<PAGE>

================================================================================

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


[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
                 For the quarterly period ended March 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 333-85141

                          HUNTSMAN INTERNATIONAL LLC


              (Exact name of registrant as specified in charter)


                        Delaware                          87-0630358
             (State or other jurisdiction of           (I.R.S. employer
             incorporation or organization)          identification no.)

                    500 Huntsman Way
                  Salt Lake City, Utah                      84108
        (Address of principal executive offices)          (Zip code)


      Registrant's telephone number, including area code: (801) 584-5700


     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 [_]


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


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

     At May 15, 2001, 1,000 member equity units of Huntsman International LLC
were outstanding.
<PAGE>

                  HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

            FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2001

                               TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                                                                             PAGE
                                                                                                             ----
<S>                                                                                                          <C>
Part I -  Financial Information

          Item 1.  -  Financial Statements
                           Consolidated Condensed Balance Sheets.........................................       2
                           Consolidated Statements of Operations and Comprehensive Loss..................       3
                           Consolidated Statements of Equity.............................................       4
                           Consolidated Condensed Statements of Cash Flows...............................       5
                           Notes to Consolidated Condensed Financial Statements..........................       6

          Item 2.  -  Management's Discussion and Analysis of Financial Condition and Results of
                           Operations....................................................................      17

          Item 3.  -  Quantitative and Qualitative Disclosures about Market Risk.........................      22

Part II - Other Information

          Item 6.  -  Reports on Form 8-K................................................................      23
</TABLE>

                                       1
<PAGE>

                                    PART I

ITEM 1.  FINANCIAL STATEMENTS

                  HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
                     Consolidated Condensed Balance Sheets
                                  (Unaudited)
                             (Millions of Dollars)
<TABLE>
<CAPTION>

                                                                  March 31, 2001           December 31, 2000
                                                               ---------------------      -------------------
<S>                                                            <C>                        <C>
ASSETS

Current assets:
    Cash and cash equivalents                                        $          55.6           $         66.1
    Accounts and notes receivable (net of allowance
        for doubtful accounts of $10.5 and $10.6,
        respectively)                                                          561.2                    553.9
    Inventories                                                                497.6                    496.4
    Other current assets                                                       260.3                     85.7
                                                               ---------------------      -------------------
        Total current assets                                                 1,374.7                  1,202.1

Property, plant and equipment, net                                           2,648.6                  2,703.9
Other noncurrent assets                                                        862.2                    909.4
                                                               ---------------------      -------------------
Total assets                                                         $       4,885.5           $      4,815.4
                                                               =====================      ===================


LIABILITIES AND EQUITY

Current liabilities:
    Accounts payable and accrued liabilities                         $         709.4           $        830.3
    Current portion of long-term debt                                            7.6                      7.5
    Other current liabilities                                                   40.6                     32.4
                                                               ---------------------      -------------------
        Total current liabilities                                              757.6                    870.2

Long-term debt                                                               2,607.4                  2,343.0
Other noncurrent liabilities                                                   442.6                    463.9
                                                               ---------------------      -------------------
        Total liabilities                                                    3,807.6                  3,677.1
                                                               ---------------------      -------------------

Minority interests                                                               9.8                      9.6
                                                               ---------------------      -------------------

Equity:
     Member's equity, 1,000 units                                            1,026.1                  1,026.1
     Retained earnings                                                         231.8                    223.3
     Accumulated other comprehensive loss                                     (189.8)                  (120.7)
                                                               ---------------------      -------------------
       Total equity                                                          1,068.1                  1,128.7
                                                               ---------------------      -------------------
       Total liabilities and equity                                  $       4,885.5           $      4,815.4
                                                               =====================      ===================
</TABLE>

     See accompanying notes to consolidated condensed financial statements

                                       2
<PAGE>

                  HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
         Consolidated Statements of Operations and Comprehensive Loss
                                  (Unaudited)
                             (Millions of Dollars)

<TABLE>
<CAPTION>
                                                                      Three Months Ended March 31,
                                                       ----------------------------------------------------------
                                                                  2001                             2000
                                                       -------------------------      ---------------------------
<S>                                                    <C>                            <C>
Revenues:
  Trade sales and services                                         $     1,042.5                  $         931.7
  Related party sales                                                      105.5                            111.0
  Tolling fees                                                               3.6                             12.2
                                                       -------------------------      ---------------------------
     Total revenues                                                      1,151.6                          1,054.9
Cost of goods sold                                                         985.6                            873.6
                                                       -------------------------      ---------------------------
Gross profit                                                               166.0                            181.3

Expenses:
  Selling, general and administrative                                       80.8                             68.0
  Research and development                                                  16.4                             17.9
                                                       -------------------------      ---------------------------
     Total expenses                                                         97.2                             85.9
                                                       -------------------------      ---------------------------
Operating income                                                            68.8                             95.4

Interest expense, net                                                       59.6                             54.3
Loss on sale of accounts receivable                                          2.2                                -
Other (income) expense                                                      (6.4)                             0.4
                                                       -------------------------      ---------------------------
Income before income taxes                                                  13.4                             40.7
Income tax expense                                                           2.7                              3.9
Minority interests in subsidiaries                                           0.7                              0.5
                                                       -------------------------      ---------------------------

