<Page>
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                       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, 2001
                                       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 its charter)
<Table>
<S>                                             <C>
          Delaware                                    75-2104131
--------------------------------                ----------------------
(State or other jurisdiction of                   (I.R.S. Employer
incorporation or organization)                    Identification No.)
</Table>

                                500 Huntsman Way
                           Salt Lake City, Utah 84108
                                 (801) 584-5700
          (Address of principal executive offices and telephone number)

Securities registered pursuant to Section 12(b) of the Act:

<Table>
<S>                                                     <C>
                                                              Name of Each Exchange on Which
         Title of Each Class                                   The Securities are Registered
------------------------------------                    -------------------------------------------
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 31, 2002, 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.

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

<Table>
<S>                                                        <C>
                                                                  Number of Shares Outstanding
         Title of Each Class                                            at March 31, 2002
------------------------------------                       -------------------------------------------
Common Stock, $0.01 par value                                                 1,000
</Table>

===============================================================================
<Page>

                          HUNTSMAN POLYMERS CORPORATION
                          2001 FORM 10-K ANNUAL REPORT


                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                                                             PAGE

<S>                                                                                                          <C>
PART I...........................................................................................................1

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

         ITEM 2.           PROPERTIES...........................................................................10

         ITEM 3.           LEGAL PROCEEDINGS....................................................................10

         ITEM 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS..................................11

PART II.........................................................................................................11

         ITEM 5.           MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS................11

         ITEM 6.           SELECTED FINANCIAL DATA..............................................................11

         ITEM 7.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                           OPERATIONS...........................................................................12

         ITEM 7A.          QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS..........................25

         ITEM 8.           FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA..........................................26

         ITEM 9.           CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
                           DISCLOSURE...........................................................................26

PART III........................................................................................................26

         ITEM 10.          DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT...................................26

         ITEM 11.          EXECUTIVE COMPENSATION...............................................................28

         ITEM 12.          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.......................32

         ITEM 13.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.......................................32

         ITEM 14.          EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K......................34
</Table>


<Page>

                          HUNTSMAN POLYMERS CORPORATION
                         2001 ANNUAL REPORT ON FORM 10-K

     Some of the statements contained in this report are forward-looking in
nature. In some cases, you can identify forward-looking statements by
terminology such as "believes," "expects," "may," "will," "should" or
"anticipates" or the negative of such terms or other comparable terminology, or
by discussions of strategy. You are cautioned that our business and operations
are subject to a variety of risks and uncertainties, and, consequently, our
actual results may materially differ from those projected by any forward-looking
statements. Some of the risks and uncertainties are discussed below in "Item
7--Management's Discussion and Analysis of Financial Condition and Results of
Operations--Cautionary Statement for Forward Looking Information" and elsewhere
in this report. We make no commitment to revise or update any forward-looking
statements in order to reflect events or circumstances after the date any such
statement is made.

     Market data used throughout this report was obtained from internal company
surveys and industry surveys and publications. These industry surveys and
publications generally state that the information contained therein has been
obtained from sources believed to be reliable. Results of internal company
surveys contained in this report, while believed to be reliable, have not been
verified by any independent sources. References in this report to our market
position and to industry trends are based on information supplied by an industry
consulting and research firm. We have not independently verified such data.

                                    PART I

ITEM 1.  BUSINESS

GENERAL

     We manufacture a wide variety of chemical products, ranging from
value-added specialty products, such as customized specialty polymers, to base
chemicals, such as ethylene and propylene. These products are sold for use in a
wide variety of industrial and consumer related applications. Our principal
products are polyethylene (including low density polyethylene ("LDPE") and
linear low density polyethylene ("LLDPE")), polypropylene, amorphous
polyalphaolefin ("APAO"), and, until April 23, 2001, styrene. In addition, we
manufacture, primarily for our own consumption, ethylene and propylene, the two
basic chemical building blocks of our principal products. Our manufacturing
facility is located in Odessa, Texas (the "Odessa Facility") which is near four
pipelines from which we obtain most of our feedstocks and raw material supplies.

     Our Company is the result of the combination of three businesses operated
by predecessor entities. In 1958, a subsidiary of The El Paso Company ("El
Paso") built 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. By 1983,
El Paso acquired the full ownership of these businesses. Subsequently 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"), and Products subsequently changed its name to Rexene
Corporation.

     On August 27, 1997, Huntsman Centennial Corporation ("Centennial"), a
subsidiary of Huntsman Corporation, was merged with and into Rexene Corporation,
and Rexene Corporation changed its name to Huntsman Polymers Corporation (the
"Merger"). As a result of the Merger, Huntsman Corporation indirectly owns all
of our common stock, and we are an indirect subsidiary of Huntsman Corporation.


                                       1
<Page>

     On September 30, 1997, we completed the sale of our assets comprising our
CT Film Division (the "CT Business") to Huntsman Packaging Corporation, which,
at that time, was an affiliate of the Company.

     For convenience in this report, the terms "Huntsman Polymers," "Company,"
"our," "us" or "we" may be used to refer to Old Rexene, Rexene Corporation and
Huntsman Polymers Corporation and, where the context requires, their respective
consolidated subsidiaries.

     Our corporate headquarters are located at 500 Huntsman Way, Salt Lake City,
Utah 84108, and our telephone number is (801) 584-5700.

RECENT EVENTS

     HUNTSMAN CORPORATION ACCOUNTS RECEIVABLE FINANCING AND AMENDMENT
AGREEMENT

     On December 20, 2001, Huntsman Corporation entered into a supplemental
accounts receivable credit agreement. On the same date, Huntsman Corporation,
which was not in compliance with certain financial covenants in its existing
credit facilities, entered into amendment, forbearance and waiver agreements
(collectively, the "Amendment Agreement"). Under the terms of the Amendment
Agreement, existing defaults and some future defaults were waived, and the
lenders agreed to forbear exercising certain rights and remedies until March 15,
2002 (the "Forbearance Period"). On March 15, 2002, the Forbearance Period was
extended until June 30, 2002 by lenders holding a majority of Huntsman
Corporation's indebtedness under its existing credit facilities. In this
connection, however, Huntsman Corporation has agreed to significant restrictions
on the types and amounts of investments, loans and payments it would be
permitted to make in and to the Company. These limitations permit Huntsman
Corporation to make ordinary course payments in respect of existing commercial
arrangements, payments representing the reasonably equivalent value of assets
purchased, accruals of interest expenses and overhead allocations, additional
loans, not to exceed $5 million, and certain other specified payments, but
otherwise will prevent us from obtaining additional equity investments from
Huntsman Corporation and will significantly limit our ability to obtain other
financing under the intercompany loan agreement (the "Intercompany Loan
Agreement") that we maintain with Huntsman Group Holdings Finance Corporation
("HGHFC"), which is our principal source of financing. For more information, see
"Item 7--Management's Discussion and Analysis of Financial Condition and Results
of Operations--Liquidity and Capital Resources" and "--Changes in Financial
Condition."

     FAILURE TO PAY INTEREST

     In the fourth quarter of 2001, we determined not to make the December 1,
2001 interest payment due on our 11 3/4% Senior Notes due 2004 (the "Senior
Notes"). Our failure to make this interest payment within 30 days of the due
date constituted an event of default under the Senior Notes. We have interest
payments due on June 1, and December 1, 2002. Our ability to satisfy these
obligations depends on a number of significant factors, including the
availability of additional debt and equity financing. However, because the
payment of interest on the Senior Notes would result in a termination of the
Forbearance Period under the Amendment Agreement, it is unlikely that we will
make the upcoming interest payments on our Senior Notes. See "Item
7--Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources--Debt" and "--Financial
Restructuring." Moreover, we, along with Huntsman Corporation and our financial
advisor, Dresdner Kleinwort Wasserstein, Inc. ("DrKW"), are engaged in
discussions with our note holders (including an affiliate of Credit Suisse First
Boston, the holder of over 73% of our Senior Notes), concerning the
restructuring of our debt. A restructuring could be undertaken under court
supervision or outside of court, and could result in a number of outcomes,
including the following: modifications to the terms governing our debt, exchange
of our existing debt into new debt securities, conversion of our debt into new
equity securities, agreements by our debt holders to receive less than the full
amount that is owed to them, or other outcomes. While we believe our discussions
are progressing toward a restructuring of our debt, there can be no assurance
as to the final outcome of these discussions. If we are unsuccessful in our
efforts to restructure our debt, we likely would seek a court sanctioned
resolution. For more information, see "Item 7--Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity and Capital
Resources--Debt," "--Financial Restructuring" and "--Changes in Financial
Condition."


                                       2
<Page>

     DISMISSAL OF INVOLUNTARY BANKRUPTCY PETITION

     On February 27, 2002, three holders of our Senior Notes filed an
involuntary bankruptcy petition against the Company in the United States
bankruptcy court in Delaware. According to their filing, these note holders
held less than 1% of the total of our outstanding Senior Notes. On February
28, 2002 the petitioning note holders filed a motion to dismiss their
petition, and, shortly thereafter, we filed a second motion to dismiss on
several grounds, including that the bankruptcy filing was unfounded and
improper. According to court filings made by the petitioners, the petitioners
reached an agreement to sell their Senior Notes shortly after filing the
involuntary bankruptcy petition against the Company. The bankruptcy court
granted the petitioners' motion to dismiss and ordered the case dismissed
with prejudice on March 8, 2002.

     RESTRUCTURING AND IMPAIRMENT CHARGES

     We engaged in a restructuring during 2001 and incurred restructuring
charges of $140.0 million. In addition, we determined that, under Statement
of Financial Accounting Standards ("SFAS") No. 121, we were required to
review certain of our assets for possible impairment because significant
declines in sales prices and operating cash flow during 2001 indicated that
the carrying amounts of such assets might not be recoverable. Accordingly, we
recorded an asset impairment charge of $385.4 million in the fourth quarter
of 2001. For more information, see "Item 7--Management's Discussion and
Analysis of Financial Condition and Results of Operations--2001 Compared to
2000--Restructuring Costs and Impairment Charges."

PRODUCTS

     GENERAL

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

                             [FLOW CHART]

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


                                       3
<Page>

<Table>
<Caption>
                                                    YEAR ENDED               YEAR ENDED               YEAR ENDED
                                                DECEMBER 31, 2001        DECEMBER 31, 2000        DECEMBER 31, 1999
                                               ---------------------    ---------------------    ---------------------
                                                                           (in thousands)
<S>                                             <C>                      <C>                      <C>
Polyethylene (LDPE/LLDPE)                       $         239,465        $         310,967        $         226,295
Performance Polymers and Other                            250,683                  363,625                  263,409
                                               ---------------------    ---------------------    ---------------------
Total                                           $         490,148        $         674,592        $         489,704
                                               =====================    =====================    =====================
</Table>

     We sell a substantial portion of our products to Huntsman Corporation for
resale to trade customers. Nevertheless, we are not dependent upon a single
trade customer, or a few trade customers, the loss of any 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 2001, 26.8 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"), 6.9 billion pounds or 26%; LLDPE, 7.3 billion pounds
or 27%; and High Density Polyethylene ("HDPE"), 12.6 billion pounds or 47%. In
2001, we produced 392 million pounds of HP-LDPE and 197 million pounds of
LLDPE/HDPE solution.

     We produce 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 provide high clarity, durability, 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. We participate in both market
areas, but concentrate our efforts primarily in more differentiated areas.

     We are a licensee of Stamicarbon B.V.'s proprietary LLDPE solution
technology, which uses octene comonomer, and produces higher value and
performance products for specialized applications. We also produce LLDPE for
less specialized products. Unlike performance products, these products compete
primarily on the basis of price. Our product mix capabilities include Ultra Low
Density, Linear Low Density, Medium Density and High-Density resins.

     In 2001, there were approximately 16 domestic producers of LDPE resins,
some of which produce HP-LDPE and LLDPE. In 2001, these producers had an
estimated combined, annual rated production capacity of approximately 31 billion
pounds. The largest manufacturer of LDPE is ExxonMobil. In 2001, the five
largest domestic producers of both LDPE and LLDPE were ExxonMobil, Dow Carbide,
Equistar Chemicals LP, Westlake Polymers and Chevron Phillips. In 2001, we
accounted for approximately 5% of the United States capacity of HP-LDPE and
approximately 3% of the United States capacity for LLDPE.

     PERFORMANCE POLYMERS AND OTHER PRODUCTS

     POLYPROPYLENE. We currently produce a wide variety of polypropylene resin
grades with a production capacity of 210 million pounds per year. These include
high purity homopolymers, random and impact copolymers with properties
specifically tailored for specialty markets and specific end-uses, such as
medical, electrical and automotive applications. We are one of only two domestic
producers of a super clean grade of polypropylene utilized for medical
applications, electrical capacitor film and electronics packaging.


                                       4
<Page>

     In 2001, there were 13 domestic producers of polypropylene in the United
States. The industry's estimated combined, rated annual production capacity was
approximately 18.4 billion pounds in 2001. In 2001, the four largest domestic
producers of polypropylene were BP Amoco, ExxonMobil, AtoFina and Basell USA
Inc. In 2001, we accounted for approximately 1% 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. Our
polypropylene business is centered around the more differentiated polypropylene
products.

     APAO. Eastman Chemical Company and the Company are currently the only
domestic 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. We are
the only domestic producer of butane copolymer APAO, a high value product used
in hot melt adhesive applications.

     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 2001, we accounted for approximately 50%
of the United States combined capacity for APAO and APP.

     OLEFINS AND OTHER PRODUCTS. We manufacture olefins from ethane and propane,
which are fractionated from natural gas liquids ("NGLs"). At the Odessa
Facility, we obtain a combination of pure and mixed NGLs from NGL extraction
plants located in West Texas. Generally, ethane and propane prices are
established in Mont Belvieu, Texas according to prevailing market conditions.
However, we are 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. We believe feedstock supplies available in Odessa are currently
adequate for our requirements. We have storage capacity for an approximate
14-day supply of feedstocks.

     During 1999, we completed a major expansion and modernization that
increased our ethylene production from approximately 600 million to 850 million
pounds per year. We currently consume substantially all of the ethylene that we
produce internally; however, we selectively sell approximately 40-60 million
pounds of liquid ethylene annually to customers, none of which is located on the
Gulf Coast pipeline grid.

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>
                                                       2001                     2000                     1999
                                               ---------------------    ---------------------    ---------------------
                                                                       (dollars in thousands)
<S>                                             <C>                      <C>                      <C>
Export sales                                    $          82,505        $          50,498        $          31,211
Percentage of net sales                                        17%                       7%                       6%
</Table>

     Export sales as a percentage of net sales increased by 10% primarily due to
a 4% decrease in domestic sales and a 6% increase in export sales, primarily to
Canada and Mexico.

SIGNIFICANT CUSTOMERS

     We sell a substantial portion of our products to Huntsman Corporation for
resale to trade customers. Nevertheless, we are not dependent upon a single
trade customer, or a few trade customers, the loss of



                                       5
<Page>

any of which would have a material adverse effect on the Company. See "Item
13--Certain Relationships and Related Transactions" for a further discussion of
our transactions with affiliates.

PRODUCT DEVELOPMENT AND TECHNICAL SERVICES

     We continually seek to deliver to the market products that bring
performance and value to our customers. The Company actively engages in ongoing
product development efforts for all its product lines. For example, several new
APAO products were developed in 2000-2001 that have been successfully introduced
and commercialized for adhesives and roofing applications. Our growth in the
adhesives market is directly attributable to both basic and applied product
development efforts. We expect that continued development work in 2002 will lead
to a new product line also designed for specialty adhesive applications.

     We licensed the "Compact" process for the manufacture of LLDPE from
Stamicarbon, B.V., a licensing subsidiary of DSM. Commercial production began in
the second quarter of 1999, and it is the only North American facility of its
kind. Operation of this process has allowed us to focus on our strategy of
producing higher value products for specialized applications. Product
development work in value-added octene LLDPE has led to the introduction of new,
higher-performance products that were successfully commercialized in 2001. These
products offer better durability, optical properties and processability than
commodity grades of LLDPE.

     The Company supports its commercial products with a highly competent and
professional technical service staff. These services help us create and sustain
customer loyalty and are important in supporting sales of our higher value
products.

     We spent $3.8 million, $5.3 million and $6.5 million per year for product
development and technical services during the years ended December 31, 2001,
2000 and 1999, respectively. We anticipate spending approximately $3.2 million
for these services in 2002.

RAW MATERIALS FOR PRINCIPAL PRODUCTS

     Principal raw materials purchased by the Company consist of ethane and
propane extracted from NGLs and propylene (all of which are referred to as
"feedstocks") for the polymer businesses. The prices of feedstocks fluctuate
based upon the prices of natural gas, weather conditions affecting the demand
for natural gas and other factors. During the latter part of 2000 and the early
part of 2001, feedstock prices increased significantly, following the
unprecedented increases in natural gas and oil prices. During 2001, feedstocks
accounted for approximately 40% of our total cost of sales. As a result,
increases and decreases in raw material costs can have a significant impact on
operating results.

     The principal feedstocks for our 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 we are 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 2001, we
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 2001, the Odessa Facility consumed approximately 717 million and 290 million
pounds of ethane and propane, respectively, and in 2000, the Odessa Facility
consumed ethane and propane of approximately 801 million and 386 million pounds,
respectively. In 2001, the Company produced substantially all of its ethylene
and approximately 24% of its propylene requirements for the Odessa Facility. Our
other propylene requirements were purchased from third

                                       6
<Page>

parties. The feedstock supplies available in Odessa are currently adequate for
the Company's requirements. We have storage capacity for an approximately
fourteen-day supply of feedstocks.

EMPLOYEES

     As of December 31, 2001, the Company employed 520 persons. Overall, we
believe that our relations with our employees are good.

INTELLECTUAL PROPERTY RIGHTS

     We own approximately 100 patents and pending patent applications (including
U.S. and foreign) and we use trade secrets, including substantial know-how,
which relate to our polyethylene, polypropylene and APAO products. Although
patents and trade secrets are important to us, we do not believe that the loss
of any patent would have a material adverse effect on our financial condition.
We also use the technology of others under license agreements in certain of our
manufacturing operations. Our competitors or other third parties may obtain
patents that restrict or preclude our ability to lawfully produce or sell our
products in a competitive manner, which could have a material adverse effect on
our financial condition. Various trademarks owned by the Company or its
affiliates are used in connection with the sale of our products. We do not
believe that the loss of the right to use any trademarks owned by the Company
would have a material adverse effect on our financial condition. Our use of the
trademark "Huntsman" is subject to the terms of our license to use such
trademark from the owner of the trademark, Huntsman Group Intellectual Property
Holdings Corporation.

ENVIRONMENTAL AND RELATED REGULATION

     GENERAL

     Our business of manufacturing and distributing chemical products and its
related production of by-products and wastes entails risk of adverse
environmental effects. As a result, we are subject to extensive federal, state,
local and foreign laws, regulations, rules and ordinances relating to pollution,
protection of the environment and the generation, storage, handling,
transportation, treatment, disposal and remediation of hazardous substances and
waste materials. In the ordinary course of business, we are subject to frequent
environmental inspections and monitoring by governmental enforcement
authorities. In addition, our production facility requires operating permits
that are subject to renewal, modification and, in certain circumstances,
revocation. Actual or alleged violations of environmental laws or permit
requirements could result in restrictions or prohibitions on plant operations,
substantial fines and civil or criminal sanctions. Moreover, changes in
environmental regulations could inhibit or interrupt our operations, or require
us to change our equipment or operations, and any such changes could have a
material adverse effect on our businesses. Accordingly, given our businesses,
environmental or regulatory matters may cause us significant unanticipated
losses, costs or liabilities.

     Under some environmental laws, we may be jointly and severally liable for
the costs of environmental contamination on or from our properties and at
off-site locations where we disposed of or arranged for the disposal or
treatment of hazardous wastes. For example, under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
("CERCLA"), and similar state laws, a current owner or operator of real property
may be liable for such costs regardless of whether the owner or operator owned
or operated the real property at the time of the release of the hazardous
substances and regardless of whether the release or disposal was in compliance
with law at the time it occurred. In addition, under the Resource Conservation
and Recovery Act of 1976, as amended ("RCRA"), and similar state laws, as the
holder of permits to treat or store hazardous wastes, we may, under some
circumstances, be required to remediate contamination at our properties
regardless of when the contamination occurred.

