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| x   | Annual      Report Pursuant to Section 13 or 15(D) of the Securities Exchange Act of      1934 for the Fiscal Year Ended December 31,2007 |
|---------------|-------------------------------------------------------------------------------------------------------------------------------------------|

| o   | Transition      Report Pursuant to Section 13 or 15(D) of the Securities Exchange Act of      1934 |
|---------------|----------------------------------------------------------------------------------------------------|

| Delaware                                                                            |   | 22-3436215                                |
|-------------------------------------------------------------------------------------|--------|-------------------------------------------|
| (State      or other jurisdiction of                                                |   | (I.R.S.      Employer Identification No.) |
| incorporation      or organization)                                                 |   |                                      |
|                                                                                |   |                                      |
| Two      Greenville Crossing, 4001 Kennett PikeSuite      238, Greenville, Delaware |   |  19807                               |
| (Address      of principal executive offices)                                       |   | (Zip      Code)                           |

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OF

|  PART I                                            |  1  |
|---------------------------------------------------------|----------|
|  Item 1.   Business                 |  1  |
|  MILLENNIUM                                        |  1  |
|  Overview of the Business                          | 1        |
| Additional Information Available                        | 1        |
|  MILLENNIUM BUSINESSES                             |  2  |
|  Overview                                          | 2        |
| Marketing and Sales                                     | 3        |
| Raw Materials                                           | 4        |
| Competition and Industry Conditions                     | 4        |
|  EQUISTAR BUSINESSES                               |  5  |
|  Chemicals Segment                                 |  5  |
|  Overview                                          | 5        |
| Marketing and Sales                                     | 6        |
| Raw Materials                                           | 8        |
| Competition and Industry Conditions                     | 9        |
|  Polymers Segment                                  |  9  |
|  Overview                                          | 9        |
| Marketing and Sales                                     | 10       |
| Raw Materials                                           | 11       |
| Competition and Industry Conditions                     | 11       |
|  ENVIRONMENTAL CAPITAL EXPENDITURES                |  12 |
|  RESEARCH AND TECHNOLOGY; INTELLECTUAL    PROPERTY |  12 |
|  EMPLOYEE RELATIONS                                | 13       |
|  Item 1A.  Risk Factors                  | 13       |
|  Risks Relating to the Businesses                  |  13 |
| Risks Relating to Debt                                  | 21       |
|  FORWARD-LOOKING STATEMENTS                        | 25       |
|  INDUSTRY AND OTHER INFORMATION                    | 26       |
|  NON-GAAP FINANCIAL MEASURES                       | 26       |
|  Item 2.  Properties                     | 27       |
|  Principal Manufacturing Facilities                |  27 |
| Other Locations and Properties                          | 28       |

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| Item 3.  Legal Proceedings                                                                                                                  | 28        |
|-------------------------------------------------------------------------------------------------------------------------------------------------------|-----------|
|  Litigation Matters                                                                                                                              | 28        |
| Environmental Matters                                                                                                                                 | 30        |
| Indemnification                                                                                                                                       | 32        |
|  Item 4.  Submission of Matters to a Vote of      Security Holders                                                                     | 32        |
|  PART II                                                                                                                                         | 32        |
|  Item 5.  Market for Registrant’s Common Equity,      Related Stockholder Matters and Issuer Purchases of Equity      Securities |  32  |
|  Item 6.  Selected Financial    Data                                                                                                   | 33        |
|  Item 7.  Management’s Discussion and Analysis of      Financial Condition and Results of Operations                             |  34  |
|  Acquisition                                                                                                                                     |  34  |
| Overview                                                                                                                                              | 36        |
| Results of Operations                                                                                                                                 | 36        |
| Financial Condition                                                                                                                                   | 42        |
| Current Business Outlook                                                                                                                              | 50        |
| Related Party Transactions                                                                                                                            | 50        |
| Critical Accounting Policies                                                                                                                          | 51        |
| Accounting and Reporting Changes                                                                                                                      | 53        |
| Environmental Matters                                                                                                                                 | 54        |
|  Item 7A.  Quantitative and Qualitative      Disclosures About Market Risk                                                             |  55  |
|  Commodity Price Risk                                                                                                                            |  55  |
| Foreign Exchange Risk                                                                                                                                 | 55        |
| Interest Rate Risk                                                                                                                                    | 55        |
|  Item 8.  Financial Statements and Supplementary      Data                                                                             |  56  |
|  Item 9.  Changes in and Disagreements with      Accountants on Accounting and Financial Disclosure                                    |  112 |
|  Item 9A.  Controls and    Procedures                                                                                                  |  112 |
|  Item 9B.  Other Information                                                                                                           |  112 |
|  PART III                                                                                                                                        |  113 |
|  Item 10.  Directors, Executive Officers and      Corporate Governance                                                                 |  113 |
|  Item 11.  Executive    Compensation                                                                                                   |  113 |
|  Item 12.  Security Ownership of Certain      Beneficial Owners and Management and Related Stockholder      Matters                    |  113 |
|  Item 13.  Certain Relationships and Related      Transactions, and Director Independence                                              |  113 |

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| Item 14.  Principal Accountant Fees and      Services           | 113       |
|---------------------------------------------------------------------------|-----------|
|  Audit and Non-Audit Fees                                            |  113 |
| Pre-Approval Policy                                                       | 114       |
|  PART IV                                                             |  115 |
|  Item 15.  Exhibits and Financial Statement      Schedules |  115 |

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PA

Ite

MIL

Over

| ·   | Equistar’s      chemicals business segment produces and markets ethylene, its co-products      and derivatives.  Ethylene co-products include propylene,      butadiene and aromatics, which include benzene and      toluene.  Derivatives of ethylene in this segment include      ethylene oxide (“EO”), ethylene glycol (“EG”) and other EO derivatives, as      well as ethanol.  Equistar’s chemicals business segment also      produces gasoline blending components such as methyl tertiary butyl ether      (“MTBE”) and alkylate. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Equistar’s      polymers business segment produces and markets polyethylene (high density      polyethylene (“HDPE”), low density polyethylene (“LDPE”) and linear low      density polyethylene (“LLDPE”)) and  polypropylene. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Addi

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MIL

Over

| ·   | the      primary products of Millennium’s chemicals  segment; |
|--------------------|---------------------------------------------------------------------|

| ·   | annual      processing capacity as of December 31, 2007;and |
|--------------------|-------------------------------------------------------------|

| ·   | the      primary uses for those products. |
|--------------------|-------------------------------------------|

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| Product                              |   | Annual      Capacity         |   | Primary      Uses                                                                                                                                                                                                                                                                                                                                                            |
|--------------------------------------|--------|------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                 |   |                         |   |                                                                                                                                                                                                                                                                                                                                                                         |
| Vinyl      Acetate Monomer (VAM)     |   | 820      million pounds      |   | VAM      is a petrochemical product used to produce a variety of polymers products      used in adhesives, water-based paint, textile coatings and paper      coatings.                                                                                                                                                                                                      |
|                                 |   |                         |   |                                                                                                                                                                                                                                                                                                                                                                         |
| Acetic      Acid                     |   | 1.2      billion pounds      |   | Acetic      acid is a raw material used to produce VAM, terephthalic acid (used to      produce polyester for textiles and plastic bottles), industrial solvents      and a variety of other chemicals.                                                                                                                                                                      |
|                                 |   |                         |   |                                                                                                                                                                                                                                                                                                                                                                         |
| Methanol                             |   | 190      million gallons (a) |   | Methanol      is a raw material used to produce acetic acid, MTBE, formaldehyde and      several other products.                                                                                                                                                                                                                                                             |
|                                 |   |                         |   |                                                                                                                                                                                                                                                                                                                                                                         |
| Fragrance      and Flavors Chemicals |   | (b)                          |   | Fragrance      and flavors chemicals include terpene-based fragrance ingredients and      flavor ingredients, primarily for the oral care markets, and also include      products used in applications such as chemical reaction agents, or      initiators, for the rubber industry and solvents and cleaners, such as      pine oil, for the hard surface cleaner markets. |
|                                 |   |                         |   |                                                                                                                                                                                                                                                                                                                                                                         |

| (a)   | Represents      100% of the methanol capacity at the La Porte, Texas facility, which is      owned by La Porte Methanol Company, a partnership owned 85% by Millennium      and 15% by Linde. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | With      respect to fragrance and flavors chemicals, Millennium frequently works      closely with customers in developing products to satisfy the specific      requirements of those customers, and capacity varies      accordingly. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Mark

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Raw Materials

Com

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EQUI

Che

Ove

| ·   | the      primary products of Equistar’s chemicals  segment; |
|--------------------|-------------------------------------------------------------------|

| ·   | annual      processing capacity as of December 31, 2007;and |
|--------------------|-------------------------------------------------------------|

| ·   | the      primary uses for those products. |
|--------------------|-------------------------------------------|

| Products                   |   | Annual Capacity                 |   | Primary      Uses                                                                                                                                                                                                                                                                                                                             |
|----------------------------|--------|--------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Ethylene              |   | 10.8      billion pounds (a)    |   | Ethylene      is used as a raw material to manufacture polyethylene, EO, ethanol,      ethylene dichloride, styrene and vinyl acetate monomer.                                                                                                                                                                                           |
| Ethylene      Co-Products: |   |                                 |   |                                                                                                                                                                                                                                                                                                                                          |
| Propylene             |   | 4.8      billion pounds (a)(b)  |   | Propylene      is used to produce polypropylene, acrylonitrile and propylene      oxide.                                                                                                                                                                                                                                                 |
| Butadiene                  |   | 1.2      billion pounds         |   | Butadiene      is used to manufacture styrene-butadiene rubber and polybutadiene rubber,      which are used in the manufacture of tires, hoses, gaskets and other      rubber products.  Butadiene is also used in the production of      paints, adhesives, nylon clothing, carpets, paper coatings and engineered      plastics. |
| Aromatics:                 |   |                                 |   |                                                                                                                                                                                                                                                                                                                                          |
| Benzene               |   | 310      million gallons   |   | Benzene      is used to produce styrene, phenol and cyclohexane. These products are      used in the production of nylon, plastics, synthetic rubber and      polystyrene.  Polystyrene is used in insulation, packaging and      drink cups.                                                                                  |
| Toluene                    |   | 66      million gallons              |   | Toluene      is used as an octane enhancer in gasoline, as a chemical raw material for      benzene and/or paraxylene production, and a core ingredient in toluene      diisocyanate, a compound used in urethane  production.                                                                                                                |

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| Products                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Annual Capacity                                                                 |   | Primary      Uses                                                                                                                                                                |
|-----------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Ethylene      Derivatives:               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                 |   |                                                                                                                                                                             |
| Ethylene      Oxide (EO)                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 1.5      billion pounds EO equivalents; 400 million pounds as pure EO      (c)  |   | EO      is used to produce surfactants, industrial cleaners, cosmetics,      emulsifiers, paint, heat transfer fluids and ethylene glycol.                                  |
| Ethylene      Glycol (EG)                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 1.4      billion pounds (c)                                                |   | EG      is used to produce polyester fibers and film, polyethylene terephthalate      (“PET”) resin, heat transfer fluids and automobileantifreeze.             |
| Other      Ethylene OxideDerivatives     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 225      million pounds                                                    |   | EO      derivatives include ethylene glycol ethers and ethanolamines, and are used      to produce paint and coatings, polishes, solvents and chemical      intermediates.  |
| Ethanol                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 50      million gallons                                                         |   | Ethanol      is used in the production of solvents as well as household, medicinal and      personal care products.                                                         |
| Gasoline      Blending Components:       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                 |   |                                                                                                                                                                             |
| Methyl      Tertiary Butyl Ether (MTBE)  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 284      million gallons(18,500      barrels/day) (d)                      |   | MTBE      is a high octane gasoline blending component.                                                                                                                     |
| Alkylate                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 337      million gallons (e)                                                    |   | Alkylate      is a high octane gasoline blending component.                                                                                                                 |
|                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                 |
| (a)                                           | Excludes      850 million pounds/year of ethylene capacity and 200 million      pounds/year of propylene capacity at Equistar’s Lake Charles, Louisiana      ethylene and co-products facility, which has been idled since the first      quarter 2001.  Although Equistar retains the physical ability to      restart or sell that facility, in the third quarter of 2006 Equistar      determined that it had no expectation of resuming production at that      facility.  |
| (b)                                           | Does      not include refinery-grade material from Lyondell’s refinery or production      from the product flexibility unit at the Channelview facility, which can      convert ethylene and other light petrochemicals into      propylene.  These facilities have an annual processing capacity      of an additional one billion pounds/year of propylene.                                                                                                                       |
| (c)                                           | Includes      700 million pounds/year of EO equivalents capacity and      800 million pounds/year of EG capacity at the Beaumont, Texas      facility, which represents 100% of the EO equivalents capacity and EG      capacity, respectively, at the facility.  The Beaumont, Texas      facility is owned by PD Glycol, a partnership owned 50% by Equistar and      50% by E. I. du Pont de Nemours and Company (“DuPont”).                                          |
| (d)                                           | Includes      up to 44 million gallons/year of capacity produced for and returned      to Lyondell.                                                                                                                                                                                                                                                                                                                                                                                                 |
| (e)                                           | Includes      up to 172 million gallons/year of capacity produced for and returned      to Lyondell.                                                                                                                                                                                                                                                                                                                                                                                                |

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Com

Poly

Ove

| ·   | the      primary products of Equistar’s polymerssegment; |
|--------------------|----------------------------------------------------------------|

| ·   | annual      processing capacity as of December 31, 2007;and |
|--------------------|-------------------------------------------------------------|

| ·   | the      primary uses for those products. |
|--------------------|-------------------------------------------|

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| Product                                          |   | Annual      Capacity          |   | Primary      Uses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------------------------------------------------|--------|-------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Polyethylene:                                    |   |                          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| High      densitypolyethylene      (HDPE)   |   | 3.1      billion pounds  |   | HDPE      is used to manufacture grocery, merchandise and trash bags; food      containers for items from frozen desserts to margarine; plastic caps and      closures; liners for boxes of cereal and crackers; plastic drink cups and      toys; dairy crates; bread trays; pails for items from paint to fresh      fruits and vegetables; safety equipment such as hard hats; house wrap for      insulation; bottles for household and industrial chemicals and motor oil;      milk, water, and juice bottles; large (rotomolded) tanks for storing      liquids such as agricultural and lawn care chemicals; and      pipe.  |
| Low      densitypolyethylene      (LDPE)         |   | 1.5      billion pounds  |   | LDPE      is used to manufacture food packaging films; plastic bottles for packaging      food and personal care items; dry cleaning bags; ice bags; pallet shrink      wrap; heavy-duty bags for mulch and potting soil; boil-in-bag bags;      coatings on flexible packaging products; and coatings on paper board such      as milk cartons. Ethylene vinyl acetate is a specialized form of LDPE used      in foamed sheets, bag-in-box bags, vacuum cleaner hoses, medical tubing,      clear sheet protectors and flexible binders.                                                                                           |
| Linear      low densitypolyethylene      (LLDPE) |   | 1.2      billion pounds  |   | LLDPE      is used to manufacture garbage and lawn-leaf bags; industrial can liners;      housewares; lids for coffee cans and margarine tubs, dishpans, home      plastic storage containers, kitchen trash containers; large (rotomolded)      toys like outdoor gym sets; drip irrigation tubing; wire and cable      insulating resins and compounds used to insulate copper and fiber optic      wiring, and film; shrink wrap for multi-packaging canned food, bag-in-box      bags, produce bags, and pallet stretch wrap.                                                                                                    |
| Polypropylene                               |   | 280      million pounds  |   | Polypropylene      is used to manufacture fibers for carpets, rugs and upholstery;      housewares; automotive battery cases; automotive fascia, running boards      and bumpers; grid-type flooring for sports facilities; fishing tackle      boxes; and bottle caps and closures.                                                                                                                                                                                                                                                                                                                                                 |

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Com

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ENV

RESEA

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EMPL

Item 

Risk

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| ·   | supply      of and demand for raw materials; |
|--------------------|----------------------------------------------|

| ·   | changes      in customer buying patterns and demand for Millennium’s and its joint      ventures’ products; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------|

| ·   | general      economic conditions; |
|--------------------|-----------------------------------|

| ·   | domestic      and international events andcircumstances; |
|--------------------|----------------------------------------------------------|

| ·   | competitor      actions; |
|--------------------|--------------------------|

| ·   | governmental      regulation in the U.S. and abroad;and |
|--------------------|---------------------------------------------------------|

| ·   | severe      weather and natural disasters. |
|--------------------|--------------------------------------------|

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|   | Ÿ | difficulties      arising from LyondellBasell Industries operating a significantly larger      and more complex organization and adding Lyondell’s operations (including      those of Millennium) to Basell’s legacy  operations; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Ÿ | difficulties      in the assimilation of the assets and operations of the Lyondell      businesses (including those of Millennium) with the assets and operations      of Basell, especially when the assets are in business segments not shared      historically by both companies or involve joint venture      partners; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Ÿ | the loss of, or difficulty in      attracting, customers, business partners or key employees as a result of      uncertainties associated with the acquisition or  otherwise; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Ÿ | customers and business partners      being unwilling to continue doing business with Millennium on the same or      similar terms as a result of theacquisition; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Ÿ | challenges      associated with the implementation of changes in management in connection      with the acquisition and the integration of the combined company      management team; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Ÿ | difficulties      in consolidating the workforces; |
|--------|--------|----------------------------------------------------|

|   | Ÿ | the      diversion of attention from other business  concerns; |
|--------|--------|----------------------------------------------------------------|

|   | Ÿ | difficulties      arising from coordinating geographically disparate organizations, systems      and facilities; |
|--------|--------|------------------------------------------------------------------------------------------------------------------|

|   | Ÿ | difficulties      arising from coordinating and consolidating corporate and administrative      functions, including integration of internal controls and      procedures; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Ÿ | unforeseen      legal, regulatory, contractual, labor or other issues;  and |
|--------|--------|-----------------------------------------------------------------------------|

|   | Ÿ | the      failure to realize expected profitability or  growth. |
|--------|--------|----------------------------------------------------------------|

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| ·   | pipeline      leaks and ruptures; |
|--------------------|-----------------------------------|

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| ·   | explosions; |
|--------------------|-------------|

| ·   | fires; |
|--------------------|--------|

| ·   | severe      weather and natural disasters; |
|--------------------|--------------------------------------------|

| ·   | mechanical      failure; |
|--------------------|--------------------------|

| ·   | unscheduled      downtimes; |
|--------------------|-----------------------------|

| ·   | supplier      disruptions; |
|--------------------|----------------------------|

| ·   | labor      shortages or other difficulties; |
|--------------------|---------------------------------------------|

| ·   | transportation      interruptions; |
|--------------------|------------------------------------|

| ·   | remediation      complications; |
|--------------------|---------------------------------|

| ·   | chemical      spills; |
|--------------------|-----------------------|

| ·   | discharges      or releases of toxic or hazardous substances or  gases; |
|--------------------|-------------------------------------------------------------------------|

| ·   | storage      tank leaks; |
|--------------------|--------------------------|

| ·   | other      environmental risks; and |
|--------------------|-------------------------------------|

| ·   | terrorist      acts. |
|--------------------|----------------------|

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Risks

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|   | Ÿ | make      Millennium more vulnerable to a downturn in its businesses, its industry      or the economy in general as a significant percentage of its cash flow      from operations is required to make payments on its indebtedness, making      it more difficult to react to changes in its business and in market or      industry conditions; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Ÿ | require      Millennium to dedicate a substantial portion of its future cash flow from      operations to the payment of principal and interest on indebtedness,      thereby reducing the availability of its cash flow to grow its business      and to fund working capital, capital expenditures, research and      development efforts and other general corporate  purposes; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Ÿ | constrain      its ability to obtain additional financing in the future for working      capital, capital expenditures, acquisitions, debt service requirements or      other purposes, on satisfactory terms or at all, especially given the      current weak environment in the capitalmarkets; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Ÿ | make      it more difficult for it to satisfy its financial    obligations; |
|--------|--------|-----------------------------------------------------------------------------|

|   | Ÿ | place      it at a competitive disadvantage as compared to competitors that have less      debt and lower debt service requirements;and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------|

|   | Ÿ | make      it more vulnerable to increases in interest rates since part of its      indebtedness is, and any future debt may be, subject to variable interest      rates. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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FOR

| ·   | the      availability, cost and price volatility of raw materials and      utilities, |
|--------------------|---------------------------------------------------------------------------------------|

| ·   | the      supply/demand balances for Millennium’s and its joint ventures’ products,      and the related effects of industry production capacities and operating      rates, |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | operating      interruptions (including leaks, explosions, fires, weather-related      incidents, mechanical failure, unscheduled downtime, supplier disruptions,      labor shortages or other labor difficulties, transportation interruptions,      spills and releases and other environmental  risks), |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | legal,      tax and environmental proceedings, |
|--------------------|------------------------------------------------|

| ·   | uncertainties      associated with the U. S. and worldwide economies, including those due to      political tensions in the Middle East and  elsewhere, |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the      cyclical nature of the chemicalindustry, |
|--------------------|---------------------------------------------------|

| ·   | current      and potential governmental regulatory actions in the U. S. and in other      countries, |
|--------------------|------------------------------------------------------------------------------------------------------|

| ·   | terrorist      acts and international politicalunrest, |
|--------------------|--------------------------------------------------------|

| ·   | risks      of doing business outside the U.S., including foreign currency      fluctuations, |
|--------------------|----------------------------------------------------------------------------------------------|

| ·   | Millennium’s      abilitiy to service itsindebtedness, |
|--------------------|--------------------------------------------------------------|

| ·   | available      cash and access to capital markets, |
|--------------------|----------------------------------------------------|

| ·   | competitive      products and pricing pressures, |
|--------------------|--------------------------------------------------|

| ·   | technological      developments, and |
|--------------------|--------------------------------------|

| ·   | Millennium’s      ability to implement its business strategies, including integration with      LyondellBasell Industries. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------|

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INDU

NON

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Item 2

Prin

| Location                                                                                                                                                                                                                                                                              |   | Segment   |   | Principal      Products                                                   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------|--------|---------------------------------------------------------------------------|
| Millennium      Facilities                                                                                                                                                                                                                                                            |   |      |   |                                                                      |
|                                                                                                                                                                                                                                                                                  |   |      |   |                                                                      |
| Brunswick,      Georgia                                                       |   | Chemicals |   | Fragrance      and Flavors Chemicals                                      |
|                                                                                                                                                                                                                                                                                  |   |      |   |                                                                      |
| Jacksonville,      Florida                                                    |   | Chemicals |   | Fragrance      and Flavors Chemicals                                      |
|                                                                                                                                                                                                                                                                                  |   |      |   |                                                                      |
| La      Porte, Texas      †                                             |   | Chemicals |   | VAM      and Acetic Acid                                                  |
|                                                                                                                                                                                                                                                                                  |   |      |   |                                                                      |
| La      Porte, Texas      (a)                                                 |   | Chemicals |   | Methanol                                                                  |
|                                                                                                                                                                                                                                                                                  |   |      |   |                                                                      |
| Equistar      Facilities                                                                                                                                                                                                                                                              |   |      |   |                                                                      |
|                                                                                                                                                                                                                                                                                  |   |      |   |                                                                      |
| Bayport      (Pasadena), Texas †*                                                                                                                                                                                                                                               |   | Chemicals |   | EO,      EG and other EO Derivatives                                      |
|                                                                                                                                                                                                                                                                                  |   |      |   |                                                                      |
| Bayport      (Pasadena), Texas (b)†                                                                                                                                                                                                                                             |   | Polymers  |   | LDPE                                                                      |
|                                                                                                                                                                                                                                                                                  |   |      |   |                                                                      |
| Beaumont,      Texas      (c)†                                          |   | Chemicals |   | EG                                                                        |
|                                                                                                                                                                                                                                                                                  |   |      |   |                                                                      |
| Channelview,      Texas (d)†*                                                                                                                                                                                                                                                   |   | Chemicals |   | Ethylene,      Propylene, Butadiene, Benzene, Toluene, Alkylate and  MTBE |
|                                                                                                                                                                                                                                                                                  |   |      |   |                                                                      |
| Chocolate      Bayou, Texas (e)(f)†                                                                                                                                                                                                                                             |   | Chemicals |   | Ethylene,      Propylene, Butadiene, Benzene, Toluene and MTBE            |
|                                                                                                                                                                                                                                                                                  |   |      |   |                                                                      |
| Chocolate      Bayou, Texas (e) †*                                                                                                                                                                                                                                              |   | Polymers  |   | HDPE                                                                      |
|                                                                                                                                                                                                                                                                                  |   |      |   |                                                                      |
| Clinton,      Iowa      †*                                              |   | Chemicals |   | Ethylene      and Propylene                                               |
|                                                                                                                                                                                                                                                                                  |   | Polymers  |   | LDPE      and HDPE                                                        |
|                                                                                                                                                                                                                                                                                  |   |      |   |                                                                      |
| Corpus      Christi, Texas †*                                                                                                                                                                                                                                                   |   | Chemicals |   | Ethylene,      Propylene, Butadiene and Benzene                           |
|                                                                                                                                                                                                                                                                                  |   |      |   |                                                                      |
| Fairport      Harbor, Ohio *                                                                                                                                                                                                                                                          |   | Polymers  |   | Performance      Polymers                                                 |
|                                                                                                                                                                                                                                                                                  |   |      |   |                                                                      |
| La      Porte, Texas      †*                                            |   | Chemicals |   | Ethylene      and Propylene                                               |
|                                                                                                                                                                                                                                                                                  |   | Polymers  |   | LDPE      and LLDPE                                                       |
|                                                                                                                                                                                                                                                                                  |   |      |   |                                                                      |
| Lake      Charles, Louisiana (g)                                                                                                                                                                                                                                                      |   | Chemicals |   | Ethylene      and Propylene                                               |
|                                                                                                                                                                                                                                                                                  |   |      |   |                                                                      |
| Matagorda,      Texas      †*                                           |   | Polymers  |   | HDPE                                                                      |
|                                                                                                                                                                                                                                                                                  |   |      |   |                                                                      |
| Morris,      Illinois      †*                                           |   | Chemicals |   | Ethylene      and Propylene                                               |
|                                                                                                                                                                                                                                                                                  |   | Polymers  |   | LDPE,      LLDPE and Polypropylene                                        |
|                                                                                                                                                                                                                                                                                  |   |      |   |                                                                      |
| Newark,      New      Jersey                                                  |   | Chemicals |   | Denatured      Alcohol                                                    |
|                                                                                                                                                                                                                                                                                  |   |      |   |                                                                      |
| Tuscola,      Illinois      †                                           |   | Chemicals |   | Ethanol                                                                   |
|                                                                                                                                                                                                                                                                                  |   |      |   |                                                                      |
| Victoria,      Texas      (f)†*                                         |   | Polymers  |   | HDPE                                                                      |

|   | _________________________ |
|--------|---------------------------|

| † | Facilities      which received the OSHA Star Certification, which is the highest safety      designation issued by the U.S. Department of  Labor. |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------|

| * | The      facility, or portions of the facility, as applicable, owned by Equistar      are mortgaged as collateral for Lyondell’s credit  facility. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------|

| (a) | The      facility is owned by La Porte Methanol Company, a partnership owned 15% by      an unrelated party. |
|-----|--------------------------------------------------------------------------------------------------------------|

| (b) | The      facility is located on leased land.  The facility is owned by      Equistar and operated by an unrelatedparty. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------|

| (c) | The      Beaumont facility is owned by PD Glycol, a partnership owned 50% by      Equistar and 50% by an unrelated party.  The facility is located      on leased land. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d) | The      Channelview facility has two ethylene processing units owned by      Equistar.  An unrelated party owns an idled facility at the site      on land leased from Equistar.  Equistar also operates a styrene      maleic anhydride unit and a polybutadiene unit, which are owned by an      unrelated party and are located on property leased from Equistar within      the Channelview facility. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e) | Millennium      and Occidental each contributed to Equistar a facility located at the      Chocolate Bayou site.  These facilities are not on contiguous      property. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (f) | The facility is located on      leased land. |
|-----|----------------------------------------------|

| (g) | The      Lake Charles facility has been idled since the first quarter of      2001.  Although Equistar retains the physical ability to restart      or sell that facility, in the third quarter of 2006   Equistar      determined that it had no expectation of resuming production at that      facility. The facility and land are leased from Occidental under a lease      that expires in May 2009. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Other

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Ind

tem 

PAR

Item 5

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Item 6. 

