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                                                                    Exhibit 99.1

               INFORMATION RELEVANT TO FORWARD-LOOKING STATEMENTS

(The terms "our", "we" and "the Company", as used herein, refer to Millennium
Chemicals Inc.)

THE CYCLICALITY AND VOLATILITY OF THE CHEMICAL INDUSTRY MAY ADVERSELY AFFECT OUR
INCOME AND CASH FLOW LEVELS, AND MAY CAUSE FLUCTUATIONS IN OUR RESULTS OF
OPERATIONS.

Our income and cash flow levels reflect the cyclical nature of the chemical
industries in which we operate. Certain of these industries are mature and
sensitive to cyclical supply and demand balances. In particular, the markets for
ethylene and polyethylene, in which we participate through our interest in
Equistar, are highly cyclical, resulting in volatile profits and cash flow over
the business cycle. Further, the global markets for TiO[u]2, VAM, acetic acid
and our specialty chemicals are cyclical, although to a lesser degree. The
balance of supply and demand in the markets in which we and Equistar do
business, as well as the level of inventories held by downstream customers,
has a direct effect on the sales volumes and prices of our products as well as
Equistar's. For example, if supply exceeds demand, producers are often pressured
to maintain sales volumes with customers and, consequently, pressure to reduce
prices may result. This is especially true in periods of economic decline or
uncertainty, when demand may be limited and the economic conditions create
caution on the part of customers to build inventory. Reaction by producers,
including us and Equistar, is dependent on the particular circumstances in
effect at the time, but could include meeting competitive price reductions,
short-term curtailment of production, and longer-term temporary or permanent
plant shutdowns. In contrast, we believe that, over a business cycle, the
markets for specialty chemicals are generally more stable in terms of industry
demand, selling prices and operating margins.

Demand for TiO[u]2 is influenced by changes in the gross domestic product of
various regions of the world and has fluctuated from year to year. The industry
is also sensitive to changes in its customers' marketplaces, which are primarily
the paint and coatings, plastics and paper industries. In recent history,
consolidations and negative business conditions within certain of those
industries have put pressure on TiO[u]2 prices as companies compete to keep
volumes placed.

Demand for ethylene, its derivatives and acetyls has fluctuated from year to
year. These industry segments are particularly sensitive to capacity additions.
Producers have historically experienced alternating periods of inadequate
capacity, resulting in increased selling prices and operating margins, followed
by periods of large capacity additions, resulting in declining capacity
utilization rates, selling prices and operating




<PAGE>

margins. Profitability is further influenced by fluctuations in the price of
feedstocks for ethylene, which generally follow price trends for crude oil or
natural gas.

Currently, there is ongoing overcapacity in the petrochemical and polymer
industries, as a number of Equistar's competitors in various segments of the
petrochemical and polymer industries have added capacity and demand growth has
lagged behind rates experienced historically. There can be no assurance that
future growth in product demand will be sufficient to utilize current or any
additional capacity. Excess petrochemical and polymer industry capacity has
depressed, and may continue to depress, Equistar's volumes and margins. The
global economic and political environment continues to be uncertain,
contributing to low petrochemical and polymer industry operating rates, adding
to the volatility of raw material and energy costs, and forestalling the
industry's recovery from trough conditions, all of which is placing, and may
continue to place, pressure on Equistar's results of operations. As a result of
excess petrochemical and polymer industry capacity and weak demand for products,
as well as rising energy costs and raw material prices, Equistar's operating
income has declined and may remain volatile.

Different facilities may have differing operating rates from period-to-period
depending on supply and demand for the product produced at the facility during
that period, which may be affected by many factors, such as energy costs,
feedstock costs and transportation costs. As a result, individual facilities may
be operated below or above rated capacities, may be idled or may be shut down
and restarted in any period. It is possible that lower demand in the future will
cause us to reduce operating rates.

OUR BUSINESS AND EQUISTAR'S BUSINESS ARE SUBJECT TO MATERIAL FLUCTUATIONS DUE TO
EXTERNAL FACTORS WHICH MAY NEGATIVELY AFFECT OUR AND EQUISTAR'S FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.