     We may also incur future costs for capital improvements and general
compliance under environmental laws, including costs to acquire, maintain and
repair pollution control equipment. The Company's operating expenditures for
environmental remediation, compliance and waste disposal were


                                       7
<Page>

approximately $7.6 million and $9.7 million in 2001 and 2000, respectively. We
also spent approximately $3.3 million and $4.5 million relating to capital
expenditures for environmentally related projects in 2001 and 2000,
respectively. In 2002, we anticipate spending approximately $4.8 million for
environmental remediation, compliance and waste disposal. Of such amount,
expenditures relating to remediation are projected to be approximately $0.2
million for 2002. Environmental capital spending is estimated at $3.3 million
for 2002. Generally, we expect to incur between $1.5 million and $6.0 million
annually in capital spending to address the requirements of environmental laws.
However, we cannot assure you that material capital expenditures beyond those
currently anticipated will not be required under environmental laws.

     We carry 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. We also carry
Pollution Legal Liability and Closure and Post Closure insurance on certain
facilities at the Odessa Facility, 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.

     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 facilities operated by third parties at which it may have disposed
of waste or other materials.

     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
and 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 start up and that excess emissions
might result. The TNRCC investigated this matter after receiving numerous
complaints from residents of a subdivision near the Odessa Facility. In
addition, since January 1999, our Odessa Facility experienced upsets on several
occasions that led to flaring or excess emissions which the TNRCC claims were in
violation of state law. The TNRCC sought penalties for all alleged violations.
On January 30, 2002, the claims asserted by the TNRCC were settled in an agreed
order. In the order, we denied any liability, but agreed to a $140,000 penalty,
$70,000 of which was paid to the State and $70,000 of which was paid to the City
of Odessa to fund a supplemental environmental project.

     As a result of the start-up flaring during late December 1998 and early
January 1999, certain complaining citizens hired counsel to consider bringing
legal action to recover damages alleged to have been caused by that flaring.
Five such actions have been filed. Three of the filed cases, involving over
4,200 plaintiffs, have been settled. Many of those plaintiffs have now filed an
action against certain of our contractors and design engineers, one of whom has
sought indemnity against us. The remaining filed cases involve a total of about
192 claimants. Although counsel to the Company believes that the Company has
strong defenses to the remaining suits, it is too early to predict the outcome
of such litigation.

     SOLID WASTES

     In March 1994, the TNRCC granted us a permit to operate three hazardous
waste management units at the Odessa Facility, as treatment/storage/disposal
facilities under RCRA. This permit and an accompanying compliance plan require
certain corrective actions with respect to existing soil and groundwater
contamination at a number of the solid waste management units at the Odessa
Facility. Pursuant to the permit and compliance plan, we have 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 implemented a remediation plan approved
by the TNRCC. As of December 31, 2001, the TNRCC has approved closure for 55 of
the plant's solid waste management units. A program for the remediation of
existing contamination both at the Odessa Facility and at third-


                                       8
<Page>

party sites is ongoing. In addition, the permit has recently been modified to
reflect closure of one of the original three hazardous waste management units.

     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 our
facilities. This legislation requires 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 either not yet
been promulgated or have not been fully implemented. We expect that
modifications required by the currently published regulations can be
accomplished within our projected capital budget, but can give no assurance that
the costs we may incur to comply with regulations that have not yet been issued
will not be significant.

     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

     CERCLA 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. We have
sent wastes from our operations to various third-party waste disposal sites. In
this connection, we have developed estimates for the clean-up of known waste
sites and included these potential liabilities in our environmental accrual
account. From time to time we receive notices from representatives of
governmental agencies and from private parties contending that we are
potentially liable for a portion of the investigation and remediation costs at
third-party and currently and formerly-owned sites. Although there can be no
assurance, we do not believe that our liabilities for investigation and
remediation of such sites, either individually or in the aggregate, will have a
material adverse effect on the Company.

     The Company was sued on December 6, 2001, by Lyondell Chemical Company and
Atlantic Richfield Company in the U.S. District Court for the Eastern District
of Texas, for contribution with regard to remediation expenses at the Turtle
Bayou (Petro Chemical Systems, Inc.) superfund site in Liberty County, Texas.
Based upon the facts known to the Company, we believe that we have one or more
complete defenses to the suit and that even if the court rejects those defenses,
the percentage contribution we would likely be required to pay would not be
material to our financial condition. Nevertheless, the potential exists for
significant liability in such a case because of joint and several liability.

     In December of 2000, the New Mexico Environmental Bureau's Oil Conservation
Division ("OCD") gave notice that it is alleging that the Company may be a
responsible party in the cleanup of an old abandoned refinery located in
Bloomfield, New Mexico. Although the site is contaminated and was evaluated in
about 1990 under the state's superfund program and the federal superfund
program, it was not pursued under either of those programs. The site was
previously owned by El Paso Energy, El Paso Products, and Kimbell and McNutt.
Huntsman Polymers notified the OCD that Huntsman Polymers has never had an
ownership interest in the site and does not believe that it acquired any
liability relating to the site from its previous owners. In addition, the State
of New Mexico contacted Rexene about the site in 1990, had notice of the Rexene
bankruptcy in 1991-1992, made a claim against Rexene regarding another site but
did not make a claim in the bankruptcy proceeding regarding this site.
Consequently, even if the OCD had a claim against Rexene at one time, the claim
may have been extinguished by the bankruptcy. However, if a court ultimately
finds that OCD does have an actionable claim, the potential exists for
significant remediation liability.

     As a result of a United States Environmental Protection Agency ("EPA")
inspection of the Odessa Facility in April 1997 and follow-up information
requests from EPA, an enforcement action alleging


                                       9
<Page>

Clean Air Act violations has been threatened by the U.S. Department of Justice
and civil penalties in the amount of $475,000 have been proposed by the
government to resolve the matter. The Company is continuing to negotiate with
EPA and the Department of Justice in an attempt to reach settlement.

     As a result of a third-party environmental audit of the Odessa operations
starting in November 2000, the Company has voluntarily disclosed to EPA and the
TNRCC certain potential violations of environmental law. EPA and the TNRCC are
presently evaluating those disclosures to determine whether the disclosures
qualify for penalty mitigation under federal policy and state law. It is
possible that civil penalties will be assessed by one or both of these agencies
as a result of the disclosures.

     We continually review our estimates of potential environmental liabilities,
and we have approximately $6.4 million accrued in our December 31, 2001 balance
sheet as an estimate of our total potential environmental liability with respect
to investigating and remediating known and assessed site contamination. However,
no assurance can be given that all potential liabilities arising out of our
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.

ITEM 2.  PROPERTIES

     We manufacture chemical products at our Odessa Facility. The Odessa
Facility is located on an approximately 875-acre site in West Texas which
contains plants producing polyethylene, polypropylene, APAO and, until April 23,
2001, 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 2001, had 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 olefin plant at the Odessa Facility has been in operation since 1961
and was modernized and expanded in 1999. The plant currently has a rated
capacity of approximately 850 million pounds of ethylene and approximately 325
million pounds of propylene.

     The styrene plant in Odessa, Texas began operations in 1958 and had a total
rated annual production capacity of approximately 330 million pounds. Operation
of this plant ceased on April 23, 2001.

ITEM 3.  LEGAL PROCEEDINGS

     In March 1999, in connection with a construction contract dispute, an
arbitration proceeding was initiated by S&B Engineers and Constructors, Ltd.
("S&B") against the Company. S&B sought approximately $22.3 million in unpaid
invoices and bonuses under the contract and we sought in excess of $20 million
in contract damages against S&B. In August 2000, the arbitration panel awarded
S&B damages in the amount of $19.2 million plus pre-judgment interest,
attorneys' fees and costs, reserving decision on the amount of fees and costs.
In February 2001, the arbitration panel issued its final award, granting S&B
fees and costs in the amount of $3.7 million in addition to the damages
previously awarded. We appealed the award in Texas state court, seeking reversal
or modification of the award on grounds that it was based in part on erroneous
conclusions of law. Following mediation between the parties, the matter was
settled on August 30, 2001 for a total settlement amount of $22.1 million. Under
the terms of the settlement agreement, we paid S&B $10.0 million on September
14, 2001. In accordance with agreements with its lenders, Huntsman Corporation
paid S&B $6.1 million on December 31, 2001, taking a partial


                                       10
<Page>

assignment of the mechanics' lien securing our obligations to S&B. We anticipate
that Huntsman Corporation will pay S&B $6.0 million plus interest on April 1,
2002, the remaining portion under the settlement agreement, and Huntsman
Corporation will at that time take an assignment of the remaining portion of the
mechanics' lien. We will then be obligated to pay $12.1 million plus interest
and possible penalties to Huntsman Corporation, and Huntsman Corporation has
agreed to extend the time for payment of this obligation. In the event we do not
pay the obligation, Huntsman Corporation would have the right to foreclose on
the assets subject to the mechanics' lien. In accounting for this transaction,
we reduced our accrued liability to S&B and increased our liability to Huntsman
Corporation.

     We are a party to various other lawsuits arising in the ordinary course of
business, and we do not believe that the outcome of any of these lawsuits will
have a material adverse effect on our 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

     As of December 28, 2001, Huntsman Polymers Holdings Corporation ("HPHC" or
our "Parent"), the sole shareholder of the Company, by written consent, elected
Jon M. Huntsman and Peter R. Huntsman as directors of the Company and ratified
actions taken by the officers and directors of the Company during the preceding
year.

                                    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, HPHC, a wholly-owned subsidiary of Huntsman Corporation.

DIVIDENDS

     Since the Merger, no dividends have been declared or paid. Although we have
not established a formal policy with respect to the declaration of dividends, we
may evaluate the advisability of declaring dividends on a periodic basis based
on a number of factors, including our 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."

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 our 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 Corporation 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


                                       11
<Page>

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
                                                                                                                   -------------
                                                                                                 Four Months       Eight Months
                            Year Ended       Year Ended        Year Ended        Year Ended         Ended             Ended
                           December 31,     December 31,      December 31,      December 31,     December 31,       August 31,
                               2001             2000              1999              1998             1997              1997
                           -------------    --------------    -------------     -------------    -------------     -------------
                                                                      (in thousands)
<S>                         <C>              <C>               <C>               <C>              <C>               <C>
CONSOLIDATED STATEMENTS
   OF OPERATIONS DATA
   ADJUSTED FOR
   DISCONTINUED
   OPERATIONS:
   Net sales                $ 490,148        $ 674,592         $ 489,704         $ 365,748        $ 139,675         $ 307,603
   Operating income          (622,714)         (25,291)          (15,200)          (11,285)           3,462            42,460
(loss)
   Loss from continuing
     operations              (593,714)         (45,758)          (35,075)          (20,194)          (4,483)            3,155
   Loss from discontinued
     operations, net               --               --                --                --             (218)           (2,692)
   Income (loss) before
     extraordinary loss      (593,714)         (45,758)          (35,075)          (20,194)          (4,701)              463
   Extraordinary loss,
       net of income taxes         --               --                --                --               --              (694)
                           -------------    --------------    -------------     -------------    -------------     -------------
Net income (loss)           $(593,714)       $ (45,758)        $ (35,075)        $ (20,194)       $  (4,701)        $    (231)
</Table>

<Table>
<Caption>
                                                                                                                   Predecessor
                                                                                                                     Company
                                                                                                                   -------------
                              As of             As of            As of             As of            As of             As of
                           December 31,     December 31,      December 31,      December 31,     December 31,       August 31,
                               2001             2000              1999              1998             1997              1997
                           -------------    --------------    -------------     -------------    -------------     -------------
                                                                      (in thousands)
<S>                         <C>              <C>               <C>               <C>              <C>               <C>
CONSOLIDATED BALANCE
   SHEET DATA ADJUSTED
   FOR DISCONTINUED
   OPERATIONS:
   Working capital          $(509,426)       $  47,072         $  32,431         $  24,041        $ 103,261         $  61,188
   Total assets               507,411        1,137,633         1,176,431         1,109,131          943,123           541,067
   Long-term debt
(current portion) and
other noncurrent              566,763          596,616           594,164           656,413          694,241           428,927
liabilities
   Stockholder's equity     $(139,942)       $ 422,772         $ 468,530         $ 398,605        $ 168,799         $ 166,260
</Table>


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

GENERAL

     We manufacture chemical products used in a wide variety of industrial and
consumer-related applications. Our principal products are polyethylene
(including low density polyethylene ("LDPE") and linear low density polyethylene
("LLDPE")), polypropylene, amorphous polyalphaolefin ("APAO") and, until April
23, 2001, styrene.

     The markets in which we compete are generally cyclical markets that are
sensitive to relative changes in supply and demand as well as general economic
conditions. Historically, these markets 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 our products, such as APAO, are generally less sensitive to
economic cycles. In addition, our polyethylene and polypropylene businesses
focus on higher value-added, specialty grades, which are less sensitive to
cyclical swings experienced by commodity grades.


                                       12
<Page>

     The principal raw materials used in our polyethylene, polypropylene and
APAO businesses are ethane and propane extracted from NGLs, and propylene (all
of which are referred to as "feedstocks"). In 2001, the Company produced
substantially all of its ethylene requirements and about 24% of its propylene
requirements. We believe that the feedstock supplies available in Odessa, Texas
are currently adequate for our requirements. The percentage of feedstock costs
compared to the Company's total cost of sales remained relatively unchanged at
40% in 2001 compared to 41% in 2000. The percentage of feedstock costs compared
to the Company's revenues was 45.4% in 2001 as compared to 40.7% in 2000.
Feedstock prices increased in late 2000 and early 2001 because of the
unprecedented increases in natural gas prices. Those prices returned to levels
more consistent with historical levels during mid to late 2001.

RESULTS OF OPERATIONS

     SELECTED FINANCIAL RESULTS:
<Table>
<Caption>
                                                                    Actual Year Ended December 31,
                                                 ---------------------------------------------------------------------
                                                        2001                    2000                     1999
                                                        ----                    ----                     ----
                                                                            (in thousands)
<S>                                               <C>                    <C>                      <C>
CONSOLIDATED STATEMENT OF OPERATIONS:
Revenues                                          $         490,148      $         674,592        $         489,704
Cost of goods sold                                          562,164                667,333                  482,854
                                                 -------------------    ---------------------    ---------------------
Gross profit                                                (72,016)                 7,259                    6,850
Selling, general and administrative                         (25,297)               (32,550)                 (22,050)
Restructuring costs and impairment charges                 (525,401)                     -                        -
                                                 -------------------    ---------------------    ---------------------
Operating loss                                             (622,714)               (25,291)                 (15,200)
Interest expense, net                                       (49,219)               (50,132)                 (44,817)
Other income (expense)                                          (69)                 3,164                    4,799
                                                 -------------------    ---------------------    ---------------------
Income (loss) from continuing operations
   before income taxes                                     (672,002)               (72,259)                 (55,218)
Income tax benefit (expense)                                 78,288                 26,501                   20,143
                                                 -------------------    ---------------------    ---------------------
Loss from continuing operations                   $        (593,714)     $         (45,758)       $         (35,075)
                                                 ===================    =====================    =====================
</Table>

     2001 COMPARED TO 2000

     REVENUES. The Company's net sales decreased $184.5 million from $674.6
million in 2000 to $490.1 million in 2001, principally due to extremely weak
demand in oversupplied markets, which adversely affected pricing on the majority
of the Company's products. The closure of the styrene facility in April 2001
negatively affected sales revenue by $62.8 million. Polyethylene sales revenue
decreased $71.5 million due to a 36.1 million pound decrease in volume and a
$.092 per pound decrease in the average sales price due to weak demand and
oversupplied markets. Olefins and other revenue decreased $22.6 million as a
result of lower industry operating rates due to weak derivative demand, addition
of new ethylene capacity and declining raw material and energy costs that kept
downward pressure on ethylene and other derivative pricing. Polypropylene sales
revenue decreased $18.3 million as pricing went down $.035 due again to weakness
in the polypropylene market (although, from a demand perspective, the weakness
was not as severe as with other polymer groups). Flexible polyolefins ("FPO")
sales revenue decreased $11.7 million as virtually no FPO sales occurred in
2001.

     GROSS PROFIT. The Company's gross profit decreased $79.3 million from
profit of $7.3 million in 2000 to a loss of $72.0 million in 2001. Polyethylene
gross profit decreased $57.9 million, which was primarily the result of a $52.8
million decrease due to lower selling prices. Olefins gross profit decreased
$17.6 million, reflecting a $30.6 million decrease due to lower selling prices,
partially offset by lower raw material and energy prices of $13.0 million.
Polypropylene gross profit decreased $5.9 million resulting from a decrease in
the selling prices of $5.6 million. All the price decreases were the result of
weak market demand and over-capacity in the industry described above.

     SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and administrative
expenses decreased $7.3 million from $32.6 million in 2000 to $25.3 million in
2001. The decrease was primarily due to $6.1

                                       13
<Page>

million of legal costs incurred in 2000 associated with the S&B dispute
discussed in "Item 3--Legal Proceedings" and reduced information technology,
safety, environmental and international support services.

     RESTRUCTURING COSTS AND IMPAIRMENT CHARGES. The Company incurred
restructuring costs and impairment charges of $525.4 million during 2001. The
restructuring costs were recorded in two phases.

-    Phase I, which resulted in a charge of $29.8 million during the second
     quarter of 2001, was the result of the closure of the Company's styrene
     production unit and the concurrent cost restructuring and elimination
     initiative, both of which were announced on April 23, 2001. The program
     included a workforce reduction at the Odessa Facility of 97 regular
     employees. Approximately $5.2 million was accrued for termination benefits,
     all of which had been paid as of September 30, 2001. Additionally,
     decommissioning costs of $2.6 million for the styrene unit, $4.8 million in
     non-cancelable lease charges, an $8.9 million write-down of the styrene
     unit fixed assets and a $7.6 million write-off of unusable material and
     supplies inventory were recorded in connection with Phase I. Phase I was
     substantially completed by the end of the third quarter of 2001.

-    Phase II of the restructuring was announced by the Company on July 31, 2001
     and resulted in a total charge of $110.2 million. This phase encompassed
     the closure of the polypropylene Line 1 unit (representing 30% of current
     total polypropylene production), the write-off of the FPO unit which had
     been under evaluation for alternative product use, and the further
     elimination of redundant costs in the maintenance, technical services and
     overhead cost structure. Management anticipates that this program will
     result in the discharge of 93 regular employees at the Odessa Facility.
     Approximately $5.9 million was accrued for termination benefits.
     Additionally, $68.7 million related to the write-off of fixed assets, $33.8
     million related to the write-off of goodwill, $0.2 million for the
     polypropylene unit decommissioning, $0.6 million in non-cancelable lease
     charges and $1.0 million related to the write-off of unusable supplies
     inventory were recorded in connection with Phase II. The Company expects
     this phase to be completed by April 2002.

     Under SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed Of," companies must review the carrying
amount of long-lived assets and certain intangibles, including related goodwill,
whenever events or changes in circumstances indicate that the carrying amount of
an asset or a group of assets may not be recoverable.

     We recorded an asset impairment charge of $385.4 million in the fourth
quarter of 2001 related to our property, plant and equipment. During 2001, we
experienced significant declines in sales prices and operating cash flow. The
declining results were primarily due to lower sales prices, coupled with
difficulty in passing on raw material and energy costs to customers. The lower
sales prices were primarily due to decreased demand in industrial and consumer
related applications, which resulted in increased competition and reduced
operating rates. The lower operating rates had a significant effect on margins,
and margins are not expected to improve until after 2003 unless industry-wide
plant capacity declines. Additionally, opportunities for new applications of our
products did not materialize at a rate necessary to offset the declining margins
on current products. In early October 2001, as a result of the above factors and
as part of our restructuring efforts, we performed a review of our remaining
polyethylene, polypropylene and APAO businesses. During this time, Huntsman
Corporation engaged DrKW as its financial advisor and investment banker to
assist it and its domestic subsidiaries, including the Company, in identifying
and exploring strategic alternatives, including developing out of court or court
sanctioned financial restructuring plans. In February 2002, DrKW provided a
valuation report to our management which indicated an impairment of our assets.
As a result, in the fourth quarter of 2001 we assessed certain fixed assets for
impairment as required under SFAS No. 121.