Income before accounting change                                             10.0                             36.3
Cumulative effect of accounting change                                      (1.5)                               -
                                                       -------------------------      ---------------------------
Net income                                                                   8.5                             36.3
Other comprehensive loss -
  Foreign currency translation
     adjustments                                                           (60.3)                           (44.9)
Cumulative effect of accounting
  change                                                                    (1.1)                               -
Net unrealized loss on derivative instruments                               (7.7)                               -
                                                       -------------------------      ---------------------------
Comprehensive loss                                                 $       (60.6)                 $          (8.6)
                                                       =========================      ===========================
</TABLE>

     See accompanying notes to consolidated condensed financial statements

                                       3
<PAGE>

                  HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
                       Consolidated Statements of Equity
                                  (Unaudited)
                             (Millions of Dollars)


<TABLE>
<CAPTION>
                                                                            Accumulated
                                         Member's Equity                       Other
                                         --------------        Retained    Comprehensive
                                          Units     Amount     Earnings        Loss          Total
                                       ---------  ----------  ----------   ------------    ----------
<S>                                    <C>        <C>         <C>          <C>             <C>
Balance, January 1, 2001                   1,000  $  1,026.1  $    223.3   $     (120.7)   $  1,128.7
Net income                                                           8.5                          8.5
Other comprehensive loss                                                          (69.1)       (69.1)
                                       ---------  ----------  ----------   ------------    ----------
Balance, March 31, 2001                    1,000  $  1,026.1  $    231.8   $     (189.8)   $  1,068.1
                                       =========  ==========  ==========   ============    ==========
</TABLE>

      See accompanying notes to consolidated condensed financial statements

                                       4
<PAGE>

                  HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
                Consolidated Condensed Statements of Cash Flows
                                  (Unaudited)
                             (Millions of Dollars)

<TABLE>
<CAPTION>
                                                                      Three Months Ended March 31,
                                                        -------------------------------------------------------
                                                                   2001                        2000
                                                        --------------------------  ---------------------------
<S>                                                     <C>                         <C>
Cash flows from operating activities:
Net income                                               $                     8.5   $                     36.3
Adjustments to reconcile net income to net cash
    from operating activities:
    Depreciation and amortization                                             58.3                         53.3
    Other non-cash adjustments to net income                                   0.9                          0.7
    Net changes in operating assets and liabilities                         (110.0)                       (75.6)
                                                        --------------------------  ---------------------------
          Net cash provided by (used in) operating
          activities                                                         (42.3)                        14.7
                                                        --------------------------  ---------------------------
Investing activities:
Restricted deposit for acquisition                                          (173.2)
Acquisition of business                                                      (33.4)                       (26.8)
Capital expenditures                                                         (45.6)                       (28.0)
Cash received from unconsolidated affiliates                                   1.5                          3.5
Advances to unconsolidated affiliates                                         (0.8)                        (7.2)
                                                        --------------------------  ---------------------------
          Net cash used in investing activities                             (251.5)                       (58.5)
                                                        --------------------------  ---------------------------
Financing activities:
Borrowings under senior credit facilities                                    108.8
Repayments of senior credit facilities                                                                    (25.8)
Issuance of senior subordinated notes                                        191.1
Debt issuance costs                                                           (3.7)
                                                        --------------------------  ---------------------------
          Net cash provided by (used in) financing
          activities                                                         296.2                        (25.8)
                                                        --------------------------  ---------------------------
Effect of exchange rate changes on cash                                      (12.9)                        (1.4)
                                                        --------------------------  ---------------------------
Decrease in cash and cash equivalents                                        (10.5)                       (71.0)
Cash and cash equivalents at beginning of period                              66.1                        138.9
                                                        --------------------------  ---------------------------
          Cash and cash equivalents at end of period     $                    55.6   $                     67.9
                                                        ==========================  ===========================
</TABLE>

      See accompanying notes to consolidated condensed financial statements

                                       5
<PAGE>

                  HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
             NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                  (Unaudited)

1. Basis of Presentation

Huntsman International LLC ("Huntsman International" or the "Company") is a
global manufacturer and marketer of specialty and commodity chemicals through
three principal businesses: Specialty Chemicals, Petrochemicals and Titanium
Dioxide ("Tioxide").  The Company is a wholly-owned subsidiary of Huntsman
International Holdings LLC ("Holdings").

The accompanying consolidated condensed financial statements of the Company are
unaudited.  However, in management's opinion, all adjustments, consisting only
of normal recurring adjustments necessary for a fair presentation of results of
operations, financial position and cash flows for the periods shown, have been
made.  Results for interim periods are not necessarily indicative of those to be
expected for the full year. These consolidated condensed financial statements
should be read in conjunction with the audited consolidated financial statements
and notes to consolidated financial statements included in the Company's annual
report on form 10-K for the year ended December 31, 2000.

2. Summary of Significant Accounting Policies

Principles of Consolidation

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

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, 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.

Reclassifications

Certain 2000 amounts have been reclassified to conform to the 2001 presentation.

