Arch Chemicals Reports Third Quarter 2004 Results.

NORWALK, Conn. -- Arch Chemicals, Inc. (NYSE: ARJ):

Highlights:

--Sales Increased Approximately 24 Percent over the Prior Year's Quarter.

--Third Quarter Earnings from Continuing Operations Were $0.25 Per Share Compared to $0.09 in the Prior Year's Quarter.

--The Company Has Signed a Definitive Agreement to Sell the Majority of the Operations of Its Microelectronic Materials Business.

ARCH CHEMICALS, INC. (NYSE: ARJ) announced third quarter 2004 sales of $316.7 million compared to $256.2 million in 2003. Operating income was $14.3 million in 2004 compared to operating income of $7.5 million in 2003, while earnings per share from continuing operations were $0.25 for the third quarter 2004 on $5.8 million of income, compared to $0.09 income per share on earnings of $2.1 million in 2003.

"I am again encouraged by our improved year-over-year performance, which was principally driven by double-digit increases in sales and earnings in our personal care and industrial biocides businesses, as well as our wood protection operations," said Chairman, President and CEO Michael E. Campbell. "These increases helped offset a decline in pool chemical sales due to cool, wet weather, and persistently high raw material costs that impacted several of our businesses. Also," Mr. Campbell added, "I'm very pleased to have reached agreement last week to sell the majority of our Microelectronic Materials operations to Fuji Photo Film Co., Ltd. for approximately $160 million. This divestiture marks a significant milestone in the transformation of our portfolio. It supports our strategy to concentrate resources on our key growth platform, Treatment Products. We view these businesses as less cyclical and R&D-oriented than the Microelectronic Materials business. We believe this transaction serves the best interests of our stakeholders -- our shareholders, customers and employees."

The following compares segment sales and operating income for the third quarters of 2004 and 2003 (including equity in earnings of affiliated companies and excluding restructuring and certain unallocated expenses of the corporate headquarters):

Treatment Products

Treatment Products reported sales of $234.7 million and operating income of $17.8 million compared with sales and operating income of $180.6 million and $10.5 million, respectively, in 2003.

HTH Water Products

HTH water products reported sales of $83.0 million and an operating loss of $6.7 million for 2004 compared to sales and an operating loss of $75.4 million and $0.8 million, respectively, in 2003. Sales increased $7.6 million, or approximately 10 percent, principally due to the acquisitions of Avecia's pool and spa business and Aquachlor ($12.9 million). Excluding the impact of acquisitions, sales decreased approximately seven percent due to lower European and North American residential swimming pool volumes, which were slightly offset by favorable foreign currency rates. The lower sales in Europe resulted from unfavorable weather conditions throughout Europe and increased competition in France. The lower North American sales resulted from unfavorable weather conditions that led to lower pool maintenance products and accessory volumes and lower branded chlorinated isocyanurates (Pace(R)) pricing, partially offset by higher non-branded calcium hypochlorite volumes. Operating loss increased by $5.9 million as favorable foreign currency rates were more than offset by lower sales excluding acquisitions, higher raw material costs, increased selling and advertising expenses for pool dealer integration initiatives and the modest negative contribution from the acquisition of Avecia's pool and spa business.

Personal Care and Industrial Biocides

Personal care and industrial biocides reported sales of $65.5 million and operating income of $17.2 million compared to sales and operating income of $37.1 million and $7.2 million, respectively, in 2003.

Sales increased $28.4 million, or approximately 77 percent, due to the acquisition of Avecia's protection and hygiene business ($21.3 million), increased international volumes for personal care intermediate products and continued strong demand for biocides used in building products, antidandruff shampoos and marine antifouling paints. Excluding the impact of the acquisition, sales increased approximately 19 percent from the year-ago period. Operating income increased by $10.0 million as a result of the higher sales, the positive contribution from the acquisition and lower legal expenses, which were partially offset by higher selling and administration costs to support growth initiatives. In addition, this quarter's operating results benefited ($3.1 million) from the recognition of the balance of a $6.1 million settlement of a favorable judgment obtained earlier this year against a former owner of an acquired company and from a gain on the sale of a building ($0.6 million).

Wood Protection and Industrial Coatings

Wood protection and industrial coatings reported sales of $86.2 million and operating income of $7.3 million compared to sales and operating income of $68.1 million and $4.1 million, respectively, in 2003.