     We performed an evaluation of the recoverability of our assets as described
in SFAS No. 121. Management concluded from the results of this evaluation that a
significant impairment of long-lived assets had occurred. An impairment charge
was required because the estimated fair value of these assets was less than
their carrying value. The fair value of the Company's net assets was determined
by discounting estimated future cash flows using a discount rate commensurate
with the risks involved. Fair


                                       14
<Page>

value estimates, by their very nature, rely upon considerable management
judgment; accordingly, actual results may vary significantly from our estimates.

     The restructuring costs and impairment charges were recorded against the
following accounts: $463.0 million against property, plant and equipment; $33.8
million against goodwill; $5.1 million against inventories; and $23.5 million
against cash and accrued liabilities.

     A summary of the combined Phase I and Phase II costs follows (dollars in
thousands):

<Table>
<Caption>
                                                                                                        Restructuring
                                               Total               Non-Cash              Cash           Liabilities at
                                              Charge               Charges             Payments        December 31, 2001
                                         ------------------    -----------------    ---------------    -----------------
<S>                                        <C>                   <C>                  <C>                 <C>
Work force reduction                       $    11,038           $        --          $    6,518          $   4,520
Styrene unit decommissioning                     2,601                    --                 986              1,615
Polypropylene Line 1 decommissioning               200                    --                  --                200
Non-cancelable lease costs                       5,348                    --               1,304              4,044
Property and equipment                         463,038               463,038                  --                 --
Goodwill                                        33,788                33,788                  --                 --
Provision for unusable supply
   inventory                                     8,565                 5,067               2,999                499
Other charges                                      823                    --                 823                 --
                                         ------------------    -----------------    ---------------     --------------
Total restructuring costs                  $   525,401           $   501,893          $   12,630          $  10,878
</Table>

     Remaining cash expenditures relating to workforce reductions and plant
decommissioning will be substantially completed by April 2002. Cash outlays
related to non-cancelable railcar leases will be completed by 2008. When both
plant closure and cost restructuring initiatives are fully implemented, the
Company expects pretax savings in operating expenses will approximate $34
million on an annualized basis.

     OTHER INCOME (EXPENSE). The Company's other income (expense) decreased $3.3
million from income of $3.2 million in 2000 to expense of $0.1 million in 2001.
The prior year income was primarily due to a $3.6 million refund received from
the U.S. Department of Energy in 2000 relating to the Subpart V crude oil
proceeding and a $1.9 million gain on the sale of equipment in 2000, which were
partially offset by a $3.0 million start-up flaring settlement incurred in 2000
(see "Item 3--Legal Proceedings").

     INTEREST EXPENSE, NET. Interest expense, net decreased $0.9 million from
$50.1 million in 2000 to $49.2 million in 2001, primarily due to reductions in
market interest rates, offset by an increase in average outstanding balances.
The average amount of debt outstanding and the average interest rate for the
affiliate capital lease and the intercompany borrowing for the years ended
December 31, 2001 and 2000 were as follows:

<Table>
<Caption>
                                                                 Dollars in Millions
                                         Senior Notes          Affiliate Capital Lease       Intercompany Borrowing
                                    -----------------------    ------------------------     -------------------------
<S>                                 <C>                        <C>                          <C>
Year Ended December 31, 2001
   Average Amount of Debt               $     174.9                 $          67.9              $         285.1
   Average Interest Rate                       11.75%                           8.52%                        9.02%
Year Ended December 31, 2000
   Average Amount of Debt               $     174.9                 $          63.8              $         240.3
   Average Interest Rate                       11.75%                          10.02%                       10.02%
</Table>

     INCOME TAX EXPENSE. Income tax benefit increased $51.8 million from $26.5
million in 2000 to $78.3 million in 2001, due to decreased operating results for
the reasons stated above.

     NET LOSS FROM CONTINUING OPERATIONS. The Company's net loss from continuing
operations increased $547.9 million from $45.8 million in 2000 to $593.7 million
in 2001. The increased loss is a result of the reasons stated above.

                                       15
<Page>

     2000 COMPARED TO 1999

     REVENUES. The Company's net sales increased $184.9 million from $489.7
million in 1999 to $674.6 million in 2000. This increase was approximately 70%
due to higher average selling prices across all the Company's product lines and
approximately 30% due to higher sales volumes in polyethylene, styrene and
olefins. Higher selling prices were a major result of higher energy and
feedstock prices, particularly in the second half of 2000. Volume increases were
primarily the result of improved operating performance with the Company's
olefins unit and a full year of continuous operation at the new LLDPE facility.
Olefin revenue increased $56.1 million, primarily due to a 5.5 cents per pound
improvement in the average sales price and a 93 million-pound increase in sales
volume due mainly to improved operations. LLDPE sales increased $47.8 million
due to a 2.1 cents per pound improvement in average selling price resulting from
a full year of continuous operations of the new LLDPE facility and an 82.9
million pound increase in sales volume. LDPE sales revenue increased $36.9
million resulting from a 7.0 cent increase in selling price and a 20.6 million
pound increase in sales volume. Styrene sales revenue increased $32.5 million
due to a 9.2 cent improvement per pound in average selling price and a 15.8
million pound increase in sales volume due mainly to improved operations of the
styrene plant. Polypropylene sales revenue increased $16.6 million resulting
from a 9.2 cent increase in the average selling price partially offset by a 1.4
million pound sales volume reduction.

     GROSS PROFIT. The Company's gross profit increased $0.4 million from $6.9
million in 1999 to $7.3 million in 2000. The increase in gross profit is
primarily a result of the higher revenues discussed above, including the
improved operations in the Olefins unit and a full year of continuous operation
of the new LLDPE facility, all of which were substantially offset by higher raw
material and manufacturing costs.

     SG&A. Selling, general and administrative expenses increased $10.5 million
from $22.1 million in 1999 to $32.6 million in 2000. The increase was primarily
due to higher 2000 legal costs of $6.1 million relating to plant construction
disputes as well as higher overhead allocations from an affiliate of the
Company, reflecting increased information technology, safety, environmental and
international support services.

     INTEREST EXPENSE, NET. Interest expense, net increased $5.3 million from
$44.8 million in 1999 to $50.1 million in 2000, primarily due to significant
decreases in capitalized interest resulting from the completion of the Company's
modernization and expansion projects in 1999.

<Table>
<Caption>
                                                                 Dollars in Millions
                                        Senior Notes           Affiliate Capital Lease       Intercompany Borrowing
                                    ----------------------    --------------------------     ------------------------
<S>                                 <C>                       <C>                            <C>

Year Ended December 31, 2000
   Average Amount of Debt                $       174.9             $          63.8                $         240.3
   Average Interest Rate                          11.75%                      10.02%                         10.02%
Year Ended December 31, 1999
   Average Amount of Debt                $       174.9             $          59.7                $         250.4
   Average Interest Rate                          11.75%                       8.94%                          8.94%
</Table>

     OTHER INCOME (EXPENSE). The Company's other income decreased $1.6 million
from $4.8 million in 1999 to $3.2 million in 2000. This change was primarily due
to the absence of a $4.5 million one-time receipt of the final settlement of an
insurance claim which occurred in the 1999 period, partially offset by a $3.6
million refund received from the U.S. Department of Energy in 2000 relating to
the Subpart V crude oil proceeding.

     INCOME TAX EXPENSE. Income tax benefit increased $6.4 million from $20.1
million in 1999 to $26.5 million in 2000, due to decreased operating results for
the reasons stated above.

     NET LOSS FROM CONTINUING OPERATIONS. The Company's net loss from continuing
operations increased $10.7 million from $35.1 million in 1999 to $45.8 million
in 2000. The increased loss is a result of the reasons stated above.


                                       16
<Page>

LIQUIDITY AND CAPITAL RESOURCES

     CASH. Net cash used in operating activities for 2001 was $68.5 million, as
compared to $26.1 million provided by operating activities in 2000. This change
was attributable to a larger net loss of $593.7 million which occurred during
2001, partially offset by non-cash charges of $501.9 million related to the
retirement and impairment of fixed assets and goodwill and a reduction in cash
used in working capital. The increase in cash provided by working capital was
primarily due to a $46.7 million increase in cash provided by receivables and a
$29.3 million increase in cash from a reduction in inventories, partially offset
by a $71.6 million increase in cash used for accounts payable and accrued
liabilities.

     Net cash used in investing activities for 2001 was $11.4 million, as
compared to $20.2 million in 2000. This decrease was attributable to a decrease
in the proceeds from the sale of property and a decrease in capital
expenditures.

     Net cash provided by financing activities for 2001 was $79.9 million, as
compared to $5.9 million used in financing activities in 2000. The increase was
primarily attributable to a net increase in the level of intercompany borrowings
and capital contributions from the Company's parent during 2001 as compared to
2000.

     DEBT. As of December 31, 2001, we owed $279.1 million under the
Intercompany Loan Agreement that we maintain with HGHFC, $174.9 million under
our Senior Notes and $67.9 million pursuant to a capital lease with Huntsman
Corporation. For a discussion of our Senior Notes, see "--Financial
Restructuring" below.

     The Intercompany Loan Agreement is our principal source of financing, and,
as discussed in the following paragraphs, our ability to obtain additional
financing under the Intercompany Loan Agreement has been significantly limited.
In addition, our ability to borrow under the Intercompany Loan Agreement is
subject to the limitations imposed by the Indenture governing our Senior Notes.

     As of December 31, 2001, Huntsman Corporation had borrowings of
approximately $1.5 billion outstanding under its senior secured credit
facilities, as amended and supplemented (the "Existing HC Credit Facilities").
As collateral for its obligations under the Existing HC Credit Facilities,
Huntsman Corporation has pledged its 100% ownership interest in our Parent, and
our Parent has pledged its 100% ownership interest in the Company. In addition,
we and our Parent are guarantors of Huntsman Corporation's obligations under the
Existing HC Credit Facilities. We have granted security interests and liens on
substantially all of our assets to secure our obligations under our guaranty to
Huntsman Corporation's lenders (the "Guaranty"), subject to certain limitations
in effect until such time as all of the Senior Notes have been indefeasibly
repaid, redeemed or repurchased in full. The Guaranty provides that our maximum
liability thereunder at any time will not exceed the amount permitted to exist
at such time under the Indenture. At this time, because of the restrictions on
incurring indebtedness and making investments contained in the Indenture, we do
not have any liability under the Guaranty. Nevertheless, as a result of recent
amendments to the Existing HC Credit Facilities, Huntsman Corporation's lenders
now have certain rights to receive assignments of security interests in our
assets created in connection with the Intercompany Loan Agreement.

     On December 20, 2001, Huntsman Corporation, which is not in compliance with
certain financial covenants contained in the Existing HC Credit Facilities
entered into the Amendment Agreement. Under the Amendment Agreement, existing
defaults and some future defaults were waived and the lenders agreed to forbear
exercising rights and remedies arising from the failure to pay certain interest
until March 15, 2002. On March 15, 2002, the Forbearance Period was extended
until June 30, 2002. If the Forbearance Period is not extended beyond June 30,
2002, or if the rights of the lenders under the Existing HC Credit Facilities
are not otherwise stayed or unless Huntsman Corporation's debt is restructured
before June 30, 2002, Huntsman Corporation's lenders could pursue certain
remedies under the Existing HC Credit Facilities including accelerating the debt
due, enforcing the guaranties of HPHC and the Company, foreclosing on the pledge
of the equity of HPHC and the Company, and foreclosing on the security interests
and liens on the assets securing the Company's


                                       17
<Page>

obligations under the Guaranty to the extent the Company has any liability under
the Guaranty at the time of the foreclosure and subject to the limitations on
the security interests and liens referred to above.

     On December 20, 2001, Huntsman Corporation entered into a supplemental
accounts receivable credit agreement (the "HC Supplemental Credit Agreement")
with certain of its lenders under Existing HC Credit Facilities pursuant to
which a revolving loan facility of $40 million and a term loan facility of $110
million were made available to it. Proceeds from the HC Supplemental Credit
Facility will be used, among other things, to provide liquidity to Huntsman
Corporation and certain of its affiliates. Pursuant to the Amendment Agreement
and the HC Supplemental Credit Facility, Huntsman Corporation is only permitted
to make certain investments in or payments to the Company, including ordinary
course payments in respect of existing commercial arrangements, payments
representing the reasonably equivalent value of assets purchased by Huntsman
Corporation from the Company, accruals of interest expense and overhead
allocations, payments to purchase S&B's claim against the Company, and
additional loans, not to exceed $5 million, made through the Intercompany Loan
Agreement. These limitations also prohibit us from obtaining additional equity
investments from Huntsman Corporation.

     The acceleration by Huntsman Corporation's lenders of the debt under the
Existing HC Credit Facilities would cause an acceleration of our obligations
under the Intercompany Loan Agreement. As a result, as of June 30, 2001, we
reclassified the intercompany borrowings portion of affiliate debt as a current
liability. We have granted security interests and liens on substantially all of
our assets to secure our obligations under the Intercompany Loan Agreement,
subject to certain limitations in effect until such time as all of the Senior
Notes have been repaid in full. Acceleration of the debt under the Existing HC
Credit Facilities and of our obligations under the Intercompany Loan Agreement
would constitute an event of default under the Senior Notes, which could result
in an acceleration of our obligations under the Senior Notes by the trustee or
the holders of at least 25% in principal amount of the then outstanding Senior
Notes.

     A foreclosure on the pledge of the equity of our Parent or us would
constitute a "change of control" under the Indenture. If a "change of control"
occurs, each holder of the Senior Notes would have the right to require the
Company to purchase all or any part of the Senior Notes held by such holder at
an offer price in cash equal to 101% of the aggregate principal amount thereof,
plus accrued and unpaid interest thereon to the date of purchase. Under such
circumstances, there can be no assurance that we would have sufficient funds to
purchase all or part of the Senior Notes.

     FINANCIAL RESTRUCTURING. Our ability to satisfy our financial obligations
depends on a number of significant factors, including, but not limited to, the
availability of debt or equity financing. In the past, we have used the
Intercompany Loan Agreement as our primary source of financing. However, we do
not expect to be able to obtain the additional financing we may need under the
Intercompany Loan Agreement in the foreseeable future. Under the Amendment
Agreement and the HC Supplemental Credit Agreement, Huntsman Corporation is
prohibited from providing us with additional equity financing and is
significantly limited in the other financing it can provide to us. The Amendment
Agreement also contains a condition that would cause the Forbearance Period to
terminate if we make any interest payments on the Senior Notes.

     We did not make the interest payment under the Senior Notes due on December
1, 2001. Our failure to pay such interest within 30 days of the due date
constituted an event of default under the Senior Notes and could result in an
acceleration of the obligations thereunder by the trustee or the holders of at
least 25% in aggregate principal amount of the outstanding Senior Notes.
Moreover, we have interest payments due on June 1, and December 1, 2002.
However, because the payment of interest on our Senior Notes would result in a
termination of the Forbearance Period under the Amendment Agreement, it is
unlikely that we will make the upcoming interest payments on our Senior Notes.

     We are negotiating with an affiliate of Credit Suisse First Boston, holder
of approximately 73% of the Senior Notes to restructure our obligations under
the Senior Notes. We can give no assurance that we will reach an agreement with
the holders of the Senior Notes, or that any such agreement will be on terms
which are favorable to the Company. In addition, a restructuring of our
obligations could result in a number of outcomes, including modifications to the
terms governing our


                                       18
<Page>

debt, exchange of our existing debt into new debt securities, conversion of our
debt into new equity securities, agreements by our debt holders to receive less
than the full amount that is owed to them, or other outcomes.

     If we are unable to meet our cash requirements from borrowings, existing
cash and cash equivalent balances and cash flow from operations, we will be
forced to make choices among the various demands on our liquidity. This is
likely to have a material adverse effect on our financial position and results
of operations. Any contraction in the availability of trade credit would
increase our cash requirements, could impact our ability to obtain raw materials
and could accelerate our need to pursue other alternatives. Accordingly, in
early October 2001, Huntsman Corporation engaged DrKW as its financial advisor
and investment banker to assist it and its domestic subsidiaries, including the
Company, in identifying and exploring strategic alternatives, including
developing out of court or court sanctioned financial restructuring plans.

     The foregoing uncertainties, together with our recurring losses from
operations, negative working capital position and net stockholder's capital
deficiency, raise significant concerns about our ability to continue our
operations without some form of financial restructuring. Consistent with these
circumstances, the audit opinion on our Consolidated Financial Statements for
the year ended December 31, 2001 expresses substantial doubt about our ability
to continue as a going concern. See "Notes to Consolidated Financial
Statements--1. Summary of Significant Accounting Policies--Basis of
Presentation."

     We currently expect that cash provided by our business will provide us with
sufficient liquidity to allow us to continue our operations for the near term.
We anticipate that we will continue to fund our operations in this manner until
our debt is restructured, either by agreement with the holders of our Senior
Notes and our other lenders or pursuant to a court sanctioned plan of
restructuring. Accordingly, we intend to meet our operating and capital needs in
2002 through a combination of:

     -    improved operating performance resulting from improved industry
          conditions and the reduction of fixed costs in connection with our
          operational restructuring;

     -    borrowings under the Intercompany Loan Agreement, to the extent
          permitted;

     -    sales of inventory to Huntsman Corporation as permitted under the HC
          Supplemental Credit Agreement and the Amendment Agreement; and

     -    Targeted reductions in working capital and reduced capital
          expenditures.

     CAPITAL EXPENDITURES. Capital expenditures for 2001 were $13.4 million, a
decrease of $10.8 million as compared to 2000. The Company expects to spend
between $9.0 and $10.0 million during 2002 on capital projects.

     POTENTIAL ENVIRONMENTAL LIABILITIES. A number of potential environmental
liabilities exist which relate to certain contaminated property. In addition, we
will need to address a number of potential environmental costs relating to
pending or proposed environmental regulations. No assurance can be given that
all of the potential liabilities arising out of our 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. We have approximately $6.4 million
accrued in the December 31, 2001 balance sheet as an estimate of its total
potential environmental liability with respect to investigating and remediating
known and assessed site contamination.

     We may also incur future costs for capital improvements and general
compliance under environmental laws, including costs to acquire, maintain and
repair pollution control equipment. The Company's operating expenditures for
environmental remediation, compliance and waste disposal were approximately $7.6
million and $9.7 million in 2001 and 2000, respectively. We also spent
approximately $3.3 million and $4.5 million relating to capital expenditures for
environmentally related


                                       19
<Page>

projects in 2001 and 2000, respectively. In 2002, we anticipate spending
approximately $4.8 million for environmental remediation, compliance and waste
disposal. Of such amount, expenditures relating to remediation are projected to
be approximately $0.2 million for 2002. Environmental capital spending is
estimated at $3.3 million for 2002. Generally, we expect to incur between $1.5
million and $6.0 million annually in capital spending to address the
requirements of environmental laws. However, we cannot assure you that material
capital expenditures beyond those currently anticipated will not be required
under environmental laws.

     Extensive environmental investigation of the groundwater, soil and solid
waste management units has been conducted at the Odessa Facility. Risk
assessments have been completed for a number of these units and corrective
measures have been defined and conducted. If, however, additional liabilities
with respect to environmental contamination are identified, there can be no
assurance that additional amounts that might be required to investigate and
remediate such potential sites would not have a material adverse effect on the
financial position, results of operations or cash flows of the Company.

     In addition, future regulatory developments could restrict or possibly
prohibit existing methods of environmental compliance. At this time, we are
unable to determine the potential consequences such possible future regulatory
developments would have on our financial condition. As appropriate, we review
our estimates of potential environmental liabilities.

     We carry Pollution Legal Liability insurance to address many potential
environmental liabilities on both a sudden and accidental basis and on a gradual
basis for occurrences commencing after July 1, 1997 on our operations. Such
coverage is subject to customary terms, limits, exclusions and deductibles. The
Company also carries Pollution Legal Liability and Closure and Post Closure
insurance on certain facilities at the Odessa Facility which are regulated by
the TNRCC. This insurance satisfies requirements of the TNRCC governing
operations at this location.