3.    Inventories

Inventories consist of the following (in millions):

                                       March  31, 2001      December 31, 2000
                                       ---------------      ------------------

      Raw materials                    $         114.6      $            149.5
      Work in progress                            22.2                    22.8
      Finished goods                             340.2                   302.5
                                       ---------------      ------------------
                 Subtotal                        477.0                   474.8
      Materials and supplies                      20.6                    21.6
                                       ---------------      ------------------
                 Net                   $         497.6      $            496.4
                                       ===============      ==================

4.   Long-term Debt

On March 13, 2001, Huntsman International completed an offering of its 10-1/8%
Senior Subordinated Notes due 2009, resulting in net proceeds of approximately
(Euro)204.0 million, including (Euro)4.0 million of interest accrued from
January 1, 2001 paid by the purchasers. The terms of these notes are
substantially similar to the terms of its outstanding senior subordinated notes.

                                       6
<PAGE>

5.   Derivatives and Hedging Activities

Effective January 1, 2001, the Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 133, Accounting for Derivative Instruments and Hedging
Activities. SFAS No.133 establishes accounting and reporting standards for
derivative instruments and hedging activities.  It requires that an entity
recognize all derivative instruments as assets or liabilities in the balance
sheet and measure those instruments at fair value. The accounting for changes in
the fair value of a derivative instrument depends on the use of the instrument.

The Company is exposed to market risks, such as changes in interest rates,
currency exchange rates and commodity pricing.  As a result, the Company enters
into transactions including derivative instruments to manage these risks.  The
overall risk management philosophy of the Company is to manage the downside
risks of these activities.  Primary goals of the Company's risk management
activities include: (1) reducing the impact of fluctuations in variable interest
rates and meeting the requirements of certain credit agreements; (2) reducing
the short-term impact from certain movements in foreign exchange rates on
earnings; (3) reducing the variability in the purchase price of certain
feedstocks; and (4) hedging the net investment position in euro functional
currency entities.

Interest Rate Hedging

Through the Company's borrowing activities, it is exposed to interest rate risk.
Such risk arises due to the structure of the Company's debt portfolio, including
the duration of the portfolio and the mix of fixed and floating interest rates.
Actions taken to reduce interest rate risk include managing the mix and rate
characteristics of various interest bearing liabilities as well as entering into
interest rate swaps, collars and options.

As of March 31, 2001, the Company maintained interest rate swaps and collars
with a fair value of approximately $9.7 million which have been designated as
cash flow hedges of variable rate debt obligations.  These amounts are recorded
as other current liabilities in the accompanying balance sheet.  The effective
portion of unrealized losses of approximately $8.8 million were recorded as a
component of other comprehensive income, with the ineffective portion of
approximately $0.9 million recorded as additional interest expense in the
accompanying statement of operations.

Swaps and collars not designated as hedges are also recorded at fair value on
the balance sheet and resulted in an increase in interest expense and other
current liabilities of approximately $5.5 million in the accompanying financial
statements.

Foreign Currency Rate Hedging

The Company enters into foreign currency derivative instruments to minimize the
short-term impact of movements in foreign currency rates.  These contracts are
not designated as hedges for financial reporting purposes and are recorded at
fair value.  As of March 31, 2001, there were no outstanding contracts.

Commodity Price Hedging

Because feedstocks used by the Company are subject to price volatility, the
Company uses commodity futures and swaps to reduce the risk associated with
certain of these feedstocks.  These instruments are designated as cash flow
hedges of future inventory purchases, fair value hedges of inventory currently
held and trading activities.  The mark-to-market gains and losses of qualifying
cash flow hedges are recorded as a component of other comprehensive income. The
mark-to-market gains and losses of non-qualifying, excluded and ineffective
portions of hedges are recorded in cost of goods sold in the accompanying
statement of operations.  These activities were not material to the accompanying
financial statements for the periods presented.

Net Investment Hedging

The Company hedges its net investment position in euro functional currency
entities. To accomplish this, a portion of the Company's debt is euro
denominated and designated as a hedge of net investments. Currency effects of
these hedges produced a net gain in other comprehensive income (foreign currency
translation adjustments) of approximately $19.8 million for the quarter ended
March 31, 2001, with an ending net balance of approximately $65.5 million.

                                       7
<PAGE>

6.  Commitments and Contingencies

The Company has various purchase commitments for materials and supplies entered
into in the ordinary course of business.  These agreements extend from three to
ten years and the purchase price is generally based on market prices subject to
certain minimum price provisions.  The Company is involved in litigation from
time to time in the ordinary course of its business.  In management's opinion,
after consideration of indemnification arrangements, none of such litigation is
material to the Company's financial condition or results of operations.

7.  Environmental Matters

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.  The Company is subject to extensive federal, state,
local and foreign laws, regulations, rules and ordinances relating to pollution,
the 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.  The Company may incur substantial costs, including fines, damages
and criminal or civil sanctions, or experience interruptions in its operations
for actual or alleged violations arising under environmental laws.  In addition,
production facilities require operating permits that are subject to renewal,
modification and, in some circumstances, revocation.  Violations of permit
requirements can also result in restrictions or prohibitions on plant
operations, substantial fines and civil or criminal sanctions. Changes in
regulations regarding the generation, handling, transportation, use and disposal
of hazardous substances could inhibit or interrupt the Company's operations and
have a material adverse effect on its business.  From time to time, these
operations may result in violations under environmental laws, including spills
or other releases of hazardous substances to the environment.  In the event of a
catastrophic incident, the Company could incur material costs as a result of
addressing and implementing measures to prevent such incidents.  Given the
nature of the Company's business, there can be no assurance that violations of
environmental laws will not result in the imposition of restrictions on the
Company's operating activities, substantial fines, penalties, damages or other
costs.  In addition, potentially significant expenditures could be necessary in
order to comply with existing or future environmental laws.  In management's
opinion, after consideration of indemnification arrangements, there are
currently no environmental matters which are material to the Company's financial
condition or results of operations.