External factors beyond our control, such as general economic conditions,
weather, competitor actions, international events and governmental regulation in
the United States and abroad, can cause fluctuations in demand for our products,
fluctuations in prices and margins and volatility in the price of raw materials
that we purchase. In particular, demand within the primary end-markets for our
and Equistar's products is generally a function of regional economic conditions
in geographic areas in which sales are generated. In addition, our business
depends on the free flow of products and services through the channels of
commerce. In response to terrorists' activities and threats aimed at the United
States, transportation, mail, financial and other services have been slowed.
Further delays or stoppages in transportation, mail, financial and other
services could have a material adverse effect on our business, results of
operations and financial condition. Furthermore, we may experience an increase
in operating costs, such as costs for transportation, insurance and security as
a result of these activities and threats. To the extent the U.S. economy is
adversely affected by terrorist activities and potential activities, and other
international issues such as SARS and its impact on


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the international business environment, any economic downturn could adversely
impact our results of operations, impair our ability to raise capital or
otherwise adversely affect our business. These external factors can magnify the
impact of industry cycles. For example, third quarter 2003 TiO[u]2 sales volume
was lower than third quarter 2002 sales volume, as uncertain economic conditions
and unscheduled operating disruptions resulting from the European heat wave, the
power blackout in the Northeast region of the U.S. and Hurricane Isabel impacted
our business. As a result, our income and cash flow are subject to material
fluctuations. Any cash distributions we may expect to receive from Equistar may
be affected by the same or similar external factors.

OUR PARTICIPATION IN THE EQUISTAR JOINT VENTURE EXPOSES US TO RISKS OF SHARED
CONTROL AND FUTURE CAPITAL COMMITMENTS WHICH, AMONG OTHER THINGS, MAY ADVERSELY
AFFECT EQUISTAR'S BUSINESS OR OUR RESULTS OF OPERATIONS.

We rely, in part, on cash distributions from Equistar. We did not receive any
cash distributions from Equistar during 2001, 2002, or 2003, and we do not
expect to receive any distributions in the next 12 months. Our cash flow could
be adversely affected by actions taken by Equistar or Lyondell, our partner in
Equistar, or by conditions that affect Equistar or its business. In particular,
if Lyondell does not fulfill its obligations under the Equistar partnership
agreement, Equistar may not be able to operate according to its business plan.
If this were to occur, our results of operations could be adversely affected. In
addition, although unanimous consent of both us and Lyondell is required for
aggregate partner contributions not contemplated by an approved strategic plan
that exceed $100 million in any given year or $300 million in a five-year
period, we may be required, without our consent, to contribute amounts up to our
pro rata portion of such amounts or an unlimited amount to allow Equistar to
achieve or maintain compliance with certain health, safety and environmental
laws. If we fail to contribute these amounts, we may have to sell our interest
in Equistar to Lyondell at a price or on terms which may be unfavorable to us.

RISING COSTS OF ENERGY AND OTHER RAW MATERIALS MAY RESULT IN INCREASED OPERATING
EXPENSES AND REDUCED RESULTS OF OPERATIONS.

We and Equistar purchase large amounts of raw materials for our respective
businesses. The cost of these materials, in the aggregate, represents a
substantial portion of our operating expenses. The prices and availability of
these raw materials vary with market conditions and may be highly volatile. In
addition, we and Equistar use large amounts of energy in our respective
operations. The benchmark prices of crude oil and natural gas have on average
been significantly higher in 2003 than in 2002, reflecting rapid increases in
early 2003. As these costs rise, operating expenses will likely increase and
could have a particularly negative impact on Equistar and our Acetyls business
segment. From time to time, we and Equistar may


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enter into transactions to manage the volatility of such costs, but we cannot
assure you that these actions will have a favorable impact on our results of
operations nor can we assure you that we will continue to enter into such
transactions in the future. Energy costs remain volatile.

There have been in the past and will likely be in the future periods of time
when we are unable to pass raw material price increases on to our customers in
whole or in part. Customer consolidation in our TiO[u]2 business has made it
more difficult to pass costs along to customers, so that increased raw material
prices negatively affect our operating margins.

In our Titanium Dioxide and Related Products business segment, titanium-bearing
ores are our primary raw materials, but we also purchase large quantities of
chlorine, sulfuric acid, caustic soda, petroleum products and metallurgical
coke, aluminum, sodium silicate, oxygen and nitrogen. In our Acetyls business
segment, our primary raw materials are natural gas, carbon monoxide, methanol
and ethylene, and in our Specialty Chemicals business segment, our primary raw
materials are crude sulfate turpentine, or CST, and gum turpentine or their
derivatives. In addition, Equistar purchases petroleum liquids, including
naptha, condensates and gas oils and natural gas liquids, including ethane,
propane and butane.

