<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                          ---------------------------
                                   FORM 10-K
                          ---------------------------

[X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934
                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
                                       OR
[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934
         FOR THE TRANSITION PERIOD FROM __________________ TO _______________

                          COMMISSION FILE NUMBER 1-9988

                                HUNTSMAN POLYMERS
                                   CORPORATION
               (EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

                 DELAWARE                                        75-2104131
      (State or other jurisdiction of                         (I.R.S. employer
       incorporation or organization)                        identification no.)

            500 HUNTSMAN WAY
          SALT LAKE CITY, UTAH                                      84108
(Address of principal executive offices)                         (Zip code)

       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (801) 584-5700

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

<TABLE>
<CAPTION>
                                                 NAME OF EACH EXCHANGE ON WHICH
      TITLE OF EACH CLASS                         THE SECURITIES ARE REGISTERED
<S>                                          <C>
11 3/4% Senior Notes due 2004                        New York Stock Exchange
</TABLE>

          SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                                      None.

     Indicate by a check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes /X/ No / /

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. /X/

     As of March 30, 2000, all of the 1,000 shares of Common Stock were owned by
Huntsman Polymers Holdings Corporation, a wholly-owned subsidiary of Huntsman
Corporation, which is an affiliate of Huntsman Polymers Corporation.

              APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

     Indicate by check mark whether the Registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes / / No / /

     Indicate the number of shares outstanding of each of the Registrant's
classes of common stock, as of the latest practicable date.

<TABLE>
<CAPTION>
                                                NUMBER OF SHARES OUTSTANDING
      TITLE OF EACH CLASS                             AT MARCH 30, 2000
<S>                                          <C>
Common Stock, $0.01 par value                               1,000
</TABLE>
<PAGE>

                          HUNTSMAN POLYMERS CORPORATION
                          1999 FORM 10-K ANNUAL REPORT

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                               PAGE
                                                                                                               ----
<S>                                                                                                            <C>
PART I   .........................................................................................................3

ITEM 1.  BUSINESS.................................................................................................3

ITEM 2.  PROPERTIES..............................................................................................11

ITEM 3.  LEGAL PROCEEDINGS.......................................................................................12

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS ....................................................12

PART II  ........................................................................................................12

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND
         RELATED STOCKHOLDER MATTERS.............................................................................12

ITEM 6.  SELECTED FINANCIAL DATA.................................................................................13

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
         OPERATIONS..............................................................................................14

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK..............................................20

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.............................................................21

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
         ON ACCOUNTING AND FINANCIAL DISCLOSURE..................................................................21

PART III ........................................................................................................22

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.....................................................22

ITEM 11.  EXECUTIVE COMPENSATION.................................................................................24

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.........................................28

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.........................................................28

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K........................................29

SIGNATURES.......................................................................................................31
</TABLE>

                                        2

<PAGE>

                          HUNTSMAN POLYMERS CORPORATION
                         1999 ANNUAL REPORT ON FORM 10-K

                                     PART I

ITEM 1.  BUSINESS

INTRODUCTION

     Huntsman Polymers manufactures a wide variety of products ranging from
value-added specialty products, such as customized specialty polymers, to
intermediate chemicals, such as styrene. These products are sold for use in a
wide variety of industrial and consumer related applications. The Company's
principal products are polyethyl ene, polypropylene, amorphous polyalphaolefin
("APAO") and flexible polyolefin ("FPO") polymers, and styrene. In addition, the
Company manufactures, primarily for its own consumption, ethylene and propylene,
the two basic chemical building blocks of the Company's principal products. The
Company manufactures polymers and petrochemicals at its facility in Odessa,
Texas (the "Odessa Facility") which is located near supplies of most of its
feedstocks. The Odessa Facility is located near four pipelines from which it
derives its raw material supply.

COMPANY HISTORY

     Huntsman Polymers Corporation represents a combination of three businesses
operated by predecessor entities. In 1958, a subsidiary of The El Paso Company
("El Paso") constructed a styrene plant in Odessa, Texas. In 1960, El Paso and a
predecessor of Dart Industries Inc. ("Dart") formed a joint venture to produce
ethylene, propylene, polyethylene and polypropylene in Odessa, Texas. El Paso
subsequently acquired the plastic film business of Dart in 1979 and full
ownership of these businesses by 1983. In 1983, El Paso sold its petrochemical,
polyolefin and plastic film business to a management-led group of investors, who
consolidated the businesses under a Delaware corporation named Rexene
Corporation ("Old Rexene"). In 1988, Old Rexene was sold to an investor group
organized by an investment banking firm.

     In October 1991, Old Rexene filed a petition for reorganization under the
federal bankruptcy laws. On September 18, 1992, Old Rexene emerged from
bankruptcy in accordance with a plan of reorganization providing for the merger
of Old Rexene into its wholly-owned operating subsidiary, Rexene Products
Company ("Products"), a Delaware corporation, which subsequently changed its
name to Rexene Corporation (the "Reorganization").

     On August 27, 1997, Huntsman Centennial Corporation ("Centennial"), a
Delaware corporation and a subsidiary of Huntsman Corporation, a Utah
corporation ("Huntsman Corporation"), was merged (the "Merger") with and into
Rexene Corporation ("Rexene"), and Rexene changed its name to Huntsman Polymers
Corporation. Unless otherwise indicated, Old Rexene, Products, Rexene and
Huntsman Polymers Corporation and their consolidated subsidiaries are sometimes
collectively or separately referred to as "Huntsman Polymers" or the "Company".

     In the Merger, all of the shares of common stock, $.01 par value, of Rexene
(the "Common Stock") (other than dissenting shares and shares held by Huntsman
Corporation, Centennial or Rexene) were canceled and converted into the right to
receive $16.00 in cash, without interest, per share of Common Stock (the "Merger
Consideration"). As a result of the Merger, Huntsman Corporation indirectly owns
all of the Common Stock of the Company, and the Company thus became an indirect
subsidiary of Huntsman Corporation.

     On September 30, 1997, the Company completed the sale of certain of its
assets comprising its CT Film Division (the "CT Film Sale") to Huntsman
Packaging Corporation, a Utah corporation and an affiliate of the Company
("Huntsman Packaging"), pursuant to the First Amended Asset Purchase Agreement,
dated as of September 26, 1997 (the "Asset Purchase Agreement"), by and between
the Company and Huntsman Packaging. Pursuant to the terms of


                                        3
<PAGE>

the Asset Purchase Agreement, the Company transferred those assets primarily
used to conduct or operate the polymer film manufacturing business known as the
CT Film Division (the "CT Business"), including, among other things, its
properties, film manufacturing facilities, sales offices, warehouses, inventory,
technology and contracts that relate to the CT Business. In consideration for
the transfer of the assets of the CT Business, the Company received $70 million
in cash. The terms of the Asset Purchase Agreement were mutually agreed upon by
the Company and Huntsman Packaging and were based upon arm's-length
negotiations, taking into account various factors concerning the valuation of
the CT Business. The foregoing description of the sale of the assets of the CT
Business does not purport to be complete, and is qualified in its entirety by
reference to the terms of the Asset Purchase Agree ment, a copy of which was
filed as Exhibit 2.1 to the Company's report on Form 8-K filed on October 21,
1997.

     The corporate headquarters of the Company are located at 500 Hunts man Way,
Salt Lake City, Utah 84108, and its telephone number is (801) 584-5700.

PRINCIPAL PRODUCTS

     Polyethylene, polypropylene, APAO, FPO and styrene are used in different
industrial processes to manufacture many diverse finished goods. These principal
end market products are set forth below:


                  [GRAPHIC depicting principal raw materials,
             principal products and principal end market products.]


                                        4
<PAGE>

     The following chart presents the net sales, excluding sales to subsidiaries
of Huntsman Polymers, contributed by the Company's products for the indicated
periods:

<TABLE>
<CAPTION>
                                                                                              PREDECESSOR
                                                                                                COMPANY
                                                                           FOUR MONTHS      ----------------
                                           YEAR             YEAR             ENDED              EIGHT
                                          ENDED             ENDED          DECEMBER 31,         MONTHS
                                       DECEMBER 31,      DECEMBER 31,      DECEMBER 31,     ENDED AUGUST 31,
                                           1999             1998              1997                1998
                                       ------------      ------------     ------------      ----------------
                                                                 (in thousands)
<S>                                     <C>               <C>               <C>                <C>
Polyethylene....................        $ 160,321         $  155,454        $   56,579         $ 139,064
Performance Polymers and Other..          329,383            210,294            83,096           168,539
                                          -------            -------            ------           -------
Total ..........................        $ 489,704          $ 365,748         $ 139,675        $  307,603
                                          =======            =======           =======           =======
</TABLE>

The Company sells a substantial portion of its products to an affiliated company
for resale to trade customers. The Company is not dependent upon a single trade
customer, or a few trade customers, the loss of any one or more of which would
have a material adverse effect on the Company.

POLYETHYLENE

     Polyethylene represents the most versatile and most widely produced
thermoplastic resin in the world. During 1999 over 27 billion pounds of
polyethylene were produced in the United States. The different grades, volumes,
and percentages of resins produced include High Pressure Low Density
Polyethylene ("HP-LDPE"), 6.2 billion pounds or 23%, Linear Low Density
Polyethylene ("LLDPE"), 8.2 billion pounds or 30%; and High Density Polyethylene
("HDPE"), 13.0 billion pounds or 47%. The Company produces 430 million pounds of
HP-LDPE and has constructed a 250 million pound LLDPE/HDPE solution plant that
began commercial operations during the first quarter of 1999. Ethyl Vinyl
Acetate (EVA) specialty copolymers are also produced in the high pressure low
density process.

     The Company produces a variety of grades of HP-LDPE using both the Tubular
and Autoclave processes. Many of the resins are designed to meet specific
requirements of particular end users. Various types of conversion equipment
including extension coating, blown and cast film extrusion, injection and blow
molding, and other proprietary methods of extrusion use these differentiated
polyethylene resins to demonstrate high clarity, toughness, sealability and low
gel performance characteristics. Liner grade (general purpose) polyethylene
ordinarily competes principally on the basis of price, while more differentiated
polyethylene competes principally on the basis of product quality, performance
specifications and, to a lesser extent, price. The Company participates in both
market areas, but concentrates its efforts primarily in more differentiated
areas.

     The Company is a licensee of Stamicarbon B.V.'s proprietary LLDPE solution
technology. Huntsman is currently the only licensee of this technology in North
America. Utilizing octene comonomer, this process will produce high value, high
performance products for demanding commercial and specialty applications.
Product mix capabilities include Ultra Low Density, Linear Low Density, Medium
Density and High Density resins.

     There are currently 9 domestic producers of LDPE resins, some of which
produce HP-LDPE and LLDPE. In 1999, these producers had an estimated combined,
annual rated production capacity of approximately 19.0 billion pounds. The
largest manufacturer of LDPE is Equistar Chemicals, LP. In 1999, the five
largest domestic producers of both LDPE and LLDPE were Exxon-Mobil, Dow
Chemical, Equistar Chemicals LP, Union Carbide Corporation, and Westlake
Polymers. The proposed merger of Dow Chemical and Union Carbide will create the
largest HP-


                                       5
<PAGE>

LDPE/LLDPE producer in the United States, with a combined capacity of 5.8
billion pounds. In 1999, the Company accounted for approximately 6% of the
United States capacity of HP-LDPE and approximately 3% of the United States
capacity for LLDPE.

PERFORMANCE POLYMERS AND OTHER

     POLYPROPYLENE. The Company currently produces a wide variety of
polypropylene resin grades. These include high purity homopolymers and random
and impact copolymers with properties specifically tailored for specialty
markets and specific end-uses, such as medical, electrical and automotive
applications. The Company is one of only two domestic producers of a super clean
grade of polypropylene utilized for medical applications, electrical capacitor
film and electronics packaging.

     In 1999, there were 14 domestic producers of polypropylene in the United
States. The industry's estimated combined, rated annual production capacity was
approximately 16.0 billion pounds in 1999. In 1999, the four largest domestic
producers of polypropylene were BP Amoco, Montell U.S.A., Inc., Fina and
Exxon-Mobil. In 1999, the Company accounted for approximately 1.6% of the United
States production capacity for polypropylene. Competition for sales is dependent
upon a variety of factors, including product price, technical support and
customer service, and the degree of specialization of various grades of
polypropylene. General purpose polypropylene ordinarily competes principally on
the basis of price, while more differentiated polypropylene competes principally
on the basis of product quality, performance specifications and, to a lesser
extent, price. The Company's polypropylene business is centered around the more
differentiated polypropylene products.

     APAO. The Company is one of only two U.S. on-purpose producers of APAO.
APAO is a special purpose, high quality polymer used primarily in the production
of adhesives and sealants, modified bitumen roofing materials, lamination, wire
and cable coating. These applications include hot melt adhesives for nonwovens,
packaging, pressure sensitive and assembly applications and as a modifier of
other polymers. The Company is the only domestic producer of butane copolymer
APAO, a high value product used in hot melt adhesive applications.

     The Company and Eastman Chemical Company are currently the only domestic
on-purpose producers of APAO. In addition, a few producers of polypropylene also
produce atactic polypropylene ("APP"), which competes with APAO for some less
performance driven uses. Based on management estimates, in 1999, the Company
accounted for approximately 25% of the United States combined capacity for APAO
and APP.

     FPO. FPO is a proprietary, homogenous, polypropylene resin, produced in a
process that controls the crystallinity of the various grades. The Company has
designed FPO for specific product applications, such as medical bags,
containers, tubing, non-woven personal care products, automotive interior uses,
industrial sheeting, film and insulation.

     FPO competes with a variety of specialized or engineering grades of
polymers, including flexible polyvinyl chloride ("PVC"), polyurethane and
various polyolefins. FPO competes with these and other polymers on the basis of
product performance, specification and price. The Company continues to evaluate
the FPO business in light of its manufacturing and marketing difficulties.

     STYRENE. Styrene is an intermediate commodity petrochemical made from
ethylene and benzene and used principally in the production of polystyrene,
acrylonitrile-butadiene-styrene resins, styrene-butadiene latex,
styrenebutadiene rubbers and unsaturated polyester resins. Through these
products, styrene can be found in packaging and consumer products, including
disposable cups and trays, consumer electronics, automotive trim, tires and
building materials such as carpeting and insulation.



                                       6
<PAGE>

     The Company has several long-term styrene contracts, which it believes
reduces its exposure to price volatility. The Company's exposure to the export
market is negligible.

     In 1999, there were 9 domestic producers of styrene with an estimated
combined, rated annual production capacity of approximately 12.6 billion pounds.
About 45% of this capacity is consumed by styrene producers for the production
of derivatives such as polystyrene. In 1999, the five largest domestic producers
of styrene were Lyondell, Cos-Mar, Chevron, Sterling, and Dow Chemical.
Competition for sales is generally based on price. In 1999, the Company
accounted for approximately 2.6% of United States production of styrene.

     OLEFINS AND OTHER PRODUCTS. The Company manufactures olefins from ethane
and propane which are fractionated from natural gas liquids ("NGLs"). The Odessa
Facility obtains a combination of pure and mixed NGLs from NGL extraction plants
located in West Texas. Ethane and propane prices are established in Mont
Belvieu, Texas according to prevailing market conditions. The Company, however,
is able to purchase NGLs containing ethane and propane in West Texas at prices
discounted from prevailing reported average Mont Belvieu prices. These discounts
reflect a significant portion of the cost for the producers to transport NGLs to
Mont Belvieu, Texas and to fractionate them into pure ethane and propane. The
Company believes feedstock supplies available in Odessa are currently adequate
for the Company's requirements. The Company has storage capacity for an
approximate 14-day supply of feedstocks.

     The Company currently consumes substantially all of its ethylene production
internally. The Company selectively sells approximately 30 million pounds of
liquid ethylene to customers not located on the Gulf Coast pipeline grid. During
1999, the Company completed a major expansion and modernization that increased
its ethylene production from approximately 600 million to 850 million pounds per
year.

PLASTIC FILM

     Prior to the sale of the CT Business in September 1997, the Company,
through the CT Business, was a major participant in specialty markets for
plastic films. Product applications for these films include disposable diapers,
feminine hygiene products, medical device packaging, tapes, maskants, industrial
packaging, laminations, unsupported overwraps, and greenhouse and agricultural
applications.

EXPORT SALES

     The following chart summarizes revenues from export sales, and the
percentages of net sales represented by export sales, for the indicated years
ended December 31:

<TABLE>
<CAPTION>
                                                                            1999      1998           1997
                                                                        ---------  ---------     -------------
                                                                                (dollars in thousands)
<S>                                                                      <C>        <C>          <C>
Export sales:
     Continuing Operations..........................................     $  31,211  $  16,787    $      29,295
     Discontinued Operations........................................             0          0            9,486
Percentage of net sales (including discontinued operations):
     Continuing Operations..........................................             6%         5%               5%
     Discontinued Operations........................................             0          0                2%
</TABLE>



                                       7
<PAGE>

PRODUCT DEVELOPMENT

     The Company continually seeks to enhance and expand its portfolio of
specialty polymers through sustained in-house research and development and
licensing arrangements. For example, in late 1995, the Company licensed LLDPE
and high density polyethylene technology from Stamicarbon B.V., a licensing
subsidiary of DSM. The Company's LLDPE plant in Odessa, Texas, which commenced
production in the second quarter of 1999, is the first North American production
facility to make LLDPE using the DSM "Compact" process. This process refers to
the plant's small physical size, which is well suited to efficiently produce a
broad range of high quality products. The octene copolymers produced by this
process are consistent with the Company's strategy of producing higher quality,
value-added products.