Sales increased approximately 27 percent over the prior year, principally due to favorable product mix, as higher volumes of CCA-alternative products (Wolman(R) E and Tanalith(R) E) and moldecides more than offset lower volumes of traditional CCA products. Sales also increased from the addition of new customers in the wood protection business and higher industrial coatings sales due to favorable foreign exchange. The improvement in product mix is a result of the transition to a new generation of wood preservatives for use in the residential market, driven by the voluntary withdrawal in the U.S. by wood treatment manufacturers of their CCA registrations for non-industrial uses as of December 31, 2003. Operating income increased by $3.2 million over the prior year due to the higher sales, lower CCA legal costs and favorable foreign currency, partially offset by higher raw material costs.

Microelectronic Materials

Microelectronic Materials reported sales of $39.9 million and operating income of $5.0 million compared to sales of $36.5 million and operating income of $0.6 million for 2003. Sales were approximately nine percent higher than 2003 principally due to higher photoresists demand in all regions, partially offset by pricing pressure in certain ancillary and polyimides product lines. Operating income increased by $4.4 million as a result of the higher sales and improved operating results from the Company's FUJIFILM Arch joint venture, partially offset by the unfavorable effects of foreign exchange.

Performance Products

Performance Products reported sales of $42.1 million and an operating loss of $3.1 million compared with sales and an operating loss of $39.1 million and $1.7 million, respectively, in 2003.

Performance urethanes sales increased approximately 19 percent over the prior year as a result of higher North American volumes due to stronger demand and improved pricing for glycol and specialty polyol products. Operating results improved slightly as the higher sales and lower selling and administration expenses resulting from cost-reduction initiatives were offset by higher raw material and energy costs as well as a charge for a Brazilian import tax claim. The results for 2003 included a provision for bad debt expense related to the economic instability in Venezuela.

Hydrazine sales decreased by $3.1 million, or approximately 41 percent. The lower sales were due to lower propellant revenues as a result of the expiration of a long-term propellants supply contract with the U.S. government on April 30, 2004, partly offset by increased demand for Ultra Pure(TM) Hydrazine. Operating income was lower than prior year due to the lower hydrazine propellant revenues.

Other Items

U.S. Government Contract:

As previously reported, the U.S. Government Accountability Office (GAO) has sustained Arch's formal protest of the Defense Energy Support Center's (DESC) recent decision to award the government's next 10-year hydrazine propellant supply contract to a competing firm. The contract involves supplying propellants for use by NASA in the Space Shuttle and by the Air Force in government satellites and launch rockets.

As a result of the GAO's action, the DESC has notified the Company that it has taken corrective action by re-opening the bidding process. The bid schedule has again been revised by the DESC, with the closing date for price proposals extended until December 10, 2004. The DESC has informed the Company that it anticipates completing its contract-award decision soon thereafter.

Sale of Microelectronic Materials Business:

On October 25, the Company announced that it has signed a definitive agreement to sell the majority of the operations of its Microelectronic Materials business to Fuji Photo Film Co., Ltd. for approximately $160 million. The transaction, which is expected to close by year-end, is subject to regulatory approvals and other customary closing conditions. The transaction sales price is subject to a final post-closing working capital adjustment. The proceeds from the divestiture will be principally used to pay down debt.

The Microelectronic Materials businesses to be sold had sales of approximately $135 million in 2003, earnings before interest and taxes of $1.9 million (including the allocation of corporate charges), depreciation and amortization of $11.6 million and capital spending of $2.9 million. Equity in earnings and cash dividends from the Company's FUJIFILM Arch Co., Ltd. joint venture were $6.1 million and $2.0 million, respectively, in 2003.

For the nine months ended September 30, 2004, the Microelectronic Materials businesses to be sold had sales of approximately $110 million, earnings before interest and taxes of $9.2 million (including the allocation of corporate charges), depreciation and amortization of $7.5 million and capital spending of $1.1 million. Equity in earnings and cash dividends from the Company's FUJIFILM Arch Co., Ltd. joint venture were $10.3 million and $4.4 million, respectively.