|                                                                          |   | Sucessor                                                                          |     |   | Predecessor                                                                     |   |
|-------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------|----------|--------|---------------------------------------------------------------------------------|--------|
|                                                                          |   | For      theperiod      fromDecember      21throughDecember      31,2007      (a) |     |   | For      theperiod      fromJanuary      1throughDecember 20,2007      (a) |   |   | For      the Year Ended December 31, |   |
| Millions of      dollars                                                      |   | 2006                                                                              |     |   | 2005                                                                            |   |   | 2004 |   |   | 2003 |   |
| Results      of Operations Data:                                              |   |                                                                              |     |   |                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Sales      and other operating revenues                                       |   | $                                                                                 | 26       |   |                                                                            | $      | 616 |   |   | $ | 602 |   |   | $ | 610 |   |   | $ | 559 |   |   | $ | 515 |   |
| Income      (loss) from equity investment in Equistar after push down    debt |   |                                                                              | -      - |   |                                                                            |   | (64 | ) |   |   | 181 |   |   |   | 221 |   |   |   | 81 |   |   |   | (100 | ) |
|                                                                          |   |                                                                              |     |   |                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income      (loss) from continuing operations after push down debt      (b)   |   |                                                                              | (6       | )      |                                                                            |   | (7 | ) |   |   | 108 |   |   |   | 45 |   |   |   | (5 | ) |   |   | (78 | ) |
| Balance      Sheet Data:                                                      |   |                                                                              |     |   |                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      assets                                                             |   |                                                                              | 959      |   |                                                                            |   |   |   |   |   | 2,414 |   |   |   | 2,532 |   |   |   | 2,584 |   |   |   | 2,398 |   |
| Long-term      debt:                                                          |   |                                                                              |     |   |                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Push      down debt                                                           |   |                                                                              | 350      |   |                                                                            |   |   |   |   |   | -      - |   |   |   | -      - |   |   |   | -      - |   |   |   | -      - |   |
| Debt      of Millennium                                                       |   |                                                                              | 170      |   |                                                                            |   |   |   |   |   | 767 |   |   |   | 859 |   |   |   | 1,382 |   |   |   | 1,445 |   |
| Cash      Flow Data:                                                          |   |                                                                              |     |   |                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      provided by (used in) -                                             |   |                                                                              |     |   |                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      activities                                                     |   |                                                                              | 33       |   |                                                                            |   | (264 | ) |   |   | 193 |   |   |   | 275 |   |   |   | 195 |   |   |   | (92 | ) |
| Investing      activities                                                     |   |                                                                              | (1       | )      |                                                                            |   | 1,005 |   |   |   | (65 | ) |   |   | (60 | ) |   |   | (41 | ) |   |   | (48 | ) |
| Financing      activities                                                     |   |                                                                              | (1       | )      |                                                                            |   | (843 | ) |   |   | (290 | ) |   |   | (272 | ) |   |   | (38 | ) |   |   | 205 |   |

|   | __________ |
|--------|------------|

| (a)   | As      a result of the acquisition of Lyondell by LyondellBasell Industries on      December 20, 2007, Millennium’s assets and liabilities were revalued to      reflect the value assigned in LyondellBasell Industries’ accounting for      the purchase of Lyondell, resulting in a new basis of      accounting.  To indicate the application of a different basis of      accounting for the period subsequent to the acquisition, the 2007      financial statements present separately the period prior to the      acquisition (“Predecessor”) and the 11-day period after the acquisition      (“Successor”).  The effects of recording Millennium’s share of      Equistar’s push down debt resulted in a $1,666 million reduction to      zero of Millennium’s investment in Equistar.  In addition,      Millennium recorded $350 million of push down debt for which      Millennium is not the primary obligor, but which it has guaranteed and      which was used by LyondellBasell Industries in the acquisition of Lyondell      (“push-down debt”).  See Notes 7 and 13 to Millennium’s      Consolidated Financials. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | The      Predecessor 2007 period included after-tax benefits of $62 million related      to settlements of income tax issues.  In 2006 and 2005,      Millennium recognized an after-tax benefit of $25 million and an after-tax      change of $19 million, respectively, related to change in estimates for      prior year income tax items.  The 2004 loss before cumulative      effect of accounting change included after-tax business combination costs      of $33 million. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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ACQ

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|                                                                                        |   |             Successor |     |   | Predecessor       |   |     |                                 |   |   |        |   |
|---------------------------------------------------------------------------------------------|--------|-----------------------------------------------------|----------|--------|-------------------|--------|----------|--------------------------------------|--------|--------|-------------|--------|
|                                                                                        |   | For      the                                        |     |   | For      the      |   |     |                                 |   |   |        |   |
|                                                                                        |   | period      from                                    |     |   | period      from  |   |     |                                 |   |   |        |   |
|                                                                                        |   | December      21                                    |     |   | January      1    |   |     |                                 |   |   |        |   |
|                                                                                        |   | Through                                             |     |   | through           |   |     | Combined                             |   |   | Predecessor |   |
|                                                                                        |   | December      31,                                   |     |   | December      20, |   |     | For      the year ended December 31, |   |
| Millions of      dollars                                                                    |   | 2007                                                |     |   | 2007              |   |     | 2007                                 |   |   | 2006        |   |   | 2005 |   |
| Sales      and other operating revenues                                                     |   | $                                                   | 26       |   |              | $      | 616      |                                 |   | $      | 642         |   |   | $ | 602 |   |   | $ | 610 |   |
| Cost      of sales                                                                          |   |                                                | 35       |   |              |   | 515      |                                 |   |   | 550         |   |   |   | 537 |   |   |   | 541 |   |
| Selling,      general and administrative expenses                                           |   |                                                | -      - |   |              |   | 99       |                                 |   |   | 99          |   |   |   | 50 |   |   |   | 78 |   |
| Research      and development expenses                                                      |   |                                                | -      - |   |              |   | 3        |                                 |   |   | 3           |   |   |   | 4 |   |   |   | 2 |   |
| Other                                                                                       |   |                                                | -      - |   |              |   | -      - |                                 |   |   | -      -    |   |   |   | -      - |   |   |   | 1 |   |
| Operating      income (loss)                                                                |   |                                                | (9       | )      |              |   | (1       | )                                    |   |   | (10         | )      |   |   | 11 |   |   |   | (12 | ) |
| Interest      expense                                                                       |   |                                                | 4        |   |              |   | (2       | )                                    |   |   | 2           |   |   |   | (67 | ) |   |   | (115 | ) |
| Interest      income                                                                        |   |                                                | -      - |   |              |   | 23       |                                 |   |   | 23          |   |   |   | 4 |   |   |   | 4 |   |
| Other      expense, net                                                                     |   |                                                | -      - |   |              |   | (13      | )                                    |   |   | (13         | )      |   |   | (4 | ) |   |   | (22 | ) |
| Income      (loss) from equity investment in      Equistar Chemicals, LP                    |   |                                                | (14      | )      |              |   | (64      | )                                    |   |   | (78         | )      |   |   | 181 |   |   |   | 221 |   |
| Effect      of push-down debt on loss from equity investment in Equistar      Chemicals, LP |   |                                                | 14       |   |              |   |     |                                 |   |   | 14          |   |   |   |   |   |   |   |   |   |
| Provision      for (benefit from) income taxes                                              |   |                                                | -      - |   |              |   | (50      | )                                    |   |   | (50         | )      |   |   | 17 |   |   |   | 31 |   |
| Income      (loss) from continuing operations                                               |   |                                                | (5       | )      |              |   | (7       | )                                    |   |   | (12         | )      |   |   | 108 |   |   |   | 45 |   |
| Income      (loss) from discontinued operations, net of tax                                 |   |                                                | -      - |   |              |   | 292      |                                 |   |   | 292         |   |   |   | 51 |   |   |   | (17 | ) |
| Loss      before push down debt                                                             |   |                                                | (5       | )      |              |   |     |                                 |   |   |        |   |   |   |   |   |   |   |   |   |
| Interest      expense on push-down debt                                                     |   |                                                | (1       | )      |              |   |     |                                 |   |   | (1          | )      |   |   |   |   |   |   |   |   |
| Net      income (loss)                                                                      |   | $                                                   | (6       | )      |              | $      | 285      |                                 |   | $      | 279         |   |   | $ | 159 |   |   | $ | 28 |   |

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RES

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| ·   | crude      oil-based liquids (“liquids” or “heavy liquids”), including naphthas,      condensates, and gas oils, the prices of which are generally related to      crude oil prices; and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | natural      gas liquids (“NGLs”), principally ethane and propane, the prices of which      are generally affected by natural gasprices. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                                          |   | Average      Benchmark Price for the Year andPercent      Change Versus Prior Year Average |   |
|-------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------|--------|
|                                                                          |   | 2007                                                                                       |   |   | PercentIncrease |   |   | 2006 |   |   | PercentIncrease      (Decrease) |   |   | 2005 |   |
|                                                                          |   |                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Crude      oil – dollars per barrel                                     |   |                                                                                       | 72.23  |   |   |   | 9 | % |   |   | 66.03 |   |   |   | 17 | % |   |   | 56.44 |   |
| Natural      gas – dollars per million BTUs                             |   |                                                                                       | 6.81   |   |   |   | 4 | % |   |   | 6.53 |   |   |   | (14 | )% |   |   | 7.58 |   |
| NWE      Naphtha – dollars per barrel                                   |   |                                                                                       | 75.91  |   |   |   | 21 | % |   |   | 62.70 |   |   |   | 19 | % |   |   | 52.79 |   |
| Weighted      average cost of ethyleneproduction      – cents per pound |   |                                                                                       | 37.98  |   |   |   | 22 | % |   |   | 31.05 |   |   |   | 5 | % |   |   | 29.58 |   |
| Ethylene      – cents per pound                                         |   |                                                                                       | 48.75  |   |   |   | 1 | % |   |   | 48.08 |   |   |   | 9 | % |   |   | 44.21 |   |
| Propylene      – cents per pound                                        |   |                                                                                       | 50.41  |   |   |   | 10 | % |   |   | 45.83 |   |   |   | 12 | % |   |   | 40.75 |   |
| Benzene      – cents per gallon                                         |   |                                                                                       | 361.67 |   |   |   | 11 | % |   |   | 326.33 |   |   |   | 13 | % |   |   | 289.88 |   |
| HDPE      – cents per pound                                             |   |                                                                                       | 73.25  |   |   |   | 3 | % |   |   | 71.42 |   |   |   | 6 | % |   |   | 67.29 |   |

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|                                          |   | For      the year ended December 31, |   |
|-----------------------------------------------|--------|--------------------------------------|--------|
| Millions of      dollars                      |   | 2007                                 |   |   | 2006 |   |   | 2005 |   |
| Sales      and other operating revenues:      |   |                                 |   |   |   |   |   |   |   |
| Chemicals                                     |   | $                                    | 639    |   |   | $ | 593 |   |   | $ | 599 |   |
| Other                                         |   |                                 | 3      |   |   |   | 9 |   |   |   | 11 |   |
|                                          |   |                                 |   |   |   |   |   |   |   |   |   |   |
| Operating      income (loss):                 |   |                                 |   |   |   |   |   |   |   |   |   |   |
| Chemicals                                     |   | $                                    | 69     |   |   | $ | 43 |   |   | $ | 48 |   |
| Other                                         |   |                                 | (79    | ) |   |   | (32 | ) |   |   | (60 | ) |
|                                          |   |                                 |   |   |   |   |   |   |   |   |   |   |
| Chemicals      segment sales volumes:         |   |                                 |   |   |   |   |   |   |   |   |   |   |
| Acetyls:                                      |   |                                 |   |   |   |   |   |   |   |   |   |   |
| Vinyl      Acetate Monomer (VAM) (pounds)     |   |                                 | 604    |   |   |   | 644 |   |   |   | 712 |   |
| Acetic      acid (pounds)                     |   |                                 | 598    |   |   |   | 589 |   |   |   | 546 |   |
| Methanol      (gallons)                       |   |                                 | 49     |   |   |   | 52 |   |   |   | 64 |   |
| Fragrance      and flavors chemicals (pounds) |   |                                 | 50     |   |   |   | 48 |   |   |   | 42 |   |

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FIN

|                       |   |            Successor |   |   | Predecessor       |   |   |                                 |   |   |        |   |
|----------------------------|--------|-----------------------------------------------|--------|--------|-------------------|--------|--------|--------------------------------------|--------|--------|-------------|--------|
|                       |   | For      the                                  |   |   | For      the      |   |   |                                 |   |   |        |   |
|                       |   | period      from                              |   |   | period      from  |   |   |                                 |   |   |        |   |
|                       |   | December      21                              |   |   | January      1    |   |   |                                 |   |   |        |   |
|                       |   | Through                                       |   |   | through           |   |   | Combined                             |   |   | Predecessor |   |
|                       |   | December      31,                             |   |   | December      20, |   |   | For      the year ended December 31, |   |
| Millions of      dollars   |   | 2007                                          |   |   | 2007              |   |   | 2007                                 |   |   | 2006        |   |   | 2005 |   |
| Source      (use) of cash: |   |                                          |   |   |              |   |   |                                 |   |   |        |   |   |   |   |
| Operating      activities  |   | $                                             | 33     |   |              | $      | (139   | )                                    |   | $      | (106        | )      |   | $ | 154 |   |   | $ | 211 |   |
| Investing      activities  |   |                                          | (1     | )      |              |   | (173   | )                                    |   |   | (174        | )      |   |   | (51 | ) |   |   | 262 |   |
| Financing      activities  |   |                                          | (1     | )      |              |   | (767   | )                                    |   |   | (768        | )      |   |   | (256 | ) |   |   | (361 | ) |

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|                                               |   |   |   | Payments      Due By Period |   |
|----------------------------------------------------|--------|--------|--------|-----------------------------|--------|
| Millions of      dollars                           |   | Total  |   | 2008                        |   |   | 2009 |   | 2010 |   |   | 2011 |   |   | 2012 |   |   | Thereafter |   |
| Long-term      debt:                               |   |   |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Push-down      debt                                |   | $      | 350    |                        | $      | - - |   |   | $ | - - |   | $ | - - |   |   | $ | - - |   |   | $ | - - |   |   | $ | 350 |   |
| Debt      of Millennium                            |   |   | 328    |                        |   | 158 |   |   |   | -      - |   |   | -      - |   |   |   | -      - |   |   |   | -      - |   |   |   | 170 |   |
| Interest      on long-term debt:                   |   |   |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Push-down      debt                                |   |   | 347    |                        |   | 18 |   |   |   | 19 |   |   | 18 |   |   |   | 19 |   |   |   | 18 |   |   |   | 255 |   |
| Interest      on long-term debt      of Millennium |   |   | 297    |                        |   | 37 |   |   |   | 37 |   |   | 37 |   |   |   | 37 |   |   |   | 37 |   |   |   | 112 |   |
| Pension      benefits:                             |   |   |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| PBO                                                |   |   | 521    |                        |   | 37 |   |   |   | 36 |   |   | 34 |   |   |   | 34 |   |   |   | 34 |   |   |   | 346 |   |
| Assets                                             |   |   | (510   | )                           |   | -      - |   |   |   | -      - |   |   | -      - |   |   |   | -      - |   |   |   | -      - |   |   |   | (510 | ) |
| Funded      status                                 |   |   | 11     |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      postretirement benefits                 |   |   | 21     |                        |   | 2 |   |   |   | 2 |   |   | 2 |   |   |   | 2 |   |   |   | 2 |   |   |   | 11 |   |
| Other                                              |   |   | 206    |                        |   | -      - |   |   |   | 19 |   |   | 19 |   |   |   | 19 |   |   |   | 19 |   |   |   | 130 |   |
| Deferred      income taxes                         |   |   | 221    |                        |   | 30 |   |   |   | 36 |   |   | 39 |   |   |   | 39 |   |   |   | 40 |   |   |   | 37 |   |
| Other      obligations:                            |   |   |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Purchase      obligations                          |   |   | 98     |                        |   | 14 |   |   |   | 9 |   |   | 9 |   |   |   | 9 |   |   |   | 9 |   |   |   | 48 |   |
| Operating      leases                              |   |   | 14     |                        |   | 8 |   |   |   | 4 |   |   | 2 |   |   |   | -      - |   |   |   | -      - |   |   |   | -      - |   |
| Total                                              |   | $      | 1,893  |                        | $      | 304 |   |   | $ | 162 |   | $ | 160 |   |   | $ | 159 |   |   | $ | 159 |   |   | $ | 949 |   |

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| ·   | $150 million      under Lyondell’s $1,150 million Accounts Receivable Securitization      Facility, which matures in December 2012.  The agreement      currently permits the sale of up to $1,150 million of total interest in      domestic accounts receivable of Lyondell, including Equistar and Houston      Refining.  The outstanding amount of accounts receivable sold      under the Accounts Receivable Securitization Facility was      $1,000 million at December 31,2007. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | $584 million      in total under a five-year $1,000 million senior secured      inventory-based credit facility of Lyondell and a subsidiary of the Basell      Group, after giving effect to the borrowing base net of $316 million      of outstanding letters of credit under the inventory-based credit facility      as of December 31, 2007.  The borrowing base is determined using      a formula applied to inventory balances.  At December 31, 2007,      the outstanding borrowing under the inventory-based credit facility was      $100 million, all on the part ofLyondell. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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CURR

RELA

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CRIT

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ACC

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ENV

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Item 7A

OM

FORE

INT

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Item 8.

Ind

|                                                                                    |  Page |
|-----------------------------------------------------------------------------------------|------------|
| MILLENNIUM      CHEMICALS INC.                                                          |       |
|  Management’s Report on Internal Control Over Financial      Reporting  | 57         |

| Reports of Independent Registered Public Accounting      Firm | 58     |
|---------------------------------------------------------------|--------|
|  Consolidated      Financial Statements:                 |   |

| Consolidated      Statements of Income                     | 60 |
|------------------------------------------------------------|----|
| Consolidated      Balance Sheets                           | 61 |
| Consolidated      Statements of Cash Flows                 | 63 |
| Consolidated      Statements of Stockholder’s Equity | 65 |
| Notes to the      Consolidated Financial Statements        | 66 |

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MAN

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REP

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CONS

|                                                                                        |   | Successor         |     |   | Predecessor       |   |
|---------------------------------------------------------------------------------------------|--------|-------------------|----------|--------|-------------------|--------|
|                                                                                        |   | For      the      |     |   | For      the      |   |   |   |   |
|                                                                                        |   | period      from  |     |   | period      from  |   |   |   |   |
|                                                                                        |   | December      21  |     |   | January      1    |   |   |   |   |
|                                                                                        |   | through           |     |   | through           |   |   | For      the year ended |   |
|                                                                                        |   | December      31, |     |   | December      20, |   |   | December      31, |   |
| Millions of      dollars                                                                    |   | 2007              |     |   | 2007              |   |   | 2006 |   |   | 2005 |   |
| Sales      and other operating revenues:                                                    |   |              |     |   |              |   |   |   |   |   |   |   |
| Trade                                                                                       |   | $                 | 23       |   |              | $      | 557 |   |   | $ | 535 |   |   | $ | 565 |   |
| Related      parties                                                                        |   |              | 3        |   |              |   | 59 |   |   |   | 67 |   |   |   | 45 |   |
|                                                                                        |   |              | 26       |   |              |   | 616 |   |   |   | 602 |   |   |   | 610 |   |
| Operating      costs and expenses:                                                          |   |              |     |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Cost      of sales                                                                          |   |              | 35       |   |              |   | 515 |   |   |   | 537 |   |   |   | 541 |   |
| Selling,      general and administrative expenses                                           |   |              | -      - |   |              |   | 99 |   |   |   | 50 |   |   |   | 78 |   |
| Research      and development expenses                                                      |   |              | -      - |   |              |   | 3 |   |   |   | 4 |   |   |   | 2 |   |
| Other                                                                                       |   |              | -      - |   |              |   | -      - |   |   |   | -      - |   |   |   | 1 |   |
|                                                                                        |   |              | 35       |   |              |   | 617 |   |   |   | 591 |   |   |   | 622 |   |
| Operating      income (loss)                                                                |   |              | (9       | )      |              |   | (1 | ) |   |   | 11 |   |   |   | (12 | ) |
| Interest      expense                                                                       |   |              | 4        |   |              |   | (2 | ) |   |   | (67 | ) |   |   | (115 | ) |
| Interest      income:                                                                       |   |              |     |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Related      party                                                                          |   |              | -      - |   |              |   | 16 |   |   |   | -      - |   |   |   | -      - |   |
| Other                                                                                       |   |              | -      - |   |              |   | 7 |   |   |   | 4 |   |   |   | 4 |   |
|                                                                                        |   |              |     |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Other      expense, net                                                                     |   |              | -      - |   |              |   | (13 | ) |   |   | (4 | ) |   |   | (22 | ) |
| Income      (loss) before equity investment      and income taxes                           |   |              | (5       | )      |              |   | 7 |   |   |   | (56 | ) |   |   | (145 | ) |
| Income      (loss) from equity investment in      Equistar Chemicals, LP                    |   |              | (14      | )      |              |   | (64 | ) |   |   | 181 |   |   |   | 221 |   |
| Effect      of push-down debt on loss from equity investment in Equistar Chemicals,      LP |   |              | 14       |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Income      (loss) from continuing operations before      income taxes                      |   |              | (5       | )      |              |   | (57 | ) |   |   | 125 |   |   |   | 76 |   |
| Provision      for (benefit from) income taxes                                              |   |              | -      - |   |              |   | (50 | ) |   |   | 17 |   |   |   | 31 |   |
| Income      (loss) from continuing operations                                               |   |              | (5       | )      |              |   | (7 | ) |   |   | 108 |   |   |   | 45 |   |
| Income      (loss) from discontinued operations, net of tax                                 |   |              | -      - |   |              |   | 292 |   |   |   | 51 |   |   |   | (17 | ) |
| Loss      before push-down debt                                                             |   |              | (5       | )      |              |   |   |   |   |   |   |   |   |   |   |   |
| Interest      expense on push-down debt                                                     |   |              | (1       | )      |              |   |   |   |   |   |   |   |   |   |   |   |
| Net      income (loss)                                                                      |   | $                 | (6       | )      |              | $      | 285 |   |   | $ | 159 |   |   | $ | 28 |   |

----

Table of Contents

Index to Financial Statements

CONS

|                                              |   | Successor             |     |   | Predecessor           |   |
|---------------------------------------------------|--------|-----------------------|----------|--------|-----------------------|--------|
|                                              |   | December      31,2007 |     |   | December      31,2006 |   |
| Millions of      dollars                          |
| ASSETS                                            |   |                  |     |   |                  |   |
| Current      assets:                              |   |                  |     |   |                  |   |
| Cash      and cash equivalents                    |   | $                     | 51       |   |                  | $      | 76 |   |
| Accounts      receivable:                         |   |                  |     |   |                  |   |   |   |
| Trade,      net                                   |   |                  | 106      |   |                  |   | 96 |   |
| Related      parties                              |   |                  | 17       |   |                  |   | 15 |   |
| Inventories                                       |   |                  | 104      |   |                  |   | 87 |   |
| Prepaid      expenses and other current assets    |   |                  | 73       |   |                  |   | 13 |   |
| Deferred      tax assets                          |   |                  | 9        |   |                  |   | 62 |   |
| Notes      receivable from Equistar Chemicals, LP |   |                  | 80       |   |                  |   | -      - |   |
| Current      assets held for sale                 |   |                  | -      - |   |                  |   | 661 |   |
| Total      current assets                         |   |                  | 440      |   |                  |   | 1,010 |   |
| Property,      plant and equipment, net           |   |                  | 310      |   |                  |   | 129 |   |
| Investment      in Equistar Chemicals, LP:        |   |                  |     |   |                  |   |   |   |
| Prior      to debt push down                      |   |                  | 1,652    |   |                  |   | 470 |   |
| Effect      of push down debt                     |   |                  | (1,652   | )      |                  |   | -      - |   |
| Net      investment in Equistar Chemicals, LP     |   |                  | -      - |   |                  |   | 470 |   |
| Other      investments and long-term receivables  |   |                  | 16       |   |                  |   | -      - |   |
| Goodwill,      net                                |   |                  | -      - |   |                  |   | 49 |   |
| Other      assets, net                            |   |                  | 193      |   |                  |   | 62 |   |
| Long-term      assets held for sale               |   |                  | -      - |   |                  |   | 694 |   |
| Total      assets                                 |   | $                     | 959      |   |                  | $      | 2,414 |   |
|                                              |   |                  |     |   |                  |   |   |   |

----

Table of Contents

Index to Financial Statements

|                                                                               |   | Successor             |     |   | Predecessor           |   |
|------------------------------------------------------------------------------------|--------|-----------------------|----------|--------|-----------------------|--------|
|                                                                               |   | December      31,2007 |     |   | December      31,2006 |   |
| Millions of      dollars                                                           |   |                  |     |   |                  |   |
| LIABILITIES      AND STOCKHOLDER’S EQUITY                                    |   |                  |     |   |                  |   |
| Current      liabilities:                                                          |   |                  |     |   |                  |   |
| Current      maturities of long-term debt                                          |   | $                     | 158      |   |                  | $      | - - |   |
| Accounts      payable:                                                             |   |                  |     |   |                  |   |   |   |
| Trade                                                                              |   |                  | 79       |   |                  |   | 84 |   |
| Related      parties                                                               |   |                  | 23       |   |                  |   | 18 |   |
| Accrued      liabilities                                                           |   |                  | 75       |   |                  |   | 72 |   |
| Deferred      income taxes                                                         |   |                  | 4        |   |                  |   | -      - |   |
| Current      liabilities associated with assets held for sale                      |   |                  | -      - |   |                  |   | 335 |   |
| Total      current liabilities                                                     |   |                  | 339      |   |                  |   | 509 |   |
| Long-term      debt:                                                               |   |                  |     |   |                  |   |   |   |
| Push      down                                                                     |   |                  | 350      |   |                  |   | -      - |   |
| Debt      of Millennium                                                            |   |                  | 170      |   |                  |   | 767 |   |
| Other      liabilities                                                             |   |                  | 238      |   |                  |   | 381 |   |
| Deferred      income taxes                                                         |   |                  | 221      |   |                  |   | 248 |   |
| Long-term      liabilities associated with assets held for sale                    |   |                  | -      - |   |                  |   | 361 |   |
| Commitments      and contingencies                                                 |   |                  |     |   |                  |   |   |   |
| Minority      interest                                                             |   |                  | 7        |   |                  |   | 5 |   |
| Stockholder’s      equity:                                                   |   |                  |     |   |                  |   |   |   |
| Common      stock, $0.01 par value,1,000      shares authorized, 661 shares issued |   |                  | -      - |   |                  |   | -      - |   |
| Additional      paid-in capital                                                    |   |                  | 1,745    |   |                  |   | 1,176 |   |
| Retained      deficit                                                              |   |                  | (6       | )      |                  |   | (840 | ) |
| Push      down debt                                                                |   |                  | (2,015   | )      |                  |   |   |   |
| Accumulated      other comprehensive loss                                          |   |                  | -      - |   |                  |   | (103 | ) |
| Treasury      stock, at cost, 48 shares issued                                     |   |                  | (90      | )      |                  |   | (90 | ) |
| Total      stockholder’s equity                                              |   |                  | (366     | )      |                  |   | 143 |   |
| Total      liabilities and stockholder’s equity                              |   | $                     | 959      |   |                  | $      | 2,414 |   |

