (B) In consideration of discounts offered to certain customers for early
      payment for product, some receivable amounts were collected in
      September 2005 and 2004 that otherwise would have been expected to be
      collected in October of the respective years.  This included
      $55 million and $51 million from Occidental Chemical Corporation in
      September 2005 and 2004, respectively.



  Table 16 - Millennium Unaudited Income Statement Information (A) (C)

                                          For the three     For the nine
                                          months ended      months ended
                                    September 30, June 30,  September 30,
     (Millions of dollars)               2005       2005         2005
     Sales and other operating
      revenues (B)                       $489       $515       $1,457
     Cost of sales                        448        424        1,237
     Selling, general and
      administrative expenses              77         45          165
     Research and development expenses      5          6           17
     Asset impairments                      3          3            8
     Combination costs                      2        ---            2
       Operating income (loss)            (46)        37           28
     Interest expense, net                (24)       (25)         (73)
     Other expense, net                   (18)         5          (22)
       Income (loss) before equity
        investment, minority interest
        and income taxes                  (88)        17          (67)
     Income (loss) from equity
      investment in Equistar               (8)        42          132
       Income (loss) before income
        taxes and minority interest       (96)        59           65
     Provision for (benefit from) income
      taxes                               (26)        20           31
       Income before minority interest    (70)        39           34
     Minority interest                     (2)        (1)          (4)
     Net income (loss)                   $(72)       $38          $30

   (A) Represents information for Millennium on a stand-alone basis and does
       not reflect purchase accounting adjustments.
   (B) Sales and other operating revenues include sales to affiliates.
   (C) The third quarter and first nine months of 2005 included $39 million
       and $45 million, respectively, of charges representing revisions to
       Lyondell's previous estimates of expected future environmental
       remediation spending.



  Table 17 - Millennium Unaudited Balance Sheet Information (A)

                                                September 30,   December 31,
    (Millions of dollars)                           2005           2004

     Cash and cash equivalents                      $178           $344
     Accounts receivable, net                        339            318
     Inventories                                     425            414
     Prepaid expenses and other current assets        88             79
       Total current assets                        1,030          1,155
     Property, plant and equipment, net              659            707
     Investments                                     448            457
     Goodwill                                        104            104
     Other assets, net                                94            107
       Total assets                               $2,335         $2,530

     Accounts payable                               $256           $291
     Current maturities of long-term debt              6              7
     Accrued liabilities                             125            156
       Total current liabilities                     387            454
     Long-term debt                                1,156          1,398
     Other liabilities                               621            536
     Deferred income taxes                           171            164
     Minority interest                                46             33
     Stockholders' deficit
      (100,000,000 shares authorized;
      66,135,816 shares issued)                      (46)           (55)
      Total liabilities and stockholders'
       equity                                     $2,335         $2,530

   (A) Represents information for Millennium on a stand-alone basis and does
       not reflect purchase accounting adjustments.



  Table 18 - Millennium Unaudited Cash Flow Information (A)

                                             For the nine months ended
                                                September 30, 2005
      (Millions of dollars)
      Net income                                        $30
      Adjustments:
        Asset impairments                                 8
        Depreciation and amortization                    82
        Debt prepayment charges and premiums             10
        Deferred income taxes                           (18)
        Income from equity investment in Equistar      (132)
        Distributions of earnings from Equistar         132
      Changes in assets and liabilities:
        Accounts receivable                             (23)
        Inventories                                     (19)
        Accounts payable                                (25)
        Other, net                                       71
          Cash provided by operating activities         116

      Expenditures for property, plant and equipment    (34)
      Distributions from Equistar in excess
       of earnings                                        8
          Cash used in investing activities             (26)

      Repayment of long-term debt                      (349)
      Issuance of long-term debt                         99
      Contribution from Lyondell                          6
      Distributions to minority interests                (5)
      Other                                              (1)
          Cash used in financing activities            (250)

      Effect of exchange rate changes on cash            (6)

      Decrease in cash and cash equivalents           $(166)

   (A) Represents information for Millennium on a stand-alone basis and does
       not reflect purchase accounting adjustments.



  Table 19 - LCR Unaudited Income Statement Information

                                          For the three        For the nine
                                          months ended         months ended
                                      September 30,  June 30,  September 30,
     (Millions of dollars)            2005    2004     2005    2005    2004
     Sales and other operating
      revenues (A)                  $2,202  $1,546   $1,563  $5,301  $4,039
     Cost of sales                   2,091   1,393    1,515   5,012   3,643
     Selling, general and
      administrative expenses           11      14       11      34      45
       Operating income                100     139       37     255     351
     Interest expense, net              (9)     (6)      (9)    (26)    (24)
     Other income                      ---      14      ---     ---      14
     Net income  (B)                   $91    $147      $28    $229    $341

     EBITDA (C)                       $130    $182      $65    $341    $452

   (A) Sales and other operating revenues include sales to affiliates.
   (B) As a partnership, LCR is not subject to federal income taxes.
   (C) See Table 9 for reconciliation of LCR's net income to EBITDA.



  Table 20 - LCR Unaudited Balance Sheet Information

                                                September 30,   December 31,
    (Millions of dollars)                           2005           2004

    Total current assets                            $487           $359
    Property, plant and equipment, net             1,289          1,227
    Other assets, net                                 83             61
      Total assets                                $1,859         $1,647

    Current maturities of long-term debt              $5             $5
    Other current liabilities                        883            583
    Long-term debt                                   440            443
    Loans payable to partners                        264            264
    Other liabilities                                107            112
    Partners' capital                                160            240
      Total liabilities and partners' capital     $1,859         $1,647



  Table 21 - LCR Unaudited Cash Flow Information

                                                 For the nine months ended
                                                       September 30,
    (Millions of dollars)                           2005           2004
    Cash flow from operations                       $440           $522
    Capital expenditures                             121             42
    Depreciation and amortization                     86             87


Chemicals Inc.

DATASOURCE: Lyondell Chemical Company; Equistar Chemicals, LP; Millennium



CONTACT:  media, Susan P. Moore, [phone], or investors, Douglas

J. Pike, [phone], both of Lyondell Chemical Company



Web site:  http://www.lyondell.com/

http://www.lyondell.com/earnings 

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