     NO CREDIT SUPPORT FROM CERTAIN AFFILIATES. Huntsman International Holdings
LLC ("HIH") and Huntsman International LLC ("HI") have not guaranteed or
provided any other credit support to the obligations of Huntsman Corporation
under the Existing HC Credit Facilities or under Huntsman Corporation's
outstanding high-yield notes (the "HC Notes"). Neither events of default under
the Existing HC Credit Facilities or the HC Notes nor the exercise of any remedy
by the lenders thereunder will cause any cross-defaults or cross-accelerations
under the outstanding high-yield notes of HIH or HI or the senior secured credit
facilities of HI, except insofar as foreclosure on the stock of Huntsman
Specialty Chemicals Holdings Corporation, pledged to secure the obligations of
Huntsman Corporation under the Existing HC Credit Facilities, would constitute a
"change in control" under the senior secured credit facilities of HI and would
give certain put rights to the holders of the high-yield notes of HIH and HI.


                                       20
<Page>

CHANGES IN FINANCIAL CONDITION

<Table>
<Caption>
Selected Cash Flow Information (in
   thousands)                                    December 31, 2001          December 31, 2000          Difference
                                              ------------------------    ----------------------    ------------------
<S>                                           <C>                         <C>                       <C>
Cash and cash equivalents                         $            --             $          --            $        --
Accounts and notes receivable, net                          7,778                    30,787                (23,009)
Accounts and advances receivable--Affiliates               25,572                    44,245                (18,673)
Inventories                                                53,089                    78,707                (25,618)
Other current assets                                        3,822                     1,317                  2,505
Deferred income taxes                                       8,845                    10,261                 (1,416)
                                              ------------------------    ----------------------    ------------------
   Total current assets                                    99,106                   165,317                (66,211)

Accounts payable                                  $        36,740             $      94,274            $   (57,534)
Accounts payable -- Affiliates                              7,652                     2,030                  5,622
Accrued liabilities                                        36,198                    21,941                 14,257
Current portion of long-term debt                         174,882                        --                174,882
Advance from affiliate                                      6,070                                            6,070
Current portion of long-term debt--Affiliate              346,990                        --                346,990
                                              ------------------------    ----------------------    ------------------
   Total current liabilities                              608,532                   118,245                490,287

Working capital                                   $      (509,426)            $      47,072            $  (556,498)

Affiliate borrowings                              $            --             $     304,164            $  (304,164)
Other - 11 3/4% Senior Notes due 2004                          --                   174,882               (174,882)
                                              ------------------------    ----------------------    ------------------
   Total long-term debt                           $            --             $     479,046            $  (479,046)
</Table>

     At December 31, 2001, the Company's net working capital position was a
negative $509.4 million. Before the reclassification of long-term debt to
current, however, the position is a positive $18.5 million. This compares to a
positive $47.1 million at December 31, 2000, resulting in a decrease of $556.5
million, or $28.6 million before including the reclassification of long-term
debt made in 2001. This decrease is the result of the following:

     -    a reclassification of long-term debt to current in the amount of
          $527.9 million as explained in "--Liquidity and Capital
          Resources--Debt" above;

     -    a decrease of $41.6 million in accounts receivable primarily due to
          weaker economic conditions and lower underlying feedstock prices
          resulting in lower selling prices and also partially due to the
          closure of the styrene unit in 2001;

     -    a decrease of $25.6 million in inventories due to lower underlying
          feedstock prices and the closure of the styrene unit resulting in the
          sale of remaining inventories;

     -    a decrease of $37.7 million in accounts payable and accrued
          liabilities due to reduced raw material prices and inventories as a
          result of weaker market conditions and partially due to closure of the
          styrene unit and the partial assignment of S&B's claim against the
          Company to Huntsman Corporation in December 2001 in accordance with
          Huntsman Corporation's agreements with its lenders.

     The Company generally maintains a daily cash balance of approximately zero
because of its participation in a consolidated Huntsman Corporation cash
management system wherein Huntsman Corporation's domestic subsidiaries' daily
cash surpluses and deficits are generally swept to Huntsman Corporation. In the
past, the Company has used the Intercompany Loan Agreement as its primary source
of financing. However, as noted in "--Liquidity and Capital Resources--Debt"
above, pursuant to the Amendment Agreement and the HC Supplemental Credit
Agreement, there are limitations that will prevent the Company from obtaining
additional equity investments from Huntsman Corporation and will limit the
Company's ability to obtain other financing under the Intercompany Loan
Agreement.


                                       21
<Page>

     For the year ended December 31, 2001, total long-term debt decreased by
$479.0 million. This was the net result of reclassifying the current portion of
long-term debt, partially offset by an increase in affiliate borrowings.

RECENTLY ISSUED FINANCIAL ACCOUNTING STANDARDS

     On January 1, 2001, the Company adopted SFAS No. 133, "ACCOUNTING FOR
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES." SFAS No. 133, as amended and
interpreted, 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. The adoption of SFAS No. 133 did not have a
material effect on the Company's financial position as the financial instruments
and other contracts held by and entered into by the Company either do not meet
the definition of a derivative or qualify for the normal purchases and sales
exemption.

     On July 20, 2001, the Financial Accounting Standards Board issued SFAS No.
141, "Business Combinations," and SFAS No. 142, "Goodwill and Other Intangible
Assets." The statements will change the accounting for business combinations and
goodwill in two significant ways. SFAS No. 141 requires that the purchase method
of accounting be used for all business combinations initiated after June 30,
2001. Use of the pooling-of-interests method will be prohibited. SFAS No. 142
changes the accounting for goodwill from an amortization method to an
impairment-only approach. Thus, amortization of goodwill, including goodwill
recorded in past business combinations, will cease upon adoption of that
statement, which for the Company will be January 1, 2002. Adoption of this
pronouncement will not have a material effect on the Company's financial
statements.

     In August 2001, the Financial Accounting Standards Board issued SFAS No.
143, "Accounting for Asset Retirement Obligations." SFAS No. 143 addresses
financial accounting and reporting for obligations associated with the
retirement of tangible, long-lived assets and the associated asset retirement
costs. This Statement requires that the fair value of a liability for an asset
retirement obligation be recognized in the period in which it is incurred by
capitalizing it as part of the carrying amount of the long-lived assets. As
required by SFAS No. 143, the Company will adopt this new accounting standard on
January 1, 2003. The Company is currently evaluating the effects of adopting
this pronouncement.

     In October 2001, the Financial Accounting Standards Board issued SFAS No.
144, "Accounting for the Impairment or Disposal of Long-Lived Assets." This
Statement establishes a single accounting model for the impairment or disposal
of long-lived assets. As required by SFAS No. 144, the Company will adopt this
new accounting standard on January 1, 2002. Adoption of this pronouncement will
not have a material effect on the Company's financial statements.

CAUTIONARY STATEMENT FOR FORWARD LOOKING INFORMATION

     Certain information set forth in this report contains "forward-looking
statements" within the meaning of the federal securities laws. Forward-looking
statements include statements concerning our 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," "will," "should," or "anticipates," or the negative of such terms or
other comparable terminology, or by discussions of strategy. We may also make
additional forward-looking statements from time to time. All such subsequent
forward-looking statements, whether written or oral, by us or on our 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 our current
expectations and various assumptions. Our expectations, beliefs and projections
are expressed in good faith and we believe there is a reasonable basis for them,
but, there can be no assurance that management's expectations, beliefs and
projections will result or be achieved. All forward-looking statements apply
only as of the date made. We undertake no obligation to


                                       22
<Page>

publicly update or revise forward-looking statements 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 our 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, including those discussed elsewhere in this report,
that may cause our actual results to differ materially from the forward-looking
statements. Any forward-looking statements should be considered in light of
these factors.

     FINANCIAL CONDITION. Our financial condition, and the current financial
condition of Huntsman Corporation, create a number of serious risks and
uncertainties for our business. Cash flows from our operations may not be
sufficient to allow us to operate our business without obtaining additional
financing. As noted in "Item 7--Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital Resources,"
Huntsman Corporation is not permitted to provide us with additional equity
financing and is significantly limited in the other financing it can provide to
us. Accordingly, we face a significant likelihood that we will not be able to
obtain the financing necessary to operate our business. If we are unable to meet
our cash requirements, we will likely need to pursue an out-of-court or court
sanctioned financial restructuring.

     In addition, our failure to pay interest on our Senior Notes within 30 days
of the December 1, 2001 constituted an event of default under the Senior Notes
and could result in an acceleration of the obligations thereunder by the trustee
or the holders of at least 25% in aggregate principal amount of the outstanding
Senior Notes. However, because the payment of interest on the Senior Notes would
result in a termination of the Forbearance Period under the Amendment Agreement,
it is unlikely that we will make the upcoming interest payments on our Senior
Notes. Moreover, we, along with Huntsman Corporation and our financial advisor,
DrKW, are engaged in discussions with our note holders (including an affiliate
of Credit Suisse First Boston, the holder of over 73% of our Senior Notes),
concerning the restructuring of our debt. A restructuring could be undertaken
under court supervision or outside of court, and could result in a number of
outcomes, including modifications to the terms governing our debt, exchange of
our existing debt into new debt securities, conversion of our debt into new
equity securities, agreements by our debt holders to receive less than the full
amount that is owed to them, or other outcomes. While we believe our discussions
are progressing toward a restructuring of our debt, there can be no assurance as
to the final outcome of these discussions. If we are unsuccessful in our efforts
to restructure our debt, we likely would seek a court sanctioned resolution. For
more information, see "--Debt," "--Financial Restructuring" and "--Changes in
Financial Condition" above.

     CUSTOMER, SUPPLIER AND BUSINESS RELATIONSHIPS. Our financial circumstances,
including without limitation the issues noted under "--Financial Condition"
above and the receipt of our independent auditor's "going concern" qualification
in the audit opinion, may have an adverse effect on our customer, supplier and
other business relationships, and may result in, among other things, less
favorable trade credit terms. A tightening of trade credit terms could have a
material adverse effect on our business.

     "CHANGE OF CONTROL" EVENTS. A "change of control" could be triggered by
certain events affecting Huntsman Corporation. As of December 31, 2001, Huntsman
Corporation had borrowings of approximately $1.5 billion outstanding under its
credit facilities. As collateral for its obligations under the Existing HC
Credit Facilities, Huntsman Corporation has pledged its 100% ownership interest
in our Parent, and our Parent has pledged its 100% ownership interest in the
Company. In addition, we and our Parent are guarantors of Huntsman Corporation's
obligations under the Existing HC Credit Facilities. We have granted security
interests and liens on substantially all of our assets to secure our obligations
under our Guaranty to Huntsman Corporation's lenders, subject to certain
limitations in effect until such time as all of the Senior Notes have been
indefeasibly repaid, redeemed or repurchased in full. The Guaranty provides that
our maximum liability thereunder at any time will not exceed the amount
permitted to exist at such time under the Indenture. At this time, because of
the restrictions on incurring indebtedness and making investments contained in
the Indenture, we do not have any liability under the Guaranty. Nevertheless, as
a result of recent amendments to the Existing HC Credit Facilities, Huntsman


                                       23
<Page>

Corporation's lenders now have certain rights to receive assignments of security
interests in our assets created in connection with the Intercompany Loan
Agreement.

     On December 20, 2001, Huntsman Corporation, which is not in compliance with
certain financial covenants contained in the Existing HC Credit Facilities
entered into the Amendment Agreement. Under the Amendment Agreement, existing
defaults and some future defaults were waived and the lenders agreed to forbear
exercising rights and remedies arising from the failure to pay certain interest
until March 15, 2002. On March 15, 2002, the Forbearance Period was extended
until June 30, 2002. If the Forbearance Period is not extended beyond June 30,
2002, or if the rights of the lenders under the Existing HC Credit Facilities
are not otherwise stayed or unless Huntsman Corporation's debt is restructured,
Huntsman Corporation's lenders could pursue certain remedies under the Existing
HC Credit Facilities including accelerating the debt due, enforcing the
guaranties of HPHC and the Company, foreclosing on the pledge of the equity of
HPHC and the Company, and foreclosing on the security interests and liens on the
assets securing the Company's obligations under the Guaranty to the extent the
Company has any liability under the Guaranty at the time of the foreclosure and
subject to the limitations on the security interests and liens referred to
above.

     The acceleration by Huntsman Corporation's lenders of the debt under the
Credit Facilities would cause an acceleration of our obligations under the
Intercompany Loan Agreement. As a result, as of June 30, 2001, we reclassified
the intercompany borrowings portion of affiliate debt as a current liability. We
have granted security interests and liens on substantially all of our assets to
secure our obligations under the Intercompany Loan Agreement, subject to certain
limitations in effect until such time as all of the Senior Notes have been
repaid in full. Acceleration of the debt under the Credit Facilities and of our
obligations under the Intercompany Loan Agreement would constitute an event of
default under the Senior Notes, which could result in an acceleration of our
obligations under the Senior Notes by the trustee or the holders of at least 25%
in principal amount of the then outstanding Senior Notes.

     A foreclosure on the pledge of the equity of our Parent or us would
constitute a "change of control" under the Indenture. If a "change of control"
occurs, each holder of the Senior Notes would have the right to require the
Company to purchase all or any part of the Senior Notes held by such holder at
an offer price in cash equal to 101% of the aggregate principal amount thereof,
plus accrued and unpaid interest thereon to the date of purchase. Under such
circumstances, there can be no assurance that we would have sufficient funds to
purchase all or part of the Senior Notes.

     TERRORISM AND WAR. On September 11, 2001, the United States was the target
of terrorist attacks of unprecedented scope. These attacks have caused major
instability in the U.S. and other financial markets. Leaders of the U.S.
government are actively pursuing those behind the attacks and have indicated
that it may be necessary to initiate broader action against global terrorism.
The attacks and the response to the attacks have led to armed hostilities,
which, in turn, may lead to further acts of terrorism in the United States or
elsewhere, and such developments would likely cause further instability in
financial markets. In addition, armed hostilities and further acts of terrorism
may directly impact our physical facilities and operations, or those of our
customers. Furthermore, the recent terrorist attacks and future developments may
result in reduced demand from our customers for our products or may negatively
impact our customers' demand for our products. These developments will subject
our operations to increased risks and, depending on their magnitude, could have
a material adverse effect on our business.

     CYCLICAL NATURE OF OUR INDUSTRY. Historically, the markets for our products
have experienced alternating periods of tight supply, causing prices and profit
margins to increase, followed by periods of capacity additions, resulting in
oversupply and declining prices and profit margins. Currently, several of our
markets are experiencing periods of oversupply, and the pricing of our products
in these markets is depressed. We cannot guarantee that future growth in demand
for these products will be sufficient to alleviate any existing or future
conditions of excess industry capacity or that such conditions will not be
sustained or further aggravated by anticipated or unanticipated capacity
additions or other events.

     RAW MATERIAL SUPPLY. The prices for a large portion of our raw materials
are similarly cyclical. Our ability to pass on increases in the cost of raw
materials to our customers is, to a large extent, dependent upon market
conditions. There may be periods of time in which we are not able to recover
increases in


                                       24
<Page>

the cost of raw materials due to weakness in demand for or oversupply of our
products. Additionally, we obtain some of our raw materials from a few key
suppliers. If any of our key suppliers fails to meet its obligations or
otherwise refuses to supply us, we may be forced to pay higher prices to obtain
additional raw materials, if such raw materials are available at all.
Accordingly, any interruption in supply or price increase for our raw materials
could adversely affect our business and operations.

     COMPETITION. The industries in which we operate are highly competitive.
Among our competitors are some of the world's largest chemical companies and
major integrated petroleum companies that have their own raw material resources.
Some of these companies are able to produce products more economically than we
can. If any of our current or future competitors develop proprietary technology
that enables them to produce products at a significantly lower cost, our
technology could be rendered uneconomical or obsolete. Moreover, because certain
of our businesses use technology that is widely available, or if we cannot
protect our proprietary technology, new competitors could emerge in certain
product segments of our business. Further, petroleum-rich countries have become
more significant participants in the petrochemical industry and may expand this
role significantly in the future. Any of these developments could have a
significant negative impact on our profit margins.

     ENVIRONMENTAL REGULATIONS. We are subject to extensive federal, state,
local and foreign laws, regulations, rules and ordinances relating to pollution,
protection of the environment and the use or cleanup of hazardous substances and
wastes. We may incur substantial costs, including fines, damages, criminal or
civil sanctions and investigation and clean-up expenses, or experience
interruptions in our operations for actual or alleged violations arising under
any environmental laws. In addition, we could incur significant expenditures in
order to comply with existing or future environmental laws.

     OTHER FACTORS. In addition to the factors described above, we face a number
of other uncertainties, including:

     -    changes in economic conditions,

     -    inability to obtain new customers or retain existing ones,

     -    changes in product mix and utilization of production facilities,

     -    significant changes in our relationship with our employees and the
          adverse effects of labor disputes or grievances, should they occur,

     -    unavailability of, and substantial delays in, transportation of raw
          materials and products,

     -    significant changes in tax rates or policies or in rates of inflation
          or interest,

     -    changes in management or control of the Company, and

     -    changes in accounting principles and/or the application of such
          principles to the Company.

ITEM 7A.          QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

       We have interest and market risk with respect to certain intercompany
debt, which bears interest at floating rates. Our remaining long-term debt bears
interest at fixed rates.

       Our exposure to foreign currency market risk is minimal because sales
prices for our products are typically denominated in U.S. dollars.

       We are exposed to commodity price market risk. Our exposure to changing
commodity prices may be limited by the fact that substantially all raw materials
are acquired at posted or market related prices, and, generally, sales prices
for our finished products are at market prices which reflect changes in


                                       25
<Page>

underlying commodity prices. Nevertheless, we may be negatively impacted in
markets where economic conditions do not permit us to pass on increased raw
material costs to our customers. We typically do not enter into fixed-price
long-term contracts. We also typically do not hedge against commodity price
market risk.

       The following table summarizes our fixed and variable rate debt
obligations by contractual maturity date as of December 31, 2001:

<Table>
<Caption>
Long-term Debt (Dollars in Thousands)                       2002           2004         THEREAFTER        TOTAL        FAIR VALUE
-------------------------------------                       ----           ----         ----------        -----        ----------
<S>                                                       <C>             <C>           <C>              <C>            <C>
Fixed Rate .........................................        --            174,882            --           174,882         37,381
   Average interest rate ...........................        --              11.75%           --            11.75%
Variable Rate ......................................      67,935              --         285,125          353,060        353,080
   Average interest rate (Prime rate
   plus 0.5% to 2.0%) ..............................        8.52%             --            9.02%           8.92%
</Table>

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.

                                    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*               64       Chairman, Director
Peter R. Huntsman*             39       President and CEO, Director
J. Kimo Esplin                 39       Senior Vice President and Chief Financial Officer
Thomas J. Keenan               49       Senior Vice President
Michael J. Kern                52       Senior Vice President, Environmental, Health and Safety
Robert B. Lence                44       Senior Vice President and Chief Legal Officer, Secretary
Don H. Olsen                   56       Senior Vice President, Public Affairs
Donald J. Stanutz              51       Senior Vice President, Global Sales and Marketing
David H. Huntsman*             34       Vice President
Sean Douglas                   37       Vice President
Monte G. Edlund                46       Vice President, Polymers
L. Russell Healy               46       Vice President, Tax
Samuel D. Scruggs              42       Vice President and Treasurer
</Table>

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

     JON M. HUNTSMAN has been Chairman 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


                                       26
<Page>

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.

     PETER R. HUNTSMAN has been President and a Director of the Company since
August 1997 and CEO since 2000. Mr. Huntsman is the President and Chief
Executive 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 is also Executive Vice President
and Chief Financial Officer of Huntsman Corporation and serves as Senior Vice
President and Chief Financial Officer of Huntsman Chemical Corporation and
Huntsman Petrochemical Corporation. Since joining Huntsman in 1994, Mr. Esplin
has served as an officer or director of Huntsman Corporation and its 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 President, North American Petrochemicals Division 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 is Senior Vice President, Environmental, Health and Safety.
Mr. Kern is also Senior Vice President, Environmental, Health and Safety 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.