MTBE Developments

Denmark has recently proposed to the European Union (EU) that a directive be
issued, taking effect in 2005, allowing individual EU countries to ban the use
of MTBE.  Currently no other EU member countries have supported Denmark
officials on the issue.  Denmark has entered into a voluntary agreement with
refiners that will significantly reduce the sale of MTBE in Denmark.  The
agreement calls for refiners to cease using MTBE in 92- and 95-octane gasoline
by May 1, 2002; MTBE will still be an additive in a limited amount of 98-octane
gasoline sold in 100 selected service stations in the country.

North Tees

The U.K. Environment Agency (EA) issued an Enforcement Notice on March 30, 2001,
following an investigation into an alleged leak of benzene heartcut into the
River Tees, allegedly following a dewatering procedure at North Tees site.  The
EA investigations are continuing.  If culpable the Company could face legal
action and possible penalties.  We do not believe that, even if such action was
initiated, the probable penalties would be material to the Company.

                                       8
<PAGE>

8.   Industry Segment and Geographic Area Information

The Company derives its revenues, earnings and cash flows from the manufacture
and sale of a wide variety of specialty and commodity chemical products. The
Company has three reportable operating segments: Specialty Chemicals,
Petrochemicals and Tioxide.

The major products of each operating segment are as follows:

               Segment                              Products
          --------------------------- -----------------------------------------
          Specialty Chemicals         MDI, TDI, TPU, polyols, aniline, PO, TBA,
                                      MTBE and Ethyleneamines
          Petrochemicals              Ethylene, propylene, benzene, cyclohexane
                                      and paraxylene
          Tioxide                     TiO2

Sales between segments are generally recognized at external market prices. For
the period ended March 31, 2001 and 2000, sales to Imperial Chemicals Industries
PLC ("ICI") and its affiliates accounted for approximately 7% and 8%,
respectively, of consolidated revenues.

                                       Three months ended March 31,
                                      ------------------------------
                                          2001               2000
                                      -----------        -----------
   Net sales:
       Specialty Chemicals            $     580.9        $     491.2
       Petrochemicals                       367.6              345.3
       Tioxide                              228.0              241.5
       Sales between segments,
          Petrochemicals sales
         to Specialty Chemicals             (24.9)             (23.1)
                                      -----------        -----------
              Total                   $   1,151.6        $   1,054.9
                                      ===========        ===========
   Operating income:
       Specialty Chemicals            $      21.8        $      61.9
       Petrochemicals                        13.9              (0.3)
       Tioxide                               33.1               33.8
                                      -----------        -----------
              Total                   $      68.8        $      95.4
                                      ===========        ===========
   EBITDA (1):
       Specialty Chemicals            $      63.6        $      91.1
       Petrochemicals                        23.1               11.3
       Tioxide                               44.6               45.9
                                      -----------        -----------
              Total EBITDA                  131.3              148.3

       Depreciation & amortization          (58.3)             (53.3)
       Interest expense, net                (59.6)             (54.3)
                                      -----------        -----------
       Income before income taxes     $      13.4        $      40.7
                                      ===========        ===========

(1) EBITDA is defined as earnings from continuing operations before interest
expense, depreciation and amortization, and taxes.

                                       9
<PAGE>

9.   Subsequent Events

Issuance of (Euro)50 Million Senior Subordinated Notes

On May 2, 2001, Huntsman International completed an offering of its 10-1/8%
Senior Subordinated Notes due 2009, resulting in net proceeds of approximately
(Euro)52 million. The terms of these notes are substantially similar to the
terms of its outstanding senior subordinated notes.

Acquisition of Surfactants Business

Effective April 1, 2001 and pursuant to the terms of a definitive agreement
dated February 27, 2001, we completed our planned purchase of the European
surfactants business of Albright & Wilson, a subsidiary of Rhodia. Albright &
Wilson's surfactants business participates in the anionic surfactants and non-
ionic surfactants markets.

10.  Consolidating Condensed Financial Statements

The following consolidating condensed financial statements present, in separate
columns, financial information for: Huntsman International (on a parent only
basis), with its investment in subsidiaries recorded under the equity method;
the guarantors, under the June 30, 1999 Indenture, on a combined, or where
appropriate, consolidated basis, with its investment in the non-guarantors
recorded under the equity method; and the non-guarantors on a consolidated
basis. Additional columns present eliminating adjustments and consolidated
totals as of March 31, 2001 and December 31, 2000 and for the three months ended
March 31, 2001 and 2000. There are no contractual restrictions limiting
transfers of cash from guarantor and non-guarantor subsidiaries to Huntsman
International. The combined guarantors are wholly-owned subsidiaries of Huntsman
International and have fully and unconditionally guaranteed the senior
subordinated notes on a joint and several basis. The Company has not presented
separate financial statements and other disclosures concerning the combined
guarantors because management has determined that such information is not
material to investors.