     The Company has spent between $6.2 million and $8.0 million per year for
research and development during each of the last three fiscal years and
anticipates spending approximately $6.8 million for research and development in
2000.

RAW MATERIALS FOR PRINCIPAL PRODUCTS

     Principal raw materials purchased by the Company consist of ethane and
propane extracted from NGLs, propylene and benzene (all four of which are
referred to as "feedstocks") for the polymer and styrene businesses. The prices
of feedstocks fluctuate based upon the prices of natural gas and oil, weather
conditions affecting the demand for natural gas and other factors. During 1999,
feedstocks accounted for approximately 33% of the Company's total cost of sales.
As a result, increases and decreases in raw material costs can have a
significant impact on operating results. Feedstock prices increased
significantly in 1999, following oil prices.

     The principal feedstocks for the Company's captive ethylene and propylene
production at the Odessa Facility are ethane and propane. Ethane and propane
prices are established in Mont Belvieu, Texas (Gulf Coast) according to
prevailing market conditions, but the Company is able to purchase NGLs
containing ethane and propane in west Texas at prices discounted from the
prevailing reported average Mont Belvieu, Texas prices. These discounts reflect
a significant portion of the cost for the producers to transport NGLs containing
ethane and propane to Mont Belvieu, Texas and to fractionate them into pure
ethane and propane. In 1999, the Company acquired essentially all of the Odessa
Facility's requirements for ethane and propane under such arrangements.

     The Odessa Facility obtains a combination of pure and mixed streams of NGLs
from NGL pipelines and NGL extraction plants located in west Texas and uses such
streams to obtain ethane and propane feedstocks for the Company's olefins plant.
In 1999, the Odessa Facility consumed approximately 734 million and 439 million
pounds of ethane and propane, respectively, and in 1998, the Odessa Facility
consumed ethane and propane of approximately 519 million and 296 million pounds,
respectively. In 1999, the Company produced substantially all of its ethylene
and approximately 25% of its propylene requirements for the Odessa Facility. The
Company's other propylene requirements were purchased from third parties. The
feedstock supplies available in Odessa are currently adequate for the Company's
requirements. The Company has storage capacity for an approximately fourteen-day
supply of feedstocks.

     The Odessa Facility uses benzene and ethylene to produce styrene. In 1999,
substantially all of the Company's benzene purchases were under contracts from
west Texas and Gulf Coast producers at discounted contract prices, with the
balance of its needs filled by purchases on the spot market.

EMPLOYEES AND LABOR RELATIONS

     As of December 31, 1999, the Company employed 746 persons.


                                       8
<PAGE>

INTELLECTUAL PROPERTY RIGHTS

     The Company is the owner of many United States and foreign patents and uses
trade secrets, including substantial know-how, which relate to its polyethylene,
polypropylene, APAO and FPO products. Although patents and trade secrets are
important to the Company, the Company does not believe that the loss of any
patent would have a material adverse effect on its financial condition. The
Company also uses the technology of others under license agreements in certain
of its manufacturing operations. Various trademarks owned by the Company or its
affiliates are used in connection with the sale of the Company's products. The
Company does not believe that the loss of the right to use any trademarks owned
by the Company would have a material adverse effect on its financial condition.

ENVIRONMENTAL AND RELATED REGULATION

GENERAL

     The Company and the industry in which it competes are subject to extensive
federal, state and local environmental, health and safety laws and regulations.
The Company has received notices of alleged violations of certain environmental
laws and has endeavored to remedy such alleged violations promptly. Future
developments, such as increasingly strict regulatory requirements brought about
by the promulgation of new regulations or changes to or reinterpretations of
applicable laws could place additional onerous conditions on the handling,
manufacture, storage, use, emission or disposal of substances at the Company's
facilities. Such developments could materially and adversely affect the
Company's business and results of operations. There can be no assurance that
material costs or liabilities will not be incurred in the future to address such
regulatory changes.

     The Company's operating expenditures for environmental remediation,
compliance and waste disposal were approximately $7.9 million and $8.5 million
in 1999 and 1998, respectively. The Company also spent approximately $2.4
million and $2.5 million relating to capital expenditures for environmentally
related projects in 1999 and 1998, respectively. In 2000, the Company
anticipates spending approximately $8.7 million for environmental remediation,
compliance and waste disposal. Of such amount, expenditures relating to
remediation are projected to be approximately $1.0 million for 2000.
Environmental capital spending is estimated at $4.6 million for 2000. The
Company expects to incur between $2 million and $7 million annually in capital
spending to address the requirements of environmental laws.

     The Company believes that, in light of its historical expenditures and
expected future results of operations, it will have adequate resources to
conduct its operations in compliance with currently applicable environmental,
health and safety laws and regulations. However, in order to comply with
changing facility permitting and regulatory standards, the Company may be
required to make additional significant site or operational modifications that
are not currently contemplated. Further, the Company has incurred and may in the
future incur liability to investigate and clean up waste or contamination at its
current or former facilities, or which it may have disposed of at facilities
operated by third parties. The Company has approximately $6.6 million accrued in
the December 31, 1999 balance sheet as an estimate of its total potential
environmental liability with respect to investigating and remediating known and
assessed site contamination.

     The Company continually reviews its estimates of potential environmental
liabilities. However, no assurance can be given that all potential liabilities
arising out of the Company's present or past operations have been identified or
fully assessed or that the amount that might be required to investigate and
remediate such conditions will not be significant to the Company.


                                       9
<PAGE>

     The Company carries Pollution Legal Liability insurance to address some of
the potential environmental liabilities, subject to the policy terms, limits,
exclusions and deductibles, on both a Sudden and Accidental basis and on a
Gradual basis for occurrences first commencing after July 1, 1997.

     The Company also carries Pollution Legal Liability and Closure and Post
Closure insurance on certain facilities at the Odessa manufacturing location,
which are regulated by the Texas Natural Resources Conservation Commission (the
"TNRCC"). This insurance satisfies the requirements of the TNRCC governing the
operation of these facilities.

SOLID WASTES

     In March 1994, the TNRCC granted the Company a permit to operate three
hazardous waste management units at the Odessa Facility as
treatment/storage/disposal facilities under the Resource Conservation and
Recovery Act. This permit and an accompanying compliance plan require the
Company to undertake certain activities relating to corrective action of
existing soil and groundwater contamination at numerous solid waste management
units at the Odessa Facility. Pursuant to the permit and compliance plan, the
Company has installed groundwater recovery systems, investigated the extent of
on-site contamination, conducted a soils risk assessment to determine the level
of risk presented to human health and the environment, developed a corrective
measures study on the ways to remediate the contamination, and started
implementation of a remediation plan approved by the TNRCC. The permit has
recently been modified to reflect closure of one of the original three hazardous
waste management units.

     As of December 31, 1999, the TNRCC has approved closure for 30 of the
Odessa Facility solid waste management units. A program for the remediation of
existing contamination both at the Odessa Facility and at third-party sites is
ongoing.

AIR EMISSIONS

     In 1990, Congress amended the federal Clean Air Act to require control of
certain emissions not previously regulated, some of which are emitted by the
Company's facilities. This legislation will require the Company (and others in
the industry with such emissions) to implement additional pollution control
measures. Some of the regulations detailing these additional control measures
have not yet been promulgated. The Company expects that modifications required
by the currently published regulations can be accomplished within the projected
capital budget, but it can give no assurance that the costs it may incur to
comply with regulations that have not yet been issued will not be significant.

     By letter dated January 28, 1999, the TNRCC notified the Company of
allegations that the Company's olefins plant may have violated its air permit by
emitting visible smoke from its process/emergency flare in late December 1998 or
early January 1999. During that period, the olefins plant was in the midst of
start up after extensive construction. As required by Texas law, the Company had
given prior notice to the TNRCC of the startup and that excess emissions might
result. The TNRCC investigated this matter after receiving numerous complaints
from residents of a subdivision near the Odessa facility. A draft Agreed Order
with a proposed $15,000 penalty was sent to the Company. Following discussions
with the Company, the TNRCC re-drafted the Agreed Order with a proposed $7,500
penalty. The Company agreed to an Order stipulating that $1,500 of the $7,500 be
deferred, a $3,000 fine (which has been paid) and $3,000 offset with a
supplemental environmental project for a neighborhood monitoring program near
the facility. When the Agreed Order was presented to the Commission, Odessa
residents attending the hearing opposed its entry. The Commission remanded the
matter back to the Commission staff for further consideration. The Company will
meet with the TNRCC staff within the next month to determine whether a
settlement can be reached.

     As a result of the start-up flaring during late December 1998 and January
1999, certain complaining citizens have hired counsel to consider bringing legal
action to recover damages alleged to have been caused by that flaring. One such
action has been filed, and two other actions have been threatened. Company
lawyers believe that the



                                       10
<PAGE>

Company has strong defenses to these suits, but because the number of plaintiffs
could be as high as 5,000 to 6,000, substantial damages might be sought.

     The Company is subject to federal and Texas air permitting regulations.
Most plant operations are governed by existing air permits. Permitting of the
remaining facilities is being conducted currently in preparation for upcoming
federal air requirements associated with federal Clean Air Act Title V permits.

ADDITIONAL ENVIRONMENTAL ISSUES

     The federal Comprehensive Environmental Response Compensation and Liability
Act ("CERCLA"), as amended, and similar laws in many states, impose liability
for the clean-up of certain waste sites and for related natural resource
damages, without regard to fault or the legality of the waste disposal. Liable
persons generally include the site owner or operator, former site owners and
persons that disposed or arranged for the disposal of hazardous substances found
at those sites. The Company has sent wastes from its operations to various
third-party waste disposal sites. Additionally, the Company has developed
estimates for clean-up of known waste sites and included these potential
liabilities in its environmental accrual account. From time to time the Company
receives notices from representatives of governmental agencies and private
parties contending that the Company is potentially liable for a portion of the
investigation and remediation at such third-party and currently and
formerly-owned sites. Although there can be no assurance, the Company does not
believe that its liabilities for investigation and remediation of such sites,
either individually or in the aggregate, will have a material adverse effect on
the Company.

ITEM 2.  PROPERTIES

     The Company manufactures its polymers and petrochemicals at the Odessa
Facility. The Odessa Facility is located on an approximately 875-acre site in
west Texas which contains plants producing polyethylene, polypropylene, APAO,
FPO and styrene, as well as ethylene and propylene primarily for captive use.
The Odessa Facility is located near four NGL pipelines from which it derives its
supply.

     The HD-LDPE plant in Odessa, Texas has been in operation since 1961 and has
a total rated annual production capacity of approximately 430 million pounds. In
December 1995, the Company announced its plan to build a new LLDPE plant at the
Odessa Facility. The plant, which was completed and started up commercial
operation in the first quarter of 1999, has a total rated annual production
capacity of approximately 250 million pounds.

     The polypropylene plant in Odessa, Texas has been in operation since 1964
and, in 1999 has a total rated annual production capacity of approximately 210
million pounds. APAO is produced in a former polypropylene plant that was
converted in 1986 and has a total rated annual production capacity of
approximately 65 million pounds.

     The FPO plant in Odessa, Texas commenced commercial production in December
1996 and by mid 1997 had a total rated annual production capacity of
approximately 50 million pounds.

     The styrene plant in Odessa, Texas has been in operation since 1958 and has
a total rated annual production capacity of approximately 330 million pounds.

     The olefins plant in Odessa has been in operation since 1961 and had, until
1999, a total rated annual production capacity for ethylene of approximately 600
million pounds and for propylene of approximately 240 million pounds. In
December 1995, the Company announced plans to expand and modernize the olefins
plant. The modernization and expansion, which was completed in the first quarter
1999, included a debottlenecking of the



                                       11
<PAGE>

Company's ethylene production process, and increased ethylene capacity to
approximately 850 million pounds and propylene capacity to approximately 325
million pounds.

ITEM 3.  LEGAL PROCEEDINGS

     The Company is a party to various lawsuits arising in the ordinary course
of business and does not believe that the outcome of any of these lawsuits will
have a material adverse effect on the Company's financial position, results of
operations or cash flows.

     With respect to certain pending or threatened proceedings involving the
discharge of materials into or protection of the environment, see "Item 1 --
Business -- Environmental and Related Regulation".

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     No matter was submitted to a vote of the Company's security holders during
1999.

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET INFORMATION

     Since August 27, 1997, there has been no established public trading market
for any class of common equity securities of the Company.

HOLDERS

     As of the date of this report, there was one holder of record of the common
stock of the Company, Huntsman Polymers Holdings Corporation, a wholly-owned
subsidiary of Huntsman Corporation.

DIVIDENDS

     Since the Merger, no dividends have been declared or paid. Although the
Company has not established a formal policy with respect to the declaration of
dividends, the Company will evaluate the advisability of declaring future
dividends on a quarterly basis based on a number of factors, including the
Company's financial condition and results of operations. See "Item 7 --
Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources".



                                       12
<PAGE>

ITEM 6. SELECTED FINANCIAL DATA

     The following table sets forth selected financial data for the Company as
of the dates and for the periods indicated. Information should be read in
conjunction with the Company's Consolidated Financial Statements and Notes
thereto included on the pages immediately following the Index to Consolidated
Financial Statements appearing on page F-1. See "Item 7 - Management's
Discussion and Analysis of Financial Condition and Results of Operations". In
the Merger, effective August 27, 1997, Centennial, a wholly-owned indirect
subsidiary of Huntsman Corporation, merged with and into Rexene to form the
Company. The Merger has been accounted for using the purchase method of
accounting, and Centennial's cost of merging with the Company was allocated to
the assets and liabilities of the Company based on estimated fair values of such
assets and liabilities. In a transaction effective September 30, 1997, the
Company sold the CT Business to an affiliate of the Company. The consolidated
financial statements for periods prior to September 1, 1997 have been prepared
on a historical cost basis, adjusted for discontinued operations. As a result of
the Merger, the Company's financial position and operating results for the four
months ended December 31, 1997 reflect a new basis of accounting and are not
comparable to prior periods.

<TABLE>
<CAPTION>
                                                                                           PREDECESSOR COMPANY
                                                                                  -------------------------------------
                                              YEAR         YEAR     OUR MONTHS    EIGHT MONTHS         YEAR ENDED
                                             ENDED        ENDED       ENDED          ENDED            DECEMBER 31,
                                          DECEMBER 31, DECEMBER 31, DECEMBER 31,  AUGUST 31,     ----------------------
                                              1999         1998        1997           1997          1996        1995
                                              ----         ----        ----         ----            ----        ----
                                                                         (in thousands)
<S>                                       <C>          <C>          <C>           <C>            <C>          <C>
CONSOLIDATED STATEMENTS OF OPERATIONS DATA
ADJUSTED FOR DISCONTINUED OPERATIONS:
  Net sales..............................    $ 489,704    $ 365,748   $ 139,675      $ 307,603    $ 435,297   $ 444,713
  Operating income (loss)................      (15,200)     (11,285)      3,462         42,640       63,255     120,651
  Income (loss) from continuing
    operations...........................      (35,075)     (20,194)     (4,483)         3,155       30,444      63,466
  Income (loss) from discontinued
    operations, net......................            -            -        (218)        (2,692)        (713)      1,977
  Income (loss) before extraordinary
    loss.................................      (35,075)     (20,194)     (4,701)           463       29,731      65,443
  Extraordinary loss, net of income
    taxes................................            -            -           -           (694)           -           -
                                          ------------ -------------  ---------   ------------   ----------  ----------
 Net income (loss).......................   $  (35,075)  $  (20,194)  $  (4,701)     $    (231)   $  29,731   $  65,443
                                          ============ =============  =========   ============   ==========  ==========
</TABLE>

<TABLE>
<CAPTION>
                                                                                                     PREDECCESSOR COMPANY
                                                                                             ------------------------------------
                                                                                                             As of December 31,
                                                                                                          -----------------------
                                           AS OF           AS OF              AS OF           AS OF
                                        DECEMBER 31,    DECEMBER 31,       DECEMBER 31,      AUGUST 31,
                                           1999            1998               1997             1997           1996          1995
                                           ----            ----               ----             ----          -----         -----
                                                                          (in thousands)
<S>                                    <C>             <C>                  <C>             <C>           <C>           <C>
CONSOLIDATED BALANCE SHEET DATA
ADJUSTED FOR DISCONTINUED
  OPERATIONS:
    Working capital................    $     32,431    $      24,041        $ 103,261       $   61,188    $ 162,458     $ 108,416
    Total assets...................       1,176,431        1,109,131          943,123          541,067      567,530       520,591
    Long-term debt and other non-
       current liabilities.........         594,164          656,413          694,241          428,927      334,386       296,080
    Stockholder's equity ..........         468,530         $398,605        $ 168,799        $ 166,260    $ 169,051     $ 140,151
</TABLE>



                                       13
<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

OVERVIEW

     Through September 30, 1997, the Company conducted its business through two
operating divisions: the Rexene Products division, which manufactured
polyethylene, polypropylene, APAO, FPO, styrene, and olefins and the CT Film
division, which manufactured plastic film. On September 30, 1997, the Company
sold the CT Business to Huntsman Packaging Corporation, an affiliate of the
Company. The Company now consists solely of those assets which formerly
comprised the Rexene Products division. Consequently, management believes that a
description of the results of operations and financial condition of the CT
Business is not meaningful to an evaluation of the Company's results of
operations or financial condition.