     DON H. OLSEN is Senior Vice President, Public Affairs of the Company. Mr.
Olsen also serves as Senior Vice President, Public Affairs for Huntsman
Corporation and serves as an officer or director of many of its affiliated
companies. Prior to joining Huntsman in 1988, Mr. Olsen had a distinguished
17-year career in broadcast journalism. He also spent three years in Washington,
D.C. as Director of Communications for former U.S. Senator Jake Garn.

     DONALD J. STANUTZ is Senior Vice President, Global Sales and Marketing of
the Company. Mr. Stanutz also serves as Executive Vice President and Chief
Operating Officer of Huntsman Corporation and as Senior Vice President, Global
Sales and Marketing of Huntsman Petrochemical Corporation. 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 Manager--Chemical
Department from 1989 to 1990.


                                       27
<Page>

     DAVID H. HUNTSMAN has been Vice President of the Company since 1998. Mr.
Huntsman is a Director, Vice Chairman of the Board and Vice President,
Expandable Polystyrene of Huntsman Corporation and serves as an officer or
Director of many of 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.

     SEAN DOUGLAS is Vice President of the Company. Mr. Douglas is also Vice
President and Treasurer of Huntsman Corporation and many of its affiliated
companies. Since joining Huntsman Corporation in 1990, he has served in a number
of executive roles, including Vice President, Administration and Assistant
Treasurer of Huntsman Corporation, Vice President of Huntsman's affiliated
companies, Controller of Huntsman Specialty Chemicals Corporation, and as a
financial analyst for Huntsman's European businesses. Mr. Douglas is a CPA and,
prior to joining Huntsman, worked for Price Waterhouse.

     MONTE G. EDLUND has been Vice President, Marketing/Commercial of the
Company since August 1997. Mr. Edlund also serves as Vice President, Specialty
Polymers Marketing of Huntsman Corporation. 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 the Company since
August 1997. Mr. Healy is also Vice President, Finance of Huntsman Corporation
and its 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.

     SAMUEL D. SCRUGGS is Vice President and Treasurer. Mr. Scruggs also serves
as Executive Vice President of Huntsman Corporation and as an officer of its
affiliated companies. Mr. Scruggs previously served as Vice President and
Treasurer and Associate General Counsel of Huntsman Corporation. Prior to
joining Huntsman in 1995, Mr. Scruggs was an associate with the law firm of
Skadden, Arps, Slate, Meagher & Flom LLP.

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 three other highest paid executive officers of the Company in 2001 (the
"named executive officers") for the years indicated.


                                       28
<Page>

<Table>
<Caption>
                                                                                        Long Term
                                                                                      Compensation
                                                                                      ------------
                                                Annual Compensation (1)                   Awards
                                       -------------------------------------------------------------------------------
                                                                                         Number of
                                                                                        Securities
                                                                                        Underlying
Name and Principal                                                    Other Annual     Options/EARs      All Other
     Position              Year           Salary          Bonus      Compensation (2)  Granted (13)     Compensation
-------------------- ----------------- -------------- -------------- ---------------- ---------------- ---------------
<S>                        <C>          <C>            <C>             <C>                   <C>        <C>         <C>
Peter R. Huntsman,         2001         $  113,000     $   50,000      $    67,817(3)        26,316     $   166,805 (4)
  Chief Executive          2000         $  110,000     $   25,000               --               --     $    13,301 (5)
Officer, President         1999         $  100,000     $  160,000               --               --     $    22,911 (5)
   and Director

 Jon M. Huntsman,          2001         $  100,000             --               --           27,632     $    16,123 (6)
  Chairman of the          2000         $  150,000             --               --               --     $    17,898 (7)
       Board               1999         $  150,000     $  425,000               --               --     $    54,189 (7)

 Thomas J. Keenan,         2001         $  111,000     $   56,000               --            5,263     $    36,666 (8)
    Senior Vice            2000         $  108,000     $   40,000               --               --     $    40,138 (9)
     President             1999             -- (10)        -- (10)              --               --     $    26,396 (9)

 Monte G. Edlund,          2001         $  162,560     $   82,974               --            5,592     $    16,369 (11)
  Vice President,          2000         $  180,000     $   30,000               --               --     $    33,014 (12)
     Polymers              1999         $  150,000     $   45,000               --               --     $     3,326 (12)
</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)  Any blank items in this column reflect perquisites and other personal
     benefits, securities or property received by the named executive officer
     which are less than either $50,000 or 10% of the total annual salary and
     bonus reported for the named executive officer.
(3)  Perquisites and other personal benefits in the amount of $67,817, including
     a payment of $21,742 for relocation expenses and $31,355 for education and
     housing expenses for overseas assignment.
(4)  Consists of an employer contribution of $583 to the 401(k) Plan, an
     employer contribution of $1,883 to the Supplemental 401(k) Plan, an
     employer contribution of $49,275 to the Equity Deferral Plan (an unfunded
     deferred compensation plan), an employer contribution of $1,360 to the
     Money Purchase Pension Plan, an employer contribution of $13,704 to the
     money purchase pension plan portion of the Huntsman SERP, and an equity
     credit under the Equity Deferral Plan for foreign service of $100,000.
(5)  Consists of $2,532 and $3,782 employer's 401(k) contribution for 2000 and
     1999, respectively, and employer's money purchase contribution of $10,769
     and $19,129 for 2000 and 1999, respectively
(6)  Consists of an employer contribution of $340 to the 401(k) Plan, an
     employer contribution of $1,360 to the Money Purchase Pension Plan and
     $14,423 payment for unused vacation.
(7)  Consists of $2,949 and $10,438 employer's 401(k) contribution for 2000 and
     1999, respectively, employer's money purchase contribution of $12,231 and
     $43,751 for 2000 and 1999, respectively, and an employer's contribution of
     $2,718 to the Equity Deferral Plan in 2000.
(8)  Consists of employer contribution of $1,403 to 401(k) Plan, an employer
     contribution of $187 to nonqualified 401(k) Plan, an employer contribution
     of $22,913 to the Equity Deferral Plan, an employer contribution of $2,104
     to the Money Purchase Pension Plan, and an employee contribution of $10,059
     to the money purchase pension plan portion of the Huntsman SERP.
(9)  Consists of $1,764 and $4,682 employer's 401(k) contribution for 2000 and
     1999, respectively, employer's money purchase contribution of $11,846 and
     $21,714 for 2000 and 1999, respectively, and an employer's contribution of
     $26,528 to the Equity Deferral Plan in 2000.
(10) Mr. Keenan first became an executive officer of the Company in 2000.
(11) Consists of an employer contribution of $3,010 to the 401(k) Plan, an
     employer contribution of $12,412 to the Equity Deferral Plan, an employer
     contribution of $753 to the Money Purchase Pension Plan, and an employer
     contribution of $194 to the money purchase pension plan portion of the
     Huntsman SERP.


                                       29
<Page>

(12) Consists of $2,869 and $2,919 employer's 401(k) contribution for 2000 and
     1999, respectively, employer's money purchase contributions of $1,042 and
     $407 for 2000 and 1999, respectively, and an employer's contribution of
     $29,103 to the Equity Deferral Plan in 2000.
(13) "EARs" means equity appreciation rights.

EQUITY OPTIONS AND EQUITY APPRECIATION RIGHTS

     The following table sets forth information concerning the grant of equity
appreciation rights ("EARs") to each of the named executive officers during the
last fiscal year. The grants represent a prorated percentage of the total grants
under the Huntsman Equity Appreciation Rights Plan attributable to services
rendered to the Company.

                      OPTION/EAR GRANTS IN LAST FISCAL YEAR

<Table>
<Caption>
                                                                                Potential
                                                                             Realizable Value             Alternative:
                                                                            at Assumed Annual             Grant Date
                               Individual Grants                             Rates of Equity                 Value
                                                                                  Price
                                                                            Appreciation for
                                                                               Option Term
               Number of          % of Total                               -------------------
               Securities        Options/EARs      Exercise
               Underlying         Granted to        or Base                                               Grant Date
               Options/EARs      Employees in        Price     Expiration                                   Present
Name           Granted (#)        Fiscal Year      ($/unit)       Date            5% ($)        10% ($)    Value ($)
----           -----------        -----------      --------       ----            ------        -------    ---------

<S>                <C>               <C>             <C>         <C>             <C>            <C>        <C>
Peter R.
Huntsman           26,316            100%            $7.60       1/05/11         129,212        341,319       N/A

Jon M.             27,632            100%            $7.60       1/05/11         135,673        358,387       N/A
Huntsman

Thomas J.
Keenan              5,263            100%            $7.60       1/05/11          25,841         68,261       N/A

Monte G.
Edlund              5,592            100%            $7.60       1/05/11          27,457         72,528       N/A
</Table>

     Equity appreciation rights were granted to the named executive officers
under the Huntsman Equity Appreciation Rights Plan, and vest at a rate of 25%
per year, beginning with the first anniversary of the date of grant. Vesting of
these equity appreciation rights accelerates upon a change in control, as
defined in the plan.

     The following table sets forth information concerning the exercise of EARs
during the last fiscal year by each of the named executive officers and the
fiscal year-end value of unexercised EARs.

            AGGREGATED OPTION/EAR EXERCISES IN LAST FISCAL YEAR,
                         AND FY-END OPTION/EAR VALUES
<Table>
<Caption>
                   Securities                           Number of Securities               Value of Unexercised
                   Acquired on       Value             Underlying Unexercised          In-the-Money Options/EARs at
     Name          Exercise (#)      Realized        Options/EARs at FY-End (#)                   FY-End
                                                   -------------------------------    -------------------------------
                                                   Exercisable       Unexercisable    Exercisable       Unexercisable
---------------    -------------     ----------    -------------     -------------    -------------     -------------
<S>                <C>               <C>           <C>               <C>              <C>               <C>
Jon M.
Huntsman                0            $    0            27,632                 0           $  0              $  0
Peter R.
Huntsman                0            $    0                 0            26,316           $  0              $  0
Thomas J.
Keenan                  0            $    0                 0             5,263           $  0              $  0
Monte G.
Edlund                  0            $    0                 0             5,592           $  0              $  0
</Table>

                                       30
<Page>

RETIREMENT PLANS

     During 2001, 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 for 2001 benefits were, in general, based on the
following formula: 1.5% of average final compensation multiplied by years of
credited service, minus 1.5% of estimated Social Security benefits multiplied by
years of credited service (maximum 50% of Social Security. For years of credited
service prior to 2000, benefits are based on a 1.4% formula). Final average
compensation for the Huntsman Corporation Pension Plan is based on the highest
average 36 months. Federal regulations require that for the 2001 plan year no
more than $170,000 in compensation be considered for the calculation of
retirement benefits from the Huntsman Corporation Pension Plan, and the maximum
annual benefit paid from a qualified defined benefit plan cannot exceed
$140,000, as of January 1, 2001. Benefits are calculated on a straight life
annuity basis.

     The above pension formulas are 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 is determined using the former Rexene Retirement Plan formula and
final average compensation at the date of determination. Such applicable formula
is: (1) 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 (2) 0.5% of the employee's Final Average Pay which exceeds an average
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, 2001, all of the above-named executives 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 and calculated without the limits on benefits imposed by federal law on the
Huntsman Corporation Pension Plan.(1) Benefits under the Huntsman SERP become
vested after 10 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 related to the Huntsman Corporation Pension Plan 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 and the limits of federal law.

     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 related to the
Huntsman Corporation Pension Plan combined based on the 1.5% formula effective
for 2001.

--------
        (1) The SERP also provides benefits not available under the Huntsman
Money Purchase Pension Plan (a qualified money purchase pension plan in which
substantially all full-time employees of the Company participate) because of
limits on compensation that can be counted and amounts that can be allocated
to accounts under federal law within the Huntsman Money Purchase Pension
Plan. The amount of benefits accrued for the year under the SERP relating to
the Huntsman Money Purchase Pension Plan for the named executives allocable
to the Company are included in the Summary Compensation Table under the "All
Other Compensation" column.

                                       31
<Page>

                 HUNTSMAN CORPORATION PENSION PLAN & SERP TABLE

<Table>
<Caption>
      FINAL
   AVERAGE PAY          5           10          15           20          25           30          35           40
<S>                 <C>          <C>        <C>          <C>         <C>          <C>           <C>         <C>
      $50,000          3,800        7,500      11,300       15,000      18,800       22,500       26,300      30,000
      $75,000          5,600       11,300      16,900       22,500      28,100       33,800       39,400      45,000
     $100,000          7,500       15,000      22,500       30,000      37,500       45,000       52,500      60,000
     $125,000          9,400       18,800      28,100       37,500      46,900       56,300       65,600      75,000
     $150,000         11,300       22,500      33,800       45,000      56,300       67,500       78,800      90,000
     $175,000         13,100       26,300      39,400       52,500      65,600       78,800       91,900     105,000
     $200,000         15,000       30,000      45,000       60,000      75,000       90,000      105,000     120,000
     $225,000         16,900       33,800      50,600       67,500      84,400      101,300      118,100     135,000
     $250,000         18,800       37,500      56,300       75,000      93,800      112,500      131,300     150,000
     $275,000         20,600       41,300      61,900       82,500     103,100      123,800      144,400     165,000
     $300,000         22,500       45,000      67,500       90,000     112,500      135,000      157,500     180,000
     $325,000         24,400       48,800      73,100       97,500     121,900      146,300      170,600     195,000
     $350,000         26,300       52,500      78,800      105,000     131,300      157,500      183,800     210,000
     $375,000         28,100       56,300      84,400      112,500     140,600      168,800      196,900     225,000
     $400,000         30,000       60,000      90,000      120,000     150,000      180,000      210,000     240,000
</Table>

     For purposes of calculating benefits under the Huntsman Corporation Pension
Plan, the number of completed years of credited service as of December 31, 2001
for each named executive officer were as follows: Mr. Jon M. Huntsman, Sr. - 31;
Mr. Peter Huntsman - 18; Mr. Thomas Keenan -7; Mr. Monte Edlund - 12. For
purposes of calculating benefits under the Huntsman SERP, the number of
completed years of credited service as of December 31, 2001 for each named
executive who also participated in the Huntsman SERP were as follows: Mr. Jon M.
Huntsman, Sr. - 31; Mr. Peter Huntsman - 18; Mr. Thomas Keenan - 17; Mr. Monte
Edlund - 4.

     Effective September 27, 2001, Huntsman Corporation terminated the Huntsman
Equity Deferral Plan and the Huntsman Supplemental Salary Deferral Plan, each an
elective nonqualified deferred compensation plan, and paid out the amounts which
participants were entitled to receive under the terms of each plan. Huntsman
Corporation also amended the portion of the Huntsman SERP related to the
Huntsman Money Purchase Pension Plan to provide for the payout to participants
of amounts participants were entitled to receive under that portion of the
Huntsman SERP as of September 30, 2001.

COMPENSATION OF DIRECTORS

     FEES AND EXPENSES.  Directors received no compensation in 2001.

EMPLOYMENT AGREEMENTS

     There are no employment agreements with any executive officers.

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. Jon M.
Huntsman and his family own or control over 95% of the stock of Huntsman
Corporation. 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, 2001, are summarized as follows (dollars in
thousands):


                                       32
<Page>

<Table>
<Caption>
                                                                                    As of or for the
                                                                                       Year Ended
                                                                                   December 31, 2001
                                                                                -------------------------
<S>                                                                               <C>
           Sales to:
             Huntsman Petrochemical Corporation                                   $         10,231
             Huntsman Expandable Polymers Corporation                                        3,308
             Huntsman Corporation                                                          343,257
             Huntsman International LLC                                                     10,614
           Trade accounts receivable from:
             Huntsman Corporation                                                           23,119
             Huntsman Petrochemical Corporation                                              1,510
             Huntsman International LLC                                                        513
             Huntsman Expandable Polymers Corporation                                            2
           Miscellaneous accounts receivable from:
             Employee advances                                                                   6
             Huntsman Polypropylene Corporation                                                338
             Huntsman Expandable Polymers Corporation                                           16
             Huntsman Petrochemical Corporation                                                 19
             Huntsman International LLC                                                         49
           Product purchases from:
             Huntsman Petrochemical Corporation                                              5,642
           Interest on intercompany
           borrowings and capital lease:
             Huntsman Group Holdings Finance Corporation                                    28,200
           Allocated selling, general, and administrative:
             Huntsman Petrochemical Corporation                                              2,991
           Trade accounts payable to:
             Huntsman Petrochemical Corporation                                                821
             Huntsman Polypropylene Corporation                                              1,041
           Miscellaneous accounts payable to:
             Huntsman Petrochemical Corporation                                                230
             Huntsman Corporation                                                            5,560
           Long-term debt payable to:
             Huntsman Group Holdings Finance Corporation                                   279,055
           Advance from affiliate:
             Huntsman Group Holdings Finance Corporation                                     6,070
           Long-term capital lease payable to:
             Huntsman Corporation
                (including accrued interest)                                                67,935
             Capital contribution from parent                                               31,000
</Table>

     Affiliate overhead charges are for direct administrative services provided
by Huntsman Petrochemical Corporation, primarily in the areas of information
technology, sales & marketing, human resources and office services. The charges
are based on actual costs incurred and are representative of a third party
transaction.

     Since the Merger, we have sold products to Huntsman Corporation under the
terms of a product supply agreement (the "Product Supply Agreement"). The
Product Supply Agreement originally provided for a modified "cost plus" pricing
mechanism, and neither we nor Huntsman Corporation had any minimum purchase or
sale obligations. Beginning January 1, 2001, after decreasing market prices had
rendered the "cost plus" pricing formula unworkable, we agreed with Huntsman
Corporation to amend the Product Supply Agreement to provide for a
"market-based" pricing mechanism. In addition, on December 20, 2001 when
Huntsman Corporation entered into the Amendment Agreement and the HC
Supplemental Credit Agreement, it agreed to significant restrictions on
investments in and payments to the Company. See, "Item 7 Management's Discussion
and Analysis of Financial Condition and Results of Operations--


                                       33
<Page>

Liquidity and Capital Resources--Debt." One permitted exception to these
restrictions, however, was ordinary course payments in respect of existing
commercial arrangements. Accordingly, Huntsman Corporation is permitted to pay
us under the Product Supply Agreement for products which it purchases. As a
result, sales of product to Huntsman Corporation under the Product Supply
Agreement now provide an important source of liquidity to our business. Included
in such sales for the year ended December 31, 2001 is $8.4 million relating to
inventory segregated in our warehouses which is being held for the account of
Huntsman Corporation at December 31, 2001.

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

(a)    2.      Financial Statement Schedule:
               See Index to Consolidated Financial Statements on page F-1

(a)    3.      Description of Exhibits

       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).
       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).


                                       34
<Page>

       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).

(b) The Company filed no reports on Form 8-K for the year ended December 31,
2001.

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


                                       35
<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:  April 1, 2002                  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 the 1st day of April, 2002:

<Table>
<Caption>
                    NAME                                           CAPACITIES
---------------------------------------------    ------------------------------------------------
<S>                                              <C>


             /s/ Jon M. Huntsman
--------------------------------------------
               JON M. HUNTSMAN                   Chairman of the Board and Director



            /s/ Peter R. Huntsman
--------------------------------------------
              PETER R. HUNTSMAN                  President and Chief Executive Officer and
                                                 Director (Principal Executive Officer)


             /s/ J. Kimo Esplin
--------------------------------------------
               J. KIMO ESPLIN                    Senior Vice President, Chief Financial Officer
                                                 (Principal Financial and Accounting Officer)
</Table>


                                       36
<Page>

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

<Table>
<S>                                                                                                        <C>
Responsibility for the Consolidated Financial Statements...................................................F-2

Independent Auditors' Report...............................................................................F-3

Consolidated Balance Sheets as of December 31, 2001 and 2000...............................................F-4

Consolidated Statements of Operations for the Years Ended December 31, 2001, 2000 and 1999.................F-5

Consolidated Statements of Stockholder's Equity (Deficit) for the Years Ended December 31,
2001, 2000 and 1999........................................................................................F-6

Consolidated Statements of Cash Flows for the Years Ended December 31, 2001, 2000 and 1999.................F-7

Notes to the Consolidated Financial Statements.............................................................F-8
</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 accounting principles generally
accepted in the United States of America 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 2001, 2000 and 1999 financial statements have been audited by the
Company's independent auditors, 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 auditors 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>


                          INDEPENDENT AUDITORS' REPORT

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") as of December 31,
2001 and 2000, and the related consolidated statements of operations,
stockholder's equity and cash flows for each of the three years in the period
ended December 31, 2001. 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 audit 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 also 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 and its subsidiaries as of December 31, 2001 and 2000 and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 2001 in conformity with accounting principles
generally accepted in the United States of America.