                                       10
<PAGE>

                          HUNTSMAN INTERNATIONAL LLC
                    Consolidating Condensed Balance Sheets
                                March 31, 2001
                                  (Unaudited)
                             (Millions of Dollars)

<TABLE>
<CAPTION>
                                            Parent Only                                              Consolidated
                                             Huntsman                      Non-                        Huntsman
                                           International    Guarantors  Guarantors    Eliminations   International
                                         ---------------------------------------------------------------------------
<S>                                      <C>               <C>          <C>           <C>           <C>
ASSETS

Current assets:
 Cash and cash equivalents                 $             -   $        -   $      55.6   $        -     $       55.6
 Accounts and notes receivable, net                  127.8         80.3         465.9       (112.8)           561.2
 Inventories                                          48.1         89.9         359.6            -            497.6
 Other current assets                                 75.6         64.4         259.7       (139.4)           260.3
                                         ---------------------------------------------------------------------------
   Total current assets                              251.5        234.6       1,140.8       (252.2)         1,374.7

Property, plant and equipment, net                   589.6        373.4       1,685.6            -          2,648.6
Investment in unconsolidated affiliates            2,752.9        909.9           1.2     (3,508.6)           155.4
Other noncurrent assets                              412.4      1,291.3         272.0     (1,268.9)           706.8
                                         ---------------------------------------------------------------------------
   Total assets                            $       4,006.4   $  2,809.2   $   3,099.6   $ (5,029.7)    $    4,885.5
                                         ===========================================================================

LIABILITIES AND EQUITY

Current liabilities:
 Accounts payable and accrued liabilities  $         176.1   $    109.0   $     601.9   $   (177.6)    $      709.4
 Current portion of long-term debt                     0.2            -           7.4            -              7.6
 Other current liabilities                            69.7         34.1          10.7        (73.9)            40.6
                                         ---------------------------------------------------------------------------
   Total current liabilities                         246.0        143.1         620.0       (251.5)           757.6

Long-term debt                                     2,632.0            -       1,244.2     (1,268.8)         2,607.4
Other noncurrent liabilities                          60.3          4.1         378.2            -            442.6
                                         ---------------------------------------------------------------------------
   Total liabilities                               2,938.3        147.2       2,242.4     (1,520.3)         3,807.6
                                         ---------------------------------------------------------------------------
Minority interests                                       -            -           9.8            -              9.8
                                         ---------------------------------------------------------------------------

Equity:
 Member's equity, 1,000 units                      1,026.1            -             -            -          1,026.1
 Subsidiary equity                                       -      2,474.3         759.1     (3,233.4)               -
 Retained earnings                                   231.8        439.2         172.1       (611.3)           231.8
 Accumulated other comprehensive
  loss                                              (189.8)      (251.5)        (83.8)       335.3           (189.8)
                                         ---------------------------------------------------------------------------
   Total equity                                    1,068.1      2,662.0         847.4     (3,509.4)         1,068.1
                                         ---------------------------------------------------------------------------
Total liabilities and equity               $       4,006.4   $  2,809.2   $   3,099.6   $ (5,029.7)    $    4,885.5
                                         ===========================================================================
</TABLE>

                                       11
<PAGE>

                          HUNTSMAN INTERNATIONAL LLC
                    Consolidating Condensed Balance Sheets

                               December 31, 2000
                                  (Unaudited)
                             (Millions of Dollars)

<TABLE>
<CAPTION>
                                                  Parent Only                                                       Consolidated
                                                   Huntsman                                                           Huntsman
                                                 International      Guarantors      Non-Guarantors     Eliminations International
                                               ----------------------------------------------------------------------------------
<S>                                            <C>                <C>              <C>               <C>             <C>
ASSETS

Current assets:
   Cash and cash equivalents                   $            5.7   $           -    $        60.4     $          -    $       66.1
   Accounts and notes receivable, net                      71.8            66.2            509.1            (93.2)          553.9
   Inventories                                             61.9            63.3            371.2                -           496.4
   Other current assets                                    37.8            88.7             88.3           (129.1)           85.7
                                               ----------------------------------------------------------------------------------
        Total current assets                              177.2           218.2          1,029.0           (222.3)        1,202.1

Property, plant and equipment, net                        592.3           358.2          1,753.4                -         2,703.9
Investment in unconsolidated affiliates                 2,631.2           842.1              1.2         (3,317.8)          156.7
Other noncurrent assets                                   415.8         1,254.1            313.0         (1,230.2)          752.7
                                               ----------------------------------------------------------------------------------
        Total assets                           $        3,816.5   $     2,672.6    $     3,096.6     $   (4,770.3)   $    4,815.4
                                               ==================================================================================

LIABILITIES AND EQUITY

Current liabilities:
   Accounts payable and accrued liabilities    $          189.4   $       114.5    $       653.9     $     (127.5)   $      830.3
   Current portion of long-term debt                        0.2               -              7.3                -             7.5
   Other current liabilities                               73.4            30.0             23.8            (94.8)           32.4
                                               ----------------------------------------------------------------------------------
       Total current liabilities                          263.0           144.5            685.0           (222.3)          870.2