     The markets in which the Company competes are generally cyclical markets
that are sensitive to relative changes in supply and demand as well as general
economic conditions. Historically, these products have experienced alternating
periods of tight supply, rising prices and increased profits followed by periods
of large capacity additions resulting in oversupply, lower selling prices and
lower profits. Certain of the Company's products, such as APAO, are generally
less sensitive to economic cycles. In addition, the Company's polyethylene and
polypropylene businesses are geared toward higher value-added, specialty grades,
which are less sensitive to cyclical swings experienced by commodity grades. The
Company's 1999 results were significantly impacted by the protracted start-up of
its newly expanded and modernized facilities. Management believes that with the
start-up complete, the Company's results will be more representative of market
factors as opposed to operational factors.

     Principal raw materials purchased by the Company consist of ethane and
propane extracted from NGLs, propylene and benzene (all four of which are
referred to as "feedstocks") for the polyethylene, polypropylene and styrene
businesses. Management believes the feedstock supplies available in Odessa,
Texas are currently adequate for the Company's requirements. The percentage of
feedstock costs compared to the Company's total cost of sales increased from 25%
in 1998 to 33% in 1999. Feedstock prices increased during 1999 as a result of
increasing crude oil prices. While management expects feedstock prices to remain
volatile, declines from the current, inflated levels are anticipated during
2000.

RESULTS OF OPERATIONS

     The Merger of Rexene and Centennial, effective September 1, 1997 (the
"Effective Date") for financial accounting purposes, resulted in the
implementation of a new basis of accounting, resulting in new carrying values
for certain of the Company's assets, liabilities and equity. Huntsman Polymers'
consolidated financial statements reflect this new basis of accounting beginning
with the date of the Merger. Effective September 30, 1997, the Company sold the
assets of the CT Business. The operations of the CT Business are presented as
discontinued operations for 1997. In order to present data which is useful for
comparative purposes, the following pro forma tabular data and related
discussion have been prepared as if the Merger and the CT Film Sale had taken
place at the beginning of 1997. These results do not necessarily reflect the
results which would have been obtained if the Merger or the CT Film Sale had
actually occurred on January 1, 1997 or the results which may be expected in the
future.

     Huntsman Polymers' operations for periods after the Effective Date are
significantly affected by (1) the elimination of the amortization of the
Company's historical reorganization value, (2) the incremental depreciation
associated with the net increase in property, plant, and equipment, resulting
from the new basis of accounting incorporated at the time of the Merger, (3) the
amortization of goodwill associated with the Merger, (4) the impact on interest
expense of the replacement of selected debt vehicles with intercompany debt and
(5) the deferred income tax



                                       14
<PAGE>

effect associated with these adjustments. For these reasons, among others,
certain financial information for periods before and after the Effective Date is
not comparable.

SELECTED FINANCIAL RESULTS:

<TABLE>
<CAPTION>
                                                                                             Pro Forma (1)
                                                                  Actual                       Year Ended
                                                          Year Ended December 31,             December 31,
                                               --------------------------------------------- ---------------
                                                    1999            1998            1997          1997
                                                    ----            ----            ----          ----
                                                                      (in thousands)
<S>                                            <C>             <C>              <C>          <C>
CONSOLIDATED STATEMENT OF OPERATIONS:
Revenues                                       $       489,704 $       365,748  $    447,278 $       447,278
Cost of goods sold                                     482,854         354,264       377,801         392,457
                                               --------------- ---------------  ------------ ---------------
Gross profit                                             6,850          11,484        69,477          54,821
Selling, general and administrative                     15,470          14,720        26,212          25,850
Research and development                                 6,580           8,049         6,163           6,163
Reversal of environmental accrual                            -               -        (9,000)         (9,000)
                                               --------------- ---------------  ------------ ---------------
Operating income (loss)                                (15,200)        (11,285)       46,102          31,808
Interest expense, net                                  (44,817)        (27,280)      (23,713)        (28,833)
Other income (expense)                                   4,799           6,812       (22,173)        (13,673)
                                               --------------- ---------------  ------------ ---------------
Income (loss) from continuing operations
       before income taxes                             (55,218)        (31,753)          216         (10,698)
Income tax benefit (expense)                            20,143          11,559        (1,544)          2,603
                                               --------------- ---------------  ------------ ---------------
Loss from continuing operations                $       (35,075)$       (20,194) $     (1,328)$        (8,095)
                                               =============== ===============  ============ ===============
</TABLE>

-----------------

(1)  Pro forma results reflect purchase accounting adjustments as if the Merger
     had occurred on January 1, 1997.

1999 COMPARED TO 1998

REVENUES

     The Company's net sales increased $124.0 million from $365.7 million in
1998 to $489.7 million in 1999. This increase was primarily due to higher sales
volumes across all of the Company's product lines and higher average selling
prices. Volume increases were a result of operating improvements following the
protracted start-up of the Company's expanded and modernized facilities,
including the new LLDPE facility, while higher prices generally reflect improved
market conditions. LLDPE sales increased $62.8 million as the new facility
completed its start-up in June 1999. Olefins and other revenues increased $27.8
million, primarily due to a 2.2 cents per pound improvement in the average sales
price and a 154 million pound increase in sales volume resulting mainly from
improved and expanded operations. Styrene sales increased $17.7 million due
primarily to a 2.4 cents per pound increase in the average sales price. HP-LDPE
sales increased $8.0 million due primarily to a 1.9 cents per pound increase in
the average sales price due to improved market conditions and customer mix.
Polypropylene sales increased $5.7 million due primarily to improved volumes,
partially


                                       15
<PAGE>

offset by lower average selling prices resulting from weak industry conditions.
APAO sales increased $2.2 million, primarily due to higher sales volumes.

GROSS PROFIT

     The Company's gross profit decreased $4.6 million from $11.5 million in
1998 to $6.9 million in 1999 principally due to lower gross profit in olefins
and FPO, partially offset by higher gross profit in polypropylene and styrene.
The decrease in gross profit for olefins of $7.9 million was mainly due to
higher feedstock costs which were not immediately passed on to customers. FPO
gross profit decreased $2.2 million primarily due to lower selling prices. The
increase in gross profit for polypropylene of $3.2 million was mainly due to
lower production costs. Styrene gross profit increased $3.6 million, due
primarily to improved pricing in the styrene market.

SELLING, GENERAL AND ADMINISTRATIVE (SG&A)

     Selling, general and administrative expenses increased $0.8 million from
$14.7 million in 1998 to $15.5 million in 1999. The increase was a result of
higher SG&A expenses related to the new LLDPE plant and expanded olefin unit.

RESEARCH AND DEVELOPMENT

     Research and development expenses decreased $1.4 million from $8.0 million
in 1998 to $6.6 million in 1999, primarily due to the closure of the pilot plant
in 1999.

INTEREST EXPENSE, NET

     Interest expense, net increased $17.5 million from $27.3 million in 1998 to
$44.8 million in 1999, primarily due to significant decreases in capitalized
interest as a result of the completion of the Company's modernization and
expansion projects.

OTHER INCOME (EXPENSE)

     The Company's other income decreased $2.0 million from $6.8 million in 1998
to $4.8 million in 1999. The decline is primarily due to a number of one-time
items relating to licensing, settlement of commercial disputes, and other
agreements related to production and distribution costs which occurred in 1998.

INCOME TAX EXPENSE

     Income tax benefit increased $8.5 million from $11.6 million in 1998 to
$20.1 million in 1999, due to decreased operating results for the reasons stated
above.

NET LOSS FROM CONTINUING OPERATIONS

     The Company's net loss from continuing operations increased $14.9 million
from $20.2 million in 1998 to $35.1 million in 1999. The increased loss is a
result of the reasons stated above.



                                       16
<PAGE>

1998 COMPARED TO PRO FORMA 1997

     The 1998 compared to 1997 items below are discussed in the context of pro
forma results of operations as if the Merger between Rexene and Centennial had
occurred on January 1, 1997.

REVENUES

     The Company's net sales decreased $81.5 million from $447.3 in 1997 to
$365.7 million in 1998, principally due to lower selling prices for many of the
Company's products and to the olefins plant planned turnaround to perform
maintenance work and tie in with the new olefins and LLDPE expansion. Olefins
and other revenues declined $33.3 million due to the turnaround discussed above.
Styrene was also adversely affected due to the turnaround and depressed market
pricing resulting in a $28.3 million decrease in revenue. Polyethylene sales
decreased $15.4 million due primarily to a decrease in the average sales price
of 1.9 cents due to competitive market conditions. Polypropylene sales decreased
$15.7 million due primarily to a decrease in the average selling price of 7.6
cents because of excess capacity in the industry resulting in lower selling
prices. APAO sales decreased $2.1 million principally due to a decrease in sales
price of 3.0 cents. FPO revenue increased $13.3 million due to an increase in
sales volumes of 8.8 million pounds resulting from increased market penetration.

GROSS PROFIT

     The Company's gross profit decreased $43.3 million from $54.8 million in
1997 to $11.5 million in 1998 principally due to factors impacting polyethylene,
styrene, polypropylene and other, offset somewhat by FPO. The decrease in gross
profit for polyethylene was the result of a $7.4 million decrease resulting from
lower selling prices, $3.1 million decrease due to lower sales volumes, and
$32.1 million in additional manufacturing costs primarily due to lower
production rates resulting from the expansion and turnaround. Lower styrene
market prices negatively impacted gross profit by $7.9 million and additional
manufacturing costs of $0.8 million due in part from turnaround related work.
Approximately $13.0 million gross profit decrease was due to the decrease in the
average selling price and sales volume of polypropylene resulting from excess
capacity in the market. The decrease was offset somewhat by lower raw material
and manufacturing costs of $10.8 million. Other decreased $2.0 million,
primarily due to reversals of insurance overaccruals in 1997. FPO gross profit
increased $10.1 million due primarily to the non-recurrence in 1998 of the
negative gross margin sustained in 1997, the startup year.

SELLING, GENERAL AND ADMINISTRATIVE

     Selling, general and administrative expenses decreased $11.2 million from
$25.9 in 1997 to $14.7 million in 1998, primarily due to administrative
restructuring following the Merger.

RESEARCH AND DEVELOPMENT

     Research and development expenses increased $1.8 million from $6.2 million
in 1997 to $8.0 in 1998, primarily due to the addition of seven support
personnel for the FPO and LLDPE facilities.

REVERSAL OF ENVIRONMENTAL ACCRUAL

     An environmental accrual established in prior years was reduced by $9.0
million in 1997 as a result of modifications to the Company's remedial action
plans at the Company's Odessa Facility that were approved by the TNRCC.



                                       17
<PAGE>

OTHER INCOME (EXPENSE)

     The Company's other income (expense) changed $20.5 million from expense of
$13.7 million in 1997 to income of $6.8 million in 1998. The change is primarily
due to the $13.0 million expense incurred in September 1997 in connection with
the settlement of a lawsuit with Phillips, with additional income in 1998 from
one-time items relating to the licensing of technology and settlements of
commercial disputes and other agreements related to production and distribution
costs.

INCOME TAX EXPENSE

     Income tax benefit increased $9.0 million from $2.6 million in 1997 to
$11.6 million in 1998, due to decreased operating results for the reasons stated
above.

NET LOSS FROM CONTINUING OPERATIONS

     The Company's net loss from continuing operations increased $12.1 million
from $8.1 million in 1997 to $20.2 million in 1998. The increased loss is a
result of the reasons stated above.

LIQUIDITY AND CAPITAL RESOURCES

     Net cash used in operating activities for the twelve months ended December
31, 1999 was $36.0 million as compared to a net source of cash of $8.7 million
in the prior year. This decrease in operating cash flow was primarily
attributable to a higher loss in 1999 and a net increase in working capital
during the 1999 period as compared to a net decrease in working capital during
1998, partially offset by an increase in non-cash charges. Higher levels of
working capital were primarily a result of the start-up of the new LLDPE
facility.

     Net cash used in investing activities for twelve months ended December 31,
1999 was $59.0 million, down from $269.3 million in the prior year. This
decrease was primarily attributable to a lower level of capital spending on the
Company's modernization and expansion program during 1999.

     Net cash provided by financing activities for twelve months ended December
31, 1999 was $95.0 million, down from $260.5 million in the prior year. This
decrease was primarily attributable to a reduced level of capital contributions
provided by the Company's parent, as well as the repayment of intercompany
borrowings during the year.

     In connection with the Merger, the Company entered into an intercompany
loan agreement (the "Loan Agreement") with Huntsman Group Holdings Finance
Company ("HGHFC"), a wholly-owned subsidiary of Huntsman Corporation. As of
December 31, 1999, the Company owed $250.4 million under the Loan Agreement.
Subject to certain terms and conditions, the Company may borrow additional
amounts under the Loan Agreement. The Company has guaranteed on a secured basis,
subject to the limitations imposed by the indenture (the "Indenture") governing
the Company's 11 3/4% Senior Notes due 2004 (the "Senior Notes"), Huntsman
Corporation's senior secured borrowings on a PARI PASSU basis with substantially
all of Huntsman Corporation's domestic subsidiaries.

     Capital expenditures for the twelve months ended December 31, 1999 were
$59.0 million. The $259.3 million decrease in capital expenditures of continuing
operations for the twelve months ended December 31, 1999 compared to the same
period in 1998 was due primarily to lower levels of spending in connection with
the Company's modernization and expansion program. The Company completed this
program and commenced commercial operations in the second quarter of 1999. The
Company expects to invest a total of $15 million to $20 million in capital
projects in 2000.


                                       18
<PAGE>

     The Company believes that, based on current levels of operation and
anticipated cash flow from operations, together with other available sources of
liquidity, will be adequate to make scheduled payments of interest on the Senior
Notes, to permit anticipated capital expenditures and to fund working capital
requirements. However, the ability of the Company to satisfy these obligations
depends on a number of significant assumptions, including but not limited to,
the demand for the Company's products and raw material costs.

     A number of potential environmental liabilities exist which relate to
certain contaminated property. In addition, a number of potential environmental
costs relate to pending or proposed environmental regulations. No assurance can
be given that all of the potential liabilities arising out of the Company's
present or past operations have been identified or that the amounts that might
be required to investigate and remediate such sites or comply with pending or
proposed environmental regulations can be accurately estimated. The Company has
approximately $6.6 million accrued in the December 31, 1999 balance sheet as an
estimate of its total potential environmental liability with respect to
investigating and remediating known and assessed site contamination. Extensive
environmental investigation of the groundwater, soils and solid waste management
has been conducted at the Odessa Facility. Risk assessments have been completed
for a number of these facilities and corrective measures have been defined and
conducted. If, however, additional liabilities with respect to environmental
contamination are identified, there is no assurance that additional amounts that
might be required to investigate and remediate such potential sites would have a
material adverse effect on the Company's financial position, results of
operations or cash flows. In addition, future regulatory developments could
restrict or possibly prohibit existing methods of environmental compliance. At
this time, the Company is unable to determine the potential consequences such
possible future regulatory developments would have on its financial condition.
Management continually reviews its estimates of potential environmental
liabilities. The Company carries Pollution Legal Liability insurance to address
many of the potential environmental liabilities, subject to its terms, limits,
exclusions and deductibles, on both a sudden and accidental basis and on a
gradual basis for occurrences first commencing after July 1, 1997 on its
operations. The Company also carries Pollution Legal Liability and Closure and
Post Closure insurance on certain facilities at the Odessa manufacturing
location which are regulated by the TNRCC. This insurance satisfies the
requirements of the TNRCC governing operations at this location.

CAUTIONARY STATEMENT FOR FORWARD LOOKING INFORMATION

     Certain information set forth in this report contains "forward-looking
statements" within the meaning of federal securities laws. Forward-looking
statements include statements concerning the Company's plans, objectives, goals,
strategies, future events, future revenues or performance, capital expenditures,
financing needs, plans or intentions relating to acquisitions and other
information that is not historical information. In some cases, forward-looking
statements can be identified by terminology such as "believes," "expects,"
"may," "should," or "anticipates", or the negative of such terms or other
comparable terminology, or by discussions of strategy. The Company may also make
additional forward-looking statements from time to time. All such subsequent
forward-looking statements, whether written or oral, by the Company or on its
behalf, are also expressly qualified by these cautionary statements.

     All forward-looking statements, including without limitation, management's
examination of historical operating trends, are based upon their current
expectations and various assumptions. The Company's expectations, beliefs and
projections are expressed in good faith and the Company believes there is a
reasonable basis for them, but, there can be no assurance that the Company's
expectations, beliefs and projections will result or be achieved. All
forward-looking statements apply only as of the date made. The Company
undertakes no obligation to publicly update or revise forwardlooking statements
that may be made to reflect events or circumstances after the date made or to
reflect the occurrence of unanticipated events.