We use natural gas as a feedstock and as a source of energy. Fluctuations in the
price of natural gas affect our operating expenses which, in turn, affect our
results of operations. Our Acetyls business segment has the largest exposure to
natural gas costs. Our Titanium Dioxide and Related Products and Specialty
Chemicals business segments are impacted to a lesser extent.

The cost of raw materials and energy used in Equistar's business represent a
substantial portion of Equistar's operating expenses. These costs generally
follow the prices for natural gas and crude oil. Due to the commodity nature of
most of Equistar's products, Equistar is generally not able to protect its
market position by product differentiation and may not be able to pass on all
cost increases to its customers. Accordingly, increases in raw material and
other costs may not necessarily correlate with changes in product prices, either
in the direction of the price change or in magnitude. As a result, changes in
the prices of commodities and raw materials and other costs will affect
Equistar's income and cash flow which will, in turn, affect our financial
condition and results of operations.

In addition, higher natural gas prices adversely affect the international
competitiveness of many U.S. chemical producers since they are more reliant on
natural gas and natural gas liquids as an energy source and as a raw material.
This not only adversely impacts Equistar's exports but also increases the
availability of chemicals in North America, resulting in excess supply and lower
prices. The price of natural gas produced on the U.S. gulf coast has increased
substantially over the past few years. As long as prices


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remain high, U.S. users of natural gas will remain less competitive with users
of lower priced natural gas produced in other regions of the world.

OUR SUBSTANTIAL INDEBTEDNESS CAUSES US TO HAVE SIGNIFICANT DEBT SERVICE
OBLIGATIONS, WHICH REDUCES OUR CASH FLOW AVAILABLE TO FUND OPERATIONS.

The Company and its consolidated subsidiaries have substantial indebtedness and,
as a result, significant debt service obligations. As of December 31, 2003,
their total indebtedness outstanding aggregated approximately $1,467 million
(excluding unused commitments and $19 million of outstanding undrawn standby
letters of credit), representing approximately 105% of their total
capitalization. In addition, the Company's debt instruments permit the Company
and its consolidated subsidiaries to incur or guarantee certain additional
indebtedness, subject to certain limitations. Our debt service obligations
reduce our cash flow available to fund our operations and future business
requirements.

OUR SUBSTANTIAL INDEBTEDNESS COULD ADVERSELY AFFECT OUR ABILITY TO OPERATE OUR
BUSINESS AND LIMIT OUR ABILITY TO OBTAIN ADDITIONAL FINANCING.

The degree of our leverage could have significant consequences for the Company
and the holders of its debt and equity, including:

o    limiting our ability to obtain additional financing on satisfactory terms
     to fund our business and operations;

o    increasing our vulnerability to general economic downturns and adverse
     competitive and industry conditions, which could place us at a competitive
     disadvantage;

o    reducing the availability of our cash flow to fund our business operations
     because we will be required to use a substantial portion of our cash flow
     to service our debt obligations;

o    limiting our flexibility in planning for, or reacting to, changes in our
     business and the chemical industry; and,

o    reducing our credit rating with various credit rating agencies which could
     trigger default provisions under agreements that contain debt trigger
     provisions, limit our ability to access capital, add to the cost of
     obtaining capital and cause concern among our suppliers resulting in
     requests from suppliers for credit enhancements such as shorter credit
     terms, funds on deposit or letters of credit, any of which could reduce our
     ability to borrow additional amounts under our debt instruments and
     increase costs.


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SERVICING OUR DEBT OBLIGATIONS REQUIRES A SIGNIFICANT AMOUNT OF CASH, AND OUR
ABILITY TO GENERATE CASH DEPENDS ON MANY FACTORS BEYOND OUR CONTROL.

Our ability to satisfy our debt service obligations will depend, among other
things, upon our future operating performance, the future operating performance
of Equistar and our ability to refinance indebtedness when necessary. Each of
these factors is to a large extent dependent on economic, financial, competitive
and other factors beyond our control. The amount of cash distributions we
receive from Equistar will be affected by its results of operations and cash
flow and by the agreements under which it operates. We did not receive any cash
distributions from Equistar during 2001, 2002, or 2003, and we do not expect to
receive any distributions during the next 12 months. If, in the future, we
cannot generate sufficient cash from our operations and from Equistar to meet
our debt service obligations, we may need to reduce or delay capital
expenditures or curtail research and development efforts. In addition, we may
need to refinance our debt, obtain additional financing or sell assets, which we
may not be able to do on commercially reasonable terms, if at all. We cannot
assure you that our business or that of Equistar will generate sufficient cash
flow, or that we will be able to obtain funding, sufficient to satisfy our debt
service obligations.