----

Table of Contents

Index to Financial Statements

CON

|                                                                                                        |   | Successor         |     |   | Predecessor       |   |
|-------------------------------------------------------------------------------------------------------------|--------|-------------------|----------|--------|-------------------|--------|
|                                                                                                        |   | For      the      |     |   | For      the      |   |   |   |   |
|                                                                                                        |   | period      from  |     |   | period      from  |   |   |   |   |
|                                                                                                        |   | December      21  |     |   | January      1    |   |   |   |   |
|                                                                                                        |   | through           |     |   | through           |   |   | For      the year ended |   |
|                                                                                                        |   | December      31, |     |   | December      20, |   |   | December      31, |   |
| Millions of      dollars                                                                                    |   | 2007              |     |   | 2007              |   |   | 2006 |   |   | 2005 |   |
| Cash      flows from operating activities:                                                                  |   |              |     |   |              |   |   |   |   |   |   |   |
| Net      income (loss)                                                                                      |   | $                 | (6       | )      |              | $      | 285 |   |   | $ | 159 |   |   | $ | 28 |   |
| Loss      (income) from discontinued operations, net of tax                                                 |   |              | -      - |   |              |   | (292 | ) |   |   | (51 | ) |   |   | 17 |   |
| Adjustments      to reconcile net income (loss) tonet      cash provided by (used in) operating activities: |   |              |     |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation      and amortization                                                                          |   |              | 2        |   |              |   | 27 |   |   |   | 24 |   |   |   | 26 |   |
| Equity      investment in Equistar      Chemicals, LP -                                                     |   |              |     |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Amount      included in net (income) loss                                                                   |   |              | 14       |   |              |   | 64 |   |   |   | (181 | ) |   |   | (221 | ) |
| Distributions      of earnings                                                                              |   |              | -      - |   |              |   | -      - |   |   |   | 170 |   |   |   | 214 |   |
| Debt      push-down                                                                                         |   |              | (14      | )      |              |   | -      - |   |   |   | -      - |   |   |   | -      - |   |
| Other      effects of push down debt                                                                        |   |              | 6        |   |              |   | -      - |   |   |   | -      - |   |   |   | -      - |   |
| Deferred      income taxes                                                                                  |   |              | (6       | )      |              |   | (8 | ) |   |   | (38 | ) |   |   | (21 | ) |
| Debt      prepayment premiums and charges                                                                   |   |              | -      - |   |              |   | 15 |   |   |   | 7 |   |   |   | 11 |   |
| Changes      in assets and liabilities that provided (used) cash:                                           |   |              |     |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Accounts      receivable                                                                                    |   |              | (11      | )      |              |   | (1 | ) |   |   | (13 | ) |   |   | 9 |   |
| Inventories                                                                                                 |   |              | 13       |   |              |   | -      - |   |   |   | 8 |   |   |   | (14 | ) |
| Accounts      payable                                                                                       |   |              | 4        |   |              |   | (6 | ) |   |   | (35 | ) |   |   | 52 |   |
| Other,      net                                                                                             |   |              | 31       |   |              |   | (223 | ) |   |   | 104 |   |   |   | 110 |   |
| Net      cash provided by (used in) operating activities – continuing      operations                 |   |              | 33       |   |              |   | (139 | ) |   |   | 154 |   |   |   | 211 |   |
| Net      cash provided by (used in) operating activities – discontinued      operations               |   |              | -      - |   |              |   | (125 | ) |   |   | 39 |   |   |   | 64 |   |
| Net      cash provided by (used in) operating activities                                                    |   |              | 33       |   |              |   | (264 | ) |   |   | 193 |   |   |   | 275 |   |

----

Table of Contents

Index to Financial Statements

|                                                                                                  |   | Successor         |     |   | Predecessor       |   |
|-------------------------------------------------------------------------------------------------------|--------|-------------------|----------|--------|-------------------|--------|
|                                                                                                  |   | For      the      |     |   | For      the      |   |   |   |   |
|                                                                                                  |   | period      from  |     |   | period      from  |   |   |   |   |
|                                                                                                  |   | December      21  |     |   | January      1    |   |   |   |   |
|                                                                                                  |   | through           |     |   | through           |   |   | For      the year ended |   |
|                                                                                                  |   | December      31, |     |   | December      20, |   |   | December      31, |   |
|                                                                                                  |   | 2007              |     |   | 2007              |   |   | 2006 |   |   | 2005 |   |
| Cash      flows from investing activities:                                                            |   |              |     |   |              |   |   |   |   |   |   |   |
| Net      advances under loan agreements to Equistar Chemicals, LP                                     |   |              | -      - |   |              |   | (80 | ) |   |   | -      - |   |   |   | -      - |   |
| Expenditures      for property, plant and equipment                                                   |   |              | (1       | )      |              |   | (22 | ) |   |   | (12 | ) |   |   | (7 | ) |
| Payments      and distributions from (to) discontinued operations                                     |   |              | -      - |   |              |   | (104 | ) |   |   | (40 | ) |   |   | 269 |   |
| Distribution      from affiliates in excess of earnings                                               |   |              | -      - |   |              |   | 30 |   |   |   | -      - |   |   |   | -      - |   |
| Other                                                                                                 |   |              | -      - |   |              |   | 3 |   |   |   | 1 |   |   |   | -      - |   |
| Net      cash provided by (used in) investing activities – continuing      operations           |   |              | (1       | )      |              |   | (173 | ) |   |   | (51 | ) |   |   | 262 |   |
| Net      proceeds from sale of discontinued operations before required repayment of      debt         |   |              | -      - |   |              |   | 1,089 |   |   |   | -      - |   |   |   | -      - |   |
| Other      net cash provided by (used in) investing activities – discontinued      operations   |   |              | -      - |   |              |   | 89 |   |   |   | (14 | ) |   |   | (322 | ) |
| Net      cash provided by (used in) investing activities                                              |   |              | (1       | )      |              |   | 1,005 |   |   |   | (65 | ) |   |   | (60 | ) |
| Cash      flows from financing activities:                                                            |   |              |     |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Repayment      of long-term debt                                                                      |   |              | -      - |   |              |   | (770 | ) |   |   | (254 | ) |   |   | (366 | ) |
| Contribution      from affiliate                                                                      |   |              | -      - |   |              |   | -      - |   |   |   | -      - |   |   |   | 6 |   |
| Other                                                                                                 |   |              | (1       | )      |              |   | 3 |   |   |   | (2 | ) |   |   | (1 | ) |
| Net      cash used in financing activities – continuing operations                              |   |              | (1       | )      |              |   | (767 | ) |   |   | (256 | ) |   |   | (361 | ) |
| Debt      required to be repaid upon sale of discontinued operations                                  |   |              | -      - |   |              |   | (99 | ) |   |   | -      - |   |   |   | -      - |   |
| Other      net cash provided by (used in) financing activities – discontinued      operations   |   |              | -      - |   |              |   | 23 |   |   |   | (34 | ) |   |   | 89 |   |
| Net      cash used in financing activities                                                            |   |              | (1       | )      |              |   | (843 | ) |   |   | (290 | ) |   |   | (272 | ) |
| Effect      of exchange rate changes on cash                                                          |   |              | -      - |   |              |   | 1 |   |   |   | 4 |   |   |   | (8 | ) |
| Increase      (decrease) in cash and cash equivalents                                                 |   |              | 31       |   |              |   | (101 | ) |   |   | (158 | ) |   |   | (65 | ) |
| Cash      and cash equivalents at beginning of period                                                 |   |              | 20       |   |              |   | 121 |   |   |   | 279 |   |   |   | 344 |   |
| Cash      and cash equivalents at end of period                                                       |   |              | 51       |   |              |   | 20 |   |   |   | 121 |   |   |   | 279 |   |
| Less:  Cash      and cash equivalents at end of period – discontinued      operations |   |              | -      - |   |              |   | -      - |   |   |   | 45 |   |   |   | 50 |   |
| Cash      and cash equivalents at end of period – continuing    operations                      |   | $                 | 51       |   |              | $      | 20 |   |   | $ | 76 |   |   | $ | 229 |   |

----

Table of Contents

Index to Financial Statements

CON

|                                                                                                                              |   | Common      Stock |     |   | AdditionalPaidIn |   |     | Retained |   |   | Push      Down of |   |   | AccumulatedOtherComprehensive |     |   | TotalStockholder’sEquity |   |     | Comprehensive |   |
|-----------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|----------|--------|------------------|--------|----------|----------|--------|--------|-------------------|--------|--------|-------------------------------|----------|--------|--------------------------------|--------|----------|---------------|--------|
| Millions of      dollars                                                                                                          |   | Issued            |     |   | Treasury         |   |     | Capital  |   |   | Deficit           |   |   | Parent      Debt              |     |   | Loss                           |   |     | (Deficit)     |   |   | Income      (Loss) |   |
| Predecessor                                                                                                                       |   |              |     |   |             |   |     |     |   |   |              |   |   |                          |     |   |                           |   |     |          |   |   |   |   |
| Balance,      January 1, 2005                                                                                                |   | $                 | - -      |   |             | $      | (94      | )        |   | $      | 1,170             |   |   | $                             | (1,026   | )      |                           | $      | - -      |          |   | $ | (105 | ) |   | $ | (55 | ) |   |   |   |
| Net      income                                                                                                                   |   |              | -      - |   |             |   | -      - |     |   |   | -      -          |   |   |                          | 28       |   |                           |   | -      - |          |   |   | -      - |   |   |   | 28 |   |   | $ | 28 |   |
| Foreign      currency translation                                                                                                 |   |              | -      - |   |             |   | -      - |     |   |   | -      -          |   |   |                          | -      - |   |                           |   | -      - |          |   |   | (24 | ) |   |   | (24 | ) |   |   | (24 | ) |
| Minimum      pension liability,net      of tax of $4 million                                                                 |   |              | -      - |   |             |   | -      - |     |   |   | -      -          |   |   |                          | -      - |   |                           |   | -      - |          |   |   | 4 |   |   |   | 4 |   |   |   | 4 |   |
| Capital      contributionfrom      Lyondell                                                                                       |   |              | -      - |   |             |   | -      - |     |   |   | 6                 |   |   |                          | -      - |   |                           |   | -      - |          |   |   | -      - |   |   |   | 6 |   |   |   | -      - |   |
| Shares      sold by employeebenefit      plan trust                                                                               |   |              | -      - |   |             |   | 4        |     |   |   | -      -          |   |   |                          | (1       | )      |                           |   | -      - |          |   |   | -      - |   |   |   | 3 |   |   |   | -      - |   |
| Comprehensive      income                                                                                                         |   |              |     |   |             |   |     |     |   |   |              |   |   |                          |     |   |                           |   |     |          |   |   |   |   |   |   |   |   |   | $ | 8 |   |
| Balance,      December 31, 2005                                                                                              |   | $                 | - -      |   |             | $      | (90      | )        |   | $      | 1,176             |   |   | $                             | (999     | )      |                           | $      | - -      |          |   | $ | (125 | ) |   | $ | (38 | ) |   |   |   |   |
| Net      income                                                                                                                   |   |              | -      - |   |             |   | -      - |     |   |   | -      -          |   |   |                          | 159      |   |                           |   | -      - |          |   |   | -      - |   |   |   | 159 |   |   | $ | 159 |   |
| Foreign      currency translation                                                                                                 |   |              | -      - |   |             |   | -      - |     |   |   | -      -          |   |   |                          | -      - |   |                           |   | -      - |          |   |   | 32 |   |   |   | 32 |   |   |   | 32 |   |
| Minimum      pension liability, netof      tax of $24 million                                                                |   |              | -      - |   |             |   | -      - |     |   |   | -      -          |   |   |                          | -      - |   |                           |   | -      - |          |   |   | 47 |   |   |   | 47 |   |   |   | 47 |   |
| Change      in accountingfor      employee benefit plans,net      of tax of $27 million                                      |   |              | -      - |   |             |   | -      - |     |   |   | -      -          |   |   |                          | -      - |   |                           |   | -      - |          |   |   | (57 | ) |   |   | (57 | ) |   |   | -      - |   |
| Comprehensive      income                                                                                                         |   |              |     |   |             |   |     |     |   |   |              |   |   |                          |     |   |                           |   |     |          |   |   |   |   |   |   |   |   |   | $ | 238 |   |
| Balance,      December 31, 2006                                                                                              |   | $                 | - -      |   |             | $      | (90      | )        |   | $      | 1,176             |   |   | $                             | (840     | )      |                           | $      | - -      |          |   | $ | (103 | ) |   | $ | 143 |   |   |   |   |   |
| Change      in accounting for income taxes                                                                                        |   |              | -      - |   |             |   | -      - |     |   |   | -      -          |   |   |                          | (43      | )      |                           |   | -      - |          |   |   | -      - |   |   |   | (43 | ) |   | $ | - - |   |
| Net      income                                                                                                                   |   |              | -      - |   |             |   | -      - |     |   |   | -      -          |   |   |                          | 285      |   |                           |   | -      - |          |   |   | -      - |   |   |   | 285 |   |   |   | 285 |   |
| Foreign      currency translation                                                                                                 |   |              | -      - |   |             |   | -      - |     |   |   | -      -          |   |   |                          | -      - |   |                           |   | -      - |          |   |   | 15 |   |   |   | 15 |   |   |   | 15 |   |
| Amortization      of actuarial and investment loss included in net periodic benefit cost,      net of      tax of $3 million |   |              | -      - |   |             |   | -      - |     |   |   | -      -          |   |   |                          | -      - |   |                           |   | -      - |          |   |   | 6 |   |   |   | 6 |   |   |   | 6 |   |
| Sales      of discontinued operations                                                                                             |   |              | -      - |   |             |   | -      - |     |   |   | -      -          |   |   |                          | -      - |   |                           |   | -      - |          |   |   | (63 | ) |   |   | (63 | ) |   |   | -      - |   |
| Comprehensive      income                                                                                                         |   |              |     |   |             |   |     |     |   |   |              |   |   |                          |     |   |                           |   |     |          |   |   |   |   |   |   |   |   |   | $ | 306 |   |
| Balance,      December 20, 2007                                                                                              |   | $                 | - -      |   |             | $      | (90      | )        |   | $      | 1,176             |   |   | $                             | (598     | )      |                           | $      | - -      |          |   | $ | (145 | ) |   | $ | 343 |   |   |   |   |   |
|                                                                                                                              |   |              |     |   |             |   |     |     |   |   |              |   |   |                          |     |   |                           |   |     |          |   |   |   |   |   |   |   |   |   |   |   |   |
| Successor                                                                                                                         |   |              |     |   |             |   |     |     |   |   |              |   |   |                          |     |   |                           |   |     |          |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning      balance                                                                                                            |   | $                 | - -      |   |             | $      | (90      | )        |   | $      | 1,745             |   |   | $                             | - -      |   |                           | $      | - -      |          |   | $ | - - |   |   | $ | 1,655 |   |   |   |   |   |
| Effects      of push down debt                                                                                                    |   |              | -      - |   |             |   | -      - |     |   |   | -      -          |   |   |                          | -      - |   |                           |   | (2,015   | )             |   |   | -      - |   |   |   | (2,015 | ) |   | $ | - - |   |
| Net      loss                                                                                                                     |   |              | -      - |   |             |   | -      - |     |   |   | -      -          |   |   |                          | (6       | )      |                           |   | -      - |          |   |   | -      - |   |   |   | (6 | ) |   |   | (6 | ) |
| Comprehensive      income                                                                                                         |   |              |     |   |             |   |     |     |   |   |              |   |   |                          |     |   |                           |   |     |          |   |   |   |   |   |   |   |   |   | $ | (6 | ) |
| Balance,      December 31, 2007                                                                                              |   | $                 | - -      |   |             | $      | (90      | )        |   | $      | 1,745             |   |   | $                             | (6       | )      |                           | $      | (2,015   | )             |   | $ | - - |   |   | $ | (366 | ) |   |   |   |   |

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NOT

|  1.  |  Basis of Presentation                                     |  67  |
|-----------|-----------------------------------------------------------------|-----------|
|  2.  |  Summary of Significant Accounting    Policies             |  68  |
|  3.  |  Acquisition of Lyondell by LyondellBasell      Industries |  71  |
|  4.  |  Discontinued Operations                                   |  72  |
|  5.  |  Hurricane Effects                                         |  74  |
|  6.  |  Related Party Transactions                                |  75  |
|  7.  |  Investment in Equistar Chemicals, LP                      |  76  |
|  8.  |  Accounts Receivable                                       |  78  |
|  9.  |  Inventories                                               |  78  |
|  10. |  Property, Plant, and Equipment and Other      Assets      |  79  |
|  11. |  Accounts Payable                                          |  80  |
|  12. |  Accrued Liabilities                                       |  81  |
|  13. |  Long-Term Debt                                            |  81  |
|  14. |  Lease Commitments                                         |  83  |
|  15. |  Financial Instruments and Derivatives                     |  84  |
|  16. |  Pension and Other Postretirement    Benefits              |  85  |
|  17. |  Income Taxes                                              |  90  |
|  18. |  Commitments and Contingencies                             |  94  |
|  19. |  Stockholder’s Equity                                |  98  |
|  20. |  Supplemental Cash Flow Information                        |  99  |
|  21. |  Segment and Related Information                           |  99  |
|  22. |  Supplemental Guarantor Information                        |  102 |

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Basis 

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Sum

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Acqu

| Millions of      dollars                                            |   |   |        |
|---------------------------------------------------------------------|--------|--------|-------------|
| Allocated      purchase price                                       |   | $      |  1,655 |   |
| Book      value of Millennium net assets acquired                   |   |   | 343         |   |
| Excess      purchase price to allocate                              |   |   | 1,312       |   |
|                                                                |   |   |        |   |
| Allocation      of excess purchase price to assets and liabilities: |   |   |        |   |
| Inventories                                                         |   |   | 30          |   |
| Plant,      property and equipment                                  |   |   | 180         |   |
| Investments      and joint ventures                                 |   |   | 1,291       |   |
| Predecessor      goodwill                                           |   |   | (49         | ) |
| Other      identifiable intangibles                                 |   |   | 119         |   |
| Accumulated      other comprehensive income                         |   |   | (217        | ) |
| Deferred      taxes                                                 |   |   | (153        | ) |
| Other,      net                                                     |   |   | 111         |   |
| Goodwill                                                            |   | $      | - -         |   |

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| Millions of      dollars                |   | For      theperiod      fromJanuary 1throughDecember 20,2007 |   |   | For      the yearendedDecember 31,2006 |   |
|-----------------------------------------|--------|------------------------------------------------------------------------|--------|--------|---------------------------------------------|--------|
| Sales      and other operating revenues |   | $                                                                      | 616    |   |                                        | $      | 602 |   |
| Operating      loss                     |   |                                                                   | (17    | )      |                                        |   | (9 | ) |
| Net      income                         |   |                                                                   | 319    |   |                                        |   | 36 |   |

Disc

| Millions of      dollars                                                                     |   | Predecessor |   |
|----------------------------------------------------------------------------------------------|--------|-------------|--------|
| Gross      sales proceeds                                                                    |   | $           | 1,143  |   |
| Cash      and cash equivalents sold                                                          |   |        | (37    | ) |
| Costs      related to the sale                                                               |   |        | (17    | ) |
| Net      proceeds from sale of discontinued operationsbefore      required repayment of debt |   |        | 1,089  |   |
| Debt      required to be repaid                                                              |   |        | (99    | ) |
| Net      proceeds from sale of discontinued operations                                       |   | $           | 990    |   |

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Index to Financial Statements

|                                                        |   | Predecessor |     |
|-------------------------------------------------------------|--------|-------------|----------|
| Millions of      dollars                                    |   | 2007        |     |   | 2006 |   |   | 2005 |   |
| Sales      and other operating revenues                     |   | $           | 514      |   |   | $ | 1,346 |   |   | $ | 1,349 |   |
|                                                        |   |        |     |   |   |   |   |   |   |   |   |   |
| Gain      on sale of discontinued operations                |   |        | 333      |   |   |   | -      - |   |   |   | -      - |   |
| Other      income from discontinued operations              |   |        | 18       |   |   |   | 17 |   |   |   | 24 |   |
| Provision      for (benefit from) income taxes              |   |        | 59       |   |   |   | (36 | ) |   |   | 36 |   |
| Minority      interest                                      |   |        | -      - |   |   |   | (2 | ) |   |   | (5 | ) |
| Income      (loss) from discontinued operations, net of tax |   | $           | 292      |   |   | $ | 51 |   |   | $ | (17 | ) |

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Index to Financial Statements

|                                      |   |   |   |
|-------------------------------------------|--------|--------|--------|
| Millions of      dollars                  |   |   |   |
| Cash                                      |   | $      | 45     |   |
| Inventories                               |   |   | 353    |   |
| Other      current assets                 |   |   | 263    |   |
| Total      current assets                 |   |   | 661    |   |
| Property,      plant and equipment, net   |   |   | 522    |   |
| Goodwill,      net                        |   |   | 55     |   |
| Other      noncurrent assets, net         |   |   | 117    |   |
| Total      long-term assets               |   |   | 694    |   |
| Total      assets                         |   | $      | 1,355  |   |
|                                      |   |   |   |   |
| Current      maturities of long-term debt |   | $      | 4      |   |
| Other      current liabilities            |   |   | 331    |   |
| Total      current liabilities            |   |   | 335    |   |
| Long-term      debt                       |   |   | 82     |   |
| Other      noncurrent liabilities         |   |   | 239    |   |
| Minority      interest                    |   |   | 40     |   |
| Total      long-term liabilities          |   |   | 361    |   |
| Total      liabilities                    |   | $      | 696    |   |

Hur

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Rel

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Index to Financial Statements

|                                                         |   | Successor         |     |   | Predecessor       |   |
|--------------------------------------------------------------|--------|-------------------|----------|--------|-------------------|--------|
|                                                         |   | For      the      |     |   | For      the      |   |   |   |   |
|                                                         |   | period      from  |     |   | period      from  |   |   |   |   |
|                                                         |   | December      21  |     |   | January      1    |   |   |   |   |
|                                                         |   | through           |     |   | through           |   |   | For      the year ended |   |
|                                                         |   | December      31, |     |   | December      20, |   |   | December      31, |   |
| Millions of      dollars                                     |   | 2007              |     |   | 2007              |   |   | 2006 |   |   | 2005 |   |
| Millennium billed      related parties for:                  |   |              |     |   |              |   |   |   |   |   |   |   |
| Sales      of products and processing services–        |   |              |     |   |              |   |   |   |   |   |   |   |
| Lyondell                                                     |   | $                 | 3        |   |              | $      | 50 |   |   | $ | 58 |   |   | $ | 37 |   |
| Equistar                                                     |   |              | -      - |   |              |   | 9 |   |   |   | 9 |   |   |   | 8 |   |
|                                                         |   |              |     |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Shared      services and shared site agreements–       |   |              |     |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Equistar                                                     |   |              | -      - |   |              |   | 1 |   |   |   | 1 |   |   |   | 1 |   |
|                                                         |   |              |     |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Interest      - Equistar                                     |   |              | -      - |   |              |   | 16 |   |   |   | -      - |   |   |   | -      - |   |
|                                                         |   |              |     |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Millennium was billed      by related parties for:           |   |              |     |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Purchases      of products and processing services–    |   |              |     |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Lyondell                                                     |   | $                 | - -      |   |              | $      | 3 |   |   | $ | - - |   |   | $ | - - |   |
| Equistar                                                     |   |              | 4        |   |              |   | 93 |   |   |   | 40 |   |   |   | 53 |   |
| Occidental                                                   |   |              | -      - |   |              |   | 2 |   |   |   | 2 |   |   |   | 1 |   |
|                                                         |   |              |     |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Shared      services, transition and lease agreements– |   |              |     |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Lyondell                                                     |   |              | 1        |   |              |   | 25 |   |   |   | 11 |   |   |   | -      - |   |
| Equistar                                                     |   |              | 1        |   |              |   | 25 |   |   |   | 15 |   |   |   | 26 |   |

 Investment 

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Index to Financial Statements

|                                               |   | Successor         |   |   | Predecessor       |   |
|----------------------------------------------------|--------|-------------------|--------|--------|-------------------|--------|
|                                               |   | December 31, |   |   | December 31, |   |
| Millions of      dollars                           |   | 2007              |   |   | 2006              |   |
| BALANCE      SHEETS                                |   |              |   |   |              |   |
| Total      current assets                          |   | $                 | 2,012  |   |              | $      | 2,158 |   |
| Property,      plant and equipment, net            |   |              | 5,116  |   |              |   | 2,846 |   |
| Goodwill                                           |   |              | 750    |   |              |   | -      - |   |
| Debt      issuance costs on push down debt         |   |              | 334    |   |              |   | -      - |   |
| Investments      and other assets, net             |   |              | 1,860  |   |              |   | 355 |   |
| Total      assets                                  |   | $                 | 10,072 |   |              | $      | 5,359 |   |
|                                               |   |              |   |   |              |   |   |   |
| Current      maturities of long-term debt:         |   |              |   |   |              |   |   |   |
| Push      down debt                                |   | $                 | 146    |   |              | $      | - - |   |
| Other                                              |   |              | 27     |   |              |   | -      - |   |
| Related      party borrowings – push down    |   |              | 717    |   |              |   | -      - |   |
| Other      current liabilities                     |   |              | 1,541  |   |              |   | 1,217 |   |
| Long-term      debt:                               |   |              |   |   |              |   |   |   |
| Push      down debt                                |   |              | 16,829 |   |              |   | -      - |   |
| Other                                              |   |              | 129    |   |              |   | 2,160 |   |
| Other      liabilities and deferred revenues       |   |              | 295    |   |              |   | 378 |   |
| Partners’      capital (deficit)             |   |              | (9,612 | )      |              |   | 1,604 |   |
| Total      liabilities and partners’ capital |   | $                 | 10,072 |   |              | $      | 5,359 |   |

|                                                 |   | Successor         |     |   | Predecessor       |   |
|------------------------------------------------------|--------|-------------------|----------|--------|-------------------|--------|
|                                                 |   | For      the      |     |   | For      the      |   |   |   |   |
|                                                 |   | period      from  |     |   | period      from  |   |   |   |   |
|                                                 |   | December      21  |     |   | January      1    |   |   |   |   |
|                                                 |   | through           |     |   | through           |   |   | For      the year ended |   |
|                                                 |   | December      31, |     |   | December      20, |   |   | December      31, |   |
| Millions of      dollars                             |   | 2007              |     |   | 2007              |   |   | 2006 |   |   | 2005 |   |
| STATEMENTS      OF INCOME                            |   |              |     |   |              |   |   |   |   |   |   |   |
| Sales      and other operating revenues              |   | $                 | 457      |   |              | $      | 13,037 |   |   | $ | 12,765 |   |   | $ | 11,686 |   |
| Cost      of sales                                   |   |              | 495      |   |              |   | 12,656 |   |   |   | 11,562 |   |   |   | 10,487 |   |
| Asset      impairment                                |   |              | -      - |   |              |   | -      - |   |   |   | 135 |   |   |   | -      - |   |
| Selling,      general and administrative expenses    |   |              | 6        |   |              |   | 263 |   |   |   | 210 |   |   |   | 198 |   |
| Research      and development expense                |   |              | -      - |   |              |   | 37 |   |   |   | 34 |   |   |   | 33 |   |
| Purchased      in-process research anddevelopment    |   |              | 22       |   |              |   | -      - |   |   |   | -      - |   |   |   | -      - |   |
| Operating      income (loss)                         |   |              | (66      | )      |              |   | 81 |   |   |   | 824 |   |   |   | 968 |   |
| Interest      expense, net                           |   |              | 1        |   |              |   | (190 | ) |   |   | (210 | ) |   |   | (218 | ) |
| Other      expense, net                              |   |              | -      - |   |              |   | (107 | ) |   |   | -      - |   |   |   | (2 | ) |
| Income      (loss) before interest on push down debt |   |              | (65      | )      |              |   | (216 | ) |   |   | 614 |   |   |   | 748 |   |
| Interest      expense on push down debt              |   |              | (57      | )      |              |   |   |   |   |   |   |   |   |   |   |   |
| Net      income (loss)                               |   | $                 | (122     | )      |              | $      | (216 | ) |   | $ | 614 |   |   | $ | 748 |   |

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Index to Financial Statements

Acc

nve

|                        |   | Successor |   |   | Predecessor |   |
|-----------------------------|--------|-----------|--------|--------|-------------|--------|
| Millions of      dollars    |   | 2007      |   |   | 2006        |   |
| Finished      goods         |   | $         | 65     |   |        | $      | 63 |   |
| Work-in-process             |   |      | 21     |   |        |   | 15 |   |
| Raw      materials          |   |      | 3      |   |        |   | 4 |   |
| Materials      and supplies |   |      | 15     |   |        |   | 5 |   |
| Total      inventories      |   | $         | 104    |   |        | $      | 87 |   |