     There are a number of risks and uncertainties that could cause the
Company's actual results to differ materially from the forward-looking
statements contained in or contemplated by this report. The following are among
the factors that could cause actual results to differ materially from the
forward-looking statements. There may be other factors,



                                       19
<PAGE>

including those discussed elsewhere in this report, that may cause the Company's
actual to differ materially from the forward-looking statements. Any
forward-looking statements should be considered in light of these factors.

     1.   The cyclical nature of the Company's business

     2.   Changes in the availability and/or price of feedstocks

     3.   Environmental and safety requirements, including permitting
          enforcement activities and the possibility of related litigation

     4.   Changes in product mix and utilization of production facilities

     5.   Unavailability of, and substantial delays in, transportation of raw
          materials and products

     6.   Inability to obtain new customers or retain existing ones

     7.   Significant changes in competitive factors affecting the Company

     8.   Significant changes from expectations in actual capital expenditures
          and operating expenses and unanticipated project delays

     9.   Occurrences affecting the Company's ability to obtain funds from
          operations, debt or equity to finance needed capital expenditures and
          other investments

     10.  Significant changes in the Company's relationship with its employees
          and the potential adverse effects if labor disputes or grievances were
          to occur

     11.  Significant changes in tax rates or policies or in rates of inflation
          or interest

     12.  Changes in economic conditions

     13.  Changes in management or control of the Company

     14.  Changes in accounting principles and/or the application of such
          principles to the Company


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

     The Company has interest and market risk with respect to $175 million of
its 11 3/4% Senior Notes due 2004. The market value of this debt was $184
million and $191 million on December 31, 1999 and 1998, respectively. The senior
notes are redeemable at prices up to 105.875% of par value through 2004. All
other debt is at floating rates.

     The Company's exposure to foreign currency market risk is minimal since
sales prices are typically denominated in U.S. dollars. The Company's exposure
to changing commodity prices is also minimal since substantially all raw


                                       20
<PAGE>

material is acquired at posted or market related prices, and sales prices for
finished products are generally at market related prices.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The Company's Consolidated Financial Statements required by this item are
included on the pages immediately following the Index to Consolidated Financial
Statements appearing on page F-1.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

     N/A



                                       21
<PAGE>

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

DIRECTORS AND EXECUTIVE OFFICERS

     The current directors and executive officers of the Company are listed
below. Directors are elected at the annual meeting of stockholders and hold
office until their successors are duly elected and qualified. All officers serve
at the pleasure of the Board of Directors of the Company.

<TABLE>
<CAPTION>
NAME                                           AGE      POSITION
----                                           ---      --------
<S>                                            <C>      <C>
Jon M. Huntsman* .........................     62       Chairman and Chief Executive Officer, Director
Jon M. Huntsman, Jr.* ....................     40       Vice Chairman, Director
Peter R. Huntsman* .......................     37       President, Director
J. Kimo Esplin ...........................     37       Senior Vice President and Chief Financial Officer, Treasurer
Thomas  J. Keenan ........................     47       Senior Vice President
Michael J. Kern ..........................     50       Senior Vice President, Operations
Robert B. Lence ..........................     42       Senior Vice President and Chief Legal Officer, Secretary
Donald J. Stanutz ........................     49       Senior Vice President, Sales and Marketing
David  H. Huntsman*.......................     32       Vice President
Monte G. Edlund ..........................     44       Vice President, Marketing/Commercial
L. Russell Healy .........................     44       Vice President, Tax
Johnny W. Lasiter ........................     50       Vice President, Manufacturing
James A. Leitch ..........................     42       Vice President, Sales
Martin F. Petersen .......................     39       Vice President
</TABLE>

------------------------------
*    Such persons are related as follows: Jon M. Huntsman is the father of Jon
     M. Huntsman, Jr., Peter R. Huntsman, and David H. Huntsman

     JON M. HUNTSMAN has been Chairman and Chief Executive Officer and a
Director of the Company since August 1997. Mr. Huntsman has served as Chairman
of the Board, Chief Executive Officer and a Director of Huntsman Corporation,
its predecessors and other Huntsman companies for over 25 years. He is also the
Chairman and founder of the Huntsman Cancer Foundation. In addition, Mr.
Huntsman serves on numerous charitable, civic, industry and corporate boards. In
1994, Mr. Huntsman received the prestigious Kavaler Award as the chemical
industry's outstanding Chief Executive Officer. Mr. Huntsman formerly served as
Special Assistant to the President of the United States and as Vice Chairman of
the U.S. Chamber of Commerce. He serves on the Board of Governors of the
American Red Cross.


                                       22
<PAGE>

     JON M. HUNTSMAN, JR. has been Vice Chairman and a Director of the Company
since August 1997. Mr. Huntsman, Jr. also serves on the Boards of Directors of
Huntsman Corporation and its affiliated companies along with Owens-Corning
Corporation. Mr. Huntsman, Jr. currently serves as Vice Chairman of Huntsman
Corporation and its affiliated companies as well as President and Chief
executive Officer of the Huntsman Cancer Foundation. In addition, from 1991
until 1992, Mr. Huntsman, Jr. was a Senior Vice President and General Manager of
Huntsman Chemical Corporation. From 1992 until 1993, Mr. Huntsman, Jr. served as
United States Ambassador to the Republic of Singapore. From 1989 until 1990, Mr.
Huntsman, Jr. served as U.S. Deputy Assistant Secretary of Commerce for
International Trade, and from 1990 until 1991, he was U.S. Deputy Assistant
Secretary of Commerce for East Asian and Pacific Affairs. Mr. Huntsman, Jr.
currently serves on the Chemical Manufacturers Association and the American
Plastics Council Boards.

     PETER R. HUNTSMAN has been President and a Director of the Company since
August 1997. Mr. Huntsman is the President and Chief Operating Officer and a
Director of Huntsman Corporation and its affiliated companies. He was formerly a
Senior Vice President of Huntsman Packaging Corporation and Huntsman Chemical
Corporation. From 1991 until 1992, Mr. Huntsman was Senior Vice President and
General Manager of Huntsman Polypropylene Corporation and from 1990 until 1992,
he was Vice President--Purchasing of Huntsman Chemical Corporation.

     J. KIMO ESPLIN has been Senior Vice President and Chief Financial Officer
of the Company since August 1997. Mr. Esplin has been Senior Vice President and
Chief Financial Officer of Huntsman Corporation and its affiliated companies
since Spring of 1997. From 1994 to 1996, Mr. Esplin was Vice President and
Treasurer of Huntsman Corporation and affiliated companies. Prior to joining
Huntsman, Mr. Esplin was a Vice President of Bankers Trust Company, where he
worked for seven years.

     THOMAS J. KEENAN has been Senior Vice President of the Company since
January 1999. He is also Senior Vice President - Polypropylene of Huntsman
Corporation. Mr. Keenan has served in other executive positions with Huntsman
Corporation and its affiliated companies including Senior Vice President -
Manufacturing and Quality Performance of Huntsman Chemical Corporation. Prior to
joining Huntsman in 1994, Mr. Keenan was Vice President and General Manager of
Mobil Chemical Company, where he worked for more than sixteen years.

     MICHAEL J. KERN has been Senior Vice President, Operations since August
1997. Mr. Kern is also Senior Vice President, Manufacturing of Huntsman
Corporation, Huntsman Chemical Corporation, and Huntsman Petrochemical
Corporation. Prior to joining Huntsman Corporation and affiliated companies in
1994, Mr. Kern held a variety of positions with Texaco Chemical Company,
including Area Manager--Jefferson County Operations from 1993, Plant Manager of
Port Neches Chemical Plant from 1992 to 1993, Manager of PO/MTBE project from
1989 to 1992 and Manager of Operations--Oxides and Olefins from 1988 to 1989.

     ROBERT B. LENCE has been Senior Vice President and Chief Legal Officer and
Secretary of the Company since August 1997. Mr. Lence is also Senior Vice
President and General Counsel and Secretary of Huntsman Corporation and
affiliated companies. Prior to joining Huntsman in 1991, Mr. Lence was a partner
with Van Cott, Bagley, Cornwall & McCarthy, a Salt Lake City law firm with which
he had been associated since 1982.

     DONALD J. STANUTZ has been Senior Vice President, Sales and Marketing of
the Company since August 1997. Mr. Stanutz has also been Senior Vice President,
Olefins and Performance Chemicals of Huntsman Corporation and Senior Vice
President, Performance Chemicals of Huntsman Petrochemical Corporation. Prior to
joining Huntsman Corporation and affiliated companies in 1994, Mr. Stanutz was
Business Unit Manager and General Manager-Chemical Department of Texaco Chemical
Company from 1993 to 1994; Manager--Olefins from 1992 to 1993; General
Manager--Chemical Department of Texaco Limited, UK from 1990 to 1992; and
Assistant Chemical Man ager--Chemical Department from 1989 to 1990.




                                       23
<PAGE>

     DAVID H. HUNTSMAN has been Vice President of the Company since 1998. Mr.
Huntsman is a Director of Huntsman Corporation and its affiliated companies.
From December 1995 until July 1998 he was Vice President Polystyrene and
Expandable Resins for Huntsman Chemical Corporation. Prior to that he was Chief
Operating Officer and Vice Chairman of Huntsman Packaging Corporation.

     MONTE G. EDLUND has been Vice President, Marketing/Commercial of the
Company since August 1997. Prior to the Merger, Mr. Edlund held the following
positions with Rexene Corporation: Vice President-- Marketing, 1995- August
1997; Director--Polymers Marketing, 1994-1995; Director--Polymer Sales,
1993-1994; Director-Polypropylene Marketing, 1992-1993; and Regional Sales
Manager, 1989-1992. From 1981 to 1989, Mr. Edlund held several positions in the
Chemicals Group of Phillips Petroleum Co., including technical, sales,
marketing, and sales management in chemicals and polyethylene.

     L. RUSSELL HEALY has been Vice President, Finance of Huntsman Corporation
since August 1997. Mr. Healy is also Vice President, Tax of Huntsman Corporation
and affiliated companies. Prior to joining Huntsman Corporation in 1995, Mr.
Healy was a partner with Deloitte & Touche LLP. Mr. Healy is a Certified Public
Accountant.

     JOHNNY W. LASITER has been Vice President, Manufacturing of the Company
since August 1997. Prior to the Merger, Mr. Lasiter had been, since 1991, Vice
President of Manufacturing and General Manager of the Odessa Complex of Rexene
Products Co. and had served in various positions with Rexene Products Co. since
1977.

     JAMES A. LEITCH has been Vice President, Sales of the Company since August
1997. Prior to the Merger, Mr. Leitch was Vice President, Sales for Rexene since
March 1995. Since joining Rexene in February 1985, Mr. Leitch has worked in
sales in both the polymers and petrochemicals aspects of the business and has
held various positions with Rexene, serving as Sales Manager, Southern Region
from October 1987 to December 1992, Business Director, Polyethylene from January
1993 to December 1993 and Sales Director from January 1994 to March 1995. Prior
to joining Rexene, Mr. Leitch was with Union Carbide from 1980 to 1985 in
Engineering and Sales.

     MARTIN F. PETERSEN has been Vice President of the Company since August
1997. Mr. Petersen is also Vice President and Treasurer of Huntsman Corporation
and affiliated companies. Prior to joining Huntsman Corporation in 1997, Mr.
Petersen was a Vice President in the Investment Banking Division of Merrill
Lynch & Co. where he worked for seven years.

ITEM 11.  EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

     The following table sets forth certain summary information concerning the
compensation paid or awarded to the Chief Executive Officer of the Company and
the four other highest paid executive officers of the Company in 1999 and two
additional officers for whom disclosure would have been provided but for the
fact that they were not serving as executive officers at the end of the last
completed fiscal year (the "named executive officers") for the years indicated.



                                       24
<PAGE>

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                           ANNUAL COMPENSATION (1)

                                                                                            OPTIONS
                                                                                            (NUMBER          ALL OTHER
          NAME AND PRINCIPAL POSITION             YEAR        SALARY          BONUS        OF SHARES)      COMPENSATION (2)
          ---------------------------             ----        ------          -----        ----------      ----------------
<S>                                               <C>         <C>             <C>          <C>                 <C>
Jon M. Huntsman, Chairman of the Board and Chief  1999        $150,000        $425,000             -           $ 54,189(3)
Executive Officer..............................   1998         $89,692        $500,000             -            $58,969(3)
                                                  1997         $17,600       $  90,000             -            $10,600(3)

Peter R. Huntsman, President and Director......   1999        $100,000        $160,000             -           $ 22,911(4)
                                                  1998        $136,500        $250,000             -            $38,650(4)
                                                  1997        $ 43,600        $ 75,000             -            $10,094(4)

Thomas J. Keenan, Senior Vice President........   1999        $175,000        $105,000             -            $26,396(5)
                                                  1998               -               -             -                     -
                                                  1997               -               -             -                     -

David H. Huntsman, Vice President and Chief       1999        $135,000        $185,000             -            $27,382(6)
Operating Officer..............................   1998         $83,250        $160,000             -            $ 9,224(6)
                                                  1997               -               -             -                     -

Monte G. Edlund, Vice President, Marketing,       1999        $150,000       $  45,000             -            $ 3,326(7)
Commercial.....................................   1998               -               -             -                     -
                                                  1997               -               -             -                     -
</TABLE>


-----------------
(1)  All compensation of the above-named executive officers was paid entirely by
     Huntsman Corporation, the Company's parent; no charge with respect to this
     compensation was made to the Company. Compensation figures for the
     executives listed above represent a prorated percentage of Huntsman
     Corporation compensation attributable to services rendered to the Company.
(2)  Perquisites and other personal benefits, securities or property are less
     than either $50,000 or 10% of the total annual salary and bonus for each
     named executive officer.
(3)  Consists of $10,438, $11,794 and $2,100 employer's 401(k) contribution for
     1999, 1998 and 1997, respectively, and employer's money purchase
     contribution of $43,751, $47,175 and $8,500 for 1999, 1998 and 1997,
     respectively.
(4)  Consists of $3,782, $7,730 and $8,700 employer's 401(k) contribution for
     1999, 1998 and 1997, respectively, and employer's money purchase
     contribution of $19,129, $30,920 and $1,394 for 1999, 1998 and 1997,
     respectively.
(5)  Consists of $4,682 employer's 401(k) contribution and employer's money
     purchase contribution of $21,714.
(6)  Consists of $2,252 and $2,016 employer's 401(k) contribution for 1999 and
     1998, respectively and employer's money purchase contributions of $25,130
     and $7,208 for 1999 and 1998, respectively.
(7)  Consists of $2,919 employer's 401(k) contribution and employer's money
     purchase contribution of $407.



                                       25
<PAGE>

OPTION GRANTS, EXERCISES AND HOLDINGS

     No options to purchase common stock of the Company were granted during the
year ended December 31, 1999 to any named executive officers. No named executive
officer exercised options to purchase Common Stock in 1999. There were no
unexercised options to purchase Common Stock held at December 31, 1999 by any of
the Company's named executive officers. Any unexercised options were purchased
by Centennial in connection with the Merger.

RETIREMENT PLANS

     During 1999, Huntsman Corporation sponsored a trusteed, non-contributory,
qualified defined benefit pension plan (the "Huntsman Corporation Pension Plan")
for substantially all full-time employees of the Company. The normal retirement
age of participants is 65, and during 1999 benefits were, in general, based on
the following formula: 1.4% of average final compensation multiplied by years of
credited service, minus 1.4% of estimated Social Security benefits multiplied by
years of credited service (maximum 50% of Social Security). Final average
compensation for the Huntsman Corporation Pension Plan is based on the highest
average of three consecutive years compensation. Federal regulations require
that for the 1999 plan year no more than $160,000 in compensation be considered
for the calculation of retirement benefits from the Huntsman Corporation Pension
Plan, and the maximum amount paid from a qualified defined benefit plan cannot
exceed $130,000, as of January 1, 1999. Benefits are calculated on a straight
life annuity basis.

     The above pension formula is applicable for all years of service for
Messrs. Jon M. Huntsman Sr., Peter Huntsman, David Huntsman and Thomas Keenan.
For Mr. Monte G. Edlund, the above pension plan formula is effective for service
after December 31, 1997.

     Effective January 1, 1998, the assets and liabilities of the former Rexene
Retirement Plan were merged into the Huntsman Corporation Pension Plan. For
service prior to January 1, 1998, the qualified pension plan benefit for Mr.
Monte Edlund (who was a participant in the former Rexene Retirement Plan as of
December 31, 1997) is determined using the former Rexene Retirement Plan formula
and final average compensation at the date of determination. Such applicable
formula is 0.9% of the employee's average annual base salary during the highest
paid three consecutive years of the employee's final ten calendar years of
service ("Final Average Pay") multiplied by years of service prior to January 1,
1998, plus 0.5% of the employee's Final Average Pay which exceeds an average,
computed under Internal Revenue Service rules, of the employee's wages taken
into account for Social Security purposes, multiplied by the number of years of
service prior to January 1, 1998 (up to a maximum of 35 years).

     Certain designated employees of the Company also participate in the
Huntsman Corporation Supplemental Pension Plan (the "Huntsman SERP"). As of
December 31, 1999, all of the above named executive participated in the Huntsman
SERP.