RESTRICTIONS IMPOSED BY OUR DEBT INSTRUMENTS MAY LIMIT OUR ABILITY TO FINANCE
FUTURE OPERATIONS OR CAPITAL NEEDS OR ENGAGE IN OTHER BUSINESS ACTIVITIES THAT
MAY BE IN OUR INTEREST. OUR FAILURE TO COMPLY WITH THESE RESTRICTIONS COULD LEAD
TO AN ACCELERATION OF OUR INDEBTEDNESS.

Our debt instruments contain numerous financial and operating covenants that,
among other things, limit Millennium Chemicals' and its subsidiaries' ability to
(1) incur additional indebtedness, (2) repurchase or redeem capital stock, (3)
create liens or other encumbrances, (4) redeem debt that is junior in right of
payment to the notes, (5) make certain payments and investments, including
dividend payments, (6) enter into sale/leaseback transactions, (7) sell or
otherwise dispose of assets, (8) merge or consolidate with other entities or (9)
engage in certain transactions with subsidiaries and affiliates and otherwise
restrict corporate activities. Our bank credit agreement also requires us to
meet certain financial ratios and tests. Agreements governing future
indebtedness could also contain significant financial and operating
restrictions. Our ability to comply with these restrictions may be affected by
factors beyond our control. A failure to comply with the obligations contained
in our bank credit agreement or our indentures could result in an event of
default under our bank credit agreement or the indentures, which could permit
acceleration of the related debt and acceleration of debt under other
instruments that may contain cross-acceleration or cross-default provisions. We
are not certain whether we would have, or be able to obtain, sufficient funds to
make these accelerated


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payments. In that event, the lenders under our bank credit agreement could
proceed against our assets that secure their debt.

WE HAVE A LIMITED NUMBER OF SUPPLIERS FOR SOME OF OUR RAW MATERIALS, AND IF ONE
OF THESE SUPPLIERS WERE UNABLE TO MEET ITS OBLIGATIONS, WE COULD INCUR SUPPLY
SHORTAGES OR PRICE INCREASES FOR OUR RAW MATERIALS.

The Company has a limited number of suppliers for some of its raw materials, and
the number of sources for and availability of raw materials is specific to the
particular geographic region in which a facility is located. In 2003, the
Company and its consolidated subsidiaries purchased 71% of their
titanium-bearing ores from two suppliers, Rio Tinto Iron & Titanium Inc.
(through its affiliates Richards Bay Iron & Titanium (Proprietary) Limited and
QIT-Fer et Titane Inc.) and Iluka Resources Limited under multiple year
contractual commitments. In addition, they obtain chlorine and caustic soda
exclusively from one supplier for their Australian operations under a long-term
supply agreement. For their other TiO[u]2 manufacturing plants, there are
multiple suppliers for these raw materials and they are generally purchased
through short-term contracts. They also purchase all of their ethylene
requirements from Equistar under a supply contract based on market prices. In
addition, they purchase all of their carbon monoxide from Linde AG pursuant to a
long-term contract based primarily on the cost of production. Each of the
chloride TiO[u]2 manufacturing plants has long-term supply agreements for oxygen
and nitrogen through either 'over the fence' suppliers dedicated to the site or
through a direct pipeline arrangement. Each of these contracts is an exclusive
supply contract. Accordingly, if one of these suppliers were unable to meet its
obligations under present supply arrangements, we could suffer reduced supplies
or be forced to incur increased prices for our raw materials.

Equistar purchases the majority of its natural gas and petroleum liquids
requirements through contractual arrangements from a variety of third-party
domestic and foreign sources, as well as on the spot market from third-party
domestic and foreign sources.


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OPERATING PROBLEMS IN OUR OR EQUISTAR'S BUSINESS OR OUR INABILITY TO ACHIEVE
PRODUCTIVITY IMPROVEMENTS, COST REDUCTIONS AND WORKING CAPITAL TARGETS WITHOUT
ADVERSELY AFFECTING RELIABILITY OR EMPLOYEE RETENTION MAY MATERIALLY ADVERSELY
AFFECT OUR PRODUCTIVITY AND PROFITABILITY.