     The accompanying consolidated financial statements for the year ended
December 31, 2001 have been prepared assuming that the Company will continue as
a going concern. As discussed in Note 1 to the consolidated financial
statements, the Company's failure to make required interest payments on its
Senior Notes due 2004, recurring losses from operations, negative working
capital position and net stockholders' deficiency, coupled with Huntsman
Corporation's failure to maintain required financial covenants on its senior
credit facilities and failure to make required interest payments on certain of
its subordinated debt, raise substantial doubt about the Company's ability to
continue as a going concern. Management's plans concerning these matters are
also described in Note 1. The consolidated financial statements do not include
any adjustments that might result from the outcome of this uncertainty.



/s/ DELOITTE & TOUCHE LLP

DELOITTE & TOUCHE LLP

Houston, Texas
March 28, 2002


                                      F-3
<Page>



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

<Table>
<Caption>
                                                              December 31, 2001                December 31, 2000
                                                        ------------------------------    ----------------------------
<S>                                                     <C>                               <C>
ASSETS
CURRENT ASSETS:

   Cash and cash equivalents                                  $             --                  $             --
   Accounts and notes receivables, net                                   7,778                            30,787
   Accounts and advances receivable -
     Affiliates                                                         25,572                            44,245
   Inventories                                                          53,089                            78,707
   Other current assets                                                  3,822                             1,317
   Deferred income taxes                                                 8,845                            10,261
                                                        ------------------------------    ----------------------------
     TOTAL CURRENT ASSETS                                               99,106                           165,317

Property, plant and equipment, net                                     374,475                           895,355
Intangible assets, net                                                   8,044                            44,858
Other noncurrent assets                                                 25,786                            32,103
                                                        ------------------------------    ----------------------------
     TOTAL ASSETS                                             $        507,411                  $      1,137,633
                                                        ==============================    ============================

LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
   Accounts payable                                           $         36,740                  $         94,274
   Accounts payable - Affiliates                                         7,652                             2,030
   Accrued liabilities                                                  36,198                            21,941
   Current portion of long-term debt                                   174,882                                --
   Advance from affiliate (Notes 9 and 17)                               6,070                                --
   Current portion of long-term debt - Affiliates                      346,990                                --
                                                        ------------------------------    ----------------------------
     TOTAL CURRENT LIABILITIES                                         608,532                           118,245

Long-term debt:
   Affiliates                                                               --                           304,164
   Other                                                                    --                           174,882
Deferred income taxes                                                    8,845                            85,053
Other noncurrent liabilities                                            29,976                            32,517
                                                        ------------------------------    ----------------------------
     TOTAL LIABILITIES                                                 647,353                           714,861
                                                        ------------------------------    ----------------------------
Commitments and contingencies (see notes
   11 and 17)
STOCKHOLDER'S EQUITY (DEFICIT):
   Common Stock, par value $.01 per share; 1
     million shares authorized and 1,000
     issued and outstanding in 2001 and 2000                                --                                --
   Additional paid-in capital                                          559,500                           528,500
   Retained earnings (deficit)                                        (699,442)                         (105,728)
                                                        ------------------------------    ----------------------------
     TOTAL STOCKHOLDER'S EQUITY (DEFICIT)                             (139,942)                          422,772
                                                        ------------------------------    ----------------------------
     TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY               $        507,411                  $      1,137,633
                                                        ==============================    ============================
</Table>

                 See accompanying notes to financial statements


                                      F-4
<Page>

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

<Table>
<Caption>
                                                     YEAR ENDED              YEAR ENDED               YEAR ENDED
                                                 DECEMBER 31, 2001       DECEMBER 31, 2000        DECEMBER 31, 1999
                                                 -------------------    ---------------------    ---------------------
<S>                                               <C>                    <C>                      <C>
Revenues:
   Trade sales and services                       $         122,738      $         206,750        $         122,047
   Affiliate sales                                          367,410                467,842                  367,657
                                                 -------------------    ---------------------    ---------------------
Total revenues                                              490,148                674,592                  489,704
Cost of goods sold                                          562,164                667,333                  482,854
                                                 -------------------    ---------------------    ---------------------
Gross (loss) profit                                         (72,016)                 7,259                    6,850
Selling, general and administrative                         (25,297)               (32,550)                 (22,050)
Restructuring costs and impairment charges                 (525,401)                    --                       --
                                                 -------------------    ---------------------    ---------------------
Operating loss                                             (622,714)               (25,291)                 (15,200)
Interest expense, net:
   Affiliate interest expense                               (28,033)               (29,061)                 (23,865)
   Other interest expense                                   (21,224)               (21,319)                 (21,150)
   Interest income                                               38                    248                      198
Other income (expense)                                          (69)                 3,164                    4,799
                                                 -------------------    ---------------------    ---------------------
Net loss before income taxes                               (672,002)               (72,259)                 (55,218)
Income tax benefit                                           78,288                 26,501                   20,143
                                                 -------------------    ---------------------    ---------------------
Net loss                                          $        (593,714)     $         (45,758)       $         (35,075)
                                                 ===================    =====================    =====================
</Table>


                 See accompanying notes to financial statements.



                                      F-5
<Page>


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


<Table>
<Caption>
                                                                                      RETAINED
                                      COMMON STOCK                 PAID-IN            EARNINGS
                                SHARES           AMOUNT            CAPITAL           (DEFICIT)             TOTAL
                               ----------     -------------    ----------------    ---------------     ---------------
<S>                            <C>            <C>              <C>                 <C>                  <C>
Balance, January 1, 1999            1                --             423,500             (24,895)             398,605
Capital contribution from
   parent                          --                --             105,000                  --              105,000
Net loss                           --                --                  --             (35,075)             (35,075)
                               ----------     -------------    ----------------    ---------------     ---------------
Balance, December 31, 1999          1                --             528,500             (59,970)             468,530
Net loss                           --                --                  --             (45,758)             (45,758)
                               ----------     -------------    ----------------    ---------------     ---------------
Balance, December 31, 2000          1                --         $   528,500         $  (105,728)        $    422,772
                               ----------     -------------    ----------------    ---------------     ---------------
Capital contribution from
   parent                          --                --              31,000                  --               31,000
Net loss                           --                --                  --            (593,714)            (593,714)
                               ----------     -------------    ----------------    ---------------     ---------------
Balance, December 31, 2001          1                --         $   559,500         $  (699,442)        $   (139,942)
                               ==========     =============    ================    ===============     ===============
</Table>
                 See accompanying notes to financial statements.


                                      F-6
<Page>

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

<Table>
<Caption>
                                                    YEAR ENDED               YEAR ENDED               YEAR ENDED
                                                DECEMBER 31, 2001        DECEMBER 31, 2000        DECEMBER 31, 1999
                                               ---------------------    ---------------------    ---------------------
<S>                                             <C>                      <C>                      <C>
OPERATING ACTIVITIES:
Net loss                                        $        (593,714)       $         (45,758)       $         (35,075)
Reconciliation to net cash provided by
   (used in) operations:
   Depreciation and amortization                           70,778                   75,273                   65,519
   Loss (gain) on sale of property                          1,444                   (1,897)                      --
   Deferred income taxes                                  (78,288)                 (26,501)                 (20,143)
   Retirement of fixed assets in                           77,684                       --                       --
     restructuring
   Impairment of fixed assets                             385,354                       --                       --
   Non-cash write-off of inventory and
     other assets in restructuring                          5,067                       --                       --
   Impairment of goodwill                                  33,788                       --                       --
   Changes in operating working capital:
     Receivables                                           41,682                   (5,051)                 (39,956)
     Inventories                                           24,478                   (4,816)                 (28,003)
     Other current assets                                  (2,505)                     979                      (55)
     Accounts payable                                     (51,912)                  32,036                   31,894
     Accrued liabilities                                   14,257                    1,902                    1,662
     Other noncurrent liabilities                             955                   (2,596)                  (6,003)
     Other                                                  2,390                    2,571                   (5,827)
                                               ---------------------    ---------------------    ---------------------
     Net cash provided by (used in)
       operations                                         (68,542)                  26,142                  (35,987)
                                               ---------------------    ---------------------    ---------------------

INVESTING ACTIVITIES:
   Proceeds from sale of property                           2,076                    4,007                       --
   Capital expenditures                                   (13,430)                 (24,218)                 (58,978)
                                               ---------------------    ---------------------    ---------------------
     Net cash used in investing activities                (11,354)                 (20,211)                 (58,978)
                                               ---------------------    ---------------------    ---------------------

FINANCING ACTIVITIES:
   Intercompany (repayments to)
     borrowings from parent                                48,896                   (5,931)                 (10,035)
   Proceeds of capital contribution by
     parent                                                31,000                       --                  105,000
                                               ---------------------    ---------------------    ---------------------
     Net cash provided by (used in)
       financing activities                                79,896                   (5,931)                  94,965
                                               ---------------------    ---------------------    ---------------------

Increase (Decrease) in Cash and Cash
   Equivalents                                                 --                       --                       --
Cash and Cash Equivalents at Beginning
   of Period                                                   --                       --                       --
                                               ---------------------    ---------------------    ---------------------
Cash and Cash Equivalents at End of
   Period                                       $              --        $              --        $              --
                                               =====================    =====================    =====================

Supplemental Cash Flow information:
   Cash paid for interest                       $          10,275        $          20,754        $          20,549
   Cash paid for income taxes                                  --                       --                      996
</Table>

                 See accompanying notes to financial statements.

                                      F-7
<Page>


                 HUNTSMAN POLYMERS CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS

     Huntsman Polymers Corporation (the "Company"), formerly known as Rexene
Corporation, manufactures products used in a wide variety of industrial and
consumer related applications. The Company's principal products are
polyethylene, polypropylene and amorphous polyalphaolefin ("APAO").

BASIS OF PRESENTATION

     The Company's consolidated financial statements have been prepared on a
going concern basis, which contemplates the realization of assets and
satisfaction of liabilities in the normal course of business. The consolidated
financial statements do not include any adjustments relating to the
recoverability and classifications of recorded amounts of assets and liabilities
that might be necessary should the Company be unable to continue as a going
concern. The Company's ability to continue as a going concern depends on a
number of significant factors, including, but not limited to, restructuring
Huntsman Corporation's current senior and subordinated debt financing,
restructuring the Company's senior notes due 2004, obtaining additional debt
and/or equity financing and generating sufficient cash flows from operations to
meet its obligations.

     As of December 31, 2001, the Company's current liabilities exceeded current
assets by $509.4 million, primarily due to the classification of substantially
all of its outstanding debt as a current liability as discussed below. The
Company has sustained net losses in each of the three years in the period ended
December 31, 2001 and its net deficit is $139.9 million. Historically, the
Company's primary source of funding has been the intercompany loan agreement
(the "Intercompany Loan Agreement") from a subsidiary of Huntsman Corporation,
the ultimate parent of the Company. As of December 31, 2001, the Company has
classified the outstanding borrowings under the Intercompany Loan Agreement of
$285.1 million as a current liability as the repayment may be accelerated by
Huntsman Corporation's lenders. On December 1, 2001, the Company failed to make
interest payments on its $175 million of senior unsecured notes. As a result of
the failure to pay interest as scheduled, the debt may be accelerated and has
been classified as a current liability.

     On December 20, 2001, Huntsman Corporation, which is not in compliance
with certain financial covenants contained in the Existing HC Credit
Facilities entered into amendment, forbearance and waiver agreements
(collectively the "Amendment Agreement"). Under the Amendment Agreement,
existing defaults and some future defaults were waived and the lenders agreed
to forbear exercising rights and remedies arising from the failure to pay
certain interest until March 15, 2002 (the "Forbearance Period"). On March
15, 2002, the Forbearance Period was extended until June 30, 2002. If the
Forbearance Period is not extended beyond June 30, 2002, or if the rights of
the lenders under the Existing HC Credit Facilities are not otherwise stayed
or unless Huntsman Corporation's debt is restructured before June 30, 2002,
Huntsman Corporation's lenders could pursue certain remedies under the
Existing HC Credit Facilities including accelerating the debt due, enforcing
the guaranties of HPHC and the Company, foreclosing on the pledge of the
equity of HPHC and the Company, and foreclosing on the security interests and
liens on the assets securing the Company's obligations under the Guaranty to
the extent the Company has any liability under the Guaranty at the time of
the foreclosure and subject to the limitations on the security interests and
liens referred to above. Also, on January 1, 2002, Huntsman

                                      F-8
<Page>


Corporation failed to make interest payments on $600 million of its senior
subordinated debt. As a result of the failure to pay interest as scheduled,
the debt may be accelerated. The Amendment Agreement prohibits additional
equity and debt financing by Huntsman Corporation to the Company. The
Amendment Agreement also contains a condition that would cause the Amendment
Agreement to terminate if the Company makes payments on the Senior Notes.

     Prior to the termination of the Amendment Agreement on June 30, 2002,
Huntsman Corporation needs to restructure its senior secured credit facilities
and its subordinated debt and the Company also needs to restructure its senior
unsecured notes. Unless and until restructured long-term financing is secured,
the lenders could pursue certain remedies under the various agreements and
indentures, which include accelerating the debt, foreclosing on the security
interest and liens on assets securing the debt.

     The foregoing uncertainties raise substantial doubt about the Company's
ability to continue as a going concern without some sort of financial
restructuring. Huntsman Corporation and its financial advisor are actively
engaged in identifying and exploring strategic alternatives, including
developing out of court or court sanctioned financial restructuring plans. The
Company expects meet its operating and capital needs in 2002 through a
combination of:

     -    improved operating performance resulting from improved industry
          conditions and the reduction of fixed costs in connection with the
          Company's operational restructuring;

     -    borrowings under the Intercompany Loan Agreement, to the extent
          permitted;

     -    sales of inventory to Huntsman Corporation as permitted under the HC
          Supplemental Credit Agreement and the Amendment Agreement; and

     -    Targeted reductions in working capital and reduced capital
          expenditures.

USE OF ESTIMATES

     The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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 include its
wholly-owned subsidiaries. Intercompany transactions and balances are
eliminated.

CASH AND CASH EQUIVALENTS

     Highly liquid investments with 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.


                                      F-9
<Page>

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. Plant and equipment have useful lives ranging from 3 to 15 years, and
buildings have useful lives ranging from 15 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 amortized using the straight-line method over their
estimated useful lives of five to fifteen years or over the life of the related
agreement.

INCOME TAXES

     Deferred income taxes are provided for temporary differences between
financial statement income and taxable income using the asset and liability
method.

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 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, 2001 and 2000, the fair value of the $175
million principal amount 11 3/4% Senior Notes was approximately $37 million and
$134 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

     On January 1, 2001, the Company adopted SFAS No. 133, "ACCOUNTING FOR
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES." SFAS No. 133, as amended and
interpreted, establishes accounting and


                                      F-10
<Page>

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. The
adoption of SFAS No. 133 did not have a material effect on the Company's
financial position as the financial instruments and other contracts held by and
entered into by the Company either do not meet the definition of a derivative or
qualify for the normal purchases and sales exemption.

     On July 20, 2001, the Financial Accounting Standards Board issued SFAS No.
141, "Business Combinations," and SFAS No. 142, "Goodwill and Other Intangible
Assets." The statements will change the accounting for business combinations and
goodwill in two significant ways. SFAS No. 141 requires that the purchase method
of accounting be used for all business combinations initiated after June 30,
2001. Use of the pooling-of-interests method will be prohibited. SFAS No. 142
changes the accounting for goodwill from an amortization method to an
impairment-only approach. Thus, amortization of goodwill, including goodwill
recorded in past business combinations, will cease upon adoption of that
statement, which for the Company will be January 1, 2002. Adoption of this
pronouncement will not have a material effect on the Company's financial
statements.

     In August 2001, the Financial Accounting Standards Board issued SFAS No.
143, "Accounting for Asset Retirement Obligations." SFAS No. 143 addresses
financial accounting and reporting for obligations associated with the
retirement of tangible, long-lived assets and the associated asset retirement
costs. This Statement requires that the fair value of a liability for an asset
retirement obligation be recognized in the period in which it is incurred by
capitalizing it as part of the carrying amount of the long-lived assets. As
required by SFAS No. 143, the Company will adopt this new accounting standard on
January 1, 2003. The Company is currently evaluating the effects of adopting
this pronouncement.

     In October 2001, the Financial Accounting Standards Board issued SFAS No.
144, "Accounting for the Impairment or Disposal of Long-Lived Assets." This
Statement establishes a single accounting model for the impairment or disposal
of long-lived assets. As required by SFAS No. 144, the Company will adopt this
new accounting standard on January 1, 2002. Adoption of this pronouncement will
not have a material effect on the Company's financial statements.

INCOME (LOSS) PER SHARE

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

2.   RECEIVABLES

     Accounts receivable consist of the following (in thousands):

<Table>
<Caption>
                                                          DECEMBER 31, 2001            DECEMBER 31, 2000
                                                       ------------------------     ------------------------
<S>                                                      <C>                          <C>
     Accounts and notes receivable:
       Trade                                             $            6,250           $            28,903
       Other                                                          2,835                         2,211
                                                       ------------------------     ------------------------
                                                                      9,085                        31,114
     Less allowances for bad debts and returns                       (1,307)                         (327)
                                                       ------------------------     ------------------------
                                                                      7,778                        30,787
     Accounts and advances receivable -
       Affiliates                                                    25,572                        44,245
                                                       ------------------------     ------------------------
     TOTAL                                               $           33,350           $            75,032
                                                       ========================     ========================
</Table>


                                      F-11
<Page>

     Provision (recoveries) charged (credited) to expense for the years ended
December 31, 2001, 2000 and 1999 were (in thousands): $150.0, $(657.7) and
$633.5, respectively. Write-offs of receivables against the allowance accounts
for the years ended December 31, 2001, 2000 and 1999 were (in thousands): $0.0,
$0.0 and $332.0, respectively. In addition, during 2001 the Company increased
the allowance for uncollectible accounts by $830.0 thousand in connection with
the reassumption of the risk of loss on receivables previously accounted for by
an affiliate. In 2000, the Company decreased the allowance for uncollectible
accounts by $1,417.8 thousand in connection with the assumption of the risk of
loss on receivables by an affiliate.

3.   INVENTORIES

     Inventories consist of the following (in thousands):

<Table>
<Caption>
                                                          DECEMBER 31, 2001            DECEMBER 31, 2000
                                                       ------------------------     ------------------------
<S>                                                      <C>                          <C>
     Raw materials                                       $            9,007           $            17,551
     Work in progress                                                 5,790                         8,249
     Finished goods                                                  38,292                        52,907
                                                       ------------------------     ------------------------
     TOTAL                                               $           53,089           $            78,707
                                                       ========================     ========================
</Table>

4.   PROPERTY, PLANT AND EQUIPMENT

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

<Table>
<Caption>
                                                          DECEMBER 31, 2001            DECEMBER 31, 2000
                                                       ------------------------     ------------------------
<S>                                                      <C>                          <C>
     Land                                                $            1,008           $             3,730
     Buildings                                                       98,791                       172,831
     Plant and equipment                                            502,871                       889,866
     Construction in progress                                         2,937                         7,270
                                                       ------------------------     ------------------------
                                                                    605,607                     1,073,697
     Less accumulated depreciation                                 (231,132)                     (178,342)
                                                       ------------------------     ------------------------
     PROPERTY, PLANT AND EQUIPMENT, NET                  $          374,475           $           895,355
                                                       ========================     ========================
</Table>

     Depreciation expense for the years ended December 31, 2001, 2000, and 1999
was (in millions): $67.8, $71.5, and $62.2, respectively. During the years ended
December 31, 2001, 2000 and 1999, $0.5 million, $0.5 million, and $2.8 million,
respectively, of interest was capitalized in connection with construction
projects. See Note 8 below, "Restructuring Costs and Impairment Charges", for
more information on the change in net property, plant and equipment.