     The Huntsman SERP is a non-qualified supplemental pension plan that
provides benefits based on certain compensation amounts not included in the
calculation of benefits payable under the qualified Huntsman Corporation Pension
Plan. Benefits under the Huntsman SERP become vested after 5 years of vesting
service. Compensation amounts taken into account for purposes of the Huntsman
SERP include bonuses (as reflected under the "Bonus" column of the Summary
Compensation Table), base pay in excess of the qualified plan limitations and
non-qualified compensation deferrals. In general, the Huntsman SERP benefit is
calculated as the difference between (a) and (b) where (a) is the benefit
determined using the Huntsman Corporation Pension Plan formula with unlimited
base pay, bonus and deferred compensation, and (b) is the benefit determined
using base pay only, as limited by federal regulations.

     In specified final average earnings and years-of-service classifications,
the following table illustrates the amount of estimated annual benefits payable
from the Huntsman Corporation Pension Plan and the Huntsman SERP combined.


                                       26
<PAGE>

HUNTSMAN CORPORATION PENSION PLAN AND SERP TABLE

<TABLE>
<CAPTION>
                                                              Years of Service
        Final         ---------------------------------------------------------------------------------------------
     Average Pay          5          10          15           20          25          30         35         40
--------------------- --------- ------------ -----------  ----------- -----------  ---------  ---------  ----------
<S>                   <C>       <C>          <C>          <C>         <C>          <C>        <C>        <C>
      $100,000            7,000       14,000      21,000       28,000      35,000     42,000     49,000      56,000
      $125,000            8,800       17,500      26,300       35,000      43,800     52,500     61,300      70,000
      $150,000           10,500       21,000      31,500       42,000      52,500     63,000     73,500      84,000
      $175,000           12,300       24,500      36,800       49,000      61,300     73,500     85,800      98,000
      $200,000           14,000       28,000      42,000       56,000      70,000     84,000     98,000     112,000
      $250,000           17,500       35,000      52,500       70,000      87,500    105,000    122,500     140,000
      $300,000           21,000       42,000      63,000       84,000     105,000    126,000    147,000     168,000
      $350,000           24,500       49,000      73,500       98,000     122,500    147,000    171,500     196,000
      $400,000           28,000       56,000      84,000      112,000     140,000    168,000    196,000     224,000
      $450,000           31,500       63,000      94,500      126,000     157,500    189,000    220,500     252,000
      $500,000           35,000       70,000     105,000      140,000     175,000    210,000    245,000     280,000
      $550,000           38,500       77,000     115,500      154,000     192,500    231,000    269,500     308,000
      $600,000           42,000       84,000     126,000      168,000     210,000    252,000    294,000     336,000
      $650,000           45,500       91,000     136,500      182,000     227,500    273,000    318,500     364,000
      $700,000           49,000       98,000     147,000      196,000     245,000    294,000    343,000     392,000
      $750,000           52,500      105,000     151,500      210,000     262,500    315,000    367,500     420,000
</TABLE>

     For purposes of calculating benefits under the Huntsman Corporation Pension
Plan, the number of completed years of credited service as of December 31, 1999
for each named executive were as follows: Mr. Jon M. Huntsman Sr. - 29; Mr.
Peter Huntsman - 16; Mr. David Huntsman - 10; Mr. Thomas Keenan - 5; Mr. Monte
Edlund - 10. For purposes of calculating benefits under the Huntsman SERP, the
number of completed years of credited service as of December 31, 1999 for each
named executive were as follows: Mr. Jon M. Huntsman Sr.- 29; Mr. Peter Huntsman
- 16; Mr. David Huntsman - 10; Mr. Thomas Keenan - 15; Mr. Monte Edlund - 10.

COMPENSATION OF DIRECTORS

     FEES AND EXPENSES. Directors received no compensation in 1999.

EMPLOYMENT AGREEMENTS

     Any employment arrangements with executive officers were terminated in
connection with the Merger. There are currently no employment agreements with
any executive officers.



                                       27
<PAGE>

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The Company has 1,000 shares of common stock, par value $0.01 per share,
issued and outstanding. The Company is a wholly-owned subsidiary of Huntsman
Polymers Holdings Corporation ("HPHC"), which is a wholly-owned subsidiary of
Huntsman Corporation, 500 Huntsman Way, Salt Lake City, Utah 84108. Huntsman
Corporation is 100% owned by Jon M. Huntsman and his family. No other director,
executive officer or person beneficially owns any shares of common stock of the
Company.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Transactions between the Company and other related parties as of and for
the year ended December 31, 1999, are summarized as follows (dollars in
thousands):

<TABLE>
<S>                                                                              <C>
            Sales to:
                  Huntsman Petrochemical Corporation                             $   12,687
                  Huntsman Chemical Corporation and subsidiaries                        885
                  Huntsman Specialty Chemicals Corporation                            1,931
                  Huntsman Corporation                                              347,103
                  Huntsman ICI Chemicals LLC                                          5,051
            Trade accounts receivable from:
                  Hunstman Corporation                                               37,427
                  Huntsman Petrochemical Corporation                                  2,362
                  Huntsman ICI Chemicals LLC                                             70
            Miscellaneous receivables from:
                  Employee advances                                                      11
                  Huntsman Polypropylene Corporation                                    394
                  Huntsman Chemical Corporation and subsidiaries                          5
                  Huntsman Corporation                                                  541
            Product purchases from:
                  Huntsman Petrochemical Corporation 1,210
            Interest expense on intercompany borrowings and
            capital lease:
                  Huntsman Group Holdings Finance Company                            26,436

            Accounts payable to:
                  Huntsman Petrochemical Corporation                                    308
            Miscellaneous accounts payable to:
                  Huntsman Chemical Corporation and subsidiaries                         95
                  Huntsman Petrochemical Corporation                                    625
                  Huntsman Packaging Corporation                                        153
                  Huntsman Corporation                                                    5
                  Huntsman Corporation Belgium B.V.B.A.                                  74
            Long-term debt payable to:
                  Huntsman Group Holdings Finance Company                           250,360
            Long-term capital lease payable to:
                  Huntsman Group Holdings Finance Company
                    (including accrued interest)                                     59,735
            Capital contribution from parent                                        105,000
</TABLE>

                                       28

<PAGE>

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)      1.       Consolidated Financial Statements:

                  See Index to Consolidated Financial Statements on page F-1.

         2.       Financial  Statement Schedules:

                  See Index to Consolidated Financial Statements on page F-1.

         3.       Exhibits:

<TABLE>
<S>               <C>
         2.1  -   Agreement and Plan of Merger by and among Huntsman
                  Corporation, Huntsman Centennial Corporation and Rexene
                  Corporation dated June 9, 1997 (Filed as Exhibit 2.4 to
                  Rexene Corporation's (now known as Huntsman Polymers
                  Corporation) Quarterly Report on Form 10-Q for the
                  quarterly period ended September 30, 1997 and incorporated
                  herein by reference).

         3.1   -  Restated Certificate of Incorporation and the Certificate of
                  Amendment to the Certificate of Incorporation (filed as
                  Exhibit 3(i) to Rexene Corporation's (now known as Huntsman
                  Polymers Corporation) Quarterly Report on Form 10-Q for the
                  quarterly period ended September 30, 1997 and incorporated by
                  reference).

         3.2   -  By-Laws (filed as Exhibit 3(ii) to Rexene Corporation's (now
                  known as Huntsman Polymers Corporation) Quarterly Report on
                  Form 10-Q for the quarterly period ended September 30, 1997
                  and incorporated herein by reference).

         4.1   -  Indenture, dated as of November 29, 1994, between Rexene
                  Corporation, as Issuer, and Bank One, Texas, N.A., as Trustee,
                  for $175,000,000 11 3/4% Senior Notes due 2004 (filed as
                  Exhibit 4.1 to Rexene Corporation's (now known as Huntsman
                  Polymers Corporation) Annual Report on Form 10-K for the
                  fiscal year ended December 31, 1994 and incorporated herein
                  by reference).

         4.2.1 -  Stockholder Rights Agreement, between Rexene Corporation and
                  American Stock Transfer & Trust Company, as Rights Agent,
                  dated as of January 26, 1993 (filed as Exhibit 4.20 to Rexene
                  Corporation's (now known as Huntsman Polymers Corporation)
                  Annual Report on Form 10-K for the fiscal year ended December
                  31, 1992 and incorporated herein by reference).

         4.2.2 -  Amendment No. 1 to Stockholder Rights Agreement (filed as
                  Exhibit 1 to Rexene Corporation's (now known as Huntsman
                  Polymers Corporation) Form 8-A/A filed on October 21, 1994
                  and incorporated herein by reference).

         4.2.3 -  Amendment No. 2 to Stockholder Rights Agreement (filed as
                  Exhibit 99.4 to Rexene Corporation's (now known as Huntsman
                  Polymers Corporation) Form 8-A/A filed on July 26, 1996 and
                  incorporated herein by reference).


                                       29
<PAGE>

      10.1*    -  Rexene Corporation Supplemental Executive Retirement Plan
                  (filed as Exhibit 10.3 to Amendment No. 1 to Rexene
                  Corporation's (now known as Huntsman Polymers Corporation)
                  Registration Statement on Form S-3 (SEC File No. 33-55507) as
                  filed on October 21, 1994 and incorporated herein by
                  reference).

      10.1.1*  -  Amendment No. 1 to Rexene Corporation Supplemental Executive
                  Retirement Plan, dated as of June 1, 1996 (filed as Exhibit
                  10.6.1 to Rexene Corporation's (now known as Huntsman Polymers
                  Corporation) Quarterly Report on Form 10-Q for the quarterly
                  period ended June 30, 1996 and incorporated herein by
                  reference).

      10.1.2*  -  Amendment No. 2 to Rexene Corporation Supplemental Executive
                  Retirement Plan, dated as of July 26, 1996 (filed as Exhibit
                  10.6.2 to Rexene Corporation's (now known as Huntsman
                  Polymers Corporation) Quarterly Report on Form 10-Q for the
                  quarterly period ended June 30, 1996 and incorporated herein
                  by reference).

      10.2     -  First Amended Asset Purchase Agreement, dated as of September
                  26, 1997, between Huntsman Polymers Corporation and Huntsman
                  Packaging Corporation (filed as Exhibit 2.1 to Huntsman
                  Polymers Corporation's Current Report on Form 8-K filed on
                  October 21, 1997 and incorporated herein by reference).

      10.3     -  Intercompany Loan Agreement, dated as of August 27, 1997,
                  between Huntsman Group Holdings Finance Corporation and
                  Huntsman Polymers Corporation, dated as of August 27, 1997
                  (filed as Exhibit 10.1 to Huntsman Polymers Corporation's
                  Quarterly Report on Form 10-Q for the quarterly period ended
                  September 30, 1997 and incorporated by reference).

      21.1     -  Subsidiaries of Huntsman Polymers Corporation (filed as
                  Exhibit 21.1 to Huntsman Polymers Corporation's Annual Report
                  on Form 10-K for the fiscal year ended December 31, 1998 and
                  incorporated herein by reference)

      27.1     -  Financial Data Schedule.
</TABLE>

(b)  The Company filed no reports on Form 8-K for the year ended December 31,
     1999.

--------------------

*    Management contract or compensatory plan or arrangement required to be
     filed as an exhibit hereto.




                                       30
<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                         HUNTSMAN POLYMERS CORPORATION


     Dated March 30, 2000                By:    /s/  J. KIMO ESPLIN
                                            -------------------------
                                                     J. Kimo Esplin
                                                     SENIOR VICE PRESIDENT AND
                                                     CHIEF FINANCIAL OFFICER

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the registrant and
in the capacities indicated on March 30, 2000.

<TABLE>
<CAPTION>
              SIGNATURE                                             TITLE
              ---------                                             -----
<S>                                          <C>
        /S/  JON M. HUNTSMAN                      Chairman of the Board and Chief Executive
           JON M. HUNTSMAN                    Officer and Director (Principal Executive Officer)


      /S/  JON M. HUNTSMAN, JR.                          Vice Chairman and Director
        JON M. HUNTSMAN, JR.


       /S/  PETER R. HUNTSMAN                              President and Director
          PETER R. HUNTSMAN


         /S/  J. KIMO ESPLIN                               Senior Vice President,
           J. KIMO ESPLIN                            Chief Financial Officer (Principal
                                                      Financial and Accounting Officer)
</TABLE>



                                       31
<PAGE>

                 HUNTSMAN POLYMERS CORPORATION AND SUBSIDIARIES
                                ITEMS 8 AND 14(a)
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                                                        PAGE
<S>                                                                                                     <C>
Responsibility for the  Consolidated Financial Statements                                               F-2
Report of Independent Accountants                                                                       F-3
Consolidated Balance Sheets as of December 31, 1999 and 1998                                            F-4
Consolidated Statements of Operations and Comprehensive Income
    (Loss) for the Years Ended December 31, 1999 and 1998, the
    Four Months Ended December 31, 1997, and the Eight Months Ended August 31, 1997                     F-5
Consolidated Statements of Stockholder's Equity for the Years Ended December 31, 1999
    and 1998, the Four Months Ended December 31, 1997, and the Eight Months Ended
    August 31, 1997                                                                                     F-6
Consolidated Statements of Cash Flows for the Years Ended December
    31, 1999 and 1998, the Four Months Ended December 31, 1997, and the Eight
    Months Ended August 31, 1997                                                                        F-7
Notes to the Consolidated Financial Statements                                                          F-9
</TABLE>

All Financial Statement Schedules have been omitted because (i) the required
information is not present in amounts sufficient to require submission of the
schedule, (ii) the information required is included in the Consolidated
Financial Statements or the Notes thereto or (iii) the information required in
the schedules is not applicable to the Company.




                                       F-1
<PAGE>

RESPONSIBILITY FOR THE CONSOLIDATED FINANCIAL STATEMENTS

     Company management is responsible for the preparation, accuracy and
integrity of the consolidated financial statements and other financial
information included in this Annual Report. This responsibility includes
preparing the statements in accordance with generally accepted accounting
principles and necessarily includes estimates that are based on management's
best judgment.

     To help ensure the accuracy and integrity of Company financial data,
management maintains internal controls which are designed to provide reasonable
assurance that transactions are executed as authorized, that they are accurately
recorded and that assets are properly safeguarded. It is essential for all
Company employees to conduct their business affairs in keeping with the highest
ethical standards as outlined in our code of conduct policy, "Business Conduct
Guidelines". Careful selection of employees and appropriate divisions of
responsibility also help us to achieve our control objectives.

     The 1999, 1998 and 1997 financial statements have been audited by the
Company's independent accountants, Deloitte & Touche LLP. Their report is shown
on page F-3.

     The Board of Directors oversees the adequacy of the Company's control
environment. Certain members of senior management meet periodically with
representatives of Deloitte & Touche LLP, internal financial management and
internal auditors to review accounting, control, auditing and financial
reporting matters. The independent accountants and the internal auditors also
have full and free access to meet privately with any member of the Board of
Directors or of senior management.




                                       F-2
<PAGE>

                        REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors of Huntsman Polymers Corporation:

     We have audited the accompanying consolidated balance sheets of Huntsman
Polymers Corporation and its subsidiaries (the "Company"), formerly Rexene
Corporation (the "Predecessor Company"), as of December 31, 1999 and 1998, and
the related consolidated statements of operations and comprehensive income
(loss), stockholder's equity and cash flows for the years ended December 31,
1999 and 1998, for the four months ended December 31, 1997 and for the eight
months ended August 31, 1997 (Predecessor Company operations). These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

     We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe our audits provide a
reasonable basis for our opinion.

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Huntsman Polymers
Corporation as of December 31, 1999 and 1998, and the results of its operations
and its cash flows for the years ended December 31, 1999 and 1998 and for the
four months ended December 31, 1997, and the results of the Predecessor
Company's operations and its cash flows for the eight months ended August 31,
1997, in conformity with accounting principles generally accepted in the United
States of America.