The occurrence of material operating problems at our or Equistar's facilities,
including, but not limited to, the events described below, may have a material
adverse effect on the productivity and profitability of a particular
manufacturing facility, or on our or Equistar's operations as a whole, during
and after the period of such operational difficulties. Our income is dependent
on the continued operation of our and Equistar's various production facilities
and the ability to complete construction projects on schedule. Our and
Equistar's manufacturing operations are subject to the usual hazards associated
with chemical manufacturing and the related storage and transportation of raw
materials, products and wastes, including pipeline leaks and ruptures,
explosions, fires, inclement weather and natural disasters, mechanical failure,
unscheduled downtime, labor difficulties, transportation interruptions and
environmental hazards, such as chemical spills, discharges or releases of toxic
or hazardous substances or gases, storage tank leaks and matters relating to
remedial activities. These hazards can cause personal injury and loss of life,
severe damage to or destruction of property and equipment and environmental
contamination and other environmental damage, and may result in suspension of
operations and the imposition of civil or criminal penalties. Furthermore, we
and Equistar are also subject to present and future claims with respect to
workplace exposure, workers' compensation and other matters. The Company's
attempts to achieve productivity improvements, cost reductions and working
capital targets may adversely impact reliability and employee retention.

BECAUSE THE COMPANY'S OPERATIONS ARE CONDUCTED WORLDWIDE, THEY ARE AFFECTED BY
RISKS OF DOING BUSINESS ABROAD, INCLUDING CURRENCY RISK.

The Company and its consolidated subsidiaries generate revenue from export
sales, or sales by the Company's domestic operations to customers outside of the
United States, as well as from operations conducted outside the United States.
They sell their products to more than 90 countries. Sales from within the United
States to foreign customers amounted to approximately 16% of total revenues in
2003. Revenue from non-United States operations amounted to approximately 46% of
total revenues in 2003, principally reflecting the operations of the Titanium
Dioxide and Related Products business segment in Europe, Brazil and Australia.
Identifiable assets of the non-United States operations represented 41% of total
identifiable assets at December 31, 2003, principally reflecting the assets of
these operations. In addition, they obtain a portion of their principal raw
materials from sources outside the United States. Ores used in the production of
TiO[u]2 are obtained from suppliers in South Africa, Australia, Canada and the
Ukraine, along with that


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from the Company's own mining operations in Brazil, and a portion of their
requirements of CST and gum turpentine and its derivatives is obtained from
suppliers in South America, and in the past they have fulfilled a portion of
these requirements from Indonesia and other Asian countries as well as Europe.

The Company's international operations are subject to the risks of doing
business abroad, including fluctuations in currency exchange rates,
transportation delays and interruptions, political and economic instability and
disruptions, restrictions on the transfer of funds, the imposition of duties and
tariffs, import and export controls, changes in governmental policies, labor
unrest and current and changing regulatory environments. These events could have
an adverse effect on their international operations in the future by reducing
the demand for their products, decreasing the prices at which they can sell
their products or otherwise having an adverse effect on their business,
financial condition or results of operations. We cannot assure you that they
will continue to be found to be operating in compliance with applicable customs,
currency exchange control regulations, transfer pricing regulations or any other
laws or regulations to which they may be subject. We also cannot assure you that
these laws will not be modified, the result of which may be to prevent our
foreign subsidiaries from transferring sufficient cash to Millennium Chemicals
to permit Millennium America to service and repay its debt.

The functional currency of each of the Company's non-United States operations
(principally, the operations of its Titanium Dioxide and Related Products
business segment in the United Kingdom, France, Brazil and Australia) is
generally the local currency. Exchange rates between these currencies and U.S.
dollars in recent years have fluctuated significantly and may do so in the
future. As a result of translating the functional currency financial statements
of all their foreign subsidiaries into United States dollars, consolidated
shareholders' deficit decreased by approximately $128 million during 2003 and
$27 million during 2002. Future events, which may significantly increase or
decrease the risk of future movement in foreign currencies in which they conduct
their business, cannot be predicted.