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Prop

|                                        |   | Successor |   |   | Predecessor |   |
|---------------------------------------------|--------|-----------|--------|--------|-------------|--------|
| Millions of      dollars                    |   | 2007      |   |   | 2006        |   |
| Land                                        |   | $         | 11     |   |        | $      | 2 |   |
| Manufacturing      facilities and equipment |   |      | 277    |   |        |   | 342 |   |
| Construction      in progress               |   |      | 23     |   |        |   | 16 |   |
| Total      property, plant and equipment    |   |      | 311    |   |        |   | 360 |   |
| Less      accumulated depreciation          |   |      | (1     | )      |        |   | (231 | ) |
| Property,      plant and equipment, net     |   | $         | 310    |   |        | $      | 129 |   |

|                                 |   | Successor |     |   | Predecessor                   |   |     |
|--------------------------------------|--------|-----------|----------|--------|-------------------------------|--------|----------|
|                                 |   | 2007      |     |   | 2006                          |   |     |
| Millions of      dollars             |   | Cost      |     |   | Accumulated      Amortization |   |     | Net |   |   | Cost |   |   | Accumulated      Amortization |   |   | Net |
| Identifiable      intangible assets: |   |      |     |   |                          |   |     |   |   |   |   |   |   |   |   |   |   |
| Turnaround      costs                |   | $         | 14       |   |                          | $      | - -      |   |   | $ | 14 |   |   | $ | 4 |   |   | $ | (3 | ) |   | $ | 1 |   |
| Technology                           |   |      | 50       |   |                          |   | -      - |   |   |   | 50 |   |   |   | -      - |   |   |   | -      - |   |   |   | -      - |   |
| Software      costs                  |   |      | 1        |   |                          |   | -      - |   |   |   | 1 |   |   |   | 7 |   |   |   | (7 | ) |   |   | -      - |   |
| Debt      issuance costs             |   |      | -      - |   |                          |   | -      - |   |   |   | -      - |   |   |   | 22 |   |   |   | (15 | ) |   |   | 7 |   |
| Catalyst      costs                  |   |      | 7        |   |                          |   | -      - |   |   |   | 7 |   |   |   | 24 |   |   |   | (14 | ) |   |   | 10 |   |
| Other                                |   |      | 4        |   |                          |   | -      - |   |   |   | 4 |   |   |   | -      - |   |   |   | -      - |   |   |   | -      - |   |
| Total      intangible assets         |   | $         | 76       |   |                          | $      | - -      |   |   |   | 76 |   |   | $ | 57 |   |   | $ | (39 | ) |   |   | 18 |   |
| Pension      assets                  |   |      |     |   |                          |   |     |   |   |   | 27 |   |   |   |   |   |   |   |   |   |   |   | 23 |   |
| Precious      metals                 |   |      |     |   |                          |   |     |   |   |   | 84 |   |   |   |   |   |   |   |   |   |   |   | 16 |   |
| Other                                |   |      |     |   |                          |   |     |   |   |   | 6 |   |   |   |   |   |   |   |   |   |   |   | 5 |   |
| Total      other assets, net         |   |      |     |   |                          |   |     |   |   | $ | 193 |   |   |   |   |   |   |   |   |   |   | $ | 62 |   |

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Index to Financial Statements

|                                     |   | Successor         |     |   | Predecessor       |   |
|------------------------------------------|--------|-------------------|----------|--------|-------------------|--------|
|                                     |   | For      the      |     |   | For      the      |   |   |   |   |
|                                     |   | period      from  |     |   | period      from  |   |   |   |   |
|                                     |   | December      21  |     |   | January      1    |   |   |   |   |
|                                     |   | through           |     |   | through           |   |   | For      the year ended |   |
|                                     |   | December      31, |     |   | December      20, |   |   | December      31, |   |
| Millions of      dollars                 |   | 2007              |     |   | 2007              |   |   | 2006 |   |   | 2005 |   |
| Property,      plant and equipment       |   | $                 | 1        |   |              | $      | 21 |   |   | $ | 17 |   |   | $ | 18 |   |
| Turnaround      costs                    |   |              | -      - |   |              |   | 1 |   |   |   | 1 |   |   |   | 1 |   |
| Software      costs                      |   |              | -      - |   |              |   | -      - |   |   |   | 1 |   |   |   | 1 |   |
| Other                                    |   |              | 1        |   |              |   | 5 |   |   |   | 5 |   |   |   | 6 |   |
| Total      depreciation and amortization |   | $                 | 2        |   |              | $      | 27 |   |   | $ | 24 |   |   | $ | 26 |   |

Acco

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Acc

|                                           |   | Successor |   |   | Predecessor |   |
|------------------------------------------------|--------|-----------|--------|--------|-------------|--------|
| Millions of      dollars                       |   | 2007      |   |   | 2006        |   |
|                                           |   |      |   |   |        |   |
| Payroll      and benefits                      |   | $         | 5      |   |        | $      | 4 |   |
| Pension      and other postretirement benefits |   |      | 4      |   |        |   | 4 |   |
| Income      taxes                              |   |      | 32     |   |        |   | 35 |   |
| Product      sales rebates                     |   |      | 3      |   |        |   | 3 |   |
| Environmental      costs                       |   |      | 15     |   |        |   | 15 |   |
| Accrued      interest                          |   |      | 2      |   |        |   | 4 |   |
| Taxes      other than income taxes             |   |      | 4      |   |        |   | 3 |   |
| Other                                          |   |      | 10     |   |        |   | 4 |   |
| Total      accrued liabilities                 |   | $         | 75     |   |        | $      | 72 |   |

 Long

|                                                                   |   | Successor |     |   | Predecessor |   |
|------------------------------------------------------------------------|--------|-----------|----------|--------|-------------|--------|
| Millions of      dollars                                               |   | 2007      |     |   | 2006        |   |
| Senior      Notes due 2008, 9.25% ($2 million of premium)         |   | $         | - -      |   |        | $      | 375 |   |
| Senior      Debentures due 2026, 7.625% ($72 million of discount) |   |      | 170      |   |        |   | 245 |   |
| Convertible      Senior Debentures due 2023, 4%                        |   |      | 158      |   |        |   | 150 |   |
| Other                                                                  |   |      | -      - |   |        |   | (3 | ) |
| Total                                                                  |   |      | 328      |   |        |   | 767 |   |
| Less      current maturities                                           |   |      | (158     | )      |        |   | -      - |   |
| Total      long-term debt, net                                         |   | $         | 170      |   |        | $      | 767 |   |

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Lea

| Millions of      dollars          |   |   |     |
|-----------------------------------|--------|--------|----------|
|                              |   |   |     |
| 2008                              |   | $      | 8        |   |
| 2009                              |   |   | 4        |   |
| 2010                              |   |   | 2        |   |
| 2011                              |   |   | -      - |   |
| 2012                              |   |   | -      - |   |
| Thereafter                        |   |   | -      - |   |
| Total      minimum lease payments |   | $      | 14       |   |

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Index to Financial Statements

Fin

|                                              |   | Successor     |   |   | Predecessor |   |
|---------------------------------------------------|--------|---------------|--------|--------|-------------|--------|
|                                              |   | 2007          |   |   | 2006        |   |
| Millions of      dollars                          |   | CarryingValue |   |   | FairValue   |   |   | CarryingValue |   |   | FairValue |   |
| Investments      and long-term receivables        |   | $             | 16     |   |        | $      | 2,138 |   |   | $ | 470 |   |   | $ | 1,330 |   |
| Long-term      debt, including current maturities |   |          | 328    |   |        |   | 352 |   |   |   | 767 |   |   |   | 905 |   |

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Index to Financial Statements

Pensi

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Index to Financial Statements

|                                                                                                          |   | 2007   |     |   | 2006   |   |
|---------------------------------------------------------------------------------------------------------------|--------|--------|----------|--------|--------|--------|
| Millions of      dollars                                                                                      |   | U.S.   |     |   | U.S.   |   |   | Non-U.S. |   |
| Change      in benefit obligation:                                                                            |   |   |     |   |   |   |   |   |   |
| Benefit      obligation, January 1                                                                            |   | $      | 578      |   |   | $      | 741 |   |   | $ | 228 |   |
| Service      cost                                                                                             |   |   | 4        |   |   |   | 8 |   |   |   | 7 |   |
| Interest      cost                                                                                            |   |   | 33       |   |   |   | 38 |   |   |   | 12 |   |
| Actuarial      gain                                                                                           |   |   | (35      | )      |   |   | (30 | ) |   |   | (4 | ) |
| Benefits      paid                                                                                            |   |   | (59      | )      |   |   | (56 | ) |   |   | (12 | ) |
| Foreign      exchange effects                                                                                 |   |   | -      - |   |   |   | -      - |   |   |   | 29 |   |
| Benefit      obligation, December 31                                                                          |   |   | 521      |   |   |   | 701 |   |   |   | 260 |   |
| Less      benefit obligation of discontinued      operations, December 31                                     |   |   | -      - |   |   |   | 123 |   |   |   | 260 |   |
| Benefit      obligation of continuing      operations, December 31                                            |   |   | 521      |   |   |   | 578 |   |   |   | -      - |   |
| Change      in plan assets:                                                                                   |   |   |     |   |   |   |   |   |   |   |   |   |
| Fair      value of plan assets, January 1                                                                     |   |   | 500      |   |   |   | 588 |   |   |   | 142 |   |
| Actual      return on plan assets                                                                             |   |   | 53       |   |   |   | 67 |   |   |   | 14 |   |
| Company      contributions                                                                                    |   |   | 14       |   |   |   | 3 |   |   |   | 21 |   |
| Benefits      paid                                                                                            |   |   | (59      | )      |   |   | (56 | ) |   |   | (12 | ) |
| Foreign      exchange effects                                                                                 |   |   | -      - |   |   |   | -      - |   |   |   | 19 |   |
| Other                                                                                                         |   |   | 2        |   |   |   | -      - |   |   |   | -      - |   |
| Fair      value of plan assets, December 31                                                                   |   |   | 510      |   |   |   | 602 |   |   |   | 184 |   |
| Less:      Fair value of plan assets of discontinued      operations, December 31                             |   |   | -      - |   |   |   | 102 |   |   |   | 184 |   |
| Fair      value of plan assets of continuing      operations, December 31                                     |   |   | 510      |   |   |   | 500 |   |   |   | -      - |   |
| Funded      status of continuing      operations, December 31                                                 |   | $      | (11      | )      |   | $      | (78 | ) |   | $ | - - |   |
| Amounts      not recognized in the benefit costs of continuing      operations:                               |   |   |     |   |   |   |   |   |   |   |   |   |
| Actuarial      and investment loss                                                                            |   |   | -      - |   |   |   | 247 |   |   |   | -      - |   |
| Prior      service cost                                                                                       |   |   | -      - |   |   |   | 4 |   |   |   | -      - |   |
| Net      amount recognized in benefit costs of      continuing operations                                     |   | $      | (11      | )      |   | $      | 173 |   |   | $ | - - |   |
|                                                                                                          |   |   |     |   |   |   |   |   |   |   |   |   |
| Amounts      recognized in the Consolidated Balance Sheets      relating to continuing operations consist of: |   |   |     |   |   |   |   |   |   |   |   |   |
| Prepaid      benefit cost                                                                                     |   | $      | 27       |   |   | $      | 23 |   |   | $ | - - |   |
| Accrued      benefit liability, current                                                                       |   |   | (1       | )      |   |   | (1 | ) |   |   | -      - |   |
| Accrued      benefit liability, long-term                                                                     |   |   | (37      | )      |   |   | (100 | ) |   |   | -      - |   |
| Funded      status, December 31                                                                               |   |   | (11      | )      |   |   | (78 | ) |   |   | -      - |   |
| Accumulated      other comprehensive loss-pretax                                                              |   |   | -      - |   |   |   | 251 |   |   |   | -      - |   |
| Net      amount recognized in benefit costs of continuingoperations                                           |   | $      | (11      | )      |   | $      | 173 |   |   | $ | - - |   |

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| Millions of      dollars                                                                                            |   | 2007   |     |   | 2006   |   |
|---------------------------------------------------------------------------------------------------------------------|--------|--------|----------|--------|--------|--------|
| Accumulated      benefit obligation for defined benefit plans, December 31                                          |   | $      | 482      |   |   | $      | 519 |   |
| Decrease      in minimum liability, prior to application of SFAS No. 158, included in      other comprehensive loss |   |   | -      - |   |   |   | (50 | ) |

| Millions of      dollars                                                                                     |   | 2007   |     |   | 2006   |   |
|--------------------------------------------------------------------------------------------------------------|--------|--------|----------|--------|--------|--------|
| Change      in benefit obligation:                                                                           |   |   |     |   |   |   |
| Benefit      obligation, January 1                                                                      |   | $      | 20       |   |   | $      | 33 |   |
| Interest      cost                                                                                           |   |   | 2        |   |   |   | 2 |   |
| Actuarial      (gain) loss                                                                                   |   |   | 2        |   |   |   | (3 | ) |
| Benefits      paid                                                                                           |   |   | (3       | )      |   |   | (3 | ) |
| Benefit      obligation, December 31                                                                    |   |   | 21       |   |   |   | 29 |   |
| Less      benefit obligation of discontinued operations, December 31                                         |   |   | -      - |   |   |   | 9 |   |
| Benefit      obligation of continuing operations, December 31                                                |   |   | 21       |   |   |   | 20 |   |
| Funded      status of continuing operations, December 31                                                     |   | $      | (21      | )      |   | $      | (20 | ) |
| Amounts      not recognized in benefit costs ofcontinuing      operations:                                   |   |   |     |   |   |   |   |   |
| Actuarial      loss                                                                                          |   |   | -      - |   |   |   | -      - |   |
| Prior      service benefit                                                                                   |   |   | -      - |   |   |   | (37 | ) |
| Net      amount recognized in benefit costsof      continuing operations                                     |   | $      | (21      | )      |   | $      | (57 | ) |
| Amounts      recognized in the ConsolidatedBalance      Sheets relating to continuing operations consist of: |   |   |     |   |   |   |   |   |
| Accrued      benefit liability, current                                                                      |   | $      | (3       | )      |   | $      | (2 | ) |
| Accrued      benefit liability, long-term                                                                    |   |   | (18      | )      |   |   | (18 | ) |
| Funded      status, December 31                                                                              |   |   | (21      | )      |   |   | (20 | ) |
| Accumulated      other comprehensive income - pretax                                                         |   |   | -      - |   |   |   | (37 | ) |
| Net      amount recognized in benefit cost of continuing operations                                          |   | $      | (21      | )      |   | $      | (57 | ) |

| Millions of      dollars             |   | 2007   |     |   | 2006   |   |
|--------------------------------------|--------|--------|----------|--------|--------|--------|
| Projected      benefit obligations   |   | $      | 8        |   |   | $      | 562 |   |
| Accumulated      benefit obligations |   |   | 7        |   |   |   | 503 |   |
| Fair      value of assets            |   |   | -      - |   |   |   | 461 |   |

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Index to Financial Statements

|                                                           |   | Successor         |     |   | Predecessor       |   |
|----------------------------------------------------------------|--------|-------------------|----------|--------|-------------------|--------|
|                                                           |   | For      the      |     |   | For      the      |   |   |   |   |
|                                                           |   | period      from  |     |   | period      from  |   |   |   |   |
|                                                           |   | December      21  |     |   | January      1    |   |   |   |   |
|                                                           |   | through           |     |   | through           |   |   | For      the year ended |   |
|                                                           |   | December      31, |     |   | December      20, |   |   | December      31, |   |
| Millions of      dollars                                       |   | 2007              |     |   | 2007              |   |   | 2006 |   |   | 2005 |   |
| Net      periodic pension cost:                                |   |              |     |   |              |   |   |   |   |   |   |   |
| Service      cost                                              |   | $                 | - -      |   |              | $      | 3 |   |   | $ | 6 |   |   | $ | 6 |   |
| Interest      cost                                             |   |              | 1        |   |              |   | 29 |   |   |   | 32 |   |   |   | 33 |   |
| Actual      return on plan assets                              |   |              | (2       | )      |              |   | (51 | ) |   |   | (55 | ) |   |   | (39 | ) |
| Less-return      in excess of (less      than) expected return |   |              | 1        |   |              |   | 14 |   |   |   | 19 |   |   |   | (1 | ) |
| Expected      return on plan assets                            |   |              | (1       | )      |              |   | (37 | ) |   |   | (36 | ) |   |   | (40 | ) |
| Prior      service cost amortization                           |   |              | -      - |   |              |   | -      - |   |   |   | -      - |   |   |   | 1 |   |
| Actuarial      and investment loss amortization                |   |              | -      - |   |              |   | 11 |   |   |   | 15 |   |   |   | 13 |   |
| Net      periodic pension cost                                 |   | $                 | - -      |   |              | $      | 6 |   |   | $ | 17 |   |   | $ | 13 |   |

|                                                  |   | Predecessor       |   |
|-------------------------------------------------------|--------|-------------------|--------|
|                                                  |   | For      the      |   |   |   |   |
|                                                  |   | period      from  |   |   |   |   |
|                                                  |   | January      1    |   |   |   |   |
|                                                  |   | through           |   |   | For      the year ended |   |
|                                                  |   | December      20, |   |   | December      31, |   |
| Millions of      dollars                              |   | 2007              |   |   | 2006 |   |   | 2005 |   |
| Net      periodic other postretirement benefit costs: |   |              |   |   |   |   |   |   |   |
| Interest      cost                                    |   | $                 | 1      |   |   | $ | 1 |   |   | $ | 1 |   |
| Unrecognized      net loss amortization               |   |              | 1      |   |   |   | 1 |   |   |   | 1 |   |
| Prior      service benefit amortization               |   |              | (5     | ) |   |   | (6 | ) |   |   | (5 | ) |
| Net      periodic benefit income                      |   | $                 | (3     | ) |   | $ | (4 | ) |   | $ | (3 | ) |

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Index to Financial Statements

|                                                           |   | 2007   |   |   | 2006   |   |
|----------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Weighted-average      assumptions      as of December 31: |   |   |   |   |   |   |
| Discount      rate                                             |   |   | 6.25   | %      |   |   | 5.75 | % |
| Rate      of compensation increase                             |   |   | 4.50   | %      |   |   | 4.50 | % |

|                                            | 2007   |   | 2006   |   | 2005   |
|-------------------------------------------------|--------|--------|--------|--------|--------|
| Weighted-average      assumptions for the year: |   |   |   |   |   |
| Discount      rate                              | 5.75%  |   | 5.50%  |   | 5.75%  |
| Expected      return on plan assets             | 8.00%  |   | 8.00%  |   | 8.00%  |
| Rate      of compensation increase              | 4.50%  |   | 4.50%  |   | 4.50%  |

| Asset      Category             |   | 2007      Policy |   |   | 2007   |   |   | 2006 |   |
|---------------------------------|--------|------------------|--------|--------|--------|--------|--------|------|--------|
| U.S.      equity securities     |   |             | 55     | %      |   |   | 56     | %    |   |   | 56 | % |
| Non-U.S.      equity securities |   |             | 15     | %      |   |   | 16     | %    |   |   | 17 | % |
| Fixed      income securities    |   |             | 25     | %      |   |   | 24     | %    |   |   | 27 | % |
| Real      estate investments    |   |             | 5      | %      |   |   | 4      | %    |   |   | -      - |   |
| Total                           |   |             | 100    | %      |   |   | 100    | %    |   |   | 100 | % |

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|  Millions of      dollars |   | Pension      Benefits |   |   | OtherBenefits |   |
|--------------------------------|--------|-----------------------|--------|--------|---------------|--------|
|                           |   |                  |   |   |          |   |
| 2008                           |   | $                     | 37     |   |          | $      | 2 |   |
| 2009                           |   |                  | 36     |   |          |   | 2 |   |
| 2010                           |   |                  | 34     |   |          |   | 2 |   |
| 2011                           |   |                  | 34     |   |          |   | 2 |   |
| 2012                           |   |                  | 34     |   |          |   | 2 |   |
| 2013      through 2017         |   |                  | 166    |   |          |   | 8 |   |

 Income 

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Index to Financial Statements

|                                                                                                 |   | Successor         |     |   | Predecessor       |   |
|------------------------------------------------------------------------------------------------------|--------|-------------------|----------|--------|-------------------|--------|
|                                                                                                 |   | For      the      |     |   | For      the      |   |   |   |   |
|                                                                                                 |   | period      from  |     |   | period      from  |   |   |   |   |
|                                                                                                 |   | December      21  |     |   | January      1    |   |   |   |   |
|                                                                                                 |   | through           |     |   | through           |   |   | For      the year ended |   |
|                                                                                                 |   | December      31, |     |   | December      20, |   |   | December      31, |   |
| Millions of      dollars                                                                             |   | 2007              |     |   | 2007              |   |   | 2006 |   |   | 2005 |   |
| Current:                                                                                             |   |              |     |   |              |   |   |   |   |   |   |   |
| Federal                                                                                              |   | $                 | - -      |   |              | $      | (38 | ) |   | $ | 47 |   |   | $ | 49 |   |
| Non-U.S.                                                                                             |   |              | -      - |   |              |   | (1 | ) |   |   | 2 |   |   |   | 1 |   |
| State                                                                                                |   |              | -      - |   |              |   | (3 | ) |   |   | 5 |   |   |   | 2 |   |
| Total      current                                                                                   |   |              | -      - |   |              |   | (42 | ) |   |   | 54 |   |   |   | 52 |   |
| Deferred:                                                                                            |   |              |     |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Federal                                                                                              |   |              | -      - |   |              |   | (6 | ) |   |   | (29 | ) |   |   | (23 | ) |
| Non-U.S.                                                                                             |   |              | -      - |   |              |   | -      - |   |   |   | -      - |   |   |   | -      - |   |
| State                                                                                                |   |              | -      - |   |              |   | (2 | ) |   |   | (8 | ) |   |   | 2 |   |
| Total      deferred                                                                                  |   |              | -      - |   |              |   | (8 | ) |   |   | (37 | ) |   |   | (21 | ) |
| Provision      for (benefit from) income taxes before tax effects of other comprehensive      income |   |              | -      - |   |              |   | (50 | ) |   |   | 17 |   |   |   | 31 |   |
| Tax      effects of elements of other comprehensive income      - pension liability                  |   |              | -      - |   |              |   | 3 |   |   |   | 17 |   |   |   | -      - |   |
| Total      income tax expense (benefit) in comprehensive      income                                 |   | $                 | - -      |   |              | $      | (47 | ) |   | $ | 34 |   |   | $ | 31 |   |

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Index to Financial Statements

|                                         |   | Successor |     |   | Predecessor |   |
|----------------------------------------------|--------|-----------|----------|--------|-------------|--------|
| Millions of      dollars                     |   | 2007      |     |   | 2006        |   |
| Deferred      tax liabilities:               |   |      |     |   |        |   |
| Accelerated      tax depreciation            |   | $         | 107      |   |        | $      | 42 |   |
| Investment      in Equistar                  |   |      | 181      |   |        |   | 329 |   |
| Fair      value of debt acquired             |   |      | 25       |   |        |   | -      - |   |
| Goodwill      and other intangibles          |   |      | 13       |   |        |   | -      - |   |
| Inventory      and inventory reserves        |   |      | 9        |   |        |   | -      - |   |
| Other      liabilities                       |   |      | 19       |   |        |   | 28 |   |
| Total      deferred tax liabilities          |   |      | 354      |   |        |   | 399 |   |
| Deferred      tax assets:                    |   |      |     |   |        |   |   |   |
| Net      operating loss carryforwards        |   |      | -      - |   |        |   | 32 |   |
| Employee      benefit plans                  |   |      | 14       |   |        |   | 49 |   |
| Environmental      remediation liabilities   |   |      | 63       |   |        |   | 67 |   |
| AMT      credits                             |   |      | 49       |   |        |   | 41 |   |
| Other                                        |   |      | 12       |   |        |   | 24 |   |
| Total      deferred tax assets               |   |      | 138      |   |        |   | 213 |   |
| Deferred      tax asset valuation allowances |   |      | -      - |   |        |   | -      - |   |
| Net      deferred tax assets                 |   |      | 138      |   |        |   | 213 |   |
| Net      deferred tax liabilities            |   | $         | 216      |   |        | $      | 186 |   |
|                                         |   |      |     |   |        |   |   |   |
| Balance      sheet classifications:          |   |      |     |   |        |   |   |   |
| Deferred      tax assets - current           |   | $         | 9        |   |        | $      | 62 |   |
| Deferred      income taxes – current   |   |      | 4        |   |        |   | -      - |   |
| Deferred      income taxes – long-term |   |      | 221      |   |        |   | 248 |   |
| Net      deferred tax liabilities            |   | $         | 216      |   |        | $      | 186 |   |

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| Millions of      dollars                         |   |   |   |
|--------------------------------------------------|--------|--------|--------|
| Balance      at January 1, 2007                  |   | $      | 173    |   |
| Reductions      for tax positions of prior years |   |   | (45    | ) |
| Settlements                                      |   |   | (118   | ) |
| Balance      at December 31, 2007                |   | $      | 10     |   |

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Index to Financial Statements

|                                                                  |   | Successor         |     |   | Predecessor       |   |
|-----------------------------------------------------------------------|--------|-------------------|----------|--------|-------------------|--------|
|                                                                  |   | For      the      |     |   | For      the      |   |   |   |   |
|                                                                  |   | period      from  |     |   | period      from  |   |   |   |   |
|                                                                  |   | December      21  |     |   | January      1    |   |   |   |   |
|                                                                  |   | through           |     |   | through           |   |   | For      the year ended |   |
|                                                                  |   | December      31, |     |   | December      20, |   |   | December      31, |   |
| Millions of      dollars                                              |   | 2007              |     |   | 2007              |   |   | 2006 |   |   | 2005 |   |
| Income      (loss) before income taxes:                               |   |              |     |   |              |   |   |   |   |   |   |   |
| U.S.:                                                                 |   |              |     |   |              |   |   |   |   |   |   |   |
| Prior      to effects of push down debt                               |   | $                 | (19      | )      |              | $      | (53 | ) |   | $ | 125 |   |   | $ | 101 |   |
| Effects      of push down debt                                        |   |              | 13       |   |              |   |   |   |   |   |   |   |   |   |   |   |
|                                                                  |   |              | (6       | )      |              |   |   |   |   |   |   |   |   |   |   |   |
| Non-U.S.                                                              |   |              | -      - |   |              |   | (4 | ) |   |   | -      - |   |   |   | (25 | ) |
| Total                                                                 |   | $                 | (6       | )      |              | $      | (57 | ) |   | $ | 125 |   |   | $ | 76 |   |
|                                                                  |   |              |     |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Theoretical      income tax at U.S. statutory rate                    |   | $                 | (2       | )      |              | $      | (20 | ) |   | $ | 44 |   |   | $ | 26 |   |
| Increase      (reduction) resulting from:                             |   |              |     |   |              |   |   |   |   |   |   |   |   |   |   |   |
| State      income taxes, net of federal                               |   |              | -      - |   |              |   | (1 | ) |   |   | (2 | ) |   |   | (2 | ) |
| Changes      in estimates for prior year items                        |   |              | -      - |   |              |   | (30 | ) |   |   | (25 | ) |   |   | 19 |   |
| Repatriation      of non-U.S. earnings and      returns of investment |   |              | -      - |   |              |   | -      - |   |   |   | -      - |   |   |   | (9 | ) |
| Other,      net                                                       |   |              | 2        |   |              |   | 1 |   |   |   | -      - |   |   |   | (3 | ) |
| Provision      for (benefit from) income taxes                        |   | $                 | - -      |   |              | $      | (50 | ) |   | $ | 17 |   |   | $ | 31 |   |
| Effective      income tax rate                                        |   |              | -      - | %      |              |   | 87.7 | % |   |   | 13.2 | % |   |   | 41.1 | % |

omm

| Millions of      dollars     |   | Total  |   |
|------------------------------|--------|--------|--------|
| 2008                         |   | $      | 14     |   |
| 2009                         |   |   | 9      |   |
| 2010                         |   |   | 9      |   |
| 2011                         |   |   | 9      |   |
| 2012                         |   |   | 9      |   |
| Thereafter      through 2019 |   |   | 48     |   |
| Total                        |   | $      | 98     |   |

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Index to Financial Statements

| Millions of      dollars    |   | 2007   |   |   | 2006   |   |
|-----------------------------|--------|--------|--------|--------|--------|--------|
| Balance      at January 1   |   | $      | 148    |   |   | $      | 145 |   |
| Additional      provisions  |   |   | 52     |   |   |   | 13 |   |
| Amounts      paid           |   |   | (19    | )      |   |   | (10 | ) |
| Balance      at December 31 |   | $      | 181    |   |   | $      | 148 |   |

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Stock

| Millions of      dollars                                                                    |   | ContinuingOperations |   |   | DiscontinuedOperations |   |   | Total  |   |
|---------------------------------------------------------------------------------------------|--------|----------------------|--------|--------|------------------------|--------|--------|--------|--------|
| Predecessor                                                                                 |   |                 |   |   |                   |   |   |   |   |
| December 31,      2006                                                                      |   |                 |   |   |                   |   |   |   |   |
| Foreign      currency translation                                                           |   | $                    | 50     |   |                   | $      | 37     |   |   | $ | 87 |   |
| Pension      and postretirement liabilitiesafter      application of SFAS No. 158 |   |                 | (147   | )      |                   |   | (43    | )      |   |   | (190 | ) |
| Total                                                                                       |   | $                    | (97    | )      |                   | $      | (6     | )      |   | $ | (103 | ) |

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Index to Financial Statements