/s/  DELOITTE & TOUCHE LLP

DELOITTE & TOUCHE LLP

Houston, Texas
March 17, 2000




                                       F-3
<PAGE>

                 HUNTSMAN POLYMERS CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                            DECEMBER 31, 1999      DECEMBER 31, 1998
                                                            -----------------      -----------------
<S>                                                         <C>                    <C>
                          ASSETS
Current assets:
         Cash and cash equivalents                            $              -        $             -
         Accounts and notes receivables, net                            29,171                 10,550
         Accounts and advances receivable - Affiliates                  40,810                 19,475
         Inventories                                                    73,891                 45,888
         Other current assets                                            2,296                  2,241
                                                           -------------------    -------------------
           Total current assets                                        146,168                 78,154
Properties, plant and equipment, net                                   947,757                951,023
Intangible assets, net                                                  46,112                 48,617
Other noncurrent assets                                                 36,394                 31,337
                                                           -------------------    -------------------
         Total assets                                               $1,176,431             $1,109,131
                                                           ===================    ===================
           LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
         Accounts payable                                           $   65,219              $  33,443
         Accounts payable - Affiliates                                   1,260                  1,142
         Accrued liabilities                                            15,717                 10,986
         Deferred income taxes                                             609                  1,151
         Accrued interest                                                1,723                  1,723
         Employee benefits payable                                       2,599                  5,668
                 Current portion of long term
                   debt - Affiliates                                    26,610                      -
                                                           -------------------    -------------------
           Total current liabilities                                   113,737                 54,113
Long-term debt:
                 Affiliates                                            283,485                320,130
                 Other                                                 174,882                174,882
Deferred income taxes                                                  100,684                124,158
Other noncurrent liabilities                                            35,113                 37,243
                                                           -------------------    -------------------
           Total liabilities                                           707,901                710,526
                                                           -------------------    -------------------
Commitments and contingencies, (see notes 11 and 17)
Stockholder's equity:
         Common Stock, par value $.01 per share; 1 million
                 shares authorized and 1,000 issued and
                 outstanding in 1999 and 1998                                -                      -
         Additional paid-in capital                                    528,500                423,500
         Retained earnings (deficit)                                   (59,970)               (24,895)
                                                           -------------------    -------------------
           Total stockholder's equity                                  468,530                398,605
                                                           -------------------    -------------------
         Total liabilities and stockholder's equity                 $1,176,431             $1,109,131
                                                           ===================    ===================
</TABLE>



                 See accompanying notes to financial statements


                                       F-4
<PAGE>

                 HUNTSMAN POLYMERS CORPORATION AND SUBSIDIARIES

            CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE

                                 INCOME (LOSS)

                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                               PREDECESSOR
                                                                                                 COMPANY
                                                                                               -----------
                                                                                    FOUR          EIGHT
                                                        YEAR           YEAR        MONTHS        MONTHS
                                                       ENDED          ENDED        ENDED          ENDED
                                                    DECEMBER 31,   DECEMBER 31,  DECEMBER 31,   AUGUST 31,
                                                        1999           1998          1997          1997
                                                    -------------  ------------  ------------   -----------
<S>                                                 <C>            <C>           <C>            <C>
Revenues:
  Trade sales and services                          $     122,047  $     84,497  $     66,564   $   307,603
  Affiliate sales                                         367,657       281,251        72,169             -
  Other revenue                                                 -             -           942             -
                                                    -------------  ------------  ------------   -----------
Total revenues                                            489,704       365,748       139,675       307,603
                                                          482,854       354,264       126,914       250,887
Cost of goods sold                                  -------------  ------------  ------------   -----------
Gross Profit                                                6,850        11,484        12,761        56,716
Expenses
  Selling, general and administrative                      15,470        14,720         6,645        19,567
  Research and development                                  6,580         8,049         2,654         3,509
                                                                -             -             -         9,000
  Reversal of environmental accrual                 -------------  ------------  ------------   -----------
Operating income (loss)                                   (15,200)      (11,285)        3,462        42,640
Interest expense
  Affiliate interest expense                              (23,865)       (6,405)       (7,568)            -
  Other interest expense                                  (21,150)      (21,115)       (3,353)      (15,163)
Interest income                                               198           240         1,098         1,273
Defense and Merger Costs                                        -             -             -        (8,500)
                                                            4,799         6,812          (226)     (113,447)
Other income  (expense)                             -------------  ------------  ------------   -----------
Income (loss) from continuing operations
   before income taxes                                    (55,218)      (31,753)       (6,587)        6,803
                                                           20,143        11,559         2,104        (3,648)
Income tax benefit (expense)                        -------------  ------------  ------------   -----------
Income (loss) from continuing operations                  (35,075)      (20,194)       (4,483)        3,155
Loss from discontinued operations (net of income
   tax benefits of $0, $0, ($55) and ($673)
   respectively)                                                -             -           218         2,692
                                                    -------------  ------------  ------------  ------------
Income (loss) before extraordinary loss                  (35,075)       (20,194)       (4,701)          463

Extraordinary loss (net of income tax
   benefit of $424)                                            -              -             -           694
                                                    ------------   ------------   -----------   ------------
Net loss                                            $    (35,075)  $    (20,194)  $    (4,701)  $      (231)
                                                    ============   ============   ===========   ============
Other comprehensive income, net of tax:
   foreign currency translation
   adjustment (net of income tax benefit of
   $0, $0, $323, and $433, respectively) -
   discontinued operations                                     -             -          (527)          (707)
                                                    ------------   -----------   -----------   ------------
Comprehensive income (loss)                         $    (35,075)  $   (20,194)  $    (5,228)  $       (938)
                                                    ============   ===========   ===========   ============
</TABLE>


                See accompanying notes to financial statements

                                      F-5
<PAGE>

                 HUNTSMAN POLYMERS CORPORATION AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                                          FOREIGN
                                                                                            RETAINED      CURRENCY
                                                COMMON STOCK       TREASURY    PAID-IN      EARNINGS    TRANSLATION
PREDECESSOR COMPANY:                         SHARES     AMOUNT      STOCK      CAPITAL      (DEFICIT)    ADJUSTMENT       TOTAL
                                             ------     ------      -----      -------       -------     ----------       -----
<S>                                          <C>       <C>         <C>        <C>          <C>          <C>            <C>
Balance, January 1, 1997                       18,808  $     188   $      -   $  111,553   $    55,320  $      1,990   $   169,051
 Issuance of common stock                          52          1          -          334             -             -           335
 Repurchase of common stock                       (12)        (1)  $     12          (83)            -             -           (72)
 Foreign currency translation adjustment
  (discontinued operations)                         -          -          -            -             -        (1,140)       (1,140)
 Dividends on common stock ($.08 per share)         -          -          -            -        (1,507)            -        (1,507)
 Net loss                                           -          -          -            -          (231)            -          (231)
                                             --------  ---------   --------   ----------   -----------  ------------   -----------
Balance,  August 31, 1997                      18,848        188         12      111,804        53,582           850       166,436
-----------------------------------------------------------------------------------------------------------------------------------
POST MERGER:
 Purchase accounting adjustments              (18,847)      (188)       (12)      61,696       (53,582)         (850)        7,064
 Net loss                                           -          -          -            -        (4,701)            -        (4,701)
                                             --------  ---------   --------   ----------   -----------  ------------   -----------
Balance, December 31, 1997                          1          -          -      173,500        (4,701)            -       168,799
Capital contribution from parent                    -          -          -      250,000             -             -       250,000
 Net loss                                           -          -          -            -       (20,194)            -       (20,194)
                                             --------  ---------   --------   ----------   -----------  ------------   -----------
Balance, December 31, 1998                          1          -          -      423,500       (24,895)            -       398,605
Capital contribution from parent                    -          -          -      105,000             -             -       105,000
Net loss                                            -          -          -            -       (30,075)            -       (35,075)
                                             --------  ---------   --------   ----------   -----------  ------------   -----------
Balance, December 31, 1999                          1  $       -   $      -   $  528,500   $   (59,970) $          -   $   468,530
                                             --------  ---------   --------   ----------   -----------  ------------   -----------
</TABLE>

                  See accompanying notes to financial statements



                                      F-6
<PAGE>

                   HUNTSMAN POLYMERS CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                                                        PREDECESSOR
                                                                                                                          COMPANY
                                                                                                                        ----------
                                                                                                          FOUR             EIGHT
                                                                                       YEAR             MONTHS             MONTHS
                                                                  YEAR ENDED          ENDED              ENDED              ENDED
                                                                  DECEMBER 31,      DECEMBER 31,      DECEMBER 31,       AUGUST 31,
                                                                      1999             1998               1997               1997
                                                                      ----             ----               ----               ----
<S>                                                               <C>              <C>                <C>                <C>
OPERATING ACTIVITIES:
Net loss                                                           $ (35,075)       $  (20,194)         $ (4,701)         $   (231)
Reconciliation to net cash provided by continuing operations:
 Loss from discontinued operations                                         -                 -               218             2,692
 Depreciation and amortization                                        64,650            33,723            14,570            14,808
 Deferred income taxes                                               (20,143)          (13,932)            5,003            (2,160)
 Amortization of debt issuance costs                                     869               869               264             1,130
 Extraordinary loss, net of income taxes                                   -                 -                 -               694
 Changes in operating working capital (net of merger):
   Accounts receivable                                               (39,956)           21,242            12,067             1,303
   Inventories                                                       (28,003)           11,555            (7,703)            2,554
   Other current assets                                                  (55)           17,821           (20,039)               17
   Accounts payable                                                   31,894           (24,559)           21,531            (7,884)
   Accrued interest                                                        -                 -            (3,418)            3,252
   Employee benefits payable and accrued liabilities                   1,662            (2,562)          (18,858)           13,340
   Income taxes payable                                                    -                 -            (4,254)            3,660
   Other noncurrent liabilities                                       (6,003)           (6,307)          (15,153)           (9,191)
   Other                                                              (5,827)           (8,943)            9,050           (20,795)
                                                           -----------------  ----------------  ----------------  ----------------
   Net cash provided by (used in) continuing operations              (35,987)            8,713           (11,423)            3,189
Net cash  used in  discontinued operations                                 -                 -                 -            (5,565)
                                                           -----------------  ----------------  ----------------  ----------------
   Net cash provided by (used in) operations                         (35,987)            8,713           (11,423)           (2,376)
                                                           -----------------  ----------------  ----------------  ----------------
INVESTING ACTIVITIES:
 Advances receivable - affiliates                                          -            49,029           (49,029)                -
 Acquisition of Rexene                                                     -                 -          (308,369)                -
 Capital expenditures of continuing operations                       (58,978)         (318,282)          (43,859)          (72,063)
 Capital expenditures of discontinued operations                           -                 -              (147)           (3,312)
 Proceeds from sale of discontinued operations                             -                 -            70,000                 -
 Purchase of intangibles                                                   -                 -                 -            (1,271)
                                                           -----------------  ----------------  ----------------  ----------------
  Net cash used in investing activities                              (58,978)         (269,253)         (331,404)          (76,646)
                                                           -----------------  ----------------  ----------------  ----------------
</TABLE>


                                      F-7

<PAGE>

<TABLE>
<CAPTION>
                                                                                                                        PREDECESSOR
                                                                                                                          COMPANY
                                                                                                          FOUR             EIGHT
                                                                                       YEAR             MONTHS             MONTHS
                                                                  YEAR ENDED          ENDED              ENDED              ENDED
                                                                  DECEMBER 31,      DECEMBER 31,      DECEMBER 31,       AUGUST 31,
                                                                      1999             1998               1997               1997
                                                                      ----             ----               ----               ----
<S>                                                               <C>              <C>                <C>                <C>
FINANCING ACTIVITIES:
 Issuance of common stock to parent                                        -                 -           173,500                 -
 Intercompany (repayments to) borrowings from parent                 (10,035)           10,540           269,525                 -
 Long term  borrowings                                                     -                 -                 -            83,916
 Repayment of long-term debt                                               -                 -          (100,198)                -
 Debt issuance costs and other                                             -                 -                 -            (3,182)
 Cash dividends paid                                                       -                 -                 -            (2,259)
 Repurchase of common stock                                                -                 -                 -              (166)
 Proceeds of capital contribution by parent                          105,000           250,000                 -                 -
 Proceeds of issuance of common stock, net                                 -                 -                 -               251
                                                          ------------------ ----------------- ----------------- -----------------
  Net cash provided by financing activities                           94,965           260,540           342,827            78,560
                                                          ------------------ ----------------- ----------------- -----------------
Increase (Decrease) in Cash and Cash Equivalents                           -                 -                 -              (462)
Cash and Cash Equivalents at Beginning of Period                           -                 -                 -               714
Cash and Cash Equivalents at Beginning of Period
  for Discontinued Operations                                              -                 -                 -              (252)
                                                          ------------------ ----------------- ----------------- -----------------
Cash and Cash Equivalents at End of Period                                 -                 -                 -                 -
                                                          ================== ================= ================= =================
Supplemental Cash Flow information:
  Cash paid for interest                                  $           20,549 $          20,549 $          10,274 $          16,160
  Cash paid for income taxes                                             996               469             3,222             1,064
</TABLE>












                See accompanying notes to financial statements.


                                      F-8

<PAGE>

                  HUNTSMAN POLYMERS CORPORATION AND SUBSIDIARIES
                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)   MERGER

          Effective September 1, 1997, (the "Effective Date") for financial
accounting purposes, Huntsman Polymers Corporation (the "Company"), formerly
known as Rexene Corporation ("Rexene"), was acquired (the "Merger") by
Huntsman Corporation for $16.00 per share paid to the shareholders of the
Company. The accounting treatment of the cash consideration paid by Huntsman
Corporation is shown under push-down accounting rules.

          The sources and applications of funds required to consummate the
Merger are summarized below in thousands of dollars.

<TABLE>
<S>                                              <C>
Sources of Funds:
          Loan agreement with Huntsman           $        225,067
                Group Holdings Finance
                Company ("HGHFC")
          Equity Contribution                             173,500
          Rexene Working Capital                            3,382
                                                 ----------------
                Total                            $        401,949
                                                 ================
Uses of Funds:
          Payment of the Merger
                Consideration                    $        301,614
          Liquidation of Rexene debt                      100,080
          Transaction fees and expenses(1)                    255
                                                 ----------------
                Total                            $        401,949
                                                 ================
</TABLE>

----------------------

(1) Transaction fees and expenses totaled $6.8 million, of which $255,000 was
paid on August 27, 1997. The remainder were paid using funds provided by
operations.

          The Merger has been accounted for as a purchase transaction, and
accordingly, the consolidated financial statements subsequent to the
Effective Date reflect the purchase price, including transaction costs and
liabilities assumed based on their estimated fair values as of the Effective
Date. The combined financial statements for periods prior to September 1,
1997 have been prepared on a historical cost basis. Operating results
subsequent to the Merger are comparable to the operating results prior to the
Merger except for depreciation expense, amortization of intangible assets,
pensions, and interest expense. In addition, Rexene's pre-Merger common stock
was canceled and replaced with 1,000 shares of common stock (all of which are
owned by Huntsman Polymers Holding Company, a wholly owned subsidiary of
Huntsman Corporation), rendering the presentation of per share data no longer
meaningful.

                                      F-9

<PAGE>

          The allocation of the $308 million Merger consideration (including
fees and expenses) was finalized during the three months ended September 30,
1998 and differs from the original allocation as follows (in thousands of
dollars):

<TABLE>
<CAPTION>
                                        Final Allocation           Original Allocation
                                       September 30, 1998            August 27, 1997
                                      --------------------          ----------------
<S>                                <C>                          <C>
Current assets                          $          95,770            $        95,569
CT Business                                        70,000                     70,000
Plant and equipment                               639,800                    701,697
Goodwill                                           42,406                          -
Other non-current assets                           54,809                     40,254
Liabilities assumed                              (594,396)                  (599,131)
                                        -----------------            ---------------
          Total                         $         308,389            $       308,389
                                        =================            ===============
</TABLE>

(2)       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS

          The Company manufactures products used in a wide variety of
industrial and consumer-related applications. The Company's principal
products are polyethylene, polypropylene, amorphous polyalphaolefins
("APAO"), flexible polyolefin ("FPO") and styrene.

USE OF ESTIMATES

          The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

PRINCIPLES OF CONSOLIDATION

          The consolidated financial statements of the Company and the
Predecessor Company include its wholly-owned subsidiaries. Intercompany
transactions and balances are eliminated.

DISCONTINUED OPERATIONS

          As discussed more fully in Note 16, the Company sold its CT
Business effective September 30, 1997. The results of operations for the CT
Business have been reclassified as discontinued operations for all periods
presented in the Consolidated Statements of Operations. Revenues of the CT
Business were (in millions) $16.3 and $107.2 for the four months ended
December 31, 1997 and the eight months ended August 31, 1997, respectively.

                                      F-10
<PAGE>

CASH AND CASH EQUIVALENTS

          Highly liquid investments with a maturity of three months or less
when purchased are considered to be cash equivalents.

INVENTORIES

          Inventories are stated at the lower of average cost or market.

PROPERTY, PLANT AND EQUIPMENT

          Property, plant and equipment is stated at cost. Depreciation is
provided utilizing the straight line method over the estimated useful lives
of the assets, ranging from 3 to 20 years. Periodic maintenance and repairs
applicable to major units of manufacturing facilities are accounted for on
the prepaid basis by capitalizing the costs of the turnaround and amortizing
the costs over the estimated period until the next turnaround. Normal
maintenance and repairs of all other plant and equipment are charged to
expense as incurred. Renewals, betterments and major repairs that materially
extend the useful life of the assets are capitalized, and the assets
replaced, if any, are retired. Interest costs are capitalized as part of
major construction projects. Upon disposal of assets, the cost and related
accumulated depreciation are removed from the accounts and resulting gain or
loss is included in income.

INTANGIBLE ASSETS

          Debt issuance costs are amortized over the term of the related
debt, ranging from five to ten years. Goodwill is amortized over a period of
20 years. Other intangible assets are stated at their fair market values at
the time of the Merger and are amortized using the straight-line method over
their estimated useful lives of five to fifteen years or over the life of the
related agreement and are included in "Intangible assets, net."

INCOME TAXES

          Deferred income taxes are provided for temporary differences
between financial statement income and taxable income using the asset and
liability method in accordance with Statement of Financial Accounting
Standard ("SFAS") No. 109, "Accounting for Income Taxes."

FOREIGN CURRENCY TRANSLATION

          The Company's foreign subsidiary was sold effective September 30,
1997 in conjunction with the CT Film sale transaction described in Note 16.
Prior to the sale, the operations of the Company's foreign subsidiary used
the local currency of the country of operation as the functional currency.
The financial statements of the foreign subsidiary were translated at the
current and average exchange rates, with any resulting translation
adjustments included in the foreign currency translation adjustment account
in other comprehensive income (loss).