                                      F-12
<Page>

5.   INTANGIBLE ASSETS

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

<Table>
<Caption>
                                                          DECEMBER 31, 2001            DECEMBER 31, 2000
                                                       ------------------------     ------------------------
<S>                                                      <C>                          <C>
     Debt issuance costs                                 $            7,173           $             7,173
     Less accumulated amortization                                   (5,295)                       (4,427)
                                                       ------------------------     ------------------------
                                                                      1,878                         2,746
                                                       ------------------------     ------------------------
     Goodwill                                                            --                        42,406
     Less accumulated amortization                                       --                        (7,035)
                                                       ------------------------     ------------------------
                                                                         --                        35,371
                                                       ------------------------     ------------------------
     Other intangible assets                                          8,115                         7,973
     Less accumulated amortization                                   (1,949)                       (1,232)
                                                       ------------------------     ------------------------
                                                                      6,166                         6,741
                                                       ------------------------     ------------------------
     Intangible assets, net                              $            8,044           $            44,858
                                                       ========================     ========================
</Table>

     In the third quarter of 2001, goodwill was written off as part of
restructuring costs. This is discussed further in Note 8 below, "Restructuring
Costs and Impairment Charges."

6.   OTHER NONCURRENT ASSETS

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

<Table>
<Caption>
                                                          DECEMBER 31, 2001            DECEMBER 31, 2000
                                                       ------------------------     ------------------------
<S>                                                      <C>                          <C>
     Spare parts inventory--at average cost              $           21,210           $            22,677
     Capitalized turnaround expenses                                  3,368                         5,051
     Catalysts                                                          873                         1,903
     Long-term note receivable                                           --                           423
     Other                                                              335                         2,049
                                                       ------------------------     ------------------------
     Total                                               $           25,786           $            32,103
                                                       ========================     ========================
</Table>

7.   ACCRUED LIABILITIES

     Accrued liabilities consist of the following (in thousands):

<Table>
<Caption>
                                                          DECEMBER 31, 2001            DECEMBER 31, 2000
                                                       ------------------------     ------------------------
<S>                                                      <C>                          <C>
     Accrued taxes, other than income                    $            9,370           $            10,659
     Interest on Senior Notes                                        12,096                         1,723
     Restructuring reserve                                           10,878                            --
     Other accrued expenses                                           3,854                         9,559
                                                       ------------------------     ------------------------
     Total                                               $           36,198           $            21,941
                                                       ========================     ========================
</Table>

8.   RESTRUCTURING COSTS AND IMPAIRMENT CHARGES

     The Company incurred restructuring costs and impairment charges of $525.4
million during 2001. The restructuring costs were recorded in two phases.


                                      F-13
<Page>


-    Phase I, which resulted in a charge of $29.8 million during the second
     quarter of 2001, was the result of the closure of the Company's styrene
     production unit and the concurrent cost restructuring and elimination
     initiative, both of which were announced on April 23, 2001. The program
     included a workforce reduction at the Odessa Facility of 97 regular
     employees. Approximately $5.2 million was accrued for termination benefits,
     all of which had been paid as of September 30, 2001. Additionally,
     decommissioning costs of $2.6 million for the styrene unit, $4.8 million in
     non-cancelable lease charges, an $8.9 million write-down of the styrene
     unit fixed assets and a $7.6 million write-off of unusable material and
     supplies inventory were recorded in connection with Phase I. Phase I was
     substantially completed by the end of the third quarter of 2001.

-    Phase II of the restructuring was announced by the Company on July 31, 2001
     and resulted in a total charge of $110.2 million. This phase encompassed
     the closure of the polypropylene Line 1 unit (representing 30% of current
     total polypropylene production), the write-off of the FPO unit which had
     been under evaluation for alternative product use, and the further
     elimination of redundant costs in the maintenance, technical services and
     overhead cost structure. Management anticipates that this program will
     result in the discharge of 93 regular employees at the Odessa Facility.
     Approximately $5.9 million was accrued for termination benefits.
     Additionally, $68.7 million related to the write-off of fixed assets, $33.8
     million related to the write-off of goodwill, $0.2 million for the
     polypropylene unit decommissioning, $0.6 million in non-cancelable lease
     charges and $1.0 million related to the write-off of unusable supplies
     inventory were recorded in connection with Phase II. The Company expects
     this phase to be completed by April 2002.

     Under SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed Of," companies must review the carrying
amount of long-lived assets and certain intangibles, including related goodwill,
whenever events or changes in circumstances indicate that the carrying amount of
an asset or a group of assets may not be recoverable.

     The Company recorded an asset impairment charge of $385.4 million in the
fourth quarter of 2001 related to its property, plant and equipment. During
2001, the Company experienced significant declines in sales prices and operating
cash flow. The declining results were primarily due to lower sales prices,
coupled with difficulty in passing on raw material and energy costs to
customers. The lower sales prices were primarily due to decreased demand in
industrial and consumer related applications, which resulted in increased
competition and reduced operating rates. The lower operating rates had a
significant effect on margins, and margins are not expected to improve until
after 2003 unless industry-wide plant capacity declines. Additionally,
opportunities for new applications of the Company's products did not materialize
at a rate necessary to offset the declining margins on current products. In
early October 2001, as a result of the above factors and as part of the
Company's restructuring efforts, the Company performed a review of its remaining
polyethylene, polypropylene and APAO businesses. During this time, Huntsman
Corporation engaged DrKW as its financial advisor and investment banker to
assist it and its domestic subsidiaries, including the Company, in identifying
and exploring strategic alternatives, including developing out of court or court
sanctioned financial restructuring plans. In February 2002, DrKW provided a
valuation report to the Company's management which indicated an impairment of
the Company's assets. As a result, in the fourth quarter of 2001 the Company
assessed certain fixed assets for impairment as required under SFAS No. 121.

     The Company performed an evaluation of the recoverability of its assets as
described in SFAS No. 121. Management concluded from the results of this
evaluation that a significant impairment of long-lived assets had occurred. An
impairment charge was required because the estimated fair value of these assets
was less than their carrying value. The fair value of the Company's net assets
was determined by discounting estimated future cash flows using a discount rate
commensurate with the risks involved.


                                      F-14
<Page>

Fair value estimates, by their very nature, rely upon considerable management
judgment; accordingly, actual results may vary significantly from the Company's
estimates.

     The restructuring costs and impairment charges were recorded against the
following accounts: $463.0 million against property, plant and equipment; $33.8
million against goodwill; $5.1 million against inventories; and $23.5 million
against cash and accrued liabilities.

     A summary of the combined Phase I and II costs follows (dollars in
thousands):

<Table>
<Caption>
                                                                                                        Restructuring
                                                                                                         Liabilities
                                               Total               Non-Cash              Cash                at
                                              Charge               Charges             Payments         December 31,
                                                                                                            2001
                                         ------------------    -----------------    ---------------     --------------
<S>                                        <C>                   <C>                  <C>                 <C>
Work force reduction                       $    11,038           $        --          $    6,518          $   4,520
Styrene unit decommissioning                     2,601                    --                 986              1,615
Polypropylene Line 1 decommissioning               200                    --                  --                200
Non-cancelable lease costs                       5,348                    --               1,304              4,044
Property and equipment                         463,038               463,038                  --                 --
Goodwill                                        33,788                33,788                  --                 --
Provision for unusuable supply
   Inventory                                     8,565                 5,067               2,999                499
Other charges                                      823                    --                 823                 --
                                         ------------------    -----------------    ---------------     --------------
Total restructuring costs                  $   525,401           $   501,893          $   12,630          $  10,878
</Table>

         Remaining cash expenditures relating to workforce reductions and plant
decommissioning will be substantially completed by April 2002. Cash outlays
related to non-cancelable railcar leases will be completed by 2008. When both
initiatives are fully implemented, the Company expects pretax savings in
operating expenses will approximate $34 million on an annualized basis.

9.   LONG-TERM DEBT

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

<Table>
<Caption>
                                                          DECEMBER 31, 2001            DECEMBER 31, 2000
                                                       ------------------------     ------------------------
<S>                                                      <C>                          <C>
     Affiliates:
       Intercompany borrowings                           $          279,055           $           240,329
       Advance from affiliates                                        6,070                            --
       Capital lease - affiliates                                    67,935                        63,835
                                                       ------------------------     ------------------------
          Total affiliates                                          353,060                       304,164
       Less:  Current portion                                      (353,060)                           --
                                                       ------------------------     ------------------------
          Total long-term debt - affiliates                               -                       304,164
     Other - 11 3/4% Senior Notes due 2004                          174,882                       174,882
       Less:  Current portion of long-term
          Debt-other                                               (174,882)                           --
                                                       ------------------------     ------------------------
          Total long-term debt - other                                   --                       174,882
                                                       ------------------------     ------------------------
          Total                                          $               --           $           479,046
                                                       ========================     ========================
</Table>


                                      F-15
<Page>

INTERCOMPANY BORROWING

As of December 31, 2001, the Company owed $279.1 million under the Intercompany
Loan Agreement that it maintains with HGHFC. The loans accrue interest at prime
rate (6.75% at December 31, 2001) plus a margin of 0.75% and are payable upon
demand. The Intercompany Loan Agreement is the Company's principal source of
financing, and, as discussed in the following paragraphs, the Company's ability
to obtain additional financing under the Intercompany Loan Agreement has been
significantly limited. In addition, the Company's ability to borrow under the
Intercompany Loan Agreement is subject to the limitations imposed by the
Indenture governing the Company's Senior Notes.

     As of December 31, 2001, Huntsman Corporation had borrowings of
approximately $1.5 billion outstanding under its senior secured credit
facilities, as amended and supplemented (the "Existing HC Credit Facilities").
As collateral for its obligations under the Existing HC Credit Facilities,
Huntsman Corporation has pledged its 100% ownership interest in the Company's
parent, and the Company's Parent has pledged its 100% ownership interest in the
Company. In addition, the Company and its Parent are guarantors of Huntsman
Corporation's obligations under the Existing HC Credit Facilities. The Company
has granted security interests and liens on substantially all of its assets to
secure its obligations under its guaranty to Huntsman Corporation's lenders (the
"Guaranty"), subject to certain limitations in effect until such time as all of
the Senior Notes have been indefeasibly repaid, redeemed or repurchased in full.
The Guaranty provides that the Company's maximum liability thereunder at any
time will not exceed the amount permitted to exist at such time under the
Indenture. At this time, because of the restrictions on incurring indebtedness
and making investments contained in the Indenture, the Company does not have any
liability under the Guaranty. Nevertheless, as a result of recent amendments to
the Existing HC Credit Facilities, Huntsman Corporation's lenders now have
certain rights to receive assignments of security interests in the Company's
assets created in connection with the Intercompany Loan Agreement.

     On December 20, 2001, Huntsman Corporation, which is not in compliance with
certain financial covenants contained in the Existing HC Credit Facilities
entered into amendment, forbearance and waiver agreements (collectively the
"Amendment Agreement"). Under the Amendment Agreement, existing defaults and
some future defaults were waived and the lenders agreed to forbear exercising
rights and remedies arising from the failure to pay certain interest until March
15, 2002 (the "Forbearance Period"). On March 15, 2002, the Forbearance Period
was extended until June 30, 2002. If the Forbearance Period is not extended
beyond June 30, 2002, or if the rights of the lenders under the Existing HC
Credit Facilities are not otherwise stayed or unless restructured long-term
financing is secured by Huntsman Corporation before June 30, 2002, Huntsman
Corporation's lenders could pursue certain remedies under the Existing HC Credit
Facilities including accelerating the debt due, enforcing the guaranties of HPHC
and the Company, foreclosing on the pledge of the equity of HPHC and the
Company, and foreclosing on the security interests and liens on the assets
securing the Company's obligations under the Guaranty to the extent the Company
has any liability under the Guaranty at the time of the foreclosure and subject
to the limitations on the security interests and liens referred to above.

     On December 20, 2001, Huntsman Corporation entered into a supplemental
accounts receivable credit agreement (the "HC Supplemental Credit Agreement")
with certain of its lenders under Existing HC Credit Facilities pursuant to
which a revolving loan facility of $40 million and a term loan facility of $110
million were made available to it. Proceeds from the HC Supplemental Credit
Facility will be used, among other things, to provide liquidity to Huntsman
Corporation and certain of its affiliates. Pursuant to the Amendment Agreement
and the HC Supplemental Credit Facility, Huntsman Corporation is only permitted
to make certain investments in or payments to the Company, including ordinary
course payments in respect of existing commercial arrangements, payments
representing the reasonably equivalent value of assets purchased by Huntsman
Corporation from the Company, accruals of interest


                                      F-16
<Page>

expense and overhead allocations, payments to purchase S&B's claim against the
Company, and additional loans, not to exceed $5 million, made through the
Intercompany Loan Agreement. These limitations also prohibit the Company from
obtaining additional equity investments from Huntsman Corporation.

     The acceleration by Huntsman Corporation's lenders of the debt under the
Existing HC Credit Facilities would cause an acceleration of the Company's
obligations under the Intercompany Loan Agreement. As a result, as of June 30,
2001, the Company reclassified the intercompany borrowings portion of affiliate
debt as a current liability. The Company has granted security interests and
liens on substantially all of its assets to secure its obligations under the
Intercompany Loan Agreement, subject to certain limitations in effect until such
time as all of the Senior Notes have been repaid in full. Acceleration of the
debt under the Existing HC Credit Facilities and of the Company's obligations
under the Intercompany Loan Agreement would constitute an event of default under
the Senior Notes, which could result in an acceleration of the Company's
obligations under the Senior Notes by the trustee or the holders of at least 25%
in principal amount of the then outstanding Senior Notes.

     A foreclosure on the pledge of the equity of the Company's Parent or the
Company would constitute a "change of control" under the Indenture. If a "change
of control" occurs, each holder of the Senior Notes would have the right to
require the Company to purchase all or any part of the Senior Notes held by such
holder at an offer price in cash equal to 101% of the aggregate principal amount
thereof, plus accrued and unpaid interest thereon to the date of purchase. Under
such circumstances, there can be no assurance that the Company would have
sufficient funds to purchase all or part of the Senior Notes.

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 of 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. Interest
accrues on the unpaid lease amount ($50 million at December 31, 2001) 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%). On September 30, 2002, the maturity date of the Capital Lease Agreement,
the Company is obligated to pay the unpaid lease amount as well as all interest
owed on that amount. The Company has the option at the end of the lease period
to acquire the facility for a nominal amount. The lease is secured by all of the
fixed assets associated with the FPO facility.

     On December 12, 2001, the agreement was amended and HGHFC assigned all of
its rights under the agreement to Huntsman Corporation. The principal economic
terms of the lease agreement were not altered.

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 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


                                      F-17
<Page>


indebtedness, incur or suffer to exist certain liens, pay dividends, make
certain investments, sell significant fixed assets and engage in mergers and
consolidations.

     On December 1, 2001, the Company failed to make interest payments on the 11
3/4% Senior Notes. As a result of the failure to make interest payments, the
debt may be accelerated and has been classified as a current liability.

10.  OTHER NONCURRENT LIABILITIES

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

<Table>
<Caption>
                                                          DECEMBER 31, 2001            DECEMBER 31, 2000
                                                       ------------------------     ------------------------
<S>                                                    <C>                          <C>
     Accrued environmental remediation costs
       (see note 16)                                     $            6,376           $             6,116
     Advance payment from customer                                       --                         1,600
     Accumulated postretirement benefit
       Obligation (see note 14)                                      14,797                        13,845
     Pension liabilities (see note 14)                                4,723                         3,030
     Other                                                            4,080                         7,926
                                                       ------------------------     ------------------------
     Total                                               $           29,976           $            32,517
                                                       ========================     ========================

</Table>

     In July 1995, the 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. With the closure of the styrene plant in 2001, the
unamortized portion of the advance payment was repaid to the customer. The
unearned portion of this advance payment, net of current portion, is therefore
included as a noncurrent liability only in the 2000 balance above. This advance
payment was secured by a lien on the styrene plant in Odessa, Texas.

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, 2000 are as follows (in thousands):

<Table>
<Caption>
                     For the years ending December 31,
<S>                                                                  <C>
                              2002                                   $           9,103
                              2003                                               7,517
                              2004                                               6,362
                              2005                                               4,997
                              2006                                               4,650
                              2007 and thereafter                               24,000
                                                                   -----------------------
                     Total minimum lease payments                    $          56,629
                                                                   =======================
</Table>

     Rental expense (in millions) under operating leases for the years ended
December 31, 2001, 2000 and 1999 was approximately $12.3, $12.7, and $11.1,
respectively, substantially all of which relates to continuing operations.

     The Company had two long-term contracts with one major styrene customer.
One contract was based on fixed pricing and volumes, and the second was based on
market pricing and variable volumes. Both


                                      F-18
<Page>


were seven-year contracts that were due to expire on December 31, 2002. With the
closure of the styrene plant in 2001, these contracts were terminated.

     In 2002, the Company expects to spend between $9.0 and $10.0 million for
capital expenditures.

12.  INCOME TAX

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

<Table>
<Caption>
                                                    YEAR ENDED               YEAR ENDED               YEAR ENDED
                                                DECEMBER 31, 2001        DECEMBER 31, 2000        DECEMBER 31, 1999
                                               ---------------------    ---------------------    ---------------------
<S>                                             <C>                      <C>                      <C>
Current                                         $              --        $              --        $              --
Deferred                                                  (78,288)                 (26,501)                 (20,143)
                                               ---------------------    ---------------------    ---------------------
                                                $         (78,288)       $         (26,501)       $         (20,143)
                                               =====================    =====================    =====================
</Table>


     The statutory federal income tax rate was 35% for the years ended December
31, 2001, 2000 and 1999. The effective income tax rate differs from the amount
computed by applying the statutory federal income tax rate to the Company's loss
before income taxes. The reasons for these differences are as follows (in
thousands):

<Table>
<Caption>
                                                    YEAR ENDED               YEAR ENDED               YEAR ENDED
                                                DECEMBER 31, 2001        DECEMBER 31, 2000        DECEMBER 31, 1999
                                               ---------------------    ---------------------    ---------------------
<S>                                             <C>                      <C>                      <C>
Income tax benefit computed at
   Statutory federal tax rate                   $        (235,201)       $         (25,291)       $         (19,326)
State income taxes                                        (20,160)                  (2,167)                  (1,657)
Non-deductible amortization and
   expenses                                                   701                      848                      850
Write down of goodwill                                     12,839                       --                       --
NOL valuation allowance                                   164,197                       --                       --
Other, net                                                   (664)                     109                      (10)
                                               ---------------------    ---------------------    ---------------------
Income tax benefit                              $         (78,288)       $         (26,501)       $         (20,143)
                                               =====================    =====================    =====================
</Table>


                                      F-19
<Page>

The net deferred income tax asset at December 31, 2001 is fully reserved with a
valuation allowance due to the uncertainty of realization. The net deferred
income tax asset or liability at December 31, 2001 and December 31, 2000
consists of the following (in thousands):

<Table>
<Caption>
                                                          DECEMBER 31, 2001            DECEMBER 31, 2000
                                                       ------------------------     ------------------------
<S>                                                      <C>                          <C>
     Accounts receivable                                 $               24           $               334
     Inventories                                                      4,230                         8,289
     Tax losses and credits carried forward                         208,977                       129,075
     Other current assets                                             4,591                         1,638
     Other noncurrent assets                                         21,735                        13,478
                                                       ------------------------     ------------------------
       Gross deferred tax assets                                    239,557                       152,814
                                                       ------------------------     ------------------------
     Property, plant and equipment                                  (74,200)                     (226,088)
     Intangible assets                                               (1,160)                       (1,518)
                                                       ------------------------     ------------------------
       Gross deferred tax liabilities                               (75,360)                     (227,606)
                                                       ------------------------     ------------------------
     Net amount before valuation allowance                          164,197                       (74,792)
     Valuation allowance                                           (164,197)                           --
                                                       ------------------------     ------------------------
     Net tax liability                                   $                0           $           (74,792)
                                                       ========================     ========================
</Table>

Tax losses and credits carried forward were $549.9 million at December 31, 2001
and $339.7 million at December 31, 2000, and expire beginning December 31, 2012
and ending December 31, 2021.