Long-term debt                                          2,368.1               -          1,205.1         (1,230.2)        2,343.0
Other noncurrent liabilities                               56.7             4.0            403.2                -           463.9
                                               ----------------------------------------------------------------------------------
       Total liabilities                                2,687.8           148.5          2,293.3         (1,452.5)        3,677.1
                                               ----------------------------------------------------------------------------------

Minority interests                                            -               -              9.6                -             9.6
                                               ----------------------------------------------------------------------------------

Equity:
   Member's equity, 1,000 units                         1,026.1               -                -                -         1,026.1
   Subsidiary equity                                          -         2,331.4            726.6         (3,058.0)              -
   Retained earnings                                      223.3           361.7            123.9           (485.6)          223.3
   Accumulated other comprehensive loss                  (120.7)         (169.0)           (56.8)           225.8          (120.7)
                                               ----------------------------------------------------------------------------------
        Total equity                                    1,128.7         2,524.1            793.7         (3,317.8)        1,128.7
                                               ----------------------------------------------------------------------------------
Total liabilities and equity                   $        3,816.5   $     2,672.6    $     3,096.6     $   (4,770.3)   $    4,815.4
                                               ==================================================================================
</TABLE>

                                       12
<PAGE>

                          HUNTSMAN INTERNATIONAL LLC
   Consolidating Condensed Statements of Operations and Comprehensive Income
                       Three Months Ended March 31, 2001
                                  (Unaudited)
                             (Millions of Dollars)

<TABLE>
<CAPTION>
                                          Parent Only                                                Consolidated
                                            Huntsman                        Non-                       Huntsman
                                         International   Guarantors      Guarantors    Eliminations   International
                                         ---------------------------------------------------------------------------
<S>                                      <C>             <C>            <C>            <C>           <C>
Revenues:
  Trade sales and services               $        155.1  $      157.0   $       730.4  $         -    $     1,042.5
  Related party sales                              47.9          38.3           110.0        (90.7)           105.5
  Tolling fees                                        -           3.6               -            -              3.6
                                         ---------------------------------------------------------------------------
     Total revenue                                203.0         198.9           840.4        (90.7)         1,151.6
Cost of goods sold                                166.8         184.5           725.0        (90.7)           985.6
                                         ---------------------------------------------------------------------------
Gross profit                                       36.2          14.4           115.4            -            166.0

Expenses:
  Selling, general and administrative              26.0           9.2            45.6            -             80.8
  Research and development                         16.2           1.1            (0.9)           -             16.4
                                         ---------------------------------------------------------------------------
     Total expenses                                42.2          10.3            44.7            -             97.2
                                         ---------------------------------------------------------------------------
Operating income                                   (6.0)          4.1            70.7            -             68.8

Interest expense (income), net                     61.5         (26.7)           24.8            -             59.6
Loss on sale of accounts receivable                 0.3           1.5             0.4            -              2.2
Equity in earnings of
  unconsolidated affiliates                        77.6          48.2               -       (125.7)             0.1
Other (income)                                     (0.2)            -            (6.1)           -             (6.3)
                                         ---------------------------------------------------------------------------
Income before income taxes                         10.0          77.5            51.6       (125.7)            13.4
Income tax expense                                    -             -             2.7            -              2.7
Minority interests in subsidiaries                    -             -             0.7            -              0.7
                                         ---------------------------------------------------------------------------
Net income before accounting change                10.0          77.5            48.2       (125.7)            10.0
Cumulative effect of accounting change             (1.5)            -               -            -             (1.5)
                                         ---------------------------------------------------------------------------
Net income                                          8.5          77.5            48.2       (125.7)             8.5
Other comprehensive loss                          (69.1)        (82.5)          (27.0)       109.5            (69.1)
                                         ---------------------------------------------------------------------------
Comprehensive income (loss)              $        (60.6) $       (5.0)  $        21.2  $     (16.2)  $        (60.6)
                                         ===========================================================================
</TABLE>

                                       13
<PAGE>

                          HUMTSMAN INTERNATIONAL LLC
    Consolidating Condensed Statements of Operations and Comprehensive Loss
                       Three Months Ended March 31, 2000
                                  (Unaudited)
                             (Millions of Dollars)


<TABLE>
<CAPTION>
                                          Parent Only                                                   Consolidated
                                            Huntsman                                                       Huntsman
                                         International     Guarantors   Non-Guarantors    Eliminations  International
                                         ----------------------------------------------------------------------------
<S>                                      <C>              <C>           <C>              <C>            <C>
Revenues:
  Trade sales and services               $        245.0   $      46.6     $     640.1    $        -      $      931.7
  Related party sales                              40.6           9.0           118.6         (57.2)            111.0
  Tolling fees                                     12.2             -               -             -              12.2
                                         ----------------------------------------------------------------------------
       Total revenue                              297.8          55.6           758.7         (57.2)          1,054.9
Cost of goods sold                                223.4          47.3           660.1         (57.2)            873.6
                                         ----------------------------------------------------------------------------
Gross profit                                       74.4           8.3            98.6             -             181.3