2004 Outlook

The Company's guidance assumes a full quarter of results from our Microelectronic businesses and prior to reclassification of its results as a discontinued business. After reclassification of these businesses as discontinued operations, the effective tax rate from continuing operations will increase due to the absence of the favorable tax impact for equity earnings from the FUJIFILM-Arch joint venture.

For the full-year 2004, sales are expected to increase approximately 22 to 24 percent over 2003. Earnings from continuing operations before restructuring are expected to be at the low end of our previous guidance of $1.15 to $1.25 per share range. This guidance reflects the $2.1 million charge for a Brazilian import tax claim recorded in the third quarter, as well as continuing increases in raw material and energy costs. Depreciation and amortization is estimated to be approximately $60 million. Capital spending is anticipated to be in the $20 to $25 million range, compared to the Company's previous guidance of $25 to $30 million range.

Traditionally, Arch's fourth quarter is the weakest due to the seasonality of its Treatment Products businesses, principally HTH water products. The Company anticipates the loss from continuing operations in the fourth quarter 2004 to be in the $0.20 to $0.30 per share range, compared to a loss of $0.09, which included restructuring income of $0.03 per share, for the prior-year quarter. This guidance includes the adverse impact caused by the continuing increases in raw material costs, particularly copper in the wood protection business, propylene in the performance urethanes business and chlorine in the HTH water products business. Furthermore, in light of the DESC's decision to re-bid the next long-term hydrazine propellant supply contract, the Company continues to assume that there will be no impairment and, as a result, depreciation and certain other costs will continue. The impact on pre-tax earnings is approximately $1.5 million for the fourth quarter of 2004.

Note: All references to earnings per share above reflect diluted earnings per share.

About Arch

Headquartered in Norwalk, Connecticut, Arch Chemicals, Inc. is a global specialty chemicals company with more than $1 billion in annual sales. Arch and its subsidiaries have leadership positions in three business segments -- Treatment Products, Microelectronic Materials and Performance Products -- and they serve leading customers in these markets with forward-looking solutions to meet their chemical needs. Together with its subsidiaries, Arch has approximately 3,300 employees and manufacturing and customer-support facilities in North and South America, Europe, Asia and Africa. For more information, visit the Company's Web site at http://www.archchemicals.com.

--Listen in live to Arch Chemicals' third quarter 2004 earnings conference call on Tuesday, November 2, 2004 at 11:00 a.m. (ET) at http://www.archchemicals.com.

--If members of the public wish to access Arch's live earnings call in a listen-only mode, dial: [phone], access # 94922225, in the United States or [phone], access # 94922225, outside the United States.

--A telephone replay will be available from 1:00 p.m. on Tuesday, November 2, 2004 until 6:00 p.m. (ET) on Tuesday, November 9, 2004. The replay number is [phone], access # 39615426; from outside the United States, please call [phone], access # 39615426.

Except for historical information contained herein, the information set forth in this communication contains forward-looking statements that are based on management's beliefs, certain assumptions made by management and management's current expectations, estimates and projections about the markets and economy in which Arch and its various businesses operate. Words such as "anticipates," "believes," "estimates," "expects," "forecasts," "opines," "plans," "predicts," "projects," "should," "targets," "will," and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions ("Future Factors"), which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expected or forecasted in such forward-looking statements. The Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of future events, new information or otherwise. Future Factors which could cause actual results to differ materially from those discussed include but are not limited to: general economic and business and market conditions; lack of economic recovery in 2004 in the U.S.; lack of moderate growth or recession in European economies; increases in interest rates; economic conditions in Asia; worsening economic and political conditions in Venezuela; strengthening of the U.S. dollar against the foreign currencies; customer acceptance of new products; efficacy of new technology; changes in U.S. laws and regulations; increased competitive and/or customer pressure; the Company's ability to maintain chemical price increases; higher-than-expected raw material costs for certain chemical product lines; increased foreign competition in the calcium hypochlorite markets; lack of continued recovery in the semiconductor industry; unfavorable court, arbitration, jury decisions or tax matters; the supply/demand balance for the Company's products, including the impact of excess industry capacity; failure to achieve targeted cost-reduction programs; unsuccessful entry into new markets for electronic chemicals; capital expenditures in excess of those scheduled; environmental costs in excess of those projected; the occurrence of unexpected manufacturing interruptions/outages at customer or Company plants; reduction in expected government contract orders and/or the failure to be awarded a new U.S. government contract for hydrazine propellants; unfavorable weather conditions for swimming pool use; inability to expand sales in the professional pool dealer market and gains or losses on derivative instruments.