ENVIRONMENTAL EXPENDITURES

          Environmental-related restoration and remediation costs are
recorded as liabilities and expensed when site restoration and environmental
remediation and clean-up obligations are either known or considered probable
and the

                                     F-11
<PAGE>

related costs can be reasonably estimated. Other environmental expenditures,
which are principally maintenance or preventative in nature, are recorded
when expended and are expensed or capitalized as appropriate.

FAIR VALUE OF FINANCIAL INSTRUMENTS

          The carrying amount reported in the balance sheets for cash and
cash equivalents, accounts receivable, and accounts payable approximates fair
value because of the immediate or short-term maturity of these financial
instruments. The carrying value of the related party loans, capital lease,
and bank borrowings approximates fair value as they bear interest at a
floating rate plus an applicable margin. At December 31, 1999 and 1998, the
fair value of the $175 million principal amount 11 3/4% Senior Notes was
approximately $184 million and $191 million, respectively, based on quoted
market rates.

RECLASSIFICATIONS

          Certain amounts in the consolidated financial statements for prior
periods have been reclassified to conform with the current presentation.

NEW ACCOUNTING STANDARDS

          In June 1998, the Financial Accounting Standards Board ("FASB")
issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities," which establishes accounting and reporting standards for
derivatives and for hedging activities. It requires an entity to recognize
all derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. In June 1999, the FASB
issued SFAS No. 137, "Accounting for Derivative Instruments and Hedging
Activities - Deferral of the Effective Date of FASB Statement No. 133," which
delays the effective date for implementation of SFAS No. 133 for one year
making it effective for all fiscal quarters of fiscal years beginning after
June 15, 2000. The Company is currently in the process of evaluating the
impact of SFAS No. 133 on its financial statements.

INCOME (LOSS) PER SHARE

          Income (loss) per share is not presented because it is not
considered meaningful information due to the acquisition by a single
non-public shareholder.

(3)       ACCOUNTS RECEIVABLE

Accounts receivable consist of the following (in thousands):

<TABLE>
<CAPTION>
                                                                   DECEMBER 31, 1999              DECEMBER 31, 1998
                                                                  -------------------           -------------------
<S>                                                               <C>                           <C>
Trade                                                             $            20,266           $             8,927
Other                                                                          11,307                         3,724
                                                                  -------------------           -------------------

                                                                               31,573                        12,651
Less allowances for bad debts and returns                                      (2,402)                       (2,101)
                                                                  -------------------           -------------------

                                                                               29,171                        10,550
Affiliate-receivables and advances                                             40,810                        19,475
                                                                  -------------------           -------------------
Total accounts receivable                                         $            69,981           $            30,025
                                                                  ===================           ===================
</TABLE>


                                      F-12
<PAGE>

          Net additions to (deductions from) the allowance accounts were (in
thousands): $301, $417, $(742), and $180 for the years ended December 31,
1999 and 1998, the four months ended December 31, 1997, and the eight months
ended August 31, 1997, respectively.

(4)        INVENTORIES

Inventories consist of the following (in thousands):

<TABLE>
<CAPTION>
                                   DECEMBER 31, 1999               DECEMBER 31, 1998
                                   -----------------               -----------------
<S>                                <C>                             <C>
Raw Materials                      $          12,022               $           7,661
Work in progress                              10,548                           3,614
Finished goods                                51,321                          34,613
                                   -----------------               -----------------
Total inventories                  $          73,891               $          45,888
                                   =================               =================
</TABLE>

(5)       PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consists of the following (in thousands):

<TABLE>
<CAPTION>
                                           DECEMBER 31, 1999            DECEMBER 31, 1998
                                        ----------------------       -----------------------
<S>                                     <C>                          <C>
Land                                    $                3,702       $                 3,702
Buildings                                              171,537                       167,907
Plant and equipment                                    843,928                       488,526
Construction in progress                                35,889                       335,943
                                         ---------------------       -----------------------
                                                     1,055,056                       996,078
Less accumulated depreciation                         (107,299)                      (45,055)
                                         ---------------------       -----------------------

Total property, plant and equipment      $             947,757       $               951,023
                                         =====================       =======================
</TABLE>

          Depreciation expense for the years ended December 31, 1999 and
1998, the four months ended December 31, 1997, and the eight months ended
August 31, 1997 was (in millions) $62.2, $33.0, $14.3, and $10.0,
respectively. During the years ended December 31, 1999 and 1998, the four
months ended December 31, 1997, and eight months ended August 31, 1997, $2.8
million, $26.1 million, $4.2 million, and $5.3 million, respectively, of
interest was capitalized in connection with construction projects,
substantially all of which related to continuing operations.

                                      F-13

<PAGE>

(6)       INTANGIBLE ASSETS

Intangible assets, net of accumulated amortization are (in thousands):

<TABLE>
<CAPTION>
                                                                 DECEMBER 31, 1999      DECEMBER 31, 1998
                                                                -------------------     -----------------
<S>                                                             <C>                     <C>
Debt issuance costs                                             $             7,173     $           7,173
Less accumulated amortization                                                (3,558)               (2,689)
                                                                -------------------     -----------------
                                                                              3,615                 4,484
                                                                -------------------     -----------------
Goodwill                                                                     42,406                42,406
Less accumulated amortization                                                (4,924)               (2,814)
                                                                -------------------     -----------------
                                                                             37,482                39,592
                                                                -------------------     -----------------
Other intangible assets                                                       5,396                 4,626
Less accumulated amortization                                                  (381)                  (85)
                                                                -------------------     -----------------
                                                                              5,015                 4,541
                                                                -------------------     -----------------
Total intangible assets                                         $            46,112     $          48,617
                                                                ===================     =================
</TABLE>

(7)       OTHER NONCURRENT ASSETS

Other noncurrent assets consist of the following (in thousands):

<TABLE>
<CAPTION>
                                                                 DECEMBER 31, 1999                DECEMBER 31, 1998
                                                                 ------------------               -----------------
<S>                                                              <C>                              <C>
Spare parts inventory-at average cost                            $          24,685                $          19,374
Deferred turnaround expenses                                                 6,735                            5,865
Catalysts                                                                    2,448                            2,648
Long-term note receivable                                                      658                              918
Other                                                                        1,868                            2,532
                                                                 ------------------               -----------------
Total other noncurrent assets                                    $          36,394                $          31,337
                                                                 ==================               =================
</TABLE>

(8)       ACCRUED LIABILITIES

Accrued liabilities consist of the following (in thousands):

<TABLE>
<CAPTION>
                                                                   December 31, 1999              December 31, 1998
                                                                 ------------------               -----------------
<S>                                                              <C>                              <C>
Accrued taxes, other than income                                 $           10,885               $           4,845
Current portion of advance payment from customer
         (see note 10)                                                        3,600                           3,600
Other accrued expenses                                                        1,232                           2,541
                                                                 ------------------               -----------------
Total accrued liabilities                                        $           15,717               $          10,986
                                                                 ==================               =================
</TABLE>

                                      F-14
<PAGE>

(9)       LONG-TERM DEBT

Long-term debt consists of the following (in thousands):

<TABLE>
<CAPTION>
                                                               December 31, 1999               December 31, 1998
                                                          ----------------------------    ---------------------------
<S>                                                       <C>                             <C>
Affiliates:
        Intercompany borrowings                                    $           250,360             $          264,495
        Capital lease - affiliate                                               59,735                         55,635
                                                          ----------------------------    ---------------------------
                 Total affiliate debt                                          310,095                        320,130
        Less: Current portion of capital lease - affiliate                      26,610                              -
                                                          ----------------------------    ---------------------------
                 Total long-term debt - affiliates                             283,485                        320,130
Other - 11 3/4%  Senior Notes due 2004                                         174,882                        174,882
                                                          ----------------------------    ---------------------------
                 Total long-term portion                            $          458,367            $           495,012
                                                          ============================    ===========================
</TABLE>

INTERCOMPANY BORROWINGS

          Intercompany loans are made pursuant to the Huntsman Polymers
Intercompany Loan Agreement dated August 27, 1997 between HGHFC and the
Company. The loans accrue interest at prime rate (8.5% at December 31, 1999)
plus a margin of 0.75% and are payable upon demand. Management of HGHFC has
represented that HGHFC does not intend to require the Company to repay the
debt before January 1, 2002, accordingly, such amounts have been classified
as long-term. To the extent permitted by the indenture governing the
Company's 11 3/4% Senior Notes, the intercompany loans are secured by all of
the assets of the Company. The Senior Notes' mandatory redemption date is
December 1, 2004.

CAPITAL LEASE

          On March 8, 1997, the Company entered into a Capital Lease
Agreement with the Estherwood Corporation to finance the construction of the
Company's FPO facility in Odessa, Texas. On August 27, 1997, the agreement
was amended and Estherwood Corporation assigned all of its rights under the
agreement to HGHFC. The principal economic terms of the lease agreement were
not altered. The Company is obligated to make quarterly lease payments,
including interest, beginning December 31, 2000 through September 30, 2002,
the maturity date of the Capital Lease Agreement. At the end of the lease
period, the Company has the option to acquire the facility for a nominal
amount. Interest accrues on the unpaid lease amount ($50 million at December
31, 1999) at the prime rate plus an applicable margin (0.5% to 2.0%) or at a
Eurocurrency rate (as defined in the Capital Lease Agreement) plus an
applicable margin (1.5% to 3.0%). The lease is secured by all of the fixed
assets associated with the FPO facility.

          The Company's capital lease maturities as of December 31, 1999 are
as follows (in thousands):

<TABLE>
<S>                                         <C>
For the years ending December 31,

                  2000                      $    26,610
                  2001                           18,125
                  2002                           15,000
                                            -----------
                                            $    59,735
                                            ===========
</TABLE>


                                     F-15
<PAGE>

SENIOR NOTES

           The 11 3/4% Senior Notes due 2004 raNK PARI PAssu in right of
payment with all senior unsecured borrowings of the Company, including a
portion of the borrowings under the intercompany loan agreement. The 11 3/4%
Senior Notes rank senior in right of payment to any subordinated indebtedness
of the Company. Interest is payable on the 11 3/4% Senior Notes semiannually
on June 1 and December 1 at an annual interest rate of 11 3/4%. The Company
is not required to make mandatory redemption or sinking fund payments with
respect to the 11 3/4% Senior Notes.

           The 11 3/4% Senior Notes were not redeemable, in whole or in part,
prior to December 1, 1999. On or after December 1, 1999, the 11 3/4% Senior
Notes are redeemable, at the Company's option, in whole or in part, at the
redemption prices (expressed as percentages of principal amount) set forth
below plus accrued and unpaid interest, if any, to date of redemption.

<TABLE>
<CAPTION>
YEAR                                                                              PERCENTAGE
----                                                                              ----------
<S>                                                                               <C>
(Beginning December 1)
1999................................................................................105.875%
2000................................................................................103.917%
2001................................................................................101.958%
2002................................................................................100.000%
</TABLE>

           The indenture governing the 11 3/4% Senior Notes contains certain
covenants that, among other things, limit the ability of the Company to incur
additional indebtedness and to repurchase subordinated indebtedness, incur or
suffer to exist certain liens, pay dividends, make certain investments, sell
significant fixed assets and engage in mergers and consolidations. There are
also certain financial ratio covenants based on operational performance. As
of December 31, 1999, the Company was in compliance with all debt covenants.

(10)            OTHER NONCURRENT LIABILITIES


Other noncurrent liabilities consist of the following (in thousands):

<TABLE>
<CAPTION>
                                                                           DECEMBER 31,    DECEMBER 31,
                                                                              1999             1998
                                                                          ------------    -------------
<S>                                                                       <C>             <C>
Accrued environmental remediation costs (see note 17)                     $      6,586    $       7,626
Advance payment from customer                                                    5,200            8,800
Accumulated postretirement benefit obligation (see note 15)                     12,968           12,447
Pension liabilities (see note 15)                                                2,542            2,171
                                                                          ------------    -------------
Other                                                                            7,817            6,199
                                                                          ------------    -------------
                                                                          $     35,113    $      37,243
                                                                          ------------    -------------
</TABLE>

           In July 1995, the Predecessor Company received a $25 million
advance payment from a customer as a result of a multi-year agreement to
supply a portion of annual styrene production. The unamortized portion of
this advance payment, net of current portion, is included as a noncurrent
liability above. This advance payment is secured by a lien on the styrene
plant in Odessa, Texas.

                                       F-16

<PAGE>

(11) COMMITMENTS

           The future payments of rentals on buildings, computers, office
equipment and transportation equipment under the terms of non-cancelable
operating lease agreements as of December 31, 1999 are as follows (in
thousands):

<TABLE>
<S>                                                         <C>
For the years ending December 31,
                2000                                        $                     10,031
                2001                                                               8,033
                2002                                                               6,433
                2003                                                               4,961
                2004                                                               3,630
                2005 and thereafter                                               20,606
                                                            ----------------------------

Total minimum lease payments                                $                     53,694
                                                            ============================
</TABLE>

           Rental expense (in millions) under operating leases for the years
ended December 31, 1999, 1998 and 1997 was approximately $10.9, $5.8, and
$7.9, respectively, substantially all of which relates to continuing
operations.

           In 2000, the Company expects to spend approximately $15 - $20
million for capital expenditures.

(12) INCOME TAX

           Income tax (expense) benefit on the Company's income from
continuing operations before extraordinary loss consists of the following (in
thousands):

<TABLE>
<CAPTION>
                                                                                                         Predecessor
                                                                                                           Company
                                                                                                  --------------------------
                                                                                  Four Months
                                 Year Ended               Year Ended                 Ended                Eight Months
                                December 31,             December 31,            December 31,                 Ended
                                    1999                     1998                    1997                August 31, 1997
                            ---------------------    ---------------------    -------------------    -----------------------
<S>                         <C>                      <C>                      <C>                    <C>
Current
  Federal.................. $                   -    $                   -    $             3,518    $                 7,892
  State....................                     -                        -                    544                      1,088
Deferred...................                20,143                   11,559                (1 ,958)                   (12,628)
                            ---------------------    ---------------------    -------------------    -----------------------
                            $              20,143    $              11,559    $             2,104    $                (3,648)
                            =====================    =====================    ===================    =======================
</TABLE>

                                     F-17
<PAGE>

           In addition, for the eight months ended August 31, 1997, the
Company recorded an income tax benefit of $424,000 as a result of the
extraordinary loss from the write-off of certain deferred issuance costs as a
result of the May 8, 1997 amendment to the Credit Agreement.

           The statutory federal income tax rate was 35% for the years ended
December 31,1999, 1998 and 1997. The effective income tax rate differs from
the amount computed by applying the statutory federal income tax rate to the
Company's income (loss) from continuing operations before income taxes and
extraordinary loss. The reasons for these differences are as follows (in
thousands):

<TABLE>
<CAPTION>
                                                                                                                  Predecessor
                                                                                                                    Company
                                                                                                               -----------------
                                                                                              Four Months        Eight Months
                                                   Year Ended            Year Ended              Ended               Ended
                                                  December 31,          December 31,         December 31,         August 31,
                                                      1999                  1998                 1997                1997
                                               -------------------  --------------------  -------------------  -----------------
<S>                                            <C>                  <C>                   <C>                  <C>
Income tax (expense) benefit computed at
      statutory federal tax rate............     $          19,326     $          11,114    $          2,305   $          (2,381)
State income taxes..........................                 1,657                   953                 206               1,088
Non-deductible amortization and expenses....                  (850)                 (324)                (61)                (92)
Non-deductible merger and defense costs.....                     -                     -                   -              (2,097)
Effect of Foreign Sales Corporation.........                     -                     -                 191                 230
Other, net..................................                    10                  (184)               (537)               (396)
                                              --------------------  --------------------  ------------------  ------------------
Income tax (expense) benefit................     $          20,143     $          11,559         $     2,104   $          (3,648)
                                              ====================  ====================  ==================  ==================
</TABLE>

The net deferred income tax liability consists of the following (in
thousands):

<TABLE>
<CAPTION>
                                                            December 31, 1999            December 31, 1998
                                                           --------------------        --------------------
<S>                                                        <C>                         <C>
Property, plant and equipment...........................   $            189,794        $            143,626
Intangible assets.......................................                  1,624                       1,996
Accounts receivable.....................................                      -                       1,705
Other noncurrent assets.................................                    768                       2,308
Other current assets and liabilities....................                  1,780                       1,203
                                                           --------------------        --------------------
           Gross deferred tax liabilities...............                193,966                     150,838
                                                           --------------------        --------------------
Accounts receivable.....................................                   (816)                          -
Inventories.............................................                   (563)                     (1,796)
Tax losses and credits carried forward..................                (73,239)                    (14,547)
Other noncurrent assets.................................                (18,055)                          -
Other noncurrent liabilities............................                      -                      (9,186)
                                                           --------------------        --------------------
           Gross deferred tax assets....................                (92,673)                    (25,529)
                                                           --------------------        --------------------
Total...................................................   $            101,293        $            125,309
                                                           ====================        ====================
</TABLE>

                                      F-18
<PAGE>

The net deferred income tax liability is presented in the accompanying
consolidated balance sheets as follows:

<TABLE>
<CAPTION>
                                                             1999                          1998
                                                    ----------------------          -----------------
<S>                                                 <C>                             <C>
Net current liability                               $                  609          $           1,151
Net long-term liability                                            100,684                    124,158
                                                    ----------------------          -----------------
Total                                               $              101,293          $         125,309
                                                    ======================          =================
</TABLE>

(13)       OTHER EXPENSE

           In 1997 the Company and Phillips Petroleum Company (Phillips)
settled for $13.0 million a patent infringement lawsuit involving Phillips'
patent covering the manufacture of crystalline polypropylene. Under the
agreement, the Company paid a lump sum of $10 million to Phillips on
September 27, 1997, and will pay up to $300,000 each quarter until the patent
expires on March 15, 2000. The Company and Phillips also entered into a new
crystalline polypropylene license agreement which allows the Company to
utilize the patent until it expires in return for a royalty on sales.