Expenses:
  Selling, general and administrative              28.2           2.6            37.2             -              68.0
  Research and development                         13.1             -             4.8             -              17.9
                                         ----------------------------------------------------------------------------
       Total expenses                              41.3           2.6            42.0             -              85.9
                                         ----------------------------------------------------------------------------
Operating income                                   33.1           5.7            56.6             -              95.4

Interest expense (income), net                     55.3         (31.8)           30.8                            54.3
Loss on sale of accounts receivable                   -             -               -             -                 -
Equity in earnings of
     unconsolidated affiliates                     58.5          21.0               -         (79.5)                -
Other expense                                         -             -             0.4             -               0.4
                                         ----------------------------------------------------------------------------
Income before income taxes                         36.3          58.5            25.4         (79.5)             40.7
Income tax expense                                    -             -             3.9             -               3.9
Minority interests in subsidiaries                    -             -             0.5             -               0.5
                                         ----------------------------------------------------------------------------
Net income                                         36.3          58.5            21.0         (79.5)             36.3
Other comprehensive loss                          (44.9)        (69.1)          (21.7)         90.8             (44.9)
                                         ----------------------------------------------------------------------------
Comprehensive loss                       $         (8.6)  $     (10.6)    $      (0.7)   $     11.3      $       (8.6)
                                         ============================================================================
</TABLE>

                                       14
<PAGE>

                          HUNTSMAN INTERNATIONAL LLC
                Consolidating Condensed Statements of Cash Flow
                       Three Months Ended March 31, 2001
                                  (Unaudited)
                             (Millions of Dollars)


<TABLE>
<CAPTION>
                                                    Parent Only                                              Consolidated
                                                      Huntsman                 Non-                           Huntsman
                                                   International   Guarantors  Guarantors   Eliminations    International
                                                  ------------------------------------------------------------------------
<S>                                                <C>             <C>         <C>          <C>             <C>
Net cash provided by (used in)
  operating activities                            $       (100.2)  $     11.1   $     46.8   $         -    $       (42.3)
                                                  ------------------------------------------------------------------------
Investing activities:
Restricted deposit for acquisition                         (21.9)                   (151.3)                        (173.2)
Acquisition of business                                                 (29.1)        (4.3)                         (33.4)
Capital expenditures                                        (6.1)        (1.5)       (38.0)                         (45.6)
Cash received from unconsolidated affiliates                 1.5                                                      1.5
Advances to unconsolidated affiliates                       (0.8)                                                    (0.8)
                                                  ------------------------------------------------------------------------
Net cash used in investing  activities                     (27.3)       (30.6)      (193.6)                        (251.5)
                                                  ------------------------------------------------------------------------
Financing Activities:
Borrowings under senior credit facilities                  107.6                       1.2                          108.8
Issuance of senior subordinated notes                      191.1                                                    191.1
Debt issuance costs                                         (3.7)                                                    (3.7)
Cash contributions by parent                                            511.8        882.5      (1,394.3)
Cash distributions from subsidiaries                     1,198.9                                (1,198.9)
Cash distributions to parent                                           (348.9)      (850.0)      1,198.9
Cash distributions to subsidiaries                      (1,343.1)       (51.2)                   1,394.3
Intercompany advances - net of repayments                  (24.5)       (88.5)       113.0             -                -
                                                  ------------------------------------------------------------------------
Net cash provided by financing activities                  126.3         23.2        146.7             -            296.2
                                                  ------------------------------------------------------------------------
Effect of exchange rate changes on cash                     (4.5)        (3.7)        (4.7)            -            (12.9)
                                                  ------------------------------------------------------------------------
                                                            (5.7)           -         (4.8)            -            (10.5)
Decrease in cash and cash equivalents
Cash and cash equivalents at beginning of
  period                                                     5.7            -         60.4             -             66.1
                                                  ------------------------------------------------------------------------
Cash and cash equivalents at end of period        $            -   $        -   $     55.6   $         -    $        55.6
                                                  ========================================================================
</TABLE>

                                       15
<PAGE>

                          HUNTSMAN INTERNATIONAL LLC
                Consolidating Condensed Statements of Cash Flow
                       Three Months Ended March 31, 2000
                                  (Unaudited)
                             (Millions of Dollars)