Arch Chemicals, Inc.
Condensed Consolidated Statements of Income (a)
(In millions, except per share amounts)
----------------------------------------------------------------------
                                  Three Months         Nine Months
                               Ended September 30, Ended September 30,
                                   2004      2003      2004      2003
----------------------------------------------------------------------
Sales                            $316.7    $256.2    $998.2    $789.0
Cost of Goods Sold                231.4     182.8     712.7     560.4
Selling and Administration         68.3      66.0     209.7     181.2
Research and Development            6.2       5.8      19.3      17.4
Equity In (Earnings) of
 Affiliated Companies              (5.0)     (3.4)    (13.3)     (7.5)
Other (Gains) and Losses (b)        1.5      (2.5)      1.2      (2.5)
Restructuring (c)                     -         -       1.7       0.6
----------------------------------------------------------------------
  Income from Continuing
   Operations Before Interest,
   Taxes and Cumulative Effect
   of Accounting Change            14.3       7.5      66.9      39.4
Interest Expense, net               5.3       4.2      14.6      12.6
----------------------------------------------------------------------
  Income from Continuing
   Operations Before Taxes and
   Cumulative Effect of
   Accounting Change                9.0       3.3      52.3      26.8
Income Tax Provision                3.2       1.2      18.3       9.6
----------------------------------------------------------------------
  Income from Continuing
   Operations Before Cumulative
   Effect of Accounting Change      5.8       2.1      34.0      17.2
Income (Loss) from Discontinued
 Operations, net of tax (d)           -       0.6         -      (1.8)
Gain (Loss) on Sale of
 Discontinued Operations, net
 of tax (e)                        (0.2)     15.0      (0.2)     15.0
Cumulative Effect of Accounting
 Change, net of tax (f)               -         -         -      (0.4)
----------------------------------------------------------------------
    Net Income                     $5.6     $17.7     $33.8     $30.0
======================================================================

Basic Income Per Share:
  Continuing Operations Before
   Cumulative Effect of
   Accounting Change              $0.25     $0.09     $1.47     $0.76
  Income (Loss) from
   Discontinued Operations (d)        -      0.03         -     (0.08)
  Gain (Loss) on Sale of
   Discontinued Operations (e)    (0.01)     0.66     (0.01)     0.66
  Cumulative Effect of
   Accounting Change (f)              -         -         -     (0.02)
----------------------------------------------------------------------
Basic Income Per Share            $0.24     $0.78     $1.46     $1.32
======================================================================

Diluted Income Per Share:
  Continuing Operations Before
   Cumulative Effect of
   Accounting Change              $0.25     $0.09     $1.45     $0.76
  Income (Loss) from
   Discontinued Operations (d)        -      0.03         -     (0.08)
  Gain (Loss) on Sale of
   Discontinued Operations (e)    (0.01)     0.66     (0.01)     0.66
  Cumulative Effect of
   Accounting Change (f)              -         -         -     (0.02)
----------------------------------------------------------------------
Diluted Income Per Share          $0.24     $0.78     $1.44     $1.32
======================================================================

Weighted Average Common Stock
 Outstanding - Basic               23.4      22.6      23.1      22.6
Weighted Average Common Stock
 Outstanding - Diluted             23.7      22.7      23.4      22.6
----------------------------------------------------------------------

Adjusted EBITDA (g)               $24.3     $18.1    $109.5     $81.7
----------------------------------------------------------------------

(a) Unaudited.

(b) The third quarter 2004 includes a charge of $2.1 million for a
    Brazilian state import tax claim principally in the performance
    urethanes business offset by a pretax gain on the sale of a
    building in the personal care business of $0.6 million. Full year
    2004 also includes the pretax gain on the sale of excess property
    related to the microelectronic materials business. 2003 represents
    the pretax gain on the sale of excess land of $2.5 million.