(14)       OTHER INFORMATION

           Export sales from operations (in millions) were $31.2, $16.8,
$9.8, and $19.5 for the years ended December 31, 1999 and 1998, the four
months ended December 31, 1997, and the eight months ended August 31, 1997,
respectively.

           Maintenance and repair expenses (in millions) were $33.9, $24.0,
$8.1,and $17.5, for the years ended December 31, 1999 and 1998, the four
months ended December 31, 1997, and the eight months ended August 31, 1997,
respectively.

(15)       EMPLOYEE BENEFITS

SAVINGS PLANS

           Until December 31, 1997, the Company sponsored an employee savings
plan (the "Savings Plan") that provided participating employees with
additional income upon retirement. Employees could contribute annually
between 1% and 10% of their base salary up to the IRS pre-tax contribution
limit to the Savings Plan. The Company matched a minimum of 25% of the
employee's aggregate contributions up to 6% of the employee's base salary.
Employee contributions were fully vested. Employer contributions were fully
vested upon retirement or after five years of service. For 1997, the Company
contributed approximately $575,000 to the Savings Plan, substantially all of
which pertains to continuing operations.

           The Savings Plan merged with the Huntsman Salary Deferral Plan
(the "Huntsman Savings Plan") as of January 1, 1998. Under the Huntsman
Savings Plan, employees may contribute annually between 1% and 15% of pay up
to the IRS pre-tax contribution limit ($10,000 for 1999) to the Savings Plan.
The Company matches 50% of the employee's contributions up to 4% of the
employee's pay. Employee contributions and Company matching

                                       F-19

<PAGE>

contributions are fully vested. For 1999 and 1998, the Company match to the
Huntsman Savings Plan equaled approximately $796,000 and $770,000,
respectively.

MONEY PURCHASE PLANS

            Since 1998, Huntsman Corporation has sponsored a qualified money
purchase plan (the "Money Purchase Plan") that provides participating
employees of the Company with income upon retirement. Employees participate
in the Money Purchase Plan after 24 months of service. No employee
contributions are required or permitted. The Company contributions for
participants vary based on years of service as follows:

<TABLE>
<CAPTION>
YEARS OF SERVICE                 PERCENT OF PAY CONTRIBUTIONS
<S>                              <C>
Less than 2                      0.0%
2 to 6                           0.5%
7 to 9                           3.0%
10 or more                       8.0%
</TABLE>

           Company contributions to the Money Purchase Plan are fully vested.
For 1999 and 1998, the Company contributions to the Money Purchase Plan
equaled approximately $124,000 and $37,000, respectively.

PENSION AND RETIREMENT PLANS

           Until December 31, 1997, the Company sponsored a noncontributory
defined benefit plan (the "Pension Plan") covering substantially all
full-time employees. Benefits provided under the Pension Plan were primarily
based on years of service and the employees final average earnings. The
Company's funding policy was to contribute annually an amount based upon
actuarial and economic assumptions designed to achieve adequate funding of
projected benefit obligations.

           The Company sponsored a Supplemental Executive Retirement Plan
(the "SERP") to provide supplemental retirement and survivor benefits for
certain key employees who complete a specified period of service and
otherwise become eligible under the SERP. During 1997, the Company purchased
annuities to fully cover the benefits and liabilities accrued under the SERP.

           The Company continues to provide retirement and death benefits to
certain employees through an Executive Security Plan (the "Security Plan").
The Company does not fund the Security Plan. No new employees have been added
to this plan, and it is not expected that any additional employees will
participate in the Security Plan. Benefits accrued under this plan were $3.4
million and $3.3 million at December 31, 1999 and 1998, respectively. The
estimated expense for the years ended December 31, 1999 and 1998 was $0.1
million and $0.3 million, respectively.

                                       F-20

<PAGE>

           The accompanying table includes amounts for the SERP, Security
Plan and the Pension Plans for the year ended December 31, 1997. The net
pension expense for the Pension Plans are reflective of historical data
adjusted for the discontinued operations of the CT Business. Net pension
expense consists of the following (in Thousands:):

<TABLE>
<CAPTION>

                                                                Four Months Ended   Eight Months Ended
                                                                December 31, 1997    August 31, 1997
                                                                -----------------    ---------------
<S>                                                             <C>                 <C>
Service Cost                                                    $             525    $           976
Interest Cost                                                                 663              1,254
Actual return on plan assets                                                  127             (2,967)
Net amortization and deferral                                                (781)             1,980
                                                                -----------------    ---------------
Net pension expense                                             $             534    $         1,243
                                                                =================    ===============
</TABLE>

           Effective January 1, 1998, the Pension Plan merged with the
Huntsman Corporation Pension Plan (the "Plan"), a trusteed, non-contributory,
qualified defined benefit pension plan. The Plan covers substantially all
full-time employees of the following member affiliates: Huntsman Corporation,
Huntsman Chemical Corporation, Huntsman Petrochemical Corporation, Huntsman
International Trading Corporation, Huntsman Purchasing, Ltd. and Huntsman
Polymers Corporation. Huntsman Corporation, as the plan sponsor, reflects the
costs of the Plan in accordance with SFAS 87 and directly allocates such
costs to each of the participating employers.

           Plan assets are held in a master trust. Plan assets are stated at
fair value and are comprised primarily of corporate debt, equity securities,
and government securities held either directly or in commingled and mutual
funds. Huntsman Corporation's funding policy is to contribute annually an
amount based upon actuarial and economic assumptions designed to achieve
adequate funding of benefit obligations.

           Benefits provided under the Plan are based on years of service and
final average earnings offset by estimated Social Security benefits.

           The net pension liability included in the consolidated balance
sheet of $2.5 million and $2.2 million at December 31, 1999 and 1998,
respectively, represents the Company's allocated share of the Plan's overall
pension liability. Customary disclosures including a reconciliation of the
projected benefits obligation to the balance sheet liability and the
disclosure of component of net pension expense are not possible or meaningful
under these circumstances. The Company's net pension cost was $2.1 million
for both the years ended December 31, 1999 and 1998. The pension costs and
pension liability assumed a discount rate of 7.75% and 6.75% and a rate of
salary progression of 4.5% and 4.0% in 1999 and 1998, respectively. The
weighted average expected rate of return on assets for 1999 and 1998 was 9.0%.

POSTRETIREMENT BENEFITS OTHER THAN PENSIONS

           The Company sponsors postretirement benefits other than the
Pension Plans, such as health care and medical benefits. The Company
reimburses retirees for these benefits but does not provide any additional
funding for the postretirement benefits.

                                      F-21

<PAGE>

           The net postretirement benefit expense is reflective of historical
data adjusted for the discontinued operations of CT Film. Net postretirement
benefit expense consists of the following (in thousands):

<TABLE>
<CAPTION>
                                                                                                    Predecessor
                                                                                                      Company
                                                                               Four Months        ----------------
                                            Year Ended        Year Ended          Ended             Eight Months
                                           December 31,       December 31,     December 31,            Ended
                                               1999              1998              1997           August 31, 1997
                                               ----              ----              ----           ---------------
<S>                                        <C>               <C>               <C>                <C>
Service Cost                               $        383      $        370      $         80       $           295
Interest Cost                                       655               650               294                   636
Net amortization and
  deferral                                           78                48                 -                  (167)
                                           ------------      ------------      ------------       ---------------
Net postretirement benefit
expense                                    $     1 ,116      $     1 ,068      $        374       $           764
                                           ------------      ------------      ------------       ---------------
</TABLE>

           The following table sets forth the funded status of the
postretirement benefits as of December 31, 1999 and 1998 (in thousands):

<TABLE>
<CAPTION>
                                                                                    1999             1998
                                                                                    ----             ----
<S>                                                                            <C>               <C>
CHANGE IN ACCUMULATED POSTRETIREMENT BENEFIT OBLIGATION
Net benefit obligation at January 1                                            $      8,621      $     11,922
Service cost                                                                            383               370
Interest cost                                                                           655               650
Actuarial (gain)/loss                                                                 1,688            (3,778)
Benefits Payments (net of employee contributions)                                      (595)             (543)
                                                                               ------------      ------------
Net benefit obligation at December 31                                          $     10,752      $      8,621
                                                                               ============      ============
Plan Assets                                                                               -                 -
                                                                               ------------      ------------

FUNDED STATUS
Funded status at December 31                                                         10,752             8,621
Unrecognized net actuarial gain                                                       2,216             3,826
                                                                               ------------      ------------
Balance sheet liability                                                        $     12,968      $     12,447
                                                                               ------------      ------------
</TABLE>

           In 1999 and 1998, in determining the value of postretirement
benefit obligations, a discount rate of 7.75% and 6.75%, respectively, was
used; the health care trend rate used to measure the expected increase in
cost of benefits was assumed to be 10.0% in 1999, descending to 5.5% in 2004
and thereafter. A one percentage-point increase in the assumed health care
cost trend rate for each year would increase the net benefit obligation as of
December 31, 1999 by approximately $1.2 million and would increase the
service and interest cost components of the net postretirement benefit

                                     F-22

<PAGE>

cost for the year ended December 31, 1999 by approximately $143,000. A one
percentage-point decrease in the assumed health care cost trend rate for each
year would decrease the net benefit obligation as of December 31, 1999 by
approximately $1.0 million and would decrease the service and interest cost
components of the net postretirement benefit cost for the year ended December
31, 1999 by approximately $120,000.

(16)        RELATED PARTY TRANSACTIONS

           On September 30, 1997, the Company completed the sale of
substantially all operating assets of its CT Film division. Subsequent to the
September 30th effective date, all transactions between the Company and
Huntsman Packaging Corporation, the new owner of the CT Film division and an
affiliate of HC, are considered related party transactions. In connection
with the sale, the Company received $70 million in cash and the buyer assumed
approximately $8 million in current liabilities. Subsequent to the sale and
through December 31, 1997, the Company continued to pay selected payroll,
severance and sales and administrative expenses for the CT Film Business and
has recorded the related expenses as receivables from Huntsman Packaging.

           Transactions between the Company and other related parties are
summarized as follows (in thousands):

<TABLE>
<CAPTION>
                                                        Year Ended                   Year Ended
                                                     December 31, 1999            December 31, 1998
                                                     -----------------            -----------------
<S>                                                  <C>                          <C>
Sales to:
          Huntsman Petrochemical Corporation            $   12,687                  $        8,697
          Huntsman Chemical Corporation and subsidiaries       885                           1,057
          Huntsman Specialty Chemicals Corporation           1,931                           4,629
          Huntsman Corporation                             347,103                         266,868
          Huntsman ICI Chemicals LLC                         5,051                              -
Trade accounts receivable from:
          Huntsman Corporation                              37,427                          18,432
          Huntsman Petrochemical Corporation                 2,362                             316
          Huntsman ICI Chemicals LLC                            70                              -
Miscellaneous receivables from:
          Employee advances                                     11                             727
          Huntsman Polypropylene Corporation                   394                              -
          Huntsman Chemical Corporation and subsidiaries         5                              -
          Huntsman Corporation                                 541                              -
Product purchases from:
          Huntsman Petrochemical Corporation                 1,210                           5,240

Interest on intercompany borrowings and capital lease:
          Huntsman Group Holdings Finance Company           26,436                          32,157
Accounts payable to:
          Huntsman Petrochemical Corporation                   308                             669
Miscellaneous accounts payable to:
          Huntsman Chemical Corporation and subsidiaries        95                              -
          Huntsman Chemical Company Limited                     -                               18
          Huntsman Petrochemical Corporation                   625                             120


                                      F-23

<PAGE>

          Huntsman Packaging Corporation                       153                             153
          Huntsman Corporation                                   5                             182
          Huntsman Corporation Belgium B.V.B.A.                 74                              -
Long-term debt payable to:
          Huntsman Group Holdings Finance Company          250,360                         264,495
Long-term capital lease payable to:
          Huntsman Group Holdings Finance Company
               (including accrued interest)                 59,735                          55,635
Capital contribution from parent                           105,000                         250,000
</TABLE>

(17)    CONTINGENCIES

ENVIRONMENTAL REGULATION

        The Company, and the industry in which it competes, is subject to
extensive environmental laws and regulations concerning, for example,
emissions to the air, discharges to surface and subsurface waters and the
generation, handling, storage, transportation, treatment and disposal of
waste and other materials. The Company believes that, in light of the its
historical expenditures and expected future results of operations, it will
have adequate resources to conduct its operations in compliance with
currently applicable environmental and health and safety laws and
regulations. However, in order to comply with changing facility permitting
and regulatory requirements, the Company may be required to make additional
significant site or operational modifications that are not currently
contemplated. Further, the Company has incurred and may in the future incur
liability to investigate and clean up waste or contamination at its current
or former facilities, or which it may have disposed of at facilities operated
by third parties.

               On the basis of reasonable investigation and analysis,
management believes that the approximately $6.6 million accrued in the
December 31, 1999 balance sheet is adequate for the total potential
environmental liability of the Company with respect to contaminated sites.
Extensive environmental investigation of the groundwater, soils and solid
waste management units has been conducted at the Odessa Facility. Risk
assessments have been completed for a number of these facilities and
corrective measures have been defined and conducted. As of December 31, 1999,
the TNRCC has approved closure for 30 of the plant's waste management
facilities.

            The Company continually reviews its estimates of potential
environmental liabilities. However, no assurance can be given that all
potential liabilities arising out of the Company's present or past operations
have been identified or fully assessed or that the amounts that might be
required to remediate such conditions will not be significant to the Company.
The Company's operating expenditures for environmental remediation,
compliance and waste disposal were approximately $7.9 million, $8.5 million
and $7.1 million in 1999, 1998, and 1997, respectively, substantially all of
which relates to continuing operations.

TNRCC FLARE INVESTIGATION

                By letter dated January 28, 1999, the TNRCC notified the
Company of allegations that the Company's olefins plant may have violated its
air permit by emitting visible smoke from its process/emergency flare in late
December 1998 or early January 1999. During that period, the olefins plant
was in the midst of start up after extensive construction. As required by
Texas law, the Company had given prior notice to the TNRCC of the startup and
that excess emissions might result. The TNRCC investigated this matter after
receiving numerous complaints from residents of a subdivision near the Odessa
facility. A draft Agreed Order with a proposed $15,000 penalty was sent to
the Company. Following discussions with the Company, the TNRCC re-drafted the
Agreed Order with a proposed $7,500

                                     F-24

<PAGE>

penalty. The Company agreed to an Order stipulating that $1,500 of the $7,500
be deferred, a $3,000 fine (which has been paid) and $3,000 offset with a
supplemental environmental project for a neighborhood monitoring program near
the facility. When the Agreed Order was presented to the Commission, Odessa
residents attending the hearing opposed its entry. The Commission remanded
the matter back to the Commission staff for further consideration. The
Company will meet with the TNRCC staff within the next month to determine
whether a settlement can be reached.

                  As a result of the start-up flaring during late December
1998 and January 1999, complaining citizens have hired counsel to consider
bringing legal action to recover damages alleged to have been caused by that
flaring. One such action has been filed, and two other actions have been
threatened. Company lawyers believe that the Company has strong defenses to
these suits, but because the number of plaintiffs could be as high as 5,000
to 6,000, substantial damages might be sought.

               The Company is also a party to various lawsuits arising in the
ordinary course of business and does not believe that the outcome of any of
these lawsuits will have a material adverse effect on the Company's financial
position, results of operations or cash flows.

(18)     QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

          Summarized quarterly financial information for the years ended
December 31, 1999 and 1998 is presented below. Amounts are presented in
thousands:

<TABLE>
<CAPTION>
                                                      For quarter ended:
              ---------------------------------------------------------------------------------------------------
              December 31,  September 30,   June 30,   March 31,  December 31,  September 30, June 30,  March 31,
                  1999          1999          1999       1999        1998           1998         1998      1998
              ---------------------------------------------------------------------------------------------------
<S>           <C>           <C>            <C>         <C>        <C>           <C>           <C>       <C>
Net Sales     $    155,217  $     128,687  $  112,094  $  93,706  $     85,529  $     88,483  $ 91,376  $ 100,360
Gross Profit         6,584          3,241       2,701     (5,676)       (3,713)        3,745     4,854      6,598
Net loss            (9,563)        (5,888)     (8,057)   (11,567)      (11,836)       (3,233)     (977)    (4,148)
</TABLE>









                                      F-25