In addition, the Company and its consolidated subsidiaries generate revenue from
export sales and operations conducted outside the United States that may be
denominated in currencies other than the relevant functional currency. The
Company and its consolidated subsidiaries hedge certain revenues and costs to
minimize the impact of changes in the exchange rates of those currencies
compared to the respective functional currencies. They do not use derivative
financial instruments for trading or speculative purposes. Net foreign currency
transactions aggregated a loss of $2 million in 2003 and a gain of $3 million in
2002. It is possible that fluctuations in foreign exchange rates will have a
negative effect on their results of operations.

WE SELL OUR PRODUCTS IN MATURE AND HIGHLY COMPETITIVE INDUSTRIES AND FACE PRICE
PRESSURE IN THE MARKETS IN WHICH WE OPERATE.


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The global markets in which our chemical businesses and the businesses of
Equistar operate are highly competitive. Competition is based on a number of
factors, such as price, product quality and service. Some of our competitors may
be able to drive down prices for our products because they have costs that are
lower than ours. In addition, some of our competitors may have greater
financial, technological and other resources than ours, and may be better able
to withstand changes in market conditions. Our competitors may be able to
respond more quickly to new or emerging technologies and changes in customer
requirements than we can. Further, consolidation of our competitors or customers
in any of the industries in which we compete may have an adverse effect on us.
The occurrence of any of these events could adversely affect our financial
condition and results of operations.

WE AND EQUISTAR ARE SUBJECT TO EXTENSIVE ENVIRONMENTAL REGULATIONS AND
ENVIRONMENTAL LIABILITIES THAT COULD REQUIRE US TO EXPEND MATERIAL AMOUNTS IN
COMPLIANCE, REMEDIATION, LITIGATION AND SETTLEMENT COSTS AND JUDGMENTS.

Both our operations and those of Equistar are subject to extensive requirements
concerning the protection of the environment, including those governing
discharges of pollutants in the air and water, the generation, management and
disposal of hazardous substances and wastes and other materials and the
remediation of contamination and contaminated sites. Those operations include
chemical manufacturing plants and the distribution of chemical products and
involve the handling and use of hazardous substances. We and Equistar could
incur material liabilities, including clean-up costs, fines and civil and
criminal sanctions and claims by third parties for property damage and personal
injury, as a result of violations of or liabilities under environmental laws
with respect to our operations and those of Equistar. In addition, potentially
significant expenditures, including facility-related expenditures, could be
required in connection with any investigation and remediation of threatened or
actual pollution, increases in production that trigger more stringent
requirements under existing environmental laws, or requirements under future
environmental laws.

Equistar's principal executive offices and many of its plants are located in and
around Houston, Texas. The eight-county Houston/Galveston region has been
designated a severe non-attainment area for ozone by the United States
Environmental Protection Agency, or EPA. In December 2000, the Texas Commission
on Environmental Quality (the "TCEQ") submitted a plan to the United States
Environmental Protection Agency ("EPA") requiring the eight-county
Houston/Galveston, Texas area to come into compliance with the National Ambient
Air Quality Standard for ozone by 2007. These requirements, if implemented,
would mandate significant reductions of nitrogen oxide ("NOx") emissions. In
December 2002, the TCEQ adopted revised rules, which changed the required NOx
emission reduction levels from 90% to 80% while


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requiring new controls on emissions of highly reactive volatile organic
compounds ("HRVOCs"), such as ethylene, propylene, butadiene and butanes. The
TCEQ plans to make a final review of these rules, with final rule revisions to
be adopted by October 2004. These new rules still require approval by the EPA.
Based on the 80% NOx reduction requirement, Equistar estimates that its
aggregate related capital expenditures could total between $165 million and $200
million before the 2007 deadline, and could result in higher annual operating
costs. This result could potentially affect cash distributions from Equistar to
the Company. Equistar's spending through December 31, 2003 totaled $69 million.
Equistar is still assessing the impact of the new HRVOC control requirements.
The timing and amount of these expenditures are subject to regulatory and other
uncertainties, as well as obtaining the necessary permits and approvals. At this
time, there can be no guarantee as to the ultimate capital cost of implementing
any final plan developed to ensure ozone attainment by the 2007 deadline.