(c) 2004 restructuring includes employee-related costs for the
    hydrazine business of $2.1 million, offset by a reduction of the
    prior years' restructuring reserves of $0.4 million. 2003
    restructuring represents severance costs of $2.5 million for
    headcount reductions related to the performance products segment
    ($1.1 million associated with a revision of the 2002
    organizational restructuring program) offset by a reduction of the
    prior years' restructuring reserve of $1.9 million.

(d) Represents the results of operations of the sulfuric acid business
    and the Hickson organics business, net of tax.

(e) 2004 is principally a post-closing working capital adjustment
    related to the sale of the Hickson organics business. 2003
    represents an after-tax gain of $16.5 million on the sale of the
    sulfuric acid business and an after-tax loss of $1.5 million on
    the sale of the Hickson organics business.

(f) Reflects the adoption of SFAS No. 143, "Accounting for Asset
    Retirement Obligations."

(g) Represents earnings before interest, taxes, depreciation and
    amortization, excludes restructuring, other non-cash adjustments,
    cumulative effect of accounting change and unremitted earnings of
    50% or less owned affiliates and includes the operating results of
    the Hickson organics division and the sulfuric acid business. A
    table reconciling Adjusted EBITDA to the GAAP measure that the
    Company believes to be most directly comparable, income from
    continuing operations before cumulative effect of accounting
    change, is included in an accompanying schedule to this press
    release.

Arch Chemicals, Inc.
Condensed Consolidated Balance Sheets
(In millions, except per share amounts)
----------------------------------------------------------------------
                                            September 30, December 31,
                                                2004 (a)      2003
----------------------------------------------------------------------

Assets:
  Cash & Cash Equivalents                      $38.7         $64.8
  Accounts Receivable, Net (b)                 152.1         124.9
  Short-Term Investment (b)                     14.1          43.3
  Inventories, Net                             172.8         141.6
  Other Current Assets                          26.1          27.9
----------------------------------------------------------------------
    Total Current Assets                       403.8         402.5
  Investments and Advances - Affiliated
   Companies at Equity                          41.0          38.2
  Property, Plant and Equipment, Net           290.5         281.4
  Goodwill                                     204.4         137.3
  Other Intangibles                            154.0          61.1
  Other Assets                                  55.2          55.9
----------------------------------------------------------------------
Total Assets                                $1,148.9        $976.4
----------------------------------------------------------------------

Liabilities and Shareholders' Equity:

  Short-Term Borrowings                        $19.4          $0.7
  Accounts Payable                             164.1         139.9
  Accrued Liabilities                           99.5          88.5
----------------------------------------------------------------------
    Total Current Liabilities                  283.0         229.1
  Long-Term Debt                               291.2         218.5
  Other Liabilities                            202.9         191.1
----------------------------------------------------------------------
    Total Liabilities                          777.1         638.7
  Commitments and Contingencies
  Shareholders' Equity:
    Common Stock, Par Value $1 Per Share,
     Authorized 100.0 Shares: 23.4 Shares
     Issued and Outstanding (22.5 in 2003)      23.4          22.5
    Additional Paid-in Capital                 416.6         398.2
    Retained Earnings                           33.4          13.4
    Accumulated Other Comprehensive Loss      (101.6)        (96.4)
----------------------------------------------------------------------
        Total Shareholders' Equity             371.8         337.7
----------------------------------------------------------------------
Total Liabilities and Shareholders' Equity  $1,148.9        $976.4
----------------------------------------------------------------------

(a) Unaudited.

(b) The Company sells certain accounts receivable through an accounts
    receivable securitization program entered into in March 2002. See
    Form 10-K for additional information. As a result, accounts
    receivable have been reduced, and the Company's undivided interest
    in such receivables has been reflected as a short-term investment.
    As of September 30, 2004, the Company had sold $49.2 million of
    participation interests in $63.3 million of accounts receivable.
    As of December 31, 2003, the Company had not sold any
    participation interests in accounts receivable.