Suppl

|                                   |   | Successor         |   |   | Predecessor       |   |
|----------------------------------------|--------|-------------------|--------|--------|-------------------|--------|
|                                   |   | For      the      |   |   | For      the      |   |   |   |   |
|                                   |   | period      from  |   |   | period      from  |   |   |   |   |
|                                   |   | December      21  |   |   | January      1    |   |   |   |   |
|                                   |   | through           |   |   | through           |   |   | For      the year ended |   |
|                                   |   | December      31, |   |   | December      20, |   |   | December      31, |   |
| Millions of      dollars               |   | 2007              |   |   | 2007              |   |   | 2006 |   |   | 2005 |   |
| Cash      paid for interest and taxes: |   |              |   |   |              |   |   |   |   |   |   |   |
| Interest,      net                     |   | $                 | - -    |   |              | $      | 42 |   |   | $ | 65 |   |   | $ | 100 |   |
| Taxes,      net                        |   | $                 | - -    |   |              | $      | 135 |   |   | $ | (24 | ) |   | $ | 20 |   |

Seg

----

Table of Contents

Index to Financial Statements

| Millions of      dollars                   |   | Chemicals |   |   | Other  |   |     | Total  |   |
|--------------------------------------------|--------|-----------|--------|--------|--------|--------|----------|--------|--------|
| 2007                                       |   |      |   |   |   |   |     |   |   |
| Sales      and other operating revenues    |   | $         | 639    |   |   | $      | 3        |   |   | $ | 642 |   |
| Operating      income (loss)               |   |      | 69     |   |   |   | (79      | )      |   |   | (10 | ) |
| Capital      expenditures                  |   |      | 22     |   |   |   | 1        |   |   |   | 23 |   |
| Depreciation      and amortization expense |   |      | 24     |   |   |   | 5        |   |   |   | 29 |   |
|                                       |   |      |   |   |   |   |     |   |   |   |   |   |
| 2006                                       |   |      |   |   |   |   |     |   |   |   |   |   |
| Sales      and other operating revenues    |   | $         | 593    |   |   | $      | 9        |   |   | $ | 602 |   |
| Operating      income (loss)               |   |      | 43     |   |   |   | (32      | )      |   |   | 11 |   |
| Capital      expenditures                  |   |      | 12     |   |   |   | -      - |   |   |   | 12 |   |
| Depreciation      and amortization expense |   |      | 23     |   |   |   | 1        |   |   |   | 24 |   |
|                                       |   |      |   |   |   |   |     |   |   |   |   |   |
| 2005                                       |   |      |   |   |   |   |     |   |   |   |   |   |
| Sales      and other operating revenues    |   | $         | 599    |   |   | $      | 11       |   |   | $ | 610 |   |
| Operating      income (loss)               |   |      | 48     |   |   |   | (60      | )      |   |   | (12 | ) |
| Capital      expenditures                  |   |      | 7      |   |   |   | -      - |   |   |   | 7 |   |
| Depreciation      and amortization expense |   |      | 25     |   |   |   | 1        |   |   |   | 26 |   |

|                                    |   | Successor         |   |   | Predecessor       |   |   | Total             |   |
|-----------------------------------------|--------|-------------------|--------|--------|-------------------|--------|--------|-------------------|--------|
|                                    |   | For      the      |   |   | For      the      |   |   |              |   |
|                                    |   | period      from  |   |   | period      from  |   |   |              |   |
|                                    |   | December      21  |   |   | January      1    |   |   | For      the year |   |
|                                    |   | through           |   |   | through           |   |   | ended             |   |
|                                    |   | December      31, |   |   | December      20, |   |   | December      31, |   |
| Millions of      dollars                |   | 2007              |   |   | 2007              |   |   | 2007              |   |
| Sales      and other operating revenues |   | $                 | 26     |   |              | $      | 616    |              |   | $ | 642 |   |
| Operating      loss                     |   |              | (9     | )      |              |   | (1     | )                 |   |   | (10 | ) |
| Capital      expenditures               |   |              | 1      |   |              |   | 22     |              |   |   | 23 |   |
| Depreciation      and amortization      |   |              | 2      |   |              |   | 27     |              |   |   | 29 |   |

----

Table of Contents

Index to Financial Statements

| Millions of      dollars                |   | Chemicals |     |   | Other  |   |     | Total  |   |
|-----------------------------------------|--------|-----------|----------|--------|--------|--------|----------|--------|--------|
| 2007                                    |   |      |     |   |   |   |     |   |   |
| Property,      plant and equipment, net |   | $         | 308      |   |   | $      | 2        |   |   | $ | 310 |   |
| Goodwill                                |   |      | -      - |   |   |   | -      - |   |   |   | -      - |   |
|                                    |   |      |     |   |   |   |     |   |   |   |   |   |
| 2006                                    |   |      |     |   |   |   |     |   |   |   |   |   |
| Property,      plant and equipment, net |   | $         | 123      |   |   | $      | 6        |   |   | $ | 129 |   |
| Goodwill                                |   |      | 49       |   |   |   | -      - |   |   |   | 49 |   |
|                                    |   |      |     |   |   |   |     |   |   |   |   |   |
| 2005                                    |   |      |     |   |   |   |     |   |   |   |   |   |
| Property,      plant and equipment, net |   | $         | 125      |   |   | $      | 8        |   |   | $ | 133 |   |
| Goodwill                                |   |      | 49       |   |   |   | -      - |   |   |   | 49 |   |

|                     |   | Successor         |   |   | Predecessor       |   |
|--------------------------|--------|-------------------|--------|--------|-------------------|--------|
|                     |   | For      the      |   |   | For      the      |   |   |   |   |
|                     |   | period      from  |   |   | period      from  |   |   |   |   |
|                     |   | December      21  |   |   | January      1    |   |   |   |   |
|                     |   | through           |   |   | through           |   |   | For      the year ended |   |
|                     |   | December      31, |   |   | December      20, |   |   | December      31, |   |
| Millions of      dollars |   | 2007              |   |   | 2007              |   |   | 2006 |   |   | 2005 |   |
| United      States       |   | $                 | 14     |   |              | $      | 311 |   |   | $ | 321 |   |   | $ | 357 |   |
| Non-U.S.                 |   |              | 12     |   |              |   | 305 |   |   |   | 281 |   |   |   | 253 |   |
| Total                    |   | $                 | 26     |   |              | $      | 616 |   |   | $ | 602 |   |   | $ | 610 |   |

----

Table of Contents

Index to Financial Statements

 Supplemental 

| Millions of      dollars                               |   | MillenniumChemicals      Inc. |     |   | MillenniumAmerica      Inc. |   |     | Non-GuarantorSubsidiaries |   |   | Eliminations |   |   | MillenniumChemicalsInc.      andSubsidiaries |     |
|--------------------------------------------------------|--------|-------------------------------|----------|--------|-----------------------------|--------|----------|---------------------------|--------|--------|--------------|--------|--------|----------------------------------------------|----------|
| BALANCE      SHEET                                     |   |                          |     |   |                        |   |     |                      |   |   |         |   |   |                                         |     |
| Inventories                                            |   | $                             | - -      |   |                        | $      | - -      |                      |   | $      | 104          |   |   | $                                            | - -      |   |   | $ | 104 |   |
| Notes      receivable from Equistar      Chemicals, LP |   |                          | 80       |   |                        |   | -      - |                      |   |   | -      -     |   |   |                                         | -      - |   |   |   | 80 |   |
| Other      current assets                              |   |                          | 3        |   |                        |   | 24       |                      |   |   | 229          |   |   |                                         | -      - |   |   |   | 256 |   |
| Property,      plant and equipment, net                |   |                          | -      - |   |                        |   | -      - |                      |   |   | 310          |   |   |                                         | -      - |   |   |   | 310 |   |
| Investment      in Equistar Chemicals, LP:             |   |                          |     |   |                        |   |     |                      |   |   |         |   |   |                                         |     |   |   |   |   |   |
| Prior      to push-down debt                           |   |                          | -      - |   |                        |   | -      - |                      |   |   | 1,652        |   |   |                                         | -      - |   |   |   | 1,652 |   |
| Effect      of push-down debt                          |   |                          | -      - |   |                        |   | -      - |                      |   |   | (1,652       | )      |   |                                         | -      - |   |   |   | (1,652 | ) |
|                                                   |   |                          | -      - |   |                        |   | -      - |                      |   |   | -      -     |   |   |                                         | -      - |   |   |   | -      - |   |
|  Investment      in subsidiaries                  |   |                          | 68       |   |                        |   | 355      |                      |   |   | 16           |   |   |                                         | (423     | ) |   |   | 16 |   |
| Other      assets, net                                 |   |                          | 2        |   |                        |   | 1        |                      |   |   | 190          |   |   |                                         | -      - |   |   |   | 193 |   |
| Due      from parent and affiliates, net               |   |                          | -      - |   |                        |   | 163      |                      |   |   | -      -     |   |   |                                         | (163     | ) |   |   | -      - |   |
| Total      assets                                      |   | $                             | 153      |   |                        | $      | 543      |                      |   | $      | 849          |   |   | $                                            | (586     | ) |   | $ | 959 |   |
| Current      maturities of      long-term debt         |   | $                             | 44       |   |                        | $      | - -      |                      |   | $      | 114          |   |   | $                                            | - -      |   |   | $ | 158 |   |
| Other      current liabilities                         |   |                          | 115      |   |                        |   | 2        |                      |   |   | 64           |   |   |                                         | -      - |   |   |   | 181 |   |
| Long-term      debt:                                   |   |                          |     |   |                        |   |     |                      |   |   |         |   |   |                                         |     |   |   |   |   |   |
| Push-down      debt                                    |   |                          | 350      |   |                        |   | 350      |                      |   |   | -      -     |   |   |                                         | (350     | ) |   |   | 350 |   |
| Debt      of Millennium                                |   |                          | -      - |   |                        |   | 170      |                      |   |   | -      -     |   |   |                                         | -      - |   |   |   | 170 |   |
| Other      liabilities                                 |   |                          | -      - |   |                        |   | -      - |                      |   |   | 238          |   |   |                                         | -      - |   |   |   | 238 |   |
| Deferred      income taxes                             |   |                          | -      - |   |                        |   | -      - |                      |   |   | 221          |   |   |                                         | -      - |   |   |   | 221 |   |
| Due      to parent and affiliates, net                 |   |                          | 10       |   |                        |   | -      - |                      |   |   | 153          |   |   |                                         | (163     | ) |   |   | -      - |   |
| Total      liabilities                                 |   |                          | 519      |   |                        |   | 522      |                      |   |   | 790          |   |   |                                         | (513     | ) |   |   | 1,318 |   |
| Minority      interest                                 |   |                          | -      - |   |                        |   | -      - |                      |   |   | 7            |   |   |                                         | -      - |   |   |   | 7 |   |
| Stockholder’s      equity                        |   |                          | (366     | )      |                        |   | 21       |                      |   |   | 52           |   |   |                                         | (73      | ) |   |   | (366 | ) |
| Total      liabilities and stockholder’s equity  |   | $                             | 153      |   |                        | $      | 543      |                      |   | $      | 849          |   |   | $                                            | (586     | ) |   | $ | 959 |   |

----

Table of Contents

Index to Financial Statements

| Millions of      dollars                                                    |   | MillenniumChemicals      Inc. |     |   | MillenniumAmerica      Inc. |   |     | Non-GuarantorSubsidiaries |   |   | Eliminations |   |   | MillenniumChemicalsInc.      andSubsidiaries |     |
|-----------------------------------------------------------------------------|--------|-------------------------------|----------|--------|-----------------------------|--------|----------|---------------------------|--------|--------|--------------|--------|--------|----------------------------------------------|----------|
| STATEMENT      OF INCOME                                                    |   |                          |     |   |                        |   |     |                      |   |   |         |   |   |                                         |     |
| Sales      and other operating revenues                                     |   | $                             | - -      |   |                        | $      | - -      |                      |   | $      | 26           |   |   | $                                            | - -      |   |   | $ | 26 |   |
| Cost      of sales                                                          |   |                          | -      - |   |                        |   | -      - |                      |   |   | 35           |   |   |                                         | -      - |   |   |   | 35 |   |
| Operating      loss                                                         |   |                          | -      - |   |                        |   | -      - |                      |   |   | (9           | )      |   |                                         | -      - |   |   |   | (9 | ) |
| Interest      expense                                                       |   |                          | -      - |   |                        |   | 8        |                      |   |   | (4           | )      |   |                                         | -      - |   |   |   | 4 |   |
| Loss      from equity      investment in Equistar                           |   |                          | -      - |   |                        |   | -      - |                      |   |   | (14          | )      |   |                                         | -      - |   |   |   | (14 | ) |
| Effect      of push-down debt on loss from equity investment in    Equistar |   |                          | -      - |   |                        |   | -      - |                      |   |   | 14           |   |   |                                         | -      - |   |   |   | 14 |   |
| Equity      in income (loss) of subsidiaries                                |   |                          | (5       | )      |                        |   | 15       |                      |   |   | -      -     |   |   |                                         | (10      | ) |   |   | -      - |   |
| (Provision      for) benefit      from income taxes                         |   |                          | -      - |   |                        |   | (6       | )                         |   |   | 6            |   |   |                                         | -      - |   |   |   | -      - |   |
| Income      (loss) before push-down debt                                    |   |                          | (5       | )      |                        |   | 17       |                      |   |   | (7           | )      |   |                                         | (10      | ) |   |   | (5 | ) |
| Interest      expense on push-down debt                                     |   |                          | (1       | )      |                        |   | (1       | )                         |   |   | -      -     |   |   |                                         | 1        |   |   |   | (1 | ) |
| Provision      for income      taxes                                        |   |                          | -      - |   |                        |   | -      - |                      |   |   | -      -     |   |   |                                         | -      - |   |   |   | -      - |   |
| Net      income (loss)                                                      |   | $                             | (6       | )      |                        | $      | 16       |                      |   | $      | (7           | )      |   | $                                            | (9       | ) |   | $ | (6 | ) |

----

Table of Contents

Index to Financial Statements

| Millions of      dollars                                    |   | MillenniumChemicals      Inc. |     |   | MillenniumAmerica      Inc. |   |     | Non-GuarantorSubsidiaries |   |   | Eliminations |   |   | MillenniumChemicalsInc.      andSubsidiaries |     |
|-------------------------------------------------------------|--------|-------------------------------|----------|--------|-----------------------------|--------|----------|---------------------------|--------|--------|--------------|--------|--------|----------------------------------------------|----------|
| STATEMENT      OF INCOME                                    |   |                          |     |   |                        |   |     |                      |   |   |         |   |   |                                         |     |
| Sales      and other operating revenues                     |   | $                             | - -      |   |                        | $      | - -      |                      |   | $      | 616          |   |   | $                                            | - -      |   |   | $ | 616 |   |
| Cost      of sales                                          |   |                          | -      - |   |                        |   | -      - |                      |   |   | 515          |   |   |                                         | -      - |   |   |   | 515 |   |
| Selling,      general and      administrative expenses      |   |                          | -      - |   |                        |   | -      - |                      |   |   | 99           |   |   |                                         | -      - |   |   |   | 99 |   |
| Research      and development expenses                      |   |                          | -      - |   |                        |   | -      - |                      |   |   | 3            |   |   |                                         | -      - |   |   |   | 3 |   |
| Operating      loss                                         |   |                          | -      - |   |                        |   | -      - |                      |   |   | (1           | )      |   |                                         | -      - |   |   |   | (1 | ) |
| Interest      income (expense), net                         |   |                          | 1        |   |                        |   | 78       |                      |   |   | (58          | )      |   |                                         | -      - |   |   |   | 21 |   |
| Income      (loss) from equity      investment in Equistar  |   |                          | -      - |   |                        |   | -      - |                      |   |   | (64          | )      |   |                                         | -      - |   |   |   | (64 | ) |
| Equity      in income of subsidiaries                       |   |                          | 298      |   |                        |   | 774      |                      |   |   | -      -     |   |   |                                         | (1,072   | ) |   |   | -      - |   |
| Other      income (expense), net                            |   |                          | (51      | )      |                        |   | 5        |                      |   |   | 33           |   |   |                                         | -      - |   |   |   | (13 | ) |
| (Provision      for) benefit      from income taxes         |   |                          | 37       |   |                        |   | (63      | )                         |   |   | 76           |   |   |                                         | -      - |   |   |   | 50 |   |
| Income      (loss) from continuing operations               |   |                          | 285      |   |                        |   | 794      |                      |   |   | (14          | )      |   |                                         | (1,072   | ) |   |   | (7 | ) |
| Income      (loss) from discontinued operations, net of tax |   |                          | -      - |   |                        |   | -      - |                      |   |   | 292          |   |   |                                         | -      - |   |   |   | 292 |   |
| Net      income                                             |   | $                             | 285      |   |                        | $      | 794      |                      |   | $      | 278          |   |   | $                                            | (1,072   | ) |   | $ | 285 |   |

----

Table of Contents

Index to Financial Statements

| Millions of      dollars                                                           |   | MillenniumChemicals      Inc. |     |   | MillenniumAmerica      Inc. |   |     | Non-GuarantorSubsidiaries |   |   | Eliminations |   |   | MillenniumChemicals      Inc.and      Subsidiaries |     |
|------------------------------------------------------------------------------------|--------|-------------------------------|----------|--------|-----------------------------|--------|----------|---------------------------|--------|--------|--------------|--------|--------|----------------------------------------------------|----------|
| STATEMENT      OF      CASH FLOWS                                                  |   |                          |     |   |                        |   |     |                      |   |   |         |   |   |                                               |     |
| Net      cash provided by operating activities      – continuing operations  |   | $                             | 3        |   |                        | $      | 18       |                      |   | $      | 12           |   |   | $                                                  | - -      |   |   | $ | 33 |   |
| Expenditures      for property,      plant and equipment                           |   |                          | -      - |   |                        |   | -      - |                      |   |   | (1           | )      |   |                                               | -      - |   |   |   | (1 | ) |
| Net      cash used in investing activities – continuing operations           |   |                          | -      - |   |                        |   | -      - |                      |   |   | (1           | )      |   |                                               | -      - |   |   |   | (1 | ) |
| Net      cash used in investing activities                                         |   |                          | -      - |   |                        |   | -      - |                      |   |   | (1           | )      |   |                                               | -      - |   |   |   | (1 | ) |
| Other                                                                              |   |                          | -      - |   |                        |   | -      - |                      |   |   | (1           | )      |   |                                               | -      - |   |   |   | (1 | ) |
| Net      cash used in financing activities – continuing operations           |   |                          | -      - |   |                        |   | -      - |                      |   |   | (1           | )      |   |                                               | -      - |   |   |   | (1 | ) |
| Net      cash used in financing activities                                         |   |                          | -      - |   |                        |   | -      - |                      |   |   | (1           | )      |   |                                               | -      - |   |   |   | (1 | ) |
| Effect      of exchange rate changes on cash                                       |   |                          | -      - |   |                        |   | -      - |                      |   |   | -      -     |   |   |                                               | -      - |   |   |   | -      - |   |
| Increase      in cash and cash equivalents                                         |   |                          | 3        |   |                        |   | 18       |                      |   |   | 10           |   |   |                                               | -      - |   |   |   | 31 |   |
| Cash      and cash equivalents at      beginning of period                         |   |                          | -      - |   |                        |   | 6        |                      |   |   | 14           |   |   |                                               | -      - |   |   |   | 20 |   |
| Cash      and cash equivalents at end of period      – continuing operations |   | $                             | 3        |   |                        | $      | 24       |                      |   | $      | 24           |   |   | $                                                  | - -      |   |   | $ | 51 |   |

----

Table of Contents

Index to Financial Statements

| Millions of      dollars                                                                         |   | MillenniumChemicals      Inc. |     |   | MillenniumAmerica      Inc. |   |     | Non-GuarantorSubsidiaries |   |   | Eliminations |   |   | MillenniumChemicals      Inc.and      Subsidiaries |     |
|--------------------------------------------------------------------------------------------------|--------|-------------------------------|----------|--------|-----------------------------|--------|----------|---------------------------|--------|--------|--------------|--------|--------|----------------------------------------------------|----------|
| STATEMENT      OF      CASH FLOWS                                                                |   |                          |     |   |                        |   |     |                      |   |   |         |   |   |                                               |     |
| Net      cash provided by (used      in) operating activities – continuing      operations |   | $                             | 190      |   |                        | $      | 129      |                      |   | $      | (458         | )      |   | $                                                  | - -      |   |   | $ | (139 | ) |
| Net      cash used  by operating activities – discontinued      operations       |   |                          | -      - |   |                        |   | -      - |                      |   |   | (125         | )      |   |                                               | -      - |   |   |   | (125 | ) |
| Net      cash provided by (used      in) operating activities                                    |   |                          | 190      |   |                        |   | 129      |                      |   |   | (583         | )      |   |                                               | -      - |   |   |   | (264 | ) |
| Net      advances under loan agreements to Equistar Chemicals, LP                                |   |                          | (80      | )      |                        |   | -      - |                      |   |   | -      -     |   |   |                                               | -      - |   |   |   | (80 | ) |
| Expenditures      for property,      plant and equipment                                         |   |                          | -      - |   |                        |   | -      - |                      |   |   | (22          | )      |   |                                               | -      - |   |   |   | (22 | ) |
| Payments      and distributions to discontinued      operations                                  |   |                          | -      - |   |                        |   | -      - |                      |   |   | (104         | )      |   |                                               | -      - |   |   |   | (104 | ) |
| Distributions      from affiliates in excess of earnings                                         |   |                          | -      - |   |                        |   | -      - |                      |   |   | 30           |   |   |                                               | -      - |   |   |   | 30 |   |
| Other                                                                                            |   |                          | -      - |   |                        |   | -      - |                      |   |   | 3            |   |   |                                               | -      - |   |   |   | 3 |   |
| Net      cash used in investing activities – continuing operations                         |   |                          | (80      | )      |                        |   | -      - |                      |   |   | (93          | )      |   |                                               | -      - |   |   |   | (173 | ) |
| Net      proceeds from sale of discontinued operations      before required repayment of debt    |   |                          | -      - |   |                        |   | -      - |                      |   |   | 1,089        |   |   |                                               | -      - |   |   |   | 1,089 |   |
| Other      net cash provided by investing activities – discontinued      operations        |   |                          | -      - |   |                        |   | -      - |                      |   |   | 89           |   |   |                                               | -      - |   |   |   | 89 |   |
| Net      cash provided by (used in) investing activities                                         |   |                          | (80      | )      |                        |   | -      - |                      |   |   | 1,085        |   |   |                                               | -      - |   |   |   | 1,005 |   |
| Repayment      of long-term debt                                                                 |   |                          | (106     | )      |                        |   | (390     | )                         |   |   | (274         | )      |   |                                               | -      - |   |   |   | (770 | ) |
| Intercompany                                                                                     |   |                          | (4       | )      |                        |   | 205      |                      |   |   | (201         | )      |   |                                               | -      - |   |   |   | -      - |   |
| Other                                                                                            |   |                          | -      - |   |                        |   | -      - |                      |   |   | 3            |   |   |                                               | -      - |   |   |   | 3 |   |
| Net      cash used in financing activities – continuing operations                         |   |                          | (110     | )      |                        |   | (185     | )                         |   |   | (472         | )      |   |                                               | -      - |   |   |   | (767 | ) |
| Debt      required to be repaid upon sale of discontinued operations                             |   |                          | -      - |   |                        |   | -      - |                      |   |   | (99          | )      |   |                                               | -      - |   |   |   | (99 | ) |
| Other      net cash provided financing activities – discontinued      operations           |   |                          | -      - |   |                        |   | -      - |                      |   |   | 23           |   |   |                                               | -      - |   |   |   | 23 |   |
| Net      cash used in financing activities                                                       |   |                          | (110     | )      |                        |   | (185     | )                         |   |   | (548         | )      |   |                                               | -      - |   |   |   | (843 | ) |
| Effect      of exchange rate changes on cash                                                     |   |                          | -      - |   |                        |   | -      - |                      |   |   | 1            |   |   |                                               | -      - |   |   |   | 1 |   |
| Decrease      in cash and cash equivalents                                                       |   |                          | -      - |   |                        |   | (56      | )                         |   |   | (45          | )      |   |                                               | -      - |   |   |   | (101 | ) |
| Cash      and cash equivalents at      beginning of period                                       |   |                          | -      - |   |                        |   | 62       |                      |   |   | 59           |   |   |                                               | -      - |   |   |   | 121 |   |
| Cash      and cash equivalents      at end of period                                             |   |                          | -      - |   |                        |   | 6        |                      |   |   | 14           |   |   |                                               | -      - |   |   |   | 20 |   |
| Cash      and cash equivalents at end of period      – continuing operations               |   | $                             | - -      |   |                        | $      | 6        |                      |   | $      | 14           |   |   | $                                                  | - -      |   |   | $ | 20 |   |

----

Table of Contents

Index to Financial Statements

| Millions of      dollars                                            |   | MillenniumChemicals      Inc. |     |   | MillenniumAmerica      Inc. |   |     | Non-GuarantorSubsidiaries |   |   | Eliminations |   |   | MillenniumChemicalsInc.      andSubsidiaries |     |
|---------------------------------------------------------------------|--------|-------------------------------|----------|--------|-----------------------------|--------|----------|---------------------------|--------|--------|--------------|--------|--------|----------------------------------------------|----------|
| BALANCE      SHEET                                                  |   |                          |     |   |                        |   |     |                      |   |   |         |   |   |                                         |     |
| Inventories                                                         |   | $                             | - -      |   |                        | $      | - -      |                      |   | $      | 87           |   |   | $                                            | - -      |   |   | $ | 87 |   |
| Other      current assets                                           |   |                          | -      - |   |                        |   | 62       |                      |   |   | 200          |   |   |                                         | -      - |   |   |   | 262 |   |
| Current      assets held for sale                                   |   |                          | -      - |   |                        |   | -      - |                      |   |   | 661          |   |   |                                         | -      - |   |   |   | 661 |   |
| Property,      plant and equipment, net                             |   |                          | -      - |   |                        |   | -      - |                      |   |   | 129          |   |   |                                         | -      - |   |   |   | 129 |   |
| Investment      in Equistar Chemicals, LP                           |   |                          | -      - |   |                        |   | -      - |                      |   |   | 470          |   |   |                                         | -      - |   |   |   | 470 |   |
| Investment      in subsidiaries                                     |   |                          | 310      |   |                        |   | 497      |                      |   |   | -      -     |   |   |                                         | (807     | ) |   |   | -      - |   |
| Goodwill,      net                                                  |   |                          | -      - |   |                        |   | -      - |                      |   |   | 49           |   |   |                                         | -      - |   |   |   | 49 |   |
| Other      assets, net                                              |   |                          | (2       | )      |                        |   | (2       | )                         |   |   | 66           |   |   |                                         | -      - |   |   |   | 62 |   |
| Due      from parent and affiliates, net                            |   |                          | -      - |   |                        |   | 368      |                      |   |   | -      -     |   |   |                                         | (368     | ) |   |   | -      - |   |
| Long-term      assets held for sale                                 |   |                          | -      - |   |                        |   | -      - |                      |   |   | 694          |   |   |                                         | -      - |   |   |   | 694 |   |
| Total      assets                                                   |   | $                             | 308      |   |                        | $      | 925      |                      |   | $      | 2,356        |   |   | $                                            | (1,175   | ) |   | $ | 2,414 |   |
| Current      liabilities                                            |   | $                             | 1        |   |                        | $      | 4        |                      |   | $      | 169          |   |   | $                                            | - -      |   |   | $ | 174 |   |
| Current      liabilities associated withassets      held for sale   |   |                          | -      - |   |                        |   | -      - |                      |   |   | 335          |   |   |                                         | -      - |   |   |   | 335 |   |
| Long-term      debt                                                 |   |                          | 150      |   |                        |   | 617      |                      |   |   | -      -     |   |   |                                         | -      - |   |   |   | 767 |   |
| Other      liabilities                                              |   |                          | -      - |   |                        |   | 3        |                      |   |   | 378          |   |   |                                         | -      - |   |   |   | 381 |   |
| Deferred      income taxes                                          |   |                          | -      - |   |                        |   | -      - |                      |   |   | 248          |   |   |                                         | -      - |   |   |   | 248 |   |
| Due      to parent and affiliates, net                              |   |                          | 14       |   |                        |   | -      - |                      |   |   | 354          |   |   |                                         | (368     | ) |   |   | -      - |   |
| Long-term      liabilities associatedwith      assets held for sale |   |                          | -      - |   |                        |   | -      - |                      |   |   | 361          |   |   |                                         | -      - |   |   |   | 361 |   |
| Total      liabilities                                              |   |                          | 165      |   |                        |   | 624      |                      |   |   | 1,845        |   |   |                                         | (368     | ) |   |   | 2,266 |   |
| Minority      interest                                              |   |                          | -      - |   |                        |   | -      - |                      |   |   | 5            |   |   |                                         | -      - |   |   |   | 5 |   |
| Stockholder’s      (deficit) equity                           |   |                          | 143      |   |                        |   | 301      |                      |   |   | 506          |   |   |                                         | (807     | ) |   |   | 143 |   |
| Total      liabilities and      stockholder’s equity          |   | $                             | 308      |   |                        | $      | 925      |                      |   | $      | 2,356        |   |   | $                                            | (1,175   | ) |   | $ | 2,414 |   |