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

<Table>
<Caption>
                                                                2001                         2000
                                                       ------------------------     ------------------------
<S>                                                      <C>                          <C>
     Net current asset                                   $            8,845           $            10,261
     Net long-term liability                                         (8,845)                      (85,053)
                                                       ------------------------     ------------------------
     Net tax liability                                   $                0           $           (74,792)
                                                       ========================     ========================
</Table>

13.  OTHER INCOME (EXPENSE)

     Other income (expense) is comprised of the following significant items:

<Table>
<Caption>
                                                        Year Ended              Year Ended             Year Ended
                                                       December 31,            December 31,           December 31,
                                                           2001                    2000                   1999
                                                    --------------------    --------------------    ------------------
<S>                                                   <C>                     <C>                     <C>
Gain on sale of equipment                             $          --           $        1,897          $          --
U.S. Department of Energy refund                                 --                    3,591                     --
Flare settlement                                                 --                   (3,000)                    --
Fire insurance proceeds                                          --                       --                  3,152
Power outage proceeds                                            --                       --                  1,316
Commercial dispute settlement                                    --                       --                     --
Other items                                                      (69)                    676                    331
                                                    --------------------    --------------------    ------------------
Total other operating income                          $          (69)         $        3,164          $       4,799
                                                    ====================    ====================    ==================
</Table>


14.  OTHER INFORMATION

     Export sales from operations (in millions) were $82.5, $50.5, and $31.2 for
the years ended December 31, 2001, 2000 and 1999, respectively.


                                      F-20
<Page>

     Maintenance and repair expenses (in millions) were $30.1, $36.4, and $33.9
for the years ended December 31, 2001, 2000 and 1999, respectively.

15.  EMPLOYEE BENEFITS

SAVINGS PLAN

     Employees of the Company participate in the Huntsman Salary Deferral Plan
(the "Savings Plan"). Under the Savings Plan, employees may contribute annually
between 1% and 15% of pay up to the IRS pre-tax contribution limit ($10,500 for
2001) 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 contributions are fully vested. For 2001, 2000 and 1999, the Company
match to the Savings Plan equaled approximately $714,000, $774,000, and
$796,000, respectively.

MONEY PURCHASE PLAN

     Huntsman Corporation sponsors 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
2001, 2000 and 1999, the Company contributions to the Money Purchase Plan
equaled approximately $250,000, $250,000, and $124,000, respectively.

PENSION AND RETIREMENT PLANS

     The Company provides 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 since
1997, and it is not expected that any additional employees will participate in
the Security Plan. Benefits accrued under this plan were $2.8 million and $3.1
million at December 31, 2001 and 2000, respectively. The estimated expense
(benefit) for the years ended December 31, 2001, 2000 and 1999 was $(0.3)
million, $(0.3) million, and $0.1 million, respectively.

     In addition, Company employees participate in the Huntsman Corporate
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


                                      F-21
<Page>


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
$4.7 million and $3.0 million at December 31, 2001 and 2000, 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 $2.3 million, $2.3 million and
$2.1 million for the years ended December 31, 2001, 2000 and 1999, respectively.
The pension costs and pensions liability assumed a discount rate of 7.50%,
7.75%, and 6.75% and a rate of salary progression of 4.0%, 4.5% and 4.0% in
2001, 2000, and 1999, respectively. The weighted average expected rate of return
on assets for 2001, 2000, and 1999 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.

     Net postretirement benefit expense consists of the following (in
thousands):

<Table>
<Caption>
                                                    YEAR ENDED               YEAR ENDED               YEAR ENDED
                                                DECEMBER 31, 2001        DECEMBER 31, 2000        DECEMBER 31, 1999
                                               ---------------------    ---------------------    ---------------------
<S>                                             <C>                      <C>                      <C>
Service cost                                    $             563        $             464        $             383
Interest cost                                               1,086                      930                      655
Net amortization and deferral                                 285                      250                       78
                                               ---------------------    ---------------------    ---------------------
Net postretirement benefit expense              $           1,934        $           1,644        $           1,116
                                               =====================    =====================    =====================
</Table>

     The following table sets forth the funded status of the postretirement
benefits as of December 31, 2001 and 2000 (in thousands):

<Table>
<Caption>
                                                                2001                         2000
                                                       ------------------------     ------------------------
<S>                                                     <C>                          <C>
     CHANGE IN ACCUMULATED POSTRETIREMENT
       BENEFIT OBLIGATION
       Net benefit obligation at January 1               $           13,665           $            10,752
       Service cost                                                     563                           464
       Interest cost                                                  1,086                           930
       Actuarial (gain)/loss                                          4,395                         2,285
       Benefits Payments (net of employee
          contributions)                                               (982)                         (766)
                                                       ------------------------     ------------------------
       Net benefit obligation at December 31             $           18,727           $            13,665
                                                       ========================     ========================
       Plan Assets                                       $               --           $                --
                                                       ========================     ========================
     FUNDED STATUS
     Funded status at December 31                        $           18,727           $            13,665
     Unrecognized net actuarial gain                                 (3,930)                          180
                                                       ------------------------     ------------------------
     Balance sheet liability                             $           14,797           $            13,845
                                                       ========================     ========================
</Table>


                                      F-22
<Page>

     In 2001 and 2000, in determining the value of postretirement benefit
obligations, discount rates of 7.50% and 7.75%, respectively, were used; the
health care trend rate used to measure the expected increase in cost of benefits
was assumed to be 8.0% and 9.0% in 2001 and 2000, respectively, 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, 2001 by approximately $2.0 million and would
increase the service and interest cost components of the net postretirement
benefit cost for the year ended December 31, 2001 by approximately $240,000. 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, 2001 by
approximately $1.7 million and would decrease the service and interest cost
components of the net postretirement benefit cost for the year ended December
31, 2001 by approximately $205,000.

16.  RELATED PARTY TRANSACTIONS

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

<Table>
<Caption>
                                              AS OF AND FOR THE          AS OF AND FOR THE       AS OF AND FOR THE YEAR
                                                  YEAR ENDED                YEAR ENDED                    ENDED
                                              DECEMBER 31, 2001          DECEMBER 31, 2000          DECEMBER 31, 1999
                                             ---------------------     ----------------------    ------------------------
<S>                                            <C>                       <C>                       <C>
     Sales to:
       Huntsman Petrochemical Corporation      $        10,231           $        14,240           $         12,687
       Huntsman Chemical Corporation and
          Subsidiaries                                      --                        --                        885
       Huntsman Expandable Polymers
          Corporation                                    3,308                        19                         --
       Huntsman Specialty Chemicals
          Corporation                                       --                        --                      1,931
       Huntsman Corporation                            343,257                   443,282                    347,103
       Huntsman International LLC                       10,614                    10,301                      5,051
     Trade accounts receivable from:
       Huntsman Corporation                             23,119                    40,790                     37,427
       Huntsman Petrochemical Corporation                1,510                     1,836                      2,362
       Huntsman International LLC                          513                     1,388                         70
       Huntsman Expandable Polymers                          2                        --                         --
          Corporation
     Miscellaneous receivables from:
       Employee advances                                     6                        11                         11
       Huntsman Polypropylene Corporation                  338                       219                        394
       Huntsman Chemical Corporation and
          Subsidiaries                                      --                        --                         5
       Huntsman Expandable Polymers
          Corporation                                       16                         1                        --
       Huntsman Petrochemical Corporation                   19                        --                        --
       Huntsman International LLC                           49                        --                        --
       Huntsman Corporation                                 --                        --                        541
     Product purchases from:
       Huntsman Petrochemical Corporation                5,642                     7,026                      1,210
     Interest on intercompany borrowings
       and capital lease:
       Huntsman Group Holdings Finance
          Corporation                                   28,200                    29,217                     26,436
     Allocated selling, general, and
       administrative:
       Huntsman Petrochemical Corporation                2,991                     3,503                      1,081


                                      F-23
<Page>

     Trade accounts payable to:
       Huntsman Petrochemical Corporation                  821                       414                        308
       Huntsman Polypropylene Corporation                1,041                        --                         --
     Miscellaneous accounts payable to:
       Huntsman Chemical Corporation and
          subsidiaries                                      --                        --                         95
       Huntsman Petrochemical Corporation                  230                     1,584                        625
       Huntsman Corporation                              5,560                        32                          5
       Huntsman Corporation Belgium
          B.V.B.A.                                          --                        --                         74
     Advance from affiliate:
       Huntsman Group Holdings Finance
          Corporation                                     6,070                       --                        --
     Long-term debt payable to:
       Huntsman Group Holdings Finance
          Corporation                                  279,055                   240,329                    250,360
     Long-term capital lease payable to:
       Huntsman Corporation                             67,935                        --                        --
       Huntsman Group Holdings Finance
          Corporation (including accrued
          interest)                                         --                    63,835                     59,735
     Capital contribution from parent                   31,000                        --                    105,000
</Table>

     Affiliate overhead charges are for direct administrative services provided
by Huntsman Petrochemical Corporation, primarily in the areas of information
technology, sales & marketing, human resources and office services. The charges
are based on actual costs incurred and are representative of a third party
transaction.

     Included in sales to Huntsman Corporation for the year ended December 31,
2001 is $8.4 million relating to inventory segregated in the Company's
warehouses which is being held for the account of Huntsman Corporation at
December 31, 2001.

17.  CONTINGENCIES

ENVIRONMENTAL REGULATION

GENERAL

     The Company's business of manufacturing and distributing chemical products
and its related production of by-products and wastes entails risk of adverse
environmental effects. As a result, the Company is subject to extensive federal,
state, local and foreign laws, regulations, rules and ordinances relating to
pollution, protection of the environment and the generation, storage, handling,
transportation, treatment, disposal and remediation of hazardous substances and
waste materials. In the ordinary course of business, the Company is subject to
frequent environmental inspections and monitoring by governmental enforcement
authorities. In addition, its production facility requires operating permits
that are subject to renewal, modification and, in certain circumstances,
revocation. Actual or alleged violations of environmental laws or permit
requirements could result in restrictions or prohibitions on plant operations,
substantial fines and civil or criminal sanctions. Moreover, changes in
environmental regulations could inhibit or interrupt the Company's operations,
or require it to change its equipment or operations, and any such changes could
have a material adverse effect on its businesses. Accordingly, given its
businesses, environmental or regulatory matters may cause the Company
significant unanticipated losses, costs or liabilities.

     Under some environmental laws, the Company may be jointly and severally
liable for the costs of environmental contamination on or from its properties
and at off-site locations where it disposed of or arranged for the disposal or
treatment of hazardous wastes. For example, under the Comprehensive

                                      F-24

<Page>

Environmental Response, Compensation and Liability Act of 1980, as amended
("CERCLA"), and similar state laws, a current owner or operator of real property
may be liable for such costs regardless of whether the owner or operator owned
or operated the real property at the time of the release of the hazardous
substances and regardless of whether the release or disposal was in compliance
with law at the time it occurred. In addition, under the Resource Conservation
and Recovery Act of 1976, as amended ("RCRA"), and similar state laws, as the
holder of permits to treat or store hazardous wastes, the Company may, under
some circumstances, be required to remediate contamination at its properties
regardless of when the contamination occurred.

     The Company may also incur future costs for capital improvements and
general compliance under environmental laws, including costs to acquire,
maintain and repair pollution control equipment. The Company's operating
expenditures for environmental remediation, compliance and waste disposal were
approximately $7.6 million and $9.7 million in 2001 and 2000, respectively. The
Company also spent approximately $3.3 million and $4.5 million relating to
capital expenditures for environmentally related projects in 2001 and 2000,
respectively. In 2002, the Company anticipates spending approximately $4.8
million for environmental remediation, compliance and waste disposal. Of such
amount, expenditures relating to remediation are projected to be approximately
$0.2 million for 2002. Environmental capital spending is estimated at $3.3
million for 2002. Generally, the Company expects to incur between $1.5 million
and $6.0 million annually in capital spending to address the requirements of
environmental laws. However, the Company cannot assure you that material capital
expenditures beyond those currently anticipated will not be required under
environmental laws.

     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 Facility, 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.

     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 facilities operated by third parties at which it may have disposed
of waste or other materials.

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
and 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 start up and that excess emissions
might result. The TNRCC investigated this matter after receiving numerous
complaints from residents of a subdivision near the Odessa Facility. In
addition, since January 1999, the Company's Odessa Facility experienced upsets
on several occasions that led to flaring or excess emissions which the TNRCC
claims were in violation of state law. The TNRCC sought penalties for all
alleged violations. On January 30, 2002, the claims asserted by the TNRCC were
settled in an agreed order. In the order, the Company denied any liability, but
agreed to a $140,000 penalty, $70,000 of which was paid to the State and $70,000
of which was paid to the City of Odessa to fund a supplemental environmental
project.

     As a result of the start-up flaring during late December 1998 and early
January 1999, certain complaining citizens hired counsel to consider bringing
legal action to recover damages alleged to have


                                      F-25
<Page>

been caused by that flaring. Five such actions have been filed. Three of the
filed cases, involving over 4,200 plaintiffs, have been settled. Many of those
plaintiffs have now filed an action against certain of the Company's contractors
and design engineers, one of whom has sought indemnity against the Company. The
remaining filed cases involve a total of about 192 claimants. Although counsel
to the Company believes that it has strong defenses to the remaining suits, it
is too early to predict the outcome of such litigation.

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 RCRA. This permit and an
accompanying compliance plan require certain corrective actions with respect to
existing soil and groundwater contamination at a number of the 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
implemented a remediation plan approved by the TNRCC. As of December 31, 2001,
the TNRCC has approved closure for 55 of the plant's solid waste management
units. A program for the remediation of existing contamination both at the
Odessa Facility and at third-party sites is ongoing. In addition, the permit has
recently been modified to reflect closure of one of the original three hazardous
waste management units.

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 requires 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 either not yet been promulgated or have not been fully implemented. The
Company expects that modifications required by the currently published
regulations can be accomplished within its projected capital budget, but can
give no assurance that the costs it may incur to comply with regulations that
have not yet been issued will not be significant.

     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

     CERCLA 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. In this connection, the Company has developed estimates for the
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 from private parties
contending that it is potentially liable for a portion of the investigation and
remediation costs at 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.


                                      F-26
<Page>

     The Company was sued on December 6, 2001, by Lyondell Chemical Company and
Atlantic Richfield Company in the U.S. District Court for the Eastern District
of Texas, for contribution with regard to remediation expenses at the Turtle
Bayou (Petro Chemical Systems, Inc.) Superfund site in Liberty County, Texas.
Based upon the facts known to the Company, it believes that it has one or more
complete defenses to the suit and that even if the court rejects those defenses,
the percentage contribution the Company would likely be required to pay would
not be material to its financial condition. Nevertheless, the potential exists
for significant liability in such a case because of joint and several liability.

     In December of 2000, the New Mexico Environmental Bureau's Oil Conservation
Division ("OCD") gave notice that it is alleging that the Company may be a
responsible party in the cleanup of an old abandoned refinery located in
Bloomfield, New Mexico. Although the site is contaminated and was evaluated in
about 1990 under the state's superfund program and the federal superfund
program, it was not pursued under either of those programs. The site was
previously owned by El Paso Energy, El Paso Products, and Kimbell and McNutt.
Huntsman Polymers notified the OCD that Huntsman Polymers has never had an
ownership interest in the site and does not believe that it acquired any
liability relating to the site from its previous owners. In addition, the State
of New Mexico contacted Rexene about the site in 1990, had notice of the Rexene
bankruptcy in 1991-1992, made a claim against Rexene regarding another site but
did not make a claim in the bankruptcy proceeding regarding this site.
Consequently, even if the OCD had a claim against Rexene at one time, the claim
may have been extinguished by the bankruptcy. However, if a court ultimately
finds that OCD does have an actionable claim, the potential exists for
significant remediation liability.

     As a result of a United States Environmental Protection Agency ("EPA")
inspection of the Odessa Facility in April 1997 and follow-up information
requests from EPA, an enforcement action alleging Clean Air Act violations has
been threatened by the U.S. Department of Justice and civil penalties in the
amount of $475,000 have been proposed by the government to resolve the matter.
The Company is continuing to negotiate with EPA and the Department of Justice in
an attempt to reach settlement.

     As a result of a third-party environmental audit of the Odessa operations
starting in November 2000, the Company has voluntarily disclosed to EPA and the
TNRCC certain potential violations of environmental law. EPA and the TNRCC are
presently evaluating those disclosures to determine whether the disclosures
qualify for penalty mitigation under federal policy and state law. It is
possible that civil penalties will be assessed by one or both of these agencies
as a result of the disclosures.

     The Company continually reviews its estimates of potential environmental
liabilities, and it has approximately $6.4 million accrued in its December 31,
2001 balance sheet as an estimate of its total potential environmental liability
with respect to investigating and remediating known and assessed site
contamination. 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.

OTHER

     In March 1999, in connection with a construction contract dispute, an
arbitration proceeding was initiated by S&B Engineers and Constructors, Ltd.
("S&B") against the Company. S&B sought approximately $22.3 million in unpaid
invoices and bonuses under the contract and the Company sought in excess of $20
million in contract damages against S&B. In August 2000, the arbitration panel
awarded S&B damages in the amount of $19.2 million plus pre-judgment interest,
attorneys' fees and costs, reserving decision on the amount of fees and costs.
In February 2001, the arbitration panel issued its final award, granting S&B
fees and costs in the amount of $3.7 million in addition to the damages
previously


                                      F-27
<Page>

awarded. The Company appealed the award in Texas state court, seeking reversal
or modification of the award on grounds that it was based in part on erroneous
conclusions of law. Following mediation between the parties, the matter was
settled on August 30, 2001 for a total settlement amount of $22.1 million. Under
the terms of the settlement agreement, the Company paid S&B $10.0 million on
September 14, 2001. In accordance with agreements with its lenders, Huntsman
Corporation paid S&B $6.1 million on December 31, 2001, taking a partial
assignment of the mechanics' lien securing the Company's obligations to S&B. The
Company anticipates that Huntsman Corporation will pay S&B $6.0 million plus
interest on April 1, 2002, the remaining portion under the settlement agreement,
and Huntsman Corporation will at that time take an assignment of the remaining
portion of the mechanics' lien. Huntsman Corporation has agreed to extend the
time for payment of this obligation. In the event the Company does not pay the
obligation, Huntsman Corporation would have the right to foreclose on the assets
subject to the mechanics' lien. In accounting for these payments, the Company
reduced its accrued liability to S&B and increased its liability to Huntsman
Corporation.

     The Company is also a party to various other 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.  SUBSEQUENT EVENT

     On February 27, 2002, three holders of our Senior Notes filed an
involuntary bankruptcy petition against the Company in the United States
bankruptcy court in Delaware. According to their filing, these note holders held
less than 1% of the total of our outstanding Senior Notes. On February 28, 2002
the petitioning note holders filed a motion to dismiss their petition, and,
shortly thereafter, the Company filed a second motion to dismiss on several
grounds, including that the bankruptcy filing was unfounded and improper.
According to court filings made by the petitioners, the petitioners reached an
agreement to sell their Senior Notes to an affiliate of Credit Suisse First
Boston shortly after filing the involuntary bankruptcy petition against the
Company. The bankruptcy court granted the petitioners' motion to dismiss and
ordered the case dismissed with prejudice on March 8, 2002.

19.  QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

     Summarized quarterly financial information for the years ended December 31,
2001 and 2000 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,
                    2001            2001          2001        2001         2000           2000           2000         2000
                -------------- --------------- ----------- ----------- -------------- -------------- ------------- -----------
<S>              <C>            <C>             <C>         <C>         <C>            <C>            <C>           <C>
Net Sales        $   109,593    $   110,491     $125,294    $144,770    $   175,667    $  168,293     $ 163,342     $167,290
Gross Profit          (8,367)       (20,745)     (15,782)    (27,122)       (11,010)       (1,573)       12,052        7,790
Net loss            (418,911)      (105,502)     (39,633)    (29,668)       (20,776)      (14,628)       (3,583)      (6,771)
</Table>



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