Arch Chemicals, Inc.
Condensed Consolidated Statements of Cash Flows (a)
(In millions)
----------------------------------------------------------------------

Nine Months Ended September 30,                           2004   2003
----------------------------------------------------------------------
Operating Activities:
Net Income                                               $33.8  $30.0
Adjustments to Reconcile Net Income to Net Cash and Cash
 Equivalents Provided by (Used in) Operating Activities:
Loss from Discontinued Operations                            -    1.8
(Gain) loss on sale of discontinued operations             0.2  (15.0)
Cumulative Effect of Accounting Change                       -    0.4
Equity in Earnings of Affiliates                         (13.3)  (7.5)
Other (Gains) Losses                                       1.2   (2.5)
Depreciation and Amortization                             43.3   39.1
Deferred Taxes                                             6.1      -
Restructuring                                              1.7    0.6
Restructuring Payments                                    (3.3)  (4.0)
Changes in Assets and Liabilities, Net of Purchase and
 Sale of Businesses:
  Accounts Receivable Securitization Program              49.2  (33.5)
  Receivables                                            (18.5) (30.0)
  Inventories                                             (4.6)  16.4
  Other Current Assets                                    (0.2)   1.4
  Accounts Payable and Accrued Liabilities                11.4   (1.3)
  Noncurrent Liabilities                                   0.9    1.6
Other Operating Activities                                 9.9    6.3
----------------------------------------------------------------------
  Net Operating Activities from Continuing Operations    117.8    3.8
Change in Net Assets Held for Sale                           -  (13.5)
----------------------------------------------------------------------
  Net Operating Activities                               117.8   (9.7)
----------------------------------------------------------------------
Investing Activities:
Capital Expenditures                                     (13.5) (12.4)
Business Acquired in Purchase Transaction, net of cash
 acquired                                               (215.9)  (2.5)
Proceeds from sales of business                              -   61.5
Proceeds from sales of land                                1.2    2.0
Other Investing Activities                                (0.2)   1.6
----------------------------------------------------------------------
  Net Investing Activities                              (228.4)  50.2
----------------------------------------------------------------------
Financing Activities:
Long-Term Debt Borrowings                                207.0   15.0
Long-Term Debt Repayments                               (132.5) (15.8)
Short-Term Borrowings (Repayments)                        18.6    1.2
Dividends Paid                                           (13.8) (13.5)
Other Financing Activities                                 3.6    6.7
----------------------------------------------------------------------
  Net Financing Activities                                82.9   (6.4)
----------------------------------------------------------------------
Effect of Exchange Rate Changes on Cash and Cash
 Equivalents                                               1.6    1.2
----------------------------------------------------------------------
  Net Increase (Decrease) in Cash and Cash Equivalents   (26.1)  35.3
Cash and Cash Equivalents, Beginning of Year              64.8   12.2
----------------------------------------------------------------------
Cash and Cash Equivalents, End of Period                 $38.7  $47.5
----------------------------------------------------------------------

(a) Unaudited.

Arch Chemicals, Inc.
Segment Information (a)
(In millions)
----------------------------------------------------------------------
                                  Three Months Ended Nine Months Ended
                                    September 30,      September 30,
                                     2004      2003      2004    2003
----------------------------------------------------------------------
Sales:
  Treatment Products:
  - HTH Water Products (b)          $83.0     $75.4    $315.5  $250.5
  - Personal Care and Industrial
    Biocides (b)                     65.5      37.1     172.9   112.9
  - Wood Protection and Industrial
    Coatings                         86.2      68.1     267.8   200.1
----------------------------------------------------------------------
  Total Treatment Products          234.7     180.6     756.2   563.5
  Microelectronic Materials          39.9      36.5     119.1   109.0
  Performance Products:
  - Performance Urethanes            37.6      31.5     103.6    90.4
  - Hydrazine                         4.5       7.6      19.3    26.1
----------------------------------------------------------------------
    Total Performance Products       42.1      39.1     122.9   116.5
----------------------------------------------------------------------
          Total Sales              $316.7    $256.2    $998.2  $789.0
----------------------------------------------------------------------
Operating Income (Loss) (c):
  Treatment Products:
  - HTH Water Products (b, d)       $(6.7)    $(0.8)    $24.1   $20.7
  - Personal Care and Industrial
    Biocides (b, e, f)               17.2       7.2      38.8    22.1
  - Wood Protection and Industrial
    Coatings                          7.3       4.1      21.4    10.4
----------------------------------------------------------------------
  Total Treatment Products           17.8      10.5      84.3    53.2
  Microelectronic Materials (e)       5.0       0.6       8.3     0.1
  Performance Products:
  - Performance Urethanes (d)        (1.8)     (2.0)     (6.9)   (5.9)
  - Hydrazine (d)                    (1.3)      0.3      (1.1)    1.2
----------------------------------------------------------------------
    Total Performance Products       (3.1)     (1.7)     (8.0)   (4.7)
----------------------------------------------------------------------
                                     19.7       9.4      84.6    48.6
  General Corporate Expenses (g)     (5.4)     (1.9)    (16.0)   (8.6)
----------------------------------------------------------------------
    Total Segment Operating Income
     before Restructuring            14.3       7.5      68.6    40.0
  Restructuring                         -         -      (1.7)   (0.6)
----------------------------------------------------------------------
    Total Operating Income          $14.3      $7.5     $66.9   $39.4
----------------------------------------------------------------------