----

Table of Contents

Index to Financial Statements

| Millions of      dollars                                  |   | MillenniumChemicals      Inc. |     |   | MillenniumAmerica      Inc. |   |     | Non-GuarantorSubsidiaries |   |   | Eliminations |   |   | MillenniumChemicalsInc.      andSubsidiaries |     |
|-----------------------------------------------------------|--------|-------------------------------|----------|--------|-----------------------------|--------|----------|---------------------------|--------|--------|--------------|--------|--------|----------------------------------------------|----------|
| STATEMENT      OF INCOME                                  |   |                          |     |   |                        |   |     |                      |   |   |         |   |   |                                         |     |
| Sales      and other operating revenues                   |   | $                             | - -      |   |                        | $      | - -      |                      |   | $      | 602          |   |   | $                                            | - -      |   |   | $ | 602 |   |
| Cost      of sales                                        |   |                          | -      - |   |                        |   | -      - |                      |   |   | 537          |   |   |                                         | -      - |   |   |   | 537 |   |
| Selling,      general and      administrative expenses    |   |                          | -      - |   |                        |   | -      - |                      |   |   | 50           |   |   |                                         | -      - |   |   |   | 50 |   |
| Research      and development expenses                    |   |                          | -      - |   |                        |   | -      - |                      |   |   | 4            |   |   |                                         | -      - |   |   |   | 4 |   |
| Operating      income                                     |   |                          | -      - |   |                        |   | -      - |                      |   |   | 11           |   |   |                                         | -      - |   |   |   | 11 |   |
| Interest      expense, net                                |   |                          | (9       | )      |                        |   | (53      | )                         |   |   | (1           | )      |   |                                         | -      - |   |   |   | (63 | ) |
| Intercompany      interestincome      (expense), net      |   |                          | (1       | )      |                        |   | 110      |                      |   |   | (109         | )      |   |                                         | -      - |   |   |   | -      - |   |
| Income      from equity      investment in Equistar       |   |                          | -      - |   |                        |   | -      - |                      |   |   | 181          |   |   |                                         | -      - |   |   |   | 181 |   |
| Equity      in income of subsidiaries                     |   |                          | 169      |   |                        |   | 180      |                      |   |   | -      -     |   |   |                                         | (349     | ) |   |   | -      - |   |
| Other      expense, net                                   |   |                          | -      - |   |                        |   | 13       |                      |   |   | (17          | )      |   |                                         | -      - |   |   |   | (4 | ) |
| (Provision      for) benefit      from income taxes       |   |                          | -      - |   |                        |   | 9        |                      |   |   | (26          | )      |   |                                         | -      - |   |   |   | (17 | ) |
| Income      from continuing operations                    |   |                          | 159      |   |                        |   | 259      |                      |   |   | 39           |   |   |                                         | (349     | ) |   |   | 108 |   |
| Income      from discontinued operations, net      of tax |   |                          | -      - |   |                        |   | -      - |                      |   |   | 51           |   |   |                                         | -      - |   |   |   | 51 |   |
| Net      income                                           |   | $                             | 159      |   |                        | $      | 259      |                      |   | $      | 90           |   |   | $                                            | (349     | ) |   | $ | 159 |   |

----

Table of Contents

Index to Financial Statements

| Millions of      dollars                                                                              |   | MillenniumChemicals      Inc. |     |   | MillenniumAmerica      Inc. |   |     | Non-GuarantorSubsidiaries |   |   | Eliminations |   |   | MillenniumChemicalsInc.      and Subsidiaries |     |
|-------------------------------------------------------------------------------------------------------|--------|-------------------------------|----------|--------|-----------------------------|--------|----------|---------------------------|--------|--------|--------------|--------|--------|-----------------------------------------------|----------|
| STATEMENT      OF      CASH FLOWS                                                                     |   |                          |     |   |                        |   |     |                      |   |   |         |   |   |                                          |     |
| Net      cash provided by (used      in) operating activities – continuing      operations      |   | $                             | (7       | )      |                        | $      | 174      |                      |   | $      | (13          | )      |   | $                                             | - -      |   |   | $ | 154 |   |
| Net      cash provided by operating activities –      discontinued operations                   |   |                          | -      - |   |                        |   | -      - |                      |   |   | 39           |   |   |                                          | -      - |   |   |   | 39 |   |
| Net      cash provided by (used      in) operating activities                                         |   |                          | (7       | )      |                        |   | 174      |                      |   |   | 26           |   |   |                                          | -      - |   |   |   | 193 |   |
| Expenditures      for property,      plant and equipment                                              |   |                          | -      - |   |                        |   | -      - |                      |   |   | (12          | )      |   |                                          | -      - |   |   |   | (12 | ) |
| Payments      and distributions to discontinued      operations                                       |   |                          | -      - |   |                        |   | -      - |                      |   |   | (40          | )      |   |                                          | -      - |   |   |   | (40 | ) |
| Other                                                                                                 |   |                          | -      - |   |                        |   | -      - |                      |   |   | 1            |   |   |                                          | -      - |   |   |   | 1 |   |
| Net      cash used in investing activities –      continuing operations                         |   |                          | -      - |   |                        |   | -      - |                      |   |   | (51          | )      |   |                                          | -      - |   |   |   | (51 | ) |
| Net      cash used in investing activities – discontinued      operations                       |   |                          | -      - |   |                        |   | -      - |                      |   |   | (14          | )      |   |                                          | -      - |   |   |   | (14 | ) |
| Net      cash used in investing activities                                                            |   |                          | -      - |   |                        |   | -      - |                      |   |   | (65          | )      |   |                                          | -      - |   |   |   | (65 | ) |
| Repayment      of long-term debt                                                                      |   |                          | -      - |   |                        |   | (250     | )                         |   |   | (4           | )      |   |                                          | -      - |   |   |   | (254 | ) |
| Intercompany                                                                                          |   |                          | 7        |   |                        |   | (73      | )                         |   |   | 66           |   |   |                                          | -      - |   |   |   | -      - |   |
| Other                                                                                                 |   |                          | -      - |   |                        |   | -      - |                      |   |   | (2           | )      |   |                                          | -      - |   |   |   | (2 | ) |
| Net      cash provided by (used in) financing activities      – continuing operations           |   |                          | 7        |   |                        |   | (323     | )                         |   |   | 60           |   |   |                                          | -      - |   |   |   | (256 | ) |
| Net      cash used in financing activities –      discontinued operations                       |   |                          | -      - |   |                        |   | -      - |                      |   |   | (34          | )      |   |                                          | -      - |   |   |   | (34 | ) |
| Net      cash provided by (used      in) financing activities                                         |   |                          | 7        |   |                        |   | (323     | )                         |   |   | 26           |   |   |                                          | -      - |   |   |   | (290 | ) |
| Effect      of exchange rate changes on cash                                                          |   |                          | -      - |   |                        |   | -      - |                      |   |   | 4            |   |   |                                          | -      - |   |   |   | 4 |   |
| Decrease      in cash      and cash equivalents                                                       |   |                          | -      - |   |                        |   | (149     | )                         |   |   | (9           | )      |   |                                          | -      - |   |   |   | (158 | ) |
| Cash      and cash equivalents at      beginning of period                                            |   |                          | -      - |   |                        |   | 211      |                      |   |   | 68           |   |   |                                          | -      - |   |   |   | 279 |   |
| Cash      and cash equivalents      at end of period                                                  |   |                          | -      - |   |                        |   | 62       |                      |   |   | 59           |   |   |                                          | -      - |   |   |   | 121 |   |
| Less:  Cash      and cash equivalents at end of      period – discontinued operations |   |                          | -      - |   |                        |   | -      - |                      |   |   | 45           |   |   |                                          | -      - |   |   |   | 45 |   |
| Cash      and cash equivalents at end of period      – continuing operations                    |   | $                             | - -      |   |                        | $      | 62       |                      |   | $      | 14           |   |   | $                                             | - -      |   |   | $ | 76 |   |

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Table of Contents

Index to Financial Statements

| Millions of      dollars                                |   | MillenniumChemicals      Inc. |     |   | MillenniumAmerica      Inc. |   |     | Non-GuarantorSubsidiaries |   |   | Eliminations |   |   | MillenniumChemicalsInc.      and Subsidiaries |     |
|---------------------------------------------------------|--------|-------------------------------|----------|--------|-----------------------------|--------|----------|---------------------------|--------|--------|--------------|--------|--------|-----------------------------------------------|----------|
| STATEMENT      OF INCOME                                |   |                          |     |   |                        |   |     |                      |   |   |         |   |   |                                          |     |
| Sales      and other operating revenues                 |   | $                             | - -      |   |                        | $      | - -      |                      |   | $      | 610          |   |   | $                                             | - -      |   |   | $ | 610 |   |
| Cost      of sales                                      |   |                          | -      - |   |                        |   | -      - |                      |   |   | 541          |   |   |                                          | -      - |   |   |   | 541 |   |
| Selling,      general and      administrative expenses  |   |                          | -      - |   |                        |   | 1        |                      |   |   | 77           |   |   |                                          | -      - |   |   |   | 78 |   |
| Research      and development expenses                  |   |                          | -      - |   |                        |   | -      - |                      |   |   | 2            |   |   |                                          | -      - |   |   |   | 2 |   |
| Business      combination costs                         |   |                          | -      - |   |                        |   | -      - |                      |   |   | 1            |   |   |                                          | -      - |   |   |   | 1 |   |
| Operating      loss                                     |   |                          | -      - |   |                        |   | (1       | )                         |   |   | (11          | )      |   |                                          | -      - |   |   |   | (12 | ) |
| Interest      expense, net                              |   |                          | (6       | )      |                        |   | (89      | )                         |   |   | (16          | )      |   |                                          | -      - |   |   |   | (111 | ) |
| Intercompany      interest income      (expense), net   |   |                          | (1       | )      |                        |   | 110      |                      |   |   | (109         | )      |   |                                          | -      - |   |   |   | -      - |   |
| Income      from equity      investment in Equistar     |   |                          | -      - |   |                        |   | -      - |                      |   |   | 221          |   |   |                                          | -      - |   |   |   | 221 |   |
| Equity      in income of subsidiaries                   |   |                          | 33       |   |                        |   | 78       |                      |   |   | -      -     |   |   |                                          | (111     | ) |   |   | -      - |   |
| Other      expense, net                                 |   |                          | -      - |   |                        |   | (11      | )                         |   |   | (11          | )      |   |                                          | -      - |   |   |   | (22 | ) |
| (Provision      for) benefit      from income taxes     |   |                          | 2        |   |                        |   | (3       | )                         |   |   | (30          | )      |   |                                          | -      - |   |   |   | (31 | ) |
| Income      from continuing operations                  |   |                          | 28       |   |                        |   | 84       |                      |   |   | 44           |   |   |                                          | (111     | ) |   |   | 45 |   |
| Loss      from discontinued operations, net      of tax |   |                          | -      - |   |                        |   | -      - |                      |   |   | (17          | )      |   |                                          | -      - |   |   |   | (17 | ) |
| Net      income (loss)                                  |   | $                             | 28       |   |                        | $      | 84       |                      |   | $      | 27           |   |   | $                                             | (111     | ) |   | $ | 28 |   |

----

Table of Contents

Index to Financial Statements

| Millions of      dollars                                                                              |   | MillenniumChemicals      Inc. |     |   | MillenniumAmerica      Inc. |   |     | Non-GuarantorSubsidiaries |   |   | Eliminations |   |   | MillenniumChemicalsInc.      and Subsidiaries |     |
|-------------------------------------------------------------------------------------------------------|--------|-------------------------------|----------|--------|-----------------------------|--------|----------|---------------------------|--------|--------|--------------|--------|--------|-----------------------------------------------|----------|
| STATEMENT      OF      CASH FLOWS                                                                     |   |                          |     |   |                        |   |     |                      |   |   |         |   |   |                                          |     |
| Net      cash provided by (used      in) operating activities – continuing      operations      |   | $                             | (7       | )      |                        | $      | 15       |                      |   | $      | 203          |   |   | $                                             | - -      |   |   | $ | 211 |   |
| Net      cash used in operating activities – discontinued      operations                       |   |                          | -      - |   |                        |   | -      - |                      |   |   | 64           |   |   |                                          | -      - |   |   |   | 64 |   |
| Net      cash provided by (used      in) operating activities                                         |   |                          | (7       | )      |                        |   | 15       |                      |   |   | 267          |   |   |                                          | -      - |   |   |   | 275 |   |
| Expenditures      for property, plant      and equipment                                              |   |                          | -      - |   |                        |   | -      - |                      |   |   | (7           | )      |   |                                          | -      - |   |   |   | (7 | ) |
| Payments      and distributions from discontinued      operations                                     |   |                          | -      - |   |                        |   | -      - |                      |   |   | 269          |   |   |                                          | -      - |   |   |   | 269 |   |
| Net      cash provided by investing activities –      continuing operations                     |   |                          | -      - |   |                        |   | -      - |                      |   |   | 262          |   |   |                                          | -      - |   |   |   | 262 |   |
| Net      cash used in investing activities – discontinued      operations                       |   |                          | -      - |   |                        |   | -      - |                      |   |   | (322         | )      |   |                                          | -      - |   |   |   | (322 | ) |
| Net      cash used in investing activities                                                            |   |                          | -      - |   |                        |   | -      - |                      |   |   | (60          | )      |   |                                          | -      - |   |   |   | (60 | ) |
| Repayment      of long-term debt                                                                      |   |                          | -      - |   |                        |   | (365     | )                         |   |   | (1           | )      |   |                                          | -      - |   |   |   | (366 | ) |
| Intercompany                                                                                          |   |                          | 1        |   |                        |   | 473      |                      |   |   | (474         | )      |   |                                          | -      - |   |   |   | -      - |   |
| Contribution      from affiliate                                                                      |   |                          | 6        |   |                        |   | -      - |                      |   |   | -      -     |   |   |                                          | -      - |   |   |   | 6 |   |
| Other                                                                                                 |   |                          | -      - |   |                        |   | (2       | )                         |   |   | 1            |   |   |                                          | -      - |   |   |   | (1 | ) |
| Net      cash provided by (used in) financing activities      – continuing operations           |   |                          | 7        |   |                        |   | 106      |                      |   |   | (474         | )      |   |                                          | -      - |   |   |   | (361 | ) |
| Net      cash used in financing activities – discontinued      operations                       |   |                          | -      - |   |                        |   | -      - |                      |   |   | 89           |   |   |                                          | -      - |   |   |   | 89 |   |
| Net      cash provided by (used      in) financing activities                                         |   |                          | 7        |   |                        |   | 106      |                      |   |   | (385         | )      |   |                                          | -      - |   |   |   | (272 | ) |
| Effect      of exchange rate change on cash                                                           |   |                          | -      - |   |                        |   | -      - |                      |   |   | (8           | )      |   |                                          | -      - |   |   |   | (8 | ) |
| Increase      (decrease) in cash and cash equivalents                                                 |   |                          | -      - |   |                        |   | 121      |                      |   |   | (186         | )      |   |                                          | -      - |   |   |   | (65 | ) |
| Cash      and cash equivalents at      beginning of period                                            |   |                          | -      - |   |                        |   | 90       |                      |   |   | 254          |   |   |                                          | -      - |   |   |   | 344 |   |
| Cash      and cash equivalents      at end of period                                                  |   |                          | -      - |   |                        |   | 211      |                      |   |   | 68           |   |   |                                          | -      - |   |   |   | 279 |   |
| Less:  Cash      and cash equivalents at end of      period – discontinued operations |   |                          | -      - |   |                        |   | -      - |                      |   |   | 50           |   |   |                                          | -      - |   |   |   | 50 |   |
| Cash      and cash equivalents at end of period      – continuing operations                    |   | $                             | - -      |   |                        | $      | 211      |                      |   | $      | 18           |   |   | $                                             | - -      |   |   | $ | 229 |   |

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Item 9

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Item

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Item

Item 

Item 12

Item 13

Item 14

Audit 

| Thousands of      dollars     |   | 2007   |     |   | 2006   |   |
|-------------------------------|--------|--------|----------|--------|--------|--------|
| Audit      fees (a)           |   | $      | 1,247    |   |   | $      | 4,650 |   |
| Audit-related      fees (b)   |   |   | 105      |   |   |   | 174 |   |
| Tax      fees (c)             |   |   | 50       |   |   |   | 300 |   |
| All      other fees           |   |   | -      - |   |   |   | -      - |   |
|     Total |   | $      | 1,402    |   |   | $      | 5,124 |   |

|   | __________ |
|--------|------------|

| (a) | Audit      fees consist of the aggregate fees and expenses billed or expected to be      billed for professional services rendered by PricewaterhouseCoopers for      the audit of Millennium’s annual financial statements, the review of      financial statements included in Millennium’s Form 10-Qs or for services      that are normally provided by the independent auditors in connection with      statutory and regulatory filings or engagements for those fiscal      years.  The 2006 audit fees shown in the table above reflect a      reduction of $250,000 related to fees that were originally estimated, but      were not incurred with respect to 2006.  Of the 2006 audit fees      shown in the table, $684,000 represents fees and expenses billed in 2007      related to 2006 audit services.  Of the 2007 audit fees shown in      the table, $484,000 represents fees and expenses expected to be billed in      2008 related to 2007 auditservices. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | Audit-related      fees consist of the aggregate fees billed for assurance and related      services by PricewaterhouseCoopers that are reasonably related to the      performance of the audit or review of Millennium’s financial      statements.  This category includes fees related to: the      performance of audits of Millennium’s benefit plans; agreed-upon or      expanded audit procedures relating to accounting records required to      respond to or comply with financial, accounting or regulatory reporting      matters; and consultations as to the accounting or disclosure treatment of      transactions or events and/or the actual or potential impact of final or      proposed rules, standards or interpretations by regulatory or standard      setting bodies.  Of the 2006 audit-related fees shown in the      table, $105,000 represents fees billed in 2007 for 2006 audit-related      services.  Of the 2007 audit-related fees shown in the table,      $103,000 represents fees expected to be billed in 2008 for 2007      audit-related services. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c) | Tax      fees consist of the aggregate fees billed for professional services      rendered by PricewaterhouseCoopers for federal, state and international      tax compliance and advice. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Pre-

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Item 15

|                                                                        |   | Page      of     |   |
|-----------------------------------------------------------------------------|--------|------------------|--------|
|                                                                        |   | The      Report  |   |
| Financial      Statements of Equistar:                                      |   |             |   |
| Management’s      Report on Internal Control Over Financial Reporting |   |             | F-1    |   |
| Report      of Independent Registered Public Accounting Firm                |   |             |   |   |
| Consolidated      Statements of Income –                              |   |             |   |   |
| Years      Ended December 31, 2006, 2005 and 2004                           |   |             | F-4    |   |
| Consolidated      Balance Sheets – December 31, 2006, 2005 and 2004   |   |             | F-5    |   |
| Consolidated      Statements of Cash Flows -                                |   |             |   |   |
| Years      Ended December 31, 2006, 2005 and 2004                           |   |             | F-6    |   |
| Consolidated      Statements of Partners’ Capital -                   |   |             |   |   |
| Years      Ended December 31, 2006, 2005 and 2004                           |   |             | F-7    |   |
| Notes      to the Consolidated Financial Statements                         |   | F-8      to F-28 |   |

| ExhibitNumber                        | Description of      Document                                                                                                                                                                                                                                                                                                     |
|--------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 2.1                                  | Agreement      and Plan of Merger, dated March 28, 2004, by and among Lyondell Chemical      Company, the Registrant and Millennium Subsidiary LLC  (9)                                                                                                                                                                          |
| 2.2                                  | Sale      and Purchase Agreement, dated as of February 23, 2007, by and between      Millennium Worldwide Holdings I Inc., Millennium US Op Co, LLC, and The      National Titanium Dioxide Co. Ltd. (Cristal) and, for the limited purposes      set forth therein, Lyondell Chemical Company (14)                              |
| 3.1                                  | Restated      Certificate of Incorporation of the Registrant (10)                                                                                                                                                                                                                                                                |
| 3.2                                  | Amended      and Restated By-laws of the Registrant (11)                                                                                                                                                                                                                                                                         |
| 4.1                                  | Indenture,      dated as of November 27, 1996, among Millennium America Inc. (formerly      named Hanson America Inc.), the Registrant and The Bank of New York, as      Trustee, in respect to the 7.625% Senior Debentures due November 15, 2026      (2)                                                                      |
|           4.1(a) | First      Supplemental Indenture dated as of November 21, 1997 among Millennium      America Inc., the Registrant and The Bank of New York, as Trustee      (5)                                                                                                                                                                 |
| 4.2                                  | Senior      Secured Credit Agreement dated as of December 20, 2007  (16)                                                                                                                                                                                                                                                         |
| 4.3                                  | Interim      Loan Credit Agreement dated as of December 20, 2007(16)                                                                                                                                                                                                                                                             |
| 4.4                                  | Indenture      dated as of August 10, 2005 among Nell AF S.A.R., the guarantors named      therein, The Bank of New York, as Trustee, Registrar, Paying Agent,      Transfer Agent and Listing Agent, ABN AMRO Bank N.V., as Security Agent,      and AIB/BNY Fund Management (Ireland) Limited, as Irish Paying Agent      (16) |
|          4.4(a)       | Supplemental      Indenture dated as of February 2, 2006 to the Indenture dated as of August      10, 2005 (16)                                                                                                                                                                                                                  |
|          4.4(b)       | Second      Supplemental Indenture dated as of May 22, 2007 to the Indenture dated as      of August 10, 2005 (16)                                                                                                                                                                                                               |
|          4.4(c)       | Third      Supplemental Indenture dated as of July 26, 2007 to the Indenture dated as      of August 10, 2005 (16)                                                                                                                                                                                                               |
|          4.4(d)       | Fourth      Supplemental Indenture dated as of December 20, 2007 to the Indenture      dated as of August 10, 2005(16)                                                                                                                                                                                                           |

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|        4.5                       | Senior      Secured Inventory-Based Credit Agreement dated as of December 20, 2007      (16)                                                                                                                                                                                                                                                                                                  |
|---------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        4.6                       | Security      Agreement dated as of December 20, 2007 (16)                                                                                                                                                                                                                                                                                                                                    |
|        4.7                       | Subsidiary      Guaranty dated as of December 20, 2007 (16)                                                                                                                                                                                                                                                                                                                                   |
|        4.8                       | Intercreditor      Agreement dated as of December 20, 2007 (16)                                                                                                                                                                                                                                                                                                                               |
|        4.9                       | Intercreditor      Agreement dated as of December 20, 2007 (16)                                                                                                                                                                                                                                                                                                                               |
|                                  |                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.1                                  | Indemnification      Agreement, dated as of September 30, 1996, between Hanson and the      Registrant (1)                                                                                                                                                                                                                                                                                    |
| 10.2                                  | Tax      Sharing and Indemnification Agreement, dated as of September 30, 1996,      between Hanson, Millennium Overseas Holdings Ltd., Millennium America      Holdings Inc. (formerly HM Anglo American Ltd.), Hanson North America Inc.      and the Registrant (1)                                                                                                                        |
| 10.3                                  | Deed      of Tax Covenant, dated as of September 30, 1996, between Hanson,      Millennium Overseas Holdings Ltd., Millennium Inorganic Chemicals Limited      (formerly SCM Chemicals Limited), SCMC Holdings B.V. (formerly Hanson SCMC      B.V.), Millennium Inorganic Chemicals Ltd. (formerly SCM Chemicals Ltd.),      and the Registrant (the “Deed of Tax Covenant”) (1) |
|           10.3(a) | Amendment      to the Deed of Tax Covenant dated January 28, 1997 (3)                                                                                                                                                                                                                                                                                                                         |
| 10.4                                  | Asset      Contribution Agreement (the “Millennium Asset Contribution Agreement”)      among Millennium Petrochemicals, Millennium Petrochemicals LP LLC and      Equistar Chemicals, LP (4)                                                                                                                                                                                      |
|          10.4(a)       | First      Amendment to the Millennium Asset Contribution Agreement dated as of May      15, 1998 (6)                                                                                                                                                                                                                                                                                         |
|           10.4(b) | Second      Amendment to the Millennium Asset Contribution Agreement among the      Registrant, Millennium Petrochemicals LP LLC, and Equistar Chemicals, LP      (7)                                                                                                                                                                                                                         |
| 10.5                                  | Amended      and Restated Parent Agreement among Lyondell Chemical Company, the      Registrant and Equistar Chemicals, LP, dated as of November 6, 2002      (8)                                                                                                                                                                                                                             |
| 10.7                                  | Amended      and Restated Partnership Agreement of Equistar (15)                                                                                                                                                                                                                                                                                                                              |
| 10.8                                  | Indemnity                                                                                                                                                                                                                                                                                                                                                                                     |
| 10.9                                  | Indenture      dated as of January 29, 1996, as supplemented by a First Supplemental      Indenture dated as of February 15, 1996, between Lyondell Chemical Company      and Texas Commerce Bank, as Trustee (12)                                                                                                                                                                            |
|           10.9(a) | Second      Supplemental Indenture dated as of December 1, 1997 among Lyondell      Chemical Company, Equistar Chemicals, LP and Texas Commerce Bank National      Association (13)                                                                                                                                                                                                           |
|           10.9(b) | Third      Supplemental Indenture dated as of November 3, 2000 among Lyondell      Chemical Company, Equistar Chemicals, LP and The Chase Manhattan Bank      (13)                                                                                                                                                                                                                            |
|           10.9(c) | Fourth      Supplemental Indenture dated as of November 17, 2000 among Lyondell      Chemical Company, Equistar Chemicals, LP and The Chase Manhattan Bank      (13)                                                                                                                                                                                                                          |
|                                  |                                                                                                                                                                                                                                                                                                                                                                                          |
| 12                                    | Statement      Setting Forth Detail for Computation of Ratio of Earnings to Fixed      Charges                                                                                                                                                                                                                                                                                           |
|         31.1                | Rule      13a – 14(a)/15d – 14(a) Certification of Principal Executive      Officer                                                                                                                                                                                                                                                                                               |
|        31.2                      | Rule      13a – 14(a)/15d – 14(a) Certification of Principal Financial      Officer                                                                                                                                                                                                                                                                                               |
|        32.1                      | Section      1350 Certification of Principal Executive Officer                                                                                                                                                                                                                                                                                                                                |
|        32.2                      | Section      1350 Certification of Principal Financial  Officer                                                                                                                                                                                                                                                                                                                               |

| (1) | Filed      as an exhibit to the Registrant’s Registration Statement on Form 10 (No.      1-12091) and incorporated herein by reference.                             |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | Filed      as an exhibit to the Registrant’s Registration Statement on Form S-1 (No.      333-15975) and incorporated herein by reference.                          |
| (3) | Filed      as an exhibit to the Registrant’s Annual Report on Form 10-K for the year      ended December 31, 1996 and incorporated herein by    reference.          |
| (4) | Filed      as an exhibit to the Registrant’s Current Report on Form 8-K dated as of      December 10, 1997 and incorporated herein by reference.                    |
| (5) | Filed      as an exhibit to the Registrant’s Annual Report on Form 10-K for the year      ended December 31, 1997 and incorporated herein by    reference.          |
| (6) | Filed      as an exhibit to the Registrant’s Annual Report on Form 10-K for the year      ended December 31, 1999 and incorporated herein by    reference.          |
| (7) | Filed      as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the      quarter ended September 30, 2001 and incorporated herein by      reference. |
| (8) | Filed      as an exhibit to the Registrant’s Current Report on Form 8-K dated as of      November 26, 2002 and incorporated herein by  reference.                   |

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|  (9) | Filed      as an exhibit to the Registrant’s Current Report on Form 8-K dated as of      March 28, 2004 and incorporated herein by reference.                               |
|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (10)      | Filed      as an exhibit to the Registrant’s Current Report on Form 8-K dated as of      November 30, 2004 and incorporated herein by reference.                            |
| (11)      | Filed      as an exhibit to the Registrant’s Annual Report on Form 10-K for the year      ended December 31, 2004 and incorporated herein by    reference.                  |
| (12)      | Filed      as an exhibit to the Equistar Chemical LP’s Registration Statement on Form      S-4 (No. 333-76473) and incorporated herein by  reference.                       |
| (13)      | Filed      as an exhibit to the Equistar Chemical LP’s Annual Report on Form 10-K for      the year ended December 31, 2000 and incorporated herein by      reference. |
| (14)      | Filed      as an exhibit to the Registrant’s Current Report on Form 8-K dated as of      February 21, 2007 and incorporated herein by reference.                            |
| (15)      | Filed      as an exhibit to the Registrant’s Current Report on Form 8-K dated as of      December 19, 2007 and incorporated herein by reference.                            |
| (16)      | Filed      as an exhibit to Lyondell Chemical Company’s Annual Report on Form 10-K      for the year ended December 31, 2007 and incorporated herein by      reference.     |