We and certain of our subsidiaries have been named as defendants, potentially
responsible parties ("PRPs"), or both, in a number of cleanup proceedings with
respect to various sites, including offsite waste disposal sites and facilities
currently or formerly owned or operated by our current or former subsidiaries or
their predecessors. In the most significant of these proceedings, a subsidiary
is named as one of four PRPs at the Kalamazoo River Superfund Site in Michigan.
The site involves contamination of river sediments and floodplain soils with
polychlorinated biphenyls. Originally commenced on December 2, 1987 in the
United States District Court for the Western District of Michigan as Kelly v.
Allied Paper, Inc. et al., the matter was stayed and is being addressed under
the Comprehensive Environmental Response, Compensation and Liability Act. In
October 2000, the Kalamazoo River Study Group (the "KRSG"), of which one of the
Company's subsidiaries is a member, submitted to the State of Michigan a Draft
Remedial Investigation and Draft Feasibility Study (the "Draft Study"), which
evaluated a number of remedial options and recommended a remedy involving the
stabilization of several miles of river bank and the long-term monitoring of
river sediments at a total collective cost of approximately $73 million. The
five remedial options considered in the Draft Study range from no action to
total dredging of the river and off-site disposal of the dredged materials. In
February 2001, the PRPs, at the request of the State of Michigan, also evaluated
nine additional potential remedies. The cost for these remedial options ranged
from $0 to $2.5 billion; however, the Company strongly believes that the
likelihood of the cost being either $0 or $2.5 billion is remote. During 2001,
additional sampling activities were performed in discrete parts of the river. At
the end of 2001, the EPA took responsibility for the site at the request of the
State. While the State has submitted negative comments to the EPA on the Draft
Study, the EPA has yet to comment. Previously, the Company estimated its
liability at this site based upon the KRSG Draft Study's recommended remedy.
Based on an interim allocation, the Company is paying 35% of costs for the river
portion of the investigation. Guidance as to how the EPA will likely proceed
with any further evaluation and remediation at the Kalamazoo site is not
expected until late 2004 at the earliest. At the point in time when the EPA
announces how it intends to proceed with any such evaluation and remediation,
the Company's estimate of its liability


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at the Kalamazoo site will be re-evaluated. The Company's ultimate liability for
the Kalamazoo site will depend on many other factors that have not yet been
determined, including the ultimate remedy selected by the EPA, the number and
financial viability of the other members of the KRSG as well as of other PRPs
outside the KRSG, and the determination of the final allocation among the
members of the KRSG and other PRPs. Recently, the EPA identified 14 private
entities and 7 municipalities and sent them formal requests for information
regarding their possible connection with the Kalamazoo site.

While we believe that our businesses and the businesses of Equistar generally
operate in compliance with applicable environmental requirements and that we and
Equistar, respectively, maintain adequate reserves regarding our respective
remediation obligations and the environmental proceedings in which we, our
subsidiaries or Equistar have been named as defendants or potentially
responsible parties, the actual costs and liabilities for environmental matters
will not exceed the forecasted amounts or that the estimates made with respect
to indemnification obligations will be accurate. It is also possible that costs
will be incurred with respect to sites or indemnification obligations that
currently are unknown, or as to which it is currently not possible to make or
estimate.

PROCEEDINGS RELATING TO THE ALLEGED EXPOSURE TO LEAD-BASED PAINTS AND LEAD
PIGMENTS COULD REQUIRE US TO EXPEND MATERIAL AMOUNTS IN LITIGATION AND
SETTLEMENT COSTS AND JUDGMENTS.

Together with other alleged past manufacturers of lead-based paint and lead
pigments for use in paint, we have been named as defendants in various legal
proceedings alleging that we and other manufacturers are responsible for
personal injury, property damage, and remediation costs allegedly associated
with the use of these products. The plaintiffs in these legal proceedings
include municipalities, counties, school districts, individuals and the State of
Rhode Island, and seek recovery under a variety of theories, including
negligence, failure to warn, breach of warranty, conspiracy, market share
liability, fraud, misrepresentation and nuisance. All these legal proceedings
are in various pre-trial, post-trial and post-dismissal settings, some of which
are on appeal. The first phase of a proposed multi-phase trial in the Rhode
Island proceeding commenced on September 4, 2002. On October 29, 2002, the judge
in that case declared a mistrial after the jury declared itself deadlocked. The
sole issue before the jury was whether lead pigment in paint in and on Rhode
Island buildings constituted a 'public nuisance'. This case is tentatively set
to be retried on April 6, 2005. An order is anticipated from the court
specifying the additional issues to be considered by the jury in the retrial
beyond the public nuisance questions considered by the jury in the first trial.