(a) Unaudited.

(b) Includes the results of the acquired pool & spa and protection &
    hygiene businesses from the date of acquisition on April 2, 2004.

(c) Includes equity in earnings (losses) of affiliated companies.

(d) The third quarter and full year includes a charge for a Brazilian
    state import tax claim of $0.4 million, $1.6 million and $0.1
    million for the water products, performance urethanes and
    hydrazine businesses, respectively.

(e) Third quarter 2004 includes a gain on the sale of building of $0.6
    million for the personal care business. Full year 2004 also
    includes the gain on the sale of excess land in the
    microelectronic materials business of $0.3 million.

(f) Third quarter 2004 includes a $3.1 million settlement from a
    favorable judgment obtained earlier this year against a former
    owner of an acquired company and full year 2004 includes $6.1
    million.

(g) Includes certain general expenses of the corporate headquarters
    that are not allocated to the business segments, including costs
    associated with the Company's accounts receivable securitization
    program. Third quarter 2003 also includes the gain on sale of land
    of $2.5 million.

Arch Chemicals, Inc.
Reconciliation of GAAP to Non-GAAP Information (Unaudited):
(In millions, except per share amounts)
----------------------------------------------------------------------
                                           Three Months   Nine Months
                                              Ended          Ended
                                           September 30, September 30,
                                            2004   2003   2004   2003
----------------------------------------------------------------------
Adjusted EBITDA:
Income from Continuing Operations Before
 Cumulative Effect of Accounting Change     $5.8   $2.1  $34.0  $17.2
Add (deduct):
  Interest Expense, net                      5.3    4.2   14.6   12.6
  Income Tax Provision                       3.2    1.2   18.3    9.6
  Depreciation and Amortization             15.0   13.0   43.3   39.1
  Dividends from Affiliated Companies          -    0.3    9.8    5.5
  Equity In (Earnings) of Affiliated
   Companies                                (5.0)  (3.4) (13.3)  (7.5)
  Restructuring                                -      -    1.7    0.6
  Purchase Accounting Adjustments              -      -    1.1      -
  Discontinued Operations EBITDA (a)           -    0.7      -    4.6
----------------------------------------------------------------------
  Adjusted EBITDA                          $24.3  $18.1 $109.5  $81.7
======================================================================

(a) Discontinued Operations EBITDA is calculated as follows:

    Income (Loss) from Discontinued
     Operations, net of tax                    -   $0.6      -  $(1.8)
    Add (deduct):
      Restructuring                            -      -      -   (0.1)
      Impairment                               -      -      -    4.0
      Interest Expense, net                    -    0.2      -    0.8
      Income Tax Provision                     -   (0.1)     -    0.3
      Depreciation                             -      -      -    1.4
    ------------------------------------------------------------------
    Discontinued Operations EBITDA            $-   $0.7     $-   $4.6
    ==================================================================

----------------------------------------------------------------------
                                                           Year ended
                                                          December 31,
                                                              2004
----------------------------------------------------------------------
The following table reconciles diluted income per share from
continuing operations before cumulative effect of accounting change to
diluted income per share from continuing operations before cumulative
effect of accounting change and restructuring for the full year 2004
outlook:

Diluted Income Per Share:

Income from Continuing Operations Before Cumulative
 Effect of Accounting Change                              $1.11  $1.21
Add: Restructuring, net of tax                             0.04   0.04
----------------------------------------------------------------------
Diluted Income Per Share from Continuing Operations
 Before Cumulative Effect of Accounting Change and
 Restructuring                                            $1.15  $1.25
======================================================================