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MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIALREPORTING

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTINGFIRM

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Index to Financial Statements

CONSOLIDATED STATEMENTS OF INCOME

|                                                     |   | Successor                                                            |     |   | Predecessor                                                        |   |
|----------------------------------------------------------|--------|----------------------------------------------------------------------|----------|--------|--------------------------------------------------------------------|--------|
|                                                     |   | For      theperiod      fromDecember 21throughDecember 31, |     |   | For      theperiod      fromJanuary 1throughDecember 20, |   |   | For      the year ended December 31, |   |
| Millions      of dollars                                 |   | 2007                                                                 |     |   | 2007                                                               |   |   | 2006 |   |   | 2005 |   |
| Sales      and other operating revenues:                 |   |                                                                 |     |   |                                                               |   |   |   |   |   |   |   |
| Trade                                                    |   | $                                                                    | 342      |   |                                                               | $      | 9,451 |   |   | $ | 9,636 |   |   | $ | 8,732 |   |
| Related      parties                                     |   |                                                                 | 115      |   |                                                               |   | 3,586 |   |   |   | 3,129 |   |   |   | 2,954 |   |
|                                                     |   |                                                                 | 457      |   |                                                               |   | 13,037 |   |   |   | 12,765 |   |   |   | 11,686 |   |
| Operating      costs and expenses:                       |   |                                                                 |     |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Cost      of sales                                       |   |                                                                 | 495      |   |                                                               |   | 12,656 |   |   |   | 11,562 |   |   |   | 10,487 |   |
| Asset      impairment                                    |   |                                                                 | -      - |   |                                                               |   | -      - |   |   |   | 135 |   |   |   | -      - |   |
| Selling,      general and administrative expenses        |   |                                                                 | 6        |   |                                                               |   | 263 |   |   |   | 210 |   |   |   | 198 |   |
| Research      and development expenses                   |   |                                                                 | -      - |   |                                                               |   | 37 |   |   |   | 34 |   |   |   | 33 |   |
| Purchased      in-process research anddevelopment        |   |                                                                 | 22       |   |                                                               |   | -      - |   |   |   | -      - |   |   |   | -      - |   |
|                                                     |   |                                                                 | 523      |   |                                                               |   | 12,956 |   |   |   | 11,941 |   |   |   | 10,718 |   |
| Operating      income (loss)                             |   |                                                                 | (66      | )      |                                                               |   | 81 |   |   |   | 824 |   |   |   | 968 |   |
| Interest      expense:                                   |   |                                                                 |     |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Other                                                    |   |                                                                 | (1       | )      |                                                               |   | (180 | ) |   |   | (217 | ) |   |   | (227 | ) |
| Related      party                                       |   |                                                                 | -      - |   |                                                               |   | (16 | ) |   |   | -      - |   |   |   | -      - |   |
| Interest      income                                     |   |                                                                 | 2        |   |                                                               |   | 6 |   |   |   | 7 |   |   |   | 9 |   |
| Other      expense, net                                  |   |                                                                 | -      - |   |                                                               |   | (107 | ) |   |   | -      - |   |   |   | (2 | ) |
| Income      (loss) before interest onpush-down      debt |   |                                                                 | (65      | )      |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Interest      expense on push-down debt                  |   |                                                                 | (57      | )      |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Net      income (loss)                                   |   | $                                                                    | (122     | )      |                                                               | $      | (216 | ) |   | $ | 614 |   |   | $ | 748 |   |

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CONSOLIDATED BALANCE SHEETS

|                                                     |   | Successor             |     |   | Predecessor           |   |
|----------------------------------------------------------|--------|-----------------------|----------|--------|-----------------------|--------|
| Millions      of dollars                                 |   | December      31,2007 |     |   | December      31,2006 |   |
|  ASSETS                                             |   |                  |     |   |                  |   |
| Current      assets:                                     |   |                  |     |   |                  |   |
| Cash      and cash equivalents                           |   | $                     | 60       |   |                  | $      | 133 |   |
| Accounts      receivable:                                |   |                  |     |   |                  |   |   |   |
| Trade,      net                                          |   |                  | 95       |   |                  |   | 890 |   |
| Related      parties                                     |   |                  | 43       |   |                  |   | 277 |   |
| Inventories                                              |   |                  | 1,754    |   |                  |   | 809 |   |
| Prepaid      expenses and other current assets           |   |                  | 60       |   |                  |   | 49 |   |
| Total      current assets                                |   |                  | 2,012    |   |                  |   | 2,158 |   |
|  Property,      plant and equipment, net            |   |                  | 5,116    |   |                  |   | 2,846 |   |
| Notes      receivable from related party                 |   |                  | 785      |   |                  |   | -      - |   |
| Investments                                              |   |                  | 65       |   |                  |   | 59 |   |
| Intangible      assets, net:                             |   |                  |     |   |                  |   |   |   |
| Debt      issuance costs on push-down debt               |   |                  | 334      |   |                  |   | -      - |   |
| Intangible      assets of Equistar                       |   |                  | 998      |   |                  |   | 285 |   |
| Goodwill                                                 |   |                  | 750      |   |                  |   | -      - |   |
| Other      assets, net                                   |   |                  | 12       |   |                  |   | 11 |   |
|  Total      assets                                  |   | $                     | 10,072   |   |                  | $      | 5,359 |   |
|  LIABILITIES      AND PARTNERS’ CAPITAL       |   |                  |     |   |                  |   |   |   |
| Current      liabilities:                                |   |                  |     |   |                  |   |   |   |
| Current      maturities of long-term debt:               |   |                  |     |   |                  |   |   |   |
| Push-down      debt                                      |   | $                     | 146      |   |                  | $      | - - |   |
| Debt      of Equistar                                    |   |                  | 27       |   |                  |   | -      - |   |
| Related      party borrowings – push-down          |   |                  | 717      |   |                  |   | -      - |   |
| Accounts      payable:                                   |   |                  |     |   |                  |   |   |   |
| Trade                                                    |   |                  | 975      |   |                  |   | 731 |   |
| Related      parties                                     |   |                  | 191      |   |                  |   | 174 |   |
| Accrued      liabilities                                 |   |                  | 295      |   |                  |   | 312 |   |
| Notes      payable to related party                      |   |                  | 80       |   |                  |   | -      - |   |
| Total      current liabilities                           |   |                  | 2,431    |   |                  |   | 1,217 |   |
|  Long-term      debt:                               |   |                  |     |   |                  |   |   |   |
| Push-down      debt                                      |   |                  | 16,829   |   |                  |   | -      - |   |
| Debt      of Equistar                                    |   |                  | 129      |   |                  |   | 2,160 |   |
| Other      liabilities and deferred revenues             |   |                  | 295      |   |                  |   | 378 |   |
| Commitments      and contingencies                       |   |                  |     |   |                  |   |   |   |
| Partners’      capital:                            |   |                  |     |   |                  |   |   |   |
| Partners’      accounts                            |   |                  | 7,746    |   |                  |   | 1,642 |   |
| Push-down      debt                                      |   |                  | (17,358  | )      |                  |   | -      - |   |
| Accumulated      other comprehensive loss                |   |                  | -      - |   |                  |   | (38 | ) |
| Total      partners’ capital (deficit)             |   |                  | (9,612   | )      |                  |   | 1,604 |   |
|  Total      liabilities and partners’ capital |   | $                     | 10,072   |   |                  | $      | 5,359 |   |

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Index to Financial Statements

CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                                                                            |   | Successor                                                            |     |   | Predecessor                                                         |   |
|-----------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------|----------|--------|---------------------------------------------------------------------|--------|
|                                                                                                            |   | For      theperiod      fromDecember      21throughDecember      31, |     |   | For      theperiod      fromJanuary      1,throughDecember      20, |   |   | For      the year endedDecember      31, |   |
| Millions      of dollars                                                                                        |   | 2007                                                                 |     |   | 2007                                                                |   |   | 2006 |   |   | 2005 |   |
| Cash      flows from operating activities:                                                                      |   |                                                                 |     |   |                                                                |   |   |   |   |   |   |   |
| Net      income (loss)                                                                                          |   | $                                                                    | (122     | )      |                                                                | $      | (216 | ) |   | $ | 614 |   |   | $ | 748 |   |
| Adjustments      to reconcile net income (loss) tonet      cash provided by (used in)operating      activities: |   |                                                                 |     |   |                                                                |   |   |   |   |   |   |   |   |   |   |   |
| Push-down      debt interest                                                                                    |   |                                                                 | 57       |   |                                                                |   | -      - |   |   |   | -      - |   |   |   | -      - |   |
| Depreciation      and amortization                                                                              |   |                                                                 | 17       |   |                                                                |   | 315 |   |   |   | 324 |   |   |   | 322 |   |
| Asset      impairment                                                                                           |   |                                                                 | -      - |   |                                                                |   | -      - |   |   |   | 135 |   |   |   | -      - |   |
| Deferred      maintenance turnaroundexpenditures                                                                |   |                                                                 | -      - |   |                                                                |   | (66 | ) |   |   | (12 | ) |   |   | (51 | ) |
| Purchased      in-process researchand      development                                                          |   |                                                                 | 22       |   |                                                                |   | -      - |   |   |   | -      - |   |   |   | -      - |   |
| Debt      prepayment premiums and charges                                                                       |   |                                                                 | -      - |   |                                                                |   | 109 |   |   |   | -      - |   |   |   | -      - |   |
| Changes      in assets and liabilities that provided (used) cash:                                               |   |                                                                 |     |   |                                                                |   |   |   |   |   |   |   |   |   |   |   |
| Accounts      receivable                                                                                        |   |                                                                 | -      - |   |                                                                |   | 288 |   |   |   | (243 | ) |   |   | (96 | ) |
| Inventories                                                                                                     |   |                                                                 | 34       |   |                                                                |   | (4 | ) |   |   | (156 | ) |   |   | (69 | ) |
| Accounts      payable                                                                                           |   |                                                                 | (23      | )      |                                                                |   | 284 |   |   |   | 168 |   |   |   | 197 |   |
| Other,      net                                                                                                 |   |                                                                 | (44      | )      |                                                                |   | (49 | ) |   |   | (23 | ) |   |   | (4 | ) |
| Net      cash provided by(used      in) operating activities                                                    |   |                                                                 | (59      | )      |                                                                |   | 661 |   |   |   | 807 |   |   |   | 1,047 |   |
|                                                                                                            |   |                                                                 |     |   |                                                                |   |   |   |   |   |   |   |   |   |   |   |
| Cash      flows from investing activities:                                                                      |   |                                                                 |     |   |                                                                |   |   |   |   |   |   |   |   |   |   |   |
| Expenditures      for property, plant and equipment                                                             |   |                                                                 | (12      | )      |                                                                |   | (228 | ) |   |   | (168 | ) |   |   | (153 | ) |
| Notes      receivable from related parties                                                                      |   |                                                                 | -      - |   |                                                                |   | (44 | ) |   |   | -      - |   |   |   | -      - |   |
| Other                                                                                                           |   |                                                                 | -      - |   |                                                                |   | 8 |   |   |   | 2 |   |   |   | 3 |   |
| Net      cash used in investing activities                                                                      |   |                                                                 | (12      | )      |                                                                |   | (264 | ) |   |   | (166 | ) |   |   | (150 | ) |
| Cash      flows from financing activities:                                                                      |   |                                                                 |     |   |                                                                |   |   |   |   |   |   |   |   |   |   |   |
| Repayment      of long-term debt                                                                                |   |                                                                 | (4       | )      |                                                                |   | (2,071 | ) |   |   | (150 | ) |   |   | (1 | ) |
| Payment      of debt issuance costs                                                                             |   |                                                                 | -      - |   |                                                                |   | (7 | ) |   |   | -      - |   |   |   | -      - |   |
| Contributions      from owners                                                                                  |   |                                                                 | -      - |   |                                                                |   | 1,703 |   |   |   | -      - |   |   |   | -      - |   |
| Distribution      to owners                                                                                     |   |                                                                 | -      - |   |                                                                |   | (100 | ) |   |   | (575 | ) |   |   | (725 | ) |
| Net      proceeds from notes payable to relatedparty                                                            |   |                                                                 | -      - |   |                                                                |   | 80 |   |   |   | -      - |   |   |   | -      - |   |
| Other                                                                                                           |   |                                                                 | (11      | )      |                                                                |   | 11 |   |   |   | 2 |   |   |   | 5 |   |
| Net      cash used in financing activities                                                                      |   |                                                                 | (15      | )      |                                                                |   | (384 | ) |   |   | (723 | ) |   |   | (721 | ) |
|                                                                                                            |   |                                                                 |     |   |                                                                |   |   |   |   |   |   |   |   |   |   |   |
| Increase      (decrease) in cash and cash equivalents                                                           |   |                                                                 | (86      | )      |                                                                |   | 13 |   |   |   | (82 | ) |   |   | 176 |   |
| Cash      and cash equivalents at beginning of period                                                           |   |                                                                 | 146      |   |                                                                |   | 133 |   |   |   | 215 |   |   |   | 39 |   |
| Cash      and cash equivalents at end of period                                                                 |   | $                                                                    | 60       |   |                                                                | $      | 146 |   |   | $ | 133 |   |   | $ | 215 |   |

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CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL

| Millions      of dollars                                                        |   | Lyondell |     |   | Millennium |   |     | Total  |   |   | AccumulatedOtherComprehensiveIncome      (Loss) |   |   | Push      downof      ParentDebt |     |   | NetPartners’Capital |   |     | ComprehensiveIncome      (Loss) |   |
|---------------------------------------------------------------------------------|--------|----------|----------|--------|------------|--------|----------|--------|--------|--------|-------------------------------------------------|--------|--------|----------------------------------|----------|--------|---------------------------|--------|----------|---------------------------------|--------|
| Predecessor                                                                     |   |     |     |   |       |   |     |   |   |   |                                            |   |   |                             |     |   |                      |   |     |                            |   |
| Balance      at January 1,2005                                                  |   | $        | 642      |   |       | $      | 938      |   |   | $      | 1,580                                           |   |   | $                                | (19      | )      |                      | $      | - -      |                            |   | $ | 1,561 |   |   |   |   |
| Net      income                                                                 |   |     | 527      |   |       |   | 221      |   |   |   | 748                                             |   |   |                             | -      - |   |                      |   | -      - |                            |   |   | 748 |   |   | $ | 748 |   |
| Other      comprehensiveincome:                                                 |   |     |     |   |       |   |     |   |   |   |                                            |   |   |                             |     |   |                      |   |     |                            |   |   |   |   |   |   |   |   |
| Minimum      pension liability                                                  |   |     | -      - |   |       |   | -      - |   |   |   | -      -                                        |   |   |                             | 1        |   |                      |   | -      - |                            |   |   | 1 |   |   |   | 1 |   |
| Derivative      instruments                                                     |   |     | -      - |   |       |   | -      - |   |   |   | -      -                                        |   |   |                             | (2       | )      |                      |   | -      - |                            |   |   | (2 | ) |   |   | (2 | ) |
| Distributions      to partners                                                  |   |     | (511     | )      |       |   | (214     | )      |   |   | (725                                            | )      |   |                             | -      - |   |                      |   | -      - |                            |   |   | (725 | ) |   |   |   |   |
| Comprehensive      income                                                       |   |     |     |   |       |   |     |   |   |   |                                            |   |   |                             |     |   |                      |   |     |                            |   |   |   |   |   | $ | 747 |   |
| Balance      at December 31,2005                                           |   | $        | 658      |   |       | $      | 945      |   |   | $      | 1,603                                           |   |   | $                                | (20      | )      |                      | $      | - -      |                            |   | $ | 1,583 |   |   |   |   |   |
| Net      income                                                                 |   |     | 433      |   |       |   | 181      |   |   |   | 614                                             |   |   |                             | -      - |   |                      |   | -      - |                            |   |   | 614 |   |   | $ | 614 |   |
| Other      comprehensive income:                                                |   |     |     |   |       |   |     |   |   |   |                                            |   |   |                             |     |   |                      |   |     |                            |   |   |   |   |   |   |   |   |
| Minimum      pension liability                                                  |   |     | -      - |   |       |   | -      - |   |   |   | -      -                                        |   |   |                             | 5        |   |                      |   | -      - |                            |   |   | 5 |   |   |   | 5 |   |
| Change      in accounting forpension      and otherpostretirement      benefits |   |     | -      - |   |       |   | -      - |   |   |   | -      -                                        |   |   |                             | (23      | )      |                      |   | -      - |                            |   |   | (23 | ) |   |   | -      - |   |
| Distributions      to partners                                                  |   |     | (405     | )      |       |   | (170     | )      |   |   | (575                                            | )      |   |                             | -      - |   |                      |   | -      - |                            |   |   | (575 | ) |   |   |   |   |
| Comprehensive      income                                                       |   |     |     |   |       |   |     |   |   |   |                                            |   |   |                             |     |   |                      |   |     |                            |   |   |   |   |   | $ | 619 |   |
| Balance      at December 31, 2006                                          |   | $        | 686      |   |       | $      | 956      |   |   | $      | 1,642                                           |   |   | $                                | (38      | )      |                      | $      | - -      |                            |   | $ | 1,604 |   |   |   |   |   |
| Net      loss                                                                   |   |     | (152     | )      |       |   | (64      | )      |   |   | (216                                            | )      |   |                             | -      - |   |                      |   | -      - |                            |   |   | (216 | ) |   | $ | (216 | ) |
| Other      comprehensive income:                                                |   |     |     |   |       |   |     |   |   |   |                                            |   |   |                             |     |   |                      |   |     |                            |   |   |   |   |   |   |   |   |
| Pension      and other postretirement benefits                                  |   |     | -      - |   |       |   | -      - |   |   |   | -      -                                        |   |   |                             | 2        |   |                      |   | -      - |                            |   |   | 2 |   |   |   | -      - |   |
| Contributions      from partners                                                |   |     | 1,703    |   |       |   | -      - |   |   |   | 1,703                                           |   |   |                             | -      - |   |                      |   | -      - |                            |   |   | 1,703 |   |   |   | -      - |   |
| Distributions      to partners                                                  |   |     | (70      | )      |       |   | (30      | )      |   |   | (100                                            | )      |   |                             | -      - |   |                      |   | -      - |                            |   |   | (100 | ) |   |   |   |   |
| Comprehensive      income                                                       |   |     |     |   |       |   |     |   |   |   |                                            |   |   |                             |     |   |                      |   |     |                            |   |   |   |   |   | $ | (216 | ) |
| Balance      at December 20, 2007                                          |   | $        | 2,167    |   |       | $      | 862      |   |   | $      | 3,029                                           |   |   | $                                | (36      | )      |                      | $      | - -      |                            |   | $ | 2,993 |   |   |   |   |   |
| Successor                                                                       |   |     |     |   |       |   |     |   |   |   |                                            |   |   |                             |     |   |                      |   |     |                            |   |   |   |   |   |   |   |   |
| Beginning      balance                                                          |   | $        | 6,144    |   |       | $      | 1,667    |   |   | $      | 7,811                                           |   |   | $                                | - -      |   |                      | $      | - -      |                            |   | $ | 7,811 |   |   |   |   |   |
| Effects      of push-down debt                                                  |   |     | -      - |   |       |   | -      - |   |   |   | -      -                                        |   |   |                             | -      - |   |                      |   | (17,301  | )                               |   |   | (17,301 | ) |   | $ | - - |   |
| Net      loss                                                                   |   |     | (51      | )      |       |   | (14      | )      |   |   | (65                                             | )      |   |                             | -      - |   |                      |   | (57      | )                               |   |   | (122 | ) |   |   | (122 | ) |
| Comprehensive      income                                                       |   |     |     |   |       |   |     |   |   |   |                                            |   |   |                             |     |   |                      |   |     |                            |   |   |   |   |   | $ | (122 | ) |
| Balance      at December 31, 2007                                          |   | $        | 6,093    |   |       | $      | 1,653    |   |   | $      | 7,746                                           |   |   | $                                | - -      |   |                      | $      | (17,358  | )                               |   | $ | (9,612 | ) |   |   |   |   |

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

|      |  Page                                                          |
|-----------|---------------------------------------------------------------------|
|  1.  |  Basis of Presentation                                         |  F-9 |
|  2.  |  Summary of Significant Accounting      Policies               |  F-10 |
|  3.  |  Acquisition of Lyondell by LyondellBasell      Industries     |  F-12 |
|  4.  |  Asset Impairment                                              |  F-14 |
|  5.  |  Hurricane Effects                                             |  F-14 |
|  6.  |  Related Party Transactions                                    |  F-14 |
|  7.  |  Accounts Receivable                                           |  F-18 |
|  8.  |  Inventories                                                   |  F-18 |
|  9.  |  Property, Plant and Equipment, Goodwill and Other      Assets |  F-19 |
|  10. |  Accounts Payable                                              |  F-21 |
|  11. |  Accrued Liabilities                                           |  F-21 |
|  12. |  Deferred Revenues                                             |  F-21 |
|  13. |  Long-Term Debt                                                |  F-22 |
|  14. |  Lease Commitments                                             |  F-24 |
|  15. |  Financial Instruments andDerivatives                          |  F-24 |
|  16. |  Pension and Other Postretirement      Benefits                |  F-25 |
|  17. |  Commitments and Contingencies                                 |  F-30 |
|  18. |  Partners’    Capital (Deficit)                     |  F-31 |
|  19. |  Supplemental Cash Flow      Information                       |  F-31 |
|  20. |  Segment and Related Information                               |  F-32 |

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Basis ofPresentation

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Index to Financial Statements

Summary ofSignificant Accounting Policies

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Acquisition of Lyondell byLyondellBasell Industries

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| Millions      of dollars                                            |   |   |   |
|---------------------------------------------------------------------|--------|--------|--------|
| Allocated      purchase price                                       |   | $      | 7,811  |   |
| Book      value of Equistar net assets acquired                     |   |   | 2,993  |   |
| Excess      purchase price to allocate                              |   |   | 4,818  |   |
|                                                                |   |   |   |   |
| Allocation      of excess purchase price to assets and liabilities: |   |   |   |   |
| Inventories                                                         |   |   | 975    |   |
| Plant,      property and equipment                                  |   |   | 2,288  |   |
| Investments      and joint ventures                                 |   |   | 13     |   |
| Other      identifiable intangibles                                 |   |   | 703    |   |
| Purchased      in-process research and development                  |   |   | 22     |   |
| Other,      net                                                     |   |   | 67     |   |
| Goodwill                                                            |   | $      | 750    |   |

| Millions      of dollars                |   | For      theperiod      fromJanuary 1throughDecember 20,2007 |   |   | For      the yearendedDecember 31,2006 |   |
|-----------------------------------------|--------|------------------------------------------------------------------------|--------|--------|---------------------------------------------|--------|
| Sales      and other operating revenues |   | $                                                                      | 13,037 |   |                                        | $      | 12,765 |   |
| Operating      income (loss)            |   |                                                                   | (67    | )      |                                        |   | 583 |   |
| Net      loss                           |   |                                                                   | (1,880 | )      |                                        |   | (1,262 | ) |

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AssetImpairment

HurricaneEffects

Related PartyTransactions

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|                                                   |   | Successor                                                            |     |   | Predecessor                                                        |   |
|--------------------------------------------------------|--------|----------------------------------------------------------------------|----------|--------|--------------------------------------------------------------------|--------|
| Millions      of dollars                               |   | For      theperiod      fromDecember      21throughDecember      31, |     |   | For      theperiod      fromJanuary      1throughDecember      20, |   |   | For      the year ended December 31, |   |
|                                                   | 2007   |                                                                 |     | 2007   |                                                               |   | 2006 |   |   | 2005 |   |
|                                                   |   |                                                                 |     |   |                                                               |   |   |   |   |   |   |   |
| Equistar      billed related parties for:              |   |                                                                 |     |   |                                                               |   |   |   |   |   |   |   |
| Sales      of products and processing services:        |   |                                                                 |     |   |                                                               |   |   |   |   |   |   |   |
| Lyondell                                               |   | $                                                                    | 54       |   |                                                               | $      | 1,741 |   |   | $ | 1,467 |   |   | $ | 1,202 |   |
| Houston      Refining                                  |   |                                                                 | 30       |   |                                                               |   | 968 |   |   |   | 842 |   |   |   | 944 |   |
| Occidental                                             |   |                                                                 | 25       |   |                                                               |   | 753 |   |   |   | 780 |   |   |   | 755 |   |
| Millennium                                             |   |                                                                 | 4        |   |                                                               |   | 93 |   |   |   | 40 |   |   |   | 53 |   |
| Basell      Group                                      |   |                                                                 | 2        |   |                                                               |   | 31 |   |   |   | -      - |   |   |   | -      - |   |
|                                                   |   |                                                                 |     |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Shared      services and shared site agreements:       |   |                                                                 |     |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Millennium                                             |   |                                                                 | 1        |   |                                                               |   | 25 |   |   |   | 16 |   |   |   | 27 |   |
| Lyondell                                               |   |                                                                 | -      - |   |                                                               |   | 16 |   |   |   | 24 |   |   |   | 20 |   |
| Houston      Refining                                  |   |                                                                 | -      - |   |                                                               |   | -      - |   |   |   | 5 |   |   |   | 4 |   |
|                                                   |   |                                                                 |     |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Interest      – Lyondell                         |   |                                                                 | 2        |   |                                                               |   | -      - |   |   |   | -      - |   |   |   | -      - |   |
|                                                   |   |                                                                 |     |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Related      parties billed Equistar for:              |   |                                                                 |     |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Purchases      of products:                            |   |                                                                 |     |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Houston      Refining                                  |   | $                                                                    | 39       |   |                                                               | $      | 970 |   |   | $ | 928 |   |   | $ | 394 |   |
| Lyondell                                               |   |                                                                 | 15       |   |                                                               |   | 411 |   |   |   | 352 |   |   |   | 307 |   |
| Millennium                                             |   |                                                                 | -      - |   |                                                               |   | 10 |   |   |   | 9 |   |   |   | 8 |   |
| Occidental                                             |   |                                                                 | 1        |   |                                                               |   | 28 |   |   |   | 33 |   |   |   | 20 |   |
| Basell      Group                                      |   |                                                                 | -      - |   |                                                               |   | 3 |   |   |   | -      - |   |   |   | -      - |   |
|                                                   |   |                                                                 |     |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Shared      services, transition and lease agreements: |   |                                                                 |     |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Lyondell                                               |   |                                                                 | 11       |   |                                                               |   | 271 |   |   |   | 209 |   |   |   | 183 |   |
| Millennium                                             |   |                                                                 | -      - |   |                                                               |   | 1 |   |   |   | 1 |   |   |   | 1 |   |
| Occidental                                             |   |                                                                 | -      - |   |                                                               |   | 7 |   |   |   | 7 |   |   |   | 7 |   |
| Houston      Refining                                  |   |                                                                 | -      - |   |                                                               |   | -      - |   |   |   | 1 |   |   |   | 1 |   |
|                                                   |   |                                                                 |     |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Interest      - Millennium                             |   |                                                                 | -      - |   |                                                               |   | 16 |   |   |   | -      - |   |   |   | -      - |   |

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Index to Financial Statements

AccountsReceivable

Inventories

|                        |   | Successor |   |   | Predecessor |   |
|-----------------------------|--------|-----------|--------|--------|-------------|--------|
| Millions      of dollars    |   | 2007      |   |   | 2006        |   |
| Finished      goods         |   | $         | 902    |   |        | $      | 452 |   |
| Work-in-process             |   |      | 40     |   |        |   | 14 |   |
| Raw      materials          |   |      | 650    |   |        |   | 225 |   |
| Materials      and supplies |   |      | 162    |   |        |   | 118 |   |
| Total      inventories      |   | $         | 1,754  |   |        | $      | 809 |   |

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Property, Plant and Equipment,Goodwill and Other Assets

|                                        |   | Successor |   |   | Predecessor |   |
|---------------------------------------------|--------|-----------|--------|--------|-------------|--------|
| Millions      of dollars                    |   | 2007      |   |   | 2006        |   |
| Land                                        |   | $         | 46     |   |        | $      | 85 |   |
| Manufacturing      facilities and equipment |   |      | 4,890  |   |        |   | 6,093 |   |
| Construction      in progress               |   |      | 193    |   |        |   | 141 |   |
| Total      property, plant and equipment    |   |      | 5,129  |   |        |   | 6,319 |   |
| Less      accumulated depreciation          |   |      | (13    | )      |        |   | (3,473 | ) |
| Property,      plant and equipment, net     |   | $         | 5,116  |   |        | $      | 2,846 |   |