While we believe that we have valid defenses to all the lead-based paint and
lead pigment proceedings and are vigorously defending them, litigation is
inherently subject to many uncertainties. Additional lead-based paint and lead
pigment litigation may be filed against us in the future asserting similar or
different legal


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theories and seeking similar or different types of damages and relief, and any
adverse court rulings or determinations of liability, among other factors, could
affect this litigation by encouraging an increase in the number of future claims
and proceedings. In addition, from time to time, legislation and administrative
regulations have been enacted or proposed to impose obligations on present and
former manufacturers of lead-based paint and lead pigment respecting asserted
health concerns associated with such products or to overturn successful court
decisions.

We are unable to predict the outcome of lead-based paint and lead pigment
litigation, the number or nature of possible future claims and proceedings, and
the effect that any legislation and/or administrative regulations may have on
the litigation against us. In addition, management cannot reasonably estimate
the scope or amount of the costs and potential liabilities related to such
litigation, or any such legislation and regulations. Thus, any liability we
incur with respect to pending or future lead-based paint or lead pigment
litigation, or any legislation or regulations, could have a material impact
on the Company's consolidated financial position, results of operations or
cash flows. In addition, we have not accrued any liabilities for judgments or
settlements resulting from lead-based paint and lead pigment litigation.

OTHER PROCEEDINGS AND CLAIMS COULD REQUIRE US TO EXPEND MATERIAL AMOUNTS IN
LITIGATION, SETTLEMENT COSTS AND JUDGMENTS AND OTHER OBLIGATIONS.

In addition to the environmental matters and lead-based paint and lead pigment
litigation referred to above, we and certain of our subsidiaries are defendants
in a number of pending legal proceedings relating to present and former
operations. Several of these legal proceedings allege injurious exposure of the
plaintiffs to various chemicals and other materials on the premises of, or
manufactured by, our current and former subsidiaries, including asbestos. For
example, Millennium Petrochemicals is one of a number of defendants in
approximately 95 active, premises-based asbestos cases in Texas, Illinois, and
Indiana (i.e., where the alleged exposure to asbestos-containing materials was
to employees of third-party contractors or subcontractors on the premises of
certain facilities, and did not relate to any products manufactured or sold by
us or any of our predecessors), typically involving multiple plaintiffs. We are
responsible for these cases under our agreements with Equistar which require
Millennium Petrochemicals to assume responsibility and indemnify Equistar for
them; however, under these agreements, Equistar will be required to assume
responsibility and indemnify Millennium Petrochemicals for any such claims filed
on or after December 1, 2004. Millennium Inorganic Chemicals is one of a number
of defendants in 80 premises-based asbestos


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cases filed in late 2003 in Baltimore County, Maryland. Approximately half of
these claims are on the active docket and half are on an inactive docket of
claims for which no legal obligations attach and no defense costs are being
incurred. With respect to the active docket claims, at the current rate, cases
filed in 2003 are not likely to be scheduled to be tried for at least 10 years.
To date, no premises-based asbestos case has been tried in the State of
Maryland. Defunct indirect subsidiaries are among a number of defendants in 65
premises-based asbestos cases in Texas. Additional cases may be filed in the
future for which we may be responsible, and any liability we incur with respect
to any present or future asbestos cases against us may be material to us
(including taking into account insurance, which will not be available for most
of these cases).

On January 16, 2002, Slidell Inc. filed a lawsuit against Millennium Inorganic
Chemicals Inc. alleging breach of contract and other related causes of action
arising out of a contract between the two parties for the supply of packaging
equipment. We believe we have substantial defenses to these allegations and have
filed a counterclaim against Slidell.

The Company believes that it has valid defenses to the legal proceedings
described above and intends to defend these legal proceedings vigorously. The
Company also has indemnity rights for some of these proceedings to reimburse the
Company for certain legal expenses and to offset certain amounts deemed to be
owed in the event of an unfavorable litigation outcome. An unfavorable outcome
in one or more of these proceedings could have a material impact on the
Company's consolidated financial position, results of operations or cash flows.

The Company also has significant obligations under defined benefit pension plans
and retiree medical programs for the present and former employees of the
Company's current and former businesses. The impact of payments needed to fund
these obligations on the Company depends on factors beyond the Company's
control, including the value of investments in the Company's pension trusts,
interest rates and the costs of providing medical care in the future.


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