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|                                           |   | Successor |   |   | Predecessor             |   |
|------------------------------------------------|--------|-----------|--------|--------|-------------------------|--------|
|                                           |   | 2007      |   |   | 2006                    |   |
| Millions      of dollars                       |   | Cost      |   |   | AccumulatedAmortization |   |   | Net |   |   | Cost |   |   | AccumulatedAmortization |   |   | Net |   |
| Identifiable      intangible assets:           |   |      |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Emission      credits                          |   | $         | 486    |   |                    | $      | - - |   |   | $ | 486 |   |   | $ | 35 |   |   | $ | - - |   |   | $ | 35 |   |
| Various      contracts                         |   |      | 211    |   |                    |   | (1 | ) |   |   | 210 |   |   |   | -      - |   |   |   | -      - |   |   |   | -      - |   |
| Turnaround      costs                          |   |      | 190    |   |                    |   | (2 | ) |   |   | 188 |   |   |   | 324 |   |   |   | (157 | ) |   |   | 167 |   |
| Technology,      patents and licenses          |   |      | 30     |   |                    |   | -      - |   |   |   | 30 |   |   |   | -      - |   |   |   | -      - |   |   |   | -      - |   |
| Software      costs                            |   |      | 32     |   |                    |   | -      - |   |   |   | 32 |   |   |   | 100 |   |   |   | (68 | ) |   |   | 32 |   |
| Debt      issuance costs                       |   |      | 4      |   |                    |   | -      - |   |   |   | 4 |   |   |   | 46 |   |   |   | (28 | ) |   |   | 18 |   |
| Debt      issuance costs onPush-down      debt |   |      | 340    |   |                    |   | (6 | ) |   |   | 334 |   |   |   | -      - |   |   |   | -      - |   |   |   | -      - |   |
| Catalyst      costs                            |   |      | 11     |   |                    |   | -      - |   |   |   | 11 |   |   |   | 44 |   |   |   | (31 | ) |   |   | 13 |   |
| Other                                          |   |      | 37     |   |                    |   | -      - |   |   |   | 37 |   |   |   | 44 |   |   |   | (24 | ) |   |   | 20 |   |
| Total      intangible assets                   |   | $         | 1,341  |   |                    | $      | (9 | ) |   |   | 1,332 |   |   | $ | 593 |   |   | $ | (308 | ) |   |   | 285 |   |
| Pension      asset                             |   |      |   |   |                    |   |   |   |   |   | 8 |   |   |   |   |   |   |   |   |   |   |   | 6 |   |
| Other                                          |   |      |   |   |                    |   |   |   |   |   | 4 |   |   |   |   |   |   |   |   |   |   |   | 5 |   |
| Total      other assets, net                   |   |      |   |   |                    |   |   |   |   | $ | 1,344 |   |   |   |   |   |   |   |   |   |   | $ | 296 |   |

|                                     |   | Successor                                                            |     |   | Predecessor                                                        |   |
|------------------------------------------|--------|----------------------------------------------------------------------|----------|--------|--------------------------------------------------------------------|--------|
| Millions      of dollars                 |   | For      theperiod      fromDecember      21throughDecember      31, |     |   | For      theperiod      fromJanuary      1throughDecember      20, |   |   | For      the year ended December      31, |   |
|                                     | 2007   |                                                                 |     | 2007   |                                                               |   | 2006 |   |   | 2005 |   |
| Property,      plant and equipment       |   | $                                                                    | 14       |   |                                                               | $      | 249 |   |   | $ | 254 |   |   | $ | 254 |   |
| Turnaround      costs                    |   |                                                                 | 2        |   |                                                               |   | 43 |   |   |   | 40 |   |   |   | 38 |   |
| Software      costs                      |   |                                                                 | -      - |   |                                                               |   | 11 |   |   |   | 17 |   |   |   | 18 |   |
| Other                                    |   |                                                                 | 1        |   |                                                               |   | 12 |   |   |   | 13 |   |   |   | 12 |   |
| Total      depreciation and amortization |   | $                                                                    | 17       |   |                                                               | $      | 315 |   |   | $ | 324 |   |   | $ | 322 |   |

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AccountsPayable

AccruedLiabilities

|                                           |   | Successor |   |   | Predecessor |   |
|------------------------------------------------|--------|-----------|--------|--------|-------------|--------|
| Millions      of dollars                       |   | 2007      |   |   | 2006        |   |
| Payroll      and benefits                      |   | $         | 131    |   |        | $      | 92 |   |
| Pension      and other postretirement benefits |   |      | 7      |   |        |   | 7 |   |
| Taxes      other than income taxes             |   |      | 70     |   |        |   | 68 |   |
| Interest                                       |   |      | 5      |   |        |   | 60 |   |
| Product      sales rebates                     |   |      | 36     |   |        |   | 28 |   |
| Deferred      revenues                         |   |      | 26     |   |        |   | 36 |   |
| Other                                          |   |      | 20     |   |        |   | 21 |   |
| Total      accrued liabilities                 |   | $         | 295    |   |        | $      | 312 |   |

DeferredRevenues

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Long-Term Debt

| Millions      of dollars                                 |   |   |   |
|----------------------------------------------------------|--------|--------|--------|
| Term      loan A due 2013                                |   | $      | 1,500  |   |
| Term      loan B due 2014 ($75 million of discount) |   |   | 7,475  |   |
| Interim      Loan                                        |   |   | 8,000  |   |
| Total      long-term debt                                |   |   | 16,975 |   |
| Less      current maturities                             |   |   | (146   | ) |
| Total      long-term debt, net                           |   | $      | 16,829 |   |

|                                                      |   | Successor |     |   | Predecessor |   |
|-----------------------------------------------------------|--------|-----------|----------|--------|-------------|--------|
| Millions      of dollars                                  |   | 2007      |     |   | 2006        |   |
| Senior      Notes due 2008, 10.125%                       |   | $         | 8        |   |        | $      | 700 |   |
| Senior      Notes due 2011, 10.625%                       |   |      | 4        |   |        |   | 707 |   |
| Debentures      due 2026, 7.55% ($21 million of discount) |   |      | 129      |   |        |   | 150 |   |
| Notes      due 2009, 8.75%                                |   |      | 15       |   |        |   | 600 |   |
| Other                                                     |   |      | -      - |   |        |   | 3 |   |
| Total      long-term debt                                 |   |      | 156      |   |        |   | 2,160 |   |
| Less      current maturities                              |   |      | (27      | )      |        |   | -      - |   |
| Total      long-term debt, net                            |   | $         | 129      |   |        | $      | 2,160 |   |

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Lease Commitments

| Millions      of dollars          |   |   |   |
|-----------------------------------|--------|--------|--------|
| 2008                              |   | $      | 89     |   |
| 2009                              |   |   | 79     |   |
| 2010                              |   |   | 70     |   |
| 2011                              |   |   | 56     |   |
| 2012                              |   |   | 51     |   |
| Thereafter                        |   |   | 322    |   |
| Total      minimum lease payments |   | $      | 667    |   |

Financial Instruments andDerivatives

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Pension and Other PostretirementBenefits

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|                                                                                                                     |   | Pension      Benefits |     |   | OtherPostretirement      Benefits |   |
|--------------------------------------------------------------------------------------------------------------------------|--------|-----------------------|----------|--------|-----------------------------------|--------|
| Millions      of dollars                                                                                                 |   | 2007                  |     |   | 2006                              |   |   | 2007 |   |   | 2006 |   |
| Change      in benefit obligation:                                                                                       |   |                  |     |   |                              |   |   |   |   |   |   |   |
| Benefit      obligation, January 1                                                                                       |   | $                     | 275      |   |                              | $      | 256 |   |   | $ | 106 |   |   | $ | 110 |   |
| Service      cost                                                                                                        |   |                  | 22       |   |                              |   | 23 |   |   |   | 2 |   |   |   | 3 |   |
| Interest      cost                                                                                                       |   |                  | 15       |   |                              |   | 14 |   |   |   | 6 |   |   |   | 5 |   |
| Actuarial      gain                                                                                                      |   |                  | (13      | )      |                              |   | (8 | ) |   |   | (6 | ) |   |   | (7 | ) |
| Benefits      paid                                                                                                       |   |                  | (14      | )      |                              |   | (10 | ) |   |   | (5 | ) |   |   | (5 | ) |
| Benefit      obligation, December 31                                                                                |   |                  | 285      |   |                              |   | 275 |   |   |   | 103 |   |   |   | 106 |   |
| Change      in plan assets:                                                                                              |   |                  |     |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Fair      value of plan assets, January 1                                                                                |   |                  | 229      |   |                              |   | 169 |   |   |   |   |   |   |   |   |   |
| Actual      return on plan assets                                                                                        |   |                  | 18       |   |                              |   | 20 |   |   |   |   |   |   |   |   |   |
| Partnership      contributions                                                                                           |   |                  | 41       |   |                              |   | 50 |   |   |   |   |   |   |   |   |   |
| Benefits      paid                                                                                                       |   |                  | (14      | )      |                              |   | (10 | ) |   |   |   |   |   |   |   |   |
| Fair      value of plan assets, December 31                                                                         |   |                  | 274      |   |                              |   | 229 |   |   |   |   |   |   |   |   |   |
| Funded      status, December 31                                                                                          |   |                  | (11      | )      |                              |   | (46 | ) |   |   | (103 | ) |   |   | (106 | ) |
|                                                                                                                     |   |                  |     |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Amounts      not recognized in benefit costs:                                                                            |   |                  |     |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Actuarial      and investment gain (loss)                                                                                |   |                  | -      - |   |                              |   | 46 |   |   |   | -      - |   |   |   | (5 | ) |
| Prior      service benefit                                                                                               |   |                  | -      - |   |                              |   | (1 | ) |   |   | -      - |   |   |   | (2 | ) |
| Net      amount recognized in benefit costs                                                                              |   | $                     | (11      | )      |                              | $      | (1 | ) |   | $ | (103 | ) |   | $ | (113 | ) |
|                                                                                                                     |   |                  |     |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Amounts      recognized in theConsolidated      Balance Sheets consist of:                                               |   |                  |     |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Prepaid      benefit cost                                                                                                |   | $                     | 8        |   |                              | $      | 5 |   |   | $ | - - |   |   | $ | - - |   |
| Accrued      benefit liability, current                                                                                  |   |                  | -      - |   |                              |   | -      - |   |   |   | (6 | ) |   |   | (6 | ) |
| Accrued      benefit liability, long-term                                                                                |   |                  | (19      | )      |                              |   | (51 | ) |   |   | (97 | ) |   |   | (100 | ) |
| Funded      status, December 31,                                                                                         |   | $                     | (11      | )      |                              | $      | (46 | ) |   | $ | (103 | ) |   | $ | (106 | ) |
| Accumulated      other comprehensive(income)      loss                                                                   |   |                  | -      - |   |                              |   | 45 |   |   |   | -      - |   |   |   | (7 | ) |
| Net      amount recognized in benefit costs                                                                              |   | $                     | (11      | )      |                              | $      | (1 | ) |   | $ | (103 | ) |   | $ | (113 | ) |
|                                                                                                                     |   |                  |     |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Additional      Information:                                                                                             |   |                  |     |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Accumulated      benefit obligationfor      defined benefit plans, December 31                                      |   | $                     | 234      |   |                              | $      | 224 |   |   |   |   |   |   |   |   |   |
| Decrease      in minimum liability, prior toapplication      of SFAS No. 158, included inother      comprehensive income |   |                  | -      - |   |                              |   | (5 | ) |   |   |   |   |   |   |   |   |

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Index to Financial Statements

| Millions      of dollars          |   | 2007   |   |   | 2006   |   |
|-----------------------------------|--------|--------|--------|--------|--------|--------|
| Projected      benefit obligation |   | $      | 214    |   |   | $      | 257 |   |
| Fair      value of assets         |   |   | 195    |   |   |   | 205 |   |

| Millions      of dollars            |   | 2007   |     |   | 2006   |   |
|-------------------------------------|--------|--------|----------|--------|--------|--------|
| Accumulated      benefit obligation |   | $      | 6        |   |   | $      | 61 |   |
| Fair      value of assets           |   |   | -      - |   |   |   | 48 |   |

|                                                                   |   | Successor                                                            |     |   | Predecessor                                                        |   |
|------------------------------------------------------------------------|--------|----------------------------------------------------------------------|----------|--------|--------------------------------------------------------------------|--------|
| Millions      of dollars                                               |   | For      theperiod      fromDecember      21throughDecember      31, |     |   | For      theperiod      fromJanuary      1throughDecember      20, |   |   | For      the year endedDecember      31, |   |
|                                                                   | 2007   |                                                                 |     | 2007   |                                                               |   | 2006 |   |   | 2005 |   |
| Net      periodic pension cost:                                        |   |                                                                 |     |   |                                                               |   |   |   |   |   |   |   |
| Service      cost                                                      |   | $                                                                    | 1        |   |                                                               | $      | 22 |   |   | $ | 23 |   |   | $ | 21 |   |
| Interest      cost                                                     |   |                                                                 | 1        |   |                                                               |   | 14 |   |   |   | 14 |   |   |   | 13 |   |
|                                                                   |   |                                                                 |     |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Actual      return on plan assets                                      |   |                                                                 | (1       | )      |                                                               |   | (17 | ) |   |   | (20 | ) |   |   | (10 | ) |
| Less-return      in excess of (less than) expected return              |   |                                                                 | -      - |   |                                                               |   | -      - |   |   |   | 6 |   |   |   | (2 | ) |
| Expected      return on plan assets                                    |   |                                                                 | (1       | )      |                                                               |   | (17 | ) |   |   | (14 | ) |   |   | (12 | ) |
| Actuarial      and         investment loss amortization |   |                                                                 | -      - |   |                                                               |   | 3 |   |   |   | 5 |   |   |   | 6 |   |
| Net      periodic pension cost                                         |   | $                                                                    | 1        |   |                                                               | $      | 22 |   |   | $ | 28 |   |   | $ | 28 |   |

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Index to Financial Statements

|                                                 |   | Successor                                                            |     |   | Predecessor                                                        |   |
|------------------------------------------------------|--------|----------------------------------------------------------------------|----------|--------|--------------------------------------------------------------------|--------|
| Millions      of dollars                             |   | For      theperiod      fromDecember      21throughDecember      31, |     |   | For      theperiod      fromJanuary      1throughDecember      20, |   |   | For      the year endedDecember      31, |   |
|                                                 | 2007   |                                                                 |     | 2007   |                                                               |   | 2006 |   |   | 2005 |   |
| Net      periodic other postretirement benefit cost: |   |                                                                 |     |   |                                                               |   |   |   |   |   |   |   |
| Service      cost                                    |   | $                                                                    | - -      |   |                                                               | $      | 2 |   |   | $ | 3 |   |   | $ | 3 |   |
| Interest      cost                                   |   |                                                                 | -      - |   |                                                               |   | 6 |   |   |   | 5 |   |   |   | 6 |   |
| Prior      service cost amortization                 |   |                                                                 | -      - |   |                                                               |   | -      - |   |   |   | -      - |   |   |   | 2 |   |
| Net      periodic other postretirement benefit cost  |   | $                                                                    | - -      |   |                                                               | $      | 8 |   |   | $ | 8 |   |   | $ | 11 |   |

|                                                     |   | Pension      Benefits |   |   | Other      Postretirement Benefits |   |
|----------------------------------------------------------|--------|-----------------------|--------|--------|------------------------------------|--------|
|                                                     |   | 2007                  |   |   | 2006                               |   |   | 2007 |   |   | 2006 |   |
| Weighted-average      assumptions as ofDecember      31: |   |                  |   |   |                               |   |   |   |   |   |   |   |
| Discount      rate                                       |   |                  | 6.25   | %      |                               |   | 5.75 | % |   |   | 6.25 | % |   |   | 5.75 | % |
| Rate      of compensation increase                       |   |                  | 4.50   | %      |                               |   | 4.50 | % |   |   | 4.50 | % |   |   |   |   |

|                                                |   | Pension      Benefits |   |   | Other      Postretirement Benefits |   |
|-----------------------------------------------------|--------|-----------------------|--------|--------|------------------------------------|--------|
|                                                |   | 2007                  |   |   | 2006                               |   |   | 2005 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
| Weighted-average      assumptionsfor      the year: |   |                  |   |   |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Discount      rate                                  |   |                  | 5.75   | %      |                               |   | 5.50 | % |   |   | 5.75 | % |   |   | 5.75 | % |   |   | 5.50 | % |   |   | 5.75 | % |
| Expected      return on plan assets                 |   |                  | 8.00   | %      |                               |   | 8.00 | % |   |   | 8.00 | % |   |   |   |   |   |   |   |   |   |   |   |   |
| Rate      of compensation increase                  |   |                  | 4.50   | %      |                               |   | 4.50 | % |   |   | 4.50 | % |   |   |   |   |   |   |   |   |   |   |   |   |

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Index to Financial Statements

| Asset      Category             |   | 2007      Policy |   |   | 2007   |   |   | 2006 |   |
|---------------------------------|--------|------------------|--------|--------|--------|--------|--------|------|--------|
| U.S.      equity securities     |   |             | 55     | %      |   |   | 56     | %    |   |   | 56 | % |
| Non-U.S.      equity securities |   |             | 15     | %      |   |   | 16     | %    |   |   | 17 | % |
| Fixed      income securities    |   |             | 25     | %      |   |   | 24     | %    |   |   | 27 | % |
| Real      estate investments    |   |             | 5      | %      |   |   | 4      | %    |   |   | -      - |   |
| Total                           |   |             | 100    | %      |   |   | 100    | %    |   |   | 100 | % |

| Millions      of dollars |   | Pension      Benefits |   |   | OtherBenefits |   |
|--------------------------|--------|-----------------------|--------|--------|---------------|--------|
| 2008                     |   | $                     | 18     |   |          | $      | 7 |   |
| 2009                     |   |                  | 19     |   |          |   | 7 |   |
| 2010                     |   |                  | 19     |   |          |   | 8 |   |
| 2011                     |   |                  | 20     |   |          |   | 8 |   |
| 2012                     |   |                  | 21     |   |          |   | 8 |   |
| 2013      through 2017   |   |                  | 122    |   |          |   | 41 |   |

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Index to Financial Statements

Commitments andContingencies

| Millions      of dollars             |   |   |   |
|--------------------------------------|--------|--------|--------|
| 2008                                 |   | $      | 304    |   |
| 2009                                 |   |   | 291    |   |
| 2010                                 |   |   | 280    |   |
| 2011                                 |   |   | 278    |   |
| 2012                                 |   |   | 277    |   |
| Thereafter      through 2023         |   |   | 2,272  |   |
| Total      minimum contract payments |   | $      | 3,702  |   |

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Index to Financial Statements

Partners’ Capital(Deficit)

Supplemental Cash FlowInformation

|                                              |   | Predecessor                                                    |   |
|---------------------------------------------------|--------|----------------------------------------------------------------|--------|
| Millions      of dollars                          |   | For      the periodfrom      January 1throughDecember      20, |   |   | For      the year endedDecember      31, |   |
|                                              | 2007   |                                                           |   | 2006 |   |   | 2005 |   |
| Cash      paid for interest                       |   | $                                                              | 233    |   |   | $ | 216 |   |   | $ | 221 |   |
| Cash      paid for interest – related party |   |                                                           | 15     |   |   |   | -      - |   |   |   | -      - |   |
| Total                                             |   | $                                                              | 248    |   |   | $ | 216 |   |   | $ | 221 |   |

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Index to Financial Statements

Segment and RelatedInformation

| ·   | Chemicals,      primarily manufacturing and marketing of ethylene; its co-products,      including propylene, butadiene and aromatics, which include benzene and      toluene; ethylene derivatives, including ethylene glycol, ethylene oxide      (“EO”), and other EO derivatives, as well as ethanol; gasoline blending      components such as MTBE and alkylate;and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Polymers,      including manufacturing and marketing of polyethylene, including high      density polyethylene, low density polyethylene and linear low density      polyethylene, and polypropylene. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Index to Financial Statements

| Millions      of dollars                   |   | Chemicals |   |   | Polymers |   |     | Other  |   |   | Consolidated |   |
|--------------------------------------------|--------|-----------|--------|--------|----------|--------|----------|--------|--------|--------|--------------|--------|
| 2007                                       |   |      |   |   |     |   |     |   |   |   |         |   |
| Sales      and other operating revenues    |   |      |   |   |     |   |     |   |   |   |         |   |
| Customers                                  |   | $         | 9,999  |   |     | $      | 3,495    |   |   | $      | - -          |   |   | $ | 13,494 |   |
| Intersegment                               |   |      | 2,432  |   |     |   | -      - |   |   |   | (2,432       | )      |   |   | -      - |   |
|                                       |   |      | 12,431 |   |     |   | 3,495    |   |   |   | (2,432       | )      |   |   | 13,494 |   |
|                                       |   |      |   |   |     |   |     |   |   |   |         |   |   |   |   |   |
| Segment      operating income (loss)       |   |      | 379    |   |     |   | 156      |   |   |   | (22          | )      |   |   | 513 |   |
| Adjustment      to LIFO basis              |   |      |   |   |     |   |     |   |   |   |         |   |   |   | (498 | ) |
| Operating      income                      |   |      |   |   |     |   |     |   |   |   |         |   |   |   | 15 |   |
| Capital      expenditures                  |   |      | 219    |   |     |   | 19       |   |   |   | 2            |   |   |   | 240 |   |
| Depreciation      and amortization expense |   |      | 268    |   |     |   | 62       |   |   |   | 2            |   |   |   | 332 |   |
|                                       |   |      |   |   |     |   |     |   |   |   |         |   |   |   |   |   |
| 2006                                       |   |      |   |   |     |   |     |   |   |   |         |   |   |   |   |   |
| Sales      and other operating revenues    |   |      |   |   |     |   |     |   |   |   |         |   |   |   |   |   |
| Customers                                  |   | $         | 9,341  |   |     | $      | 3,424    |   |   | $      | - -          |   |   | $ | 12,765 |   |
| Intersegment                               |   |      | 2,227  |   |     |   | -      - |   |   |   | (2,227       | )      |   |   | -      - |   |
|                                       |   |      | 11,568 |   |     |   | 3,424    |   |   |   | (2,227       | )      |   |   | 12,765 |   |
|                                       |   |      |   |   |     |   |     |   |   |   |         |   |   |   |   |   |
| Segment      operating income              |   |      | 689    |   |     |   | 137      |   |   |   | -      -     |   |   |   | 826 |   |
| Adjustment      to LIFO basis              |   |      |   |   |     |   |     |   |   |   |         |   |   |   | (2 | ) |
| Operating      income                      |   |      |   |   |     |   |     |   |   |   |         |   |   |   | 824 |   |
| Capital      expenditures                  |   |      | 149    |   |     |   | 19       |   |   |   | -      -     |   |   |   | 168 |   |
| Depreciation      and amortization expense |   |      | 258    |   |     |   | 63       |   |   |   | 3            |   |   |   | 324 |   |
|                                       |   |      |   |   |     |   |     |   |   |   |         |   |   |   |   |   |
| 2005                                       |   |      |   |   |     |   |     |   |   |   |         |   |   |   |   |   |
| Sales      and other operating revenues    |   |      |   |   |     |   |     |   |   |   |         |   |   |   |   |   |
| Customers                                  |   | $         | 8,576  |   |     | $      | 3,110    |   |   | $      | - -          |   |   | $ | 11,686 |   |
| Intersegment                               |   |      | 2,125  |   |     |   | -      - |   |   |   | (2,125       | )      |   |   | -      - |   |
|                                       |   |      | 10,701 |   |     |   | 3,110    |   |   |   | (2,125       | )      |   |   | 11,686 |   |
|                                       |   |      |   |   |     |   |     |   |   |   |         |   |   |   |   |   |
| Segment      operating income              |   |      | 1,017  |   |     |   | 104      |   |   |   | -      -     |   |   |   | 1,121 |   |
| Adjustment      to LIFO basis              |   |      |   |   |     |   |     |   |   |   |         |   |   |   | (153 | ) |
| Operating      income                      |   |      |   |   |     |   |     |   |   |   |         |   |   |   | 968 |   |
| Capital      expenditures                  |   |      | 141    |   |     |   | 12       |   |   |   | -      -     |   |   |   | 153 |   |
| Depreciation      and amortization expense |   |      | 255    |   |     |   | 62       |   |   |   | 5            |   |   |   | 322 |   |

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Index to Financial Statements

|                                       |   | Successor                                                                |   |   | Predecessor                                                           |   |   | Total                                          |   |
|--------------------------------------------|--------|--------------------------------------------------------------------------|--------|--------|-----------------------------------------------------------------------|--------|--------|------------------------------------------------|--------|
| Millions      of dollars                   |   | For      theperiod      fromDecember 21throughDecember 31,2007 |   |   | For      theperiod      fromJanuary      1throughDecember      202007 |   |   | For      the year ended December 31, 2007 |   |
| Sales      and other operating revenues    |   | $                                                                        | 457    |   |                                                                  | $      | 13,037 |                                           |   | $ | 13,494 |   |
| Operating      income (loss)               |   |                                                                     | (66    | )      |                                                                  |   | 81     |                                           |   |   | 15 |   |
| Capital      expenditures                  |   |                                                                     | 12     |   |                                                                  |   | 228    |                                           |   |   | 240 |   |
| Depreciation      and amortization expense |   |                                                                     | 17     |   |                                                                  |   | 315    |                                           |   |   | 332 |   |

| Millions      of dollars                |   | Chemicals |     |   | Polymers |   |     | Total  |   |
|-----------------------------------------|--------|-----------|----------|--------|----------|--------|----------|--------|--------|
| 2007                                    |   |      |     |   |     |   |     |   |   |
| Property,      plant and equipment, net |   | $         | 4,520    |   |     | $      | 596      |   |   | $ | 5,116 |   |
| Goodwill                                |   |      | 500      |   |     |   | 250      |   |   |   | 750 |   |
|                                    |   |      |     |   |     |   |     |   |   |   |   |   |
| 2006                                    |   |      |     |   |     |   |     |   |   |   |   |   |
| Property,      plant and equipment, net |   | $         | 2,202    |   |     | $      | 644      |   |   | $ | 2,846 |   |
| Goodwill                                |   |      | -      - |   |     |   | -      - |   |   |   | -      - |   |
|                                    |   |      |     |   |     |   |     |   |   |   |   |   |
| 2005                                    |   |      |     |   |     |   |     |   |   |   |   |   |
| Property,      plant and equipment, net |   | $         | 2,413    |   |     | $      | 650      |   |   | $ | 3,063 |   |
| Goodwill                                |   |      | -      - |   |     |   | -      - |   |   |   | -- |   |

----

|   |                |     MILLENNIUM      CHEMICALS INC.                            |
|--------|---------------------|-----------------------------------------------------------------------------------|
|   |                |                                                                              |   |
| Date:  | March      28, 2008 |                   By: | /s/ MORRIS      GELB |
|   |                |                                                                              | Morris      Gelb, |
|   |                |                                                                              | Principal      and Chief Executive Officer |
|   |                |                                                                              |   |

| Signature                                                  |   | Title                                                             |
|------------------------------------------------------------|--------|-------------------------------------------------------------------|
|                                                       |   |                                                              |
|                                                       |   |                                                              |
| /s/         MORRIS      GELB                |   | President      and Chief Executive Officer and Director           |
| (Morris      Gelb,                                         |   |                                                              |
| Principal      Executive Officer)                          |   |                                                              |
|                                                       |   |                                                              |
|                                                       |   |                                                              |
| /s/         ALAN      BIGMAN                |   | Chief      Financial Officer and Director                         |
| (Alan      Bigman,                                         |   |                                                              |
| Principal      Financial Officer)                          |   |                                                              |
|                                                       |   |                                                              |
|                                                       |   |                                                              |
| /s/         EBERHARD      FALLER            |   | Vice      President, Controller and Chief Accounting Officer |
| (Eberhard      Faller,                                     |   |                                                              |
| Principal      Accounting Officer)                         |   |                                                              |
|                                                       |   |                                                              |
|                                                       |   |                                                              |
| /s/         C.  BART DE      JONG |   | Director                                                          |
| (C.      Bart de Jong)                                     |   |                                                              |
|                                                       |   |                                                              |
|                                                       |   |                                                              |
| /s/    EDWARD J.      DINEEN           |   | Director                                                          |
| (Edward      J. Dineen)                                    |   |                                                              |
|                                                       |   |                                                              |
|                                                       |   |                                                              |

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Index to Financial Statements