<TABLE>
<CAPTION>
                                               Parent Only                                               Consolidated
                                                Huntsman                      Non-                         Huntsman
                                              International   Guarantors   Guarantors    Eliminations    International
                                             --------------------------------------------------------------------------
<S>                                          <C>              <C>          <C>           <C>             <C>
Net cash provided by (used in)
  operating activities                       $        (68.9)  $     29.2   $    54.4     $          -    $        14.7
                                             --------------------------------------------------------------------------
Investing activities:
Acquisition of other businesses                       (12.8)                   (14.0)                            (26.8)
Cash received from unconsolidated
  affiliates                                              -          3.5                                           3.5
Advances to unconsolidated affiliates                  (7.2)                                                      (7.2)
Capital expenditures                                   (8.3)                   (19.7)                            (28.0)
                                             --------------------------------------------------------------------------
Net cash provided by (used in) investing
  activities                                          (28.3)         3.5       (33.7)                            (58.5)
                                             --------------------------------------------------------------------------
Financing Activities:
Repayment of senior credit facilities                 (24.2)           -        (1.6)                            (25.8)
Cash contributions by parent                              -         58.8         5.1            (63.9)               -
Cash distributions from subsidiaries                   67.3            -           -            (67.3)               -
Cash distributions to parent                                       (67.3)                        67.3
Cash distributions to subsidiaries                    (58.8)        (5.1)          -             63.9                -
Intercompany advances - net of repayments             119.3        (19.3)     (100.0)               -                -
                                             -------------------------------------------------------------------------
Net cash provided by (used in) financing
  activities                                          103.6        (32.9)      (96.5)               -            (25.8)
                                             -------------------------------------------------------------------------
Effect of exchange rate changes on cash                   -            -        (1.4)               -             (1.4)
                                             -------------------------------------------------------------------------
Increase (decrease)  in cash and cash
  equivalents                                           6.4         (0.2)      (77.2)               -            (71.0)
Cash and cash equivalents at beginning of
  period                                                9.0          0.2       129.7                -            138.9
                                             -------------------------------------------------------------------------
Cash and cash equivalents at end of period   $         15.4   $        -   $    52.5     $          -    $        67.9
                                             =========================================================================
</TABLE>

                                       16
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

Cautionary Statement for Forward Looking Information

Certain information set forth in this report contains "forward-looking
statements" within the meaning of federal securities laws. Forward-looking
statements include statements concerning 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 publicly update or
revise forward-looking statements which may be made to reflect events or
circumstances after the date made or to reflect the occurrence of unanticipated
events.

General

Huntsman International LLC ("Huntsman International" or the "Company") is a
global manufacturer and marketer of specialty and commodity chemicals through
three principal businesses: Specialty Chemicals, Petrochemicals and Titanium
Dioxide ("Tioxide"). The Company is a wholly-owned subsidiary of Huntsman
International Holdings LLC ("Holdings").

Recent Events

 Issuance of (Euro)50 Million Senior Subordinated Notes

On May 2, 2001, Huntsman International completed an offering of its 10-1/8%
Senior Subordinated Notes due 2009, resulting in net proceeds of approximately
(Euro)52.0 million, including (Euro)1.7 million of interest accrued from January
1, 2001 paid by the purchasers. The terms of these notes are substantially
similar to the terms of its outstanding senior subordinated notes. Proceeds of
this offering will be used to reduce the Company's outstanding indebtedness.

 Acquisition of Surfactants Business

Effective April 1, 2001 and pursuant to the terms of a definitive agreement
dated February 27, 2001, we completed our planned purchase of the European
surfactants business of Albright & Wilson, a subsidiary of Rhodia. Albright &
Wilson's surfactants business participates in the anionic surfactants and non-
ionic surfactants markets.

The surfactants business manufactures, develops and markets a wide range of
surfactants and surfactant intermediates used primarily in consumer detergents,
toiletries, baby shampoos and personal care products. It is also a major
producer of surfactants and specialty products for industrial uses including
leather and textile treatment, foundry and construction, agriculture, polymers
and coatings, and includes a facility for the manufacture of fatty alcohol, a
key surfactants intermediate raw material. The business includes seven
manufacturing facilities: one in the U.K., and two sites in each of Italy,
France and Spain. We anticipate that we will work cooperatively with Rhodia in
the joint operation and management of the U.K. site (at which Rhodia will
continue to operate unrelated retained businesses).

                                       17
<PAGE>

  Proposed Investment by Bain Capital in Huntsman Corporation

On February 23, 2001, Huntsman Corporation announced that it had entered into a
letter of intent with Bain Capital, Inc. relating to a proposed investment by
Bain Capital in Huntsman Corporation. This letter of intent has expired by its
terms. Huntsman Corporation and Bain Capital are currently negotiating a new and
modified letter of intent. Although no assurance can be given, it is expected
that Bain Capital and other investors will invest over $600 million in Huntsman
Corporation or one of its affiliates in exchange for a minority equity interest
in Huntsman Corporation or such affiliate. If the parties complete the proposed
transaction, a substantial portion of the proceeds received from Bain Capital
and other investors is intended to be used to finance the purchase of the
membership interests of Holdings that are currently held by ICI and by other
minority interest holders.

 MTBE Developments

Denmark has recently proposed to the European Union (EU) that a directive be
issued, taking effect in 2005, allowing individual EU countries to ban the use
of MTBE. Currently no other EU member countries have supported Denmark officials
on the issue. Denmark has entered into a voluntary agreement with refiners that
will significantly reduce the sale of MTBE in Denmark. The agreement calls for
refiners to cease using MTBE in 92- and 95-octane gasoline by May 1, 2002; MTBE
will still be an additive in a limited amount of 98-octane gasoline sold in 100
selected service stations in the country.

 North Tees

The U.K. Environment Agency (EA) issued an Enforcement Notice on March 30, 2001,
following an investigation into an alleged leak of benzene heartcut into the
River Tees, allegedly following a dewatering procedure at North Tees site. The
EA investigations are continuing. If culpable the Company could face legal
action and possible penalties. We do not believe that, even if such action was
initiated, the probable penalties would be material to the Company.

                                       18


<PAGE>

Three Months Ended March 31, 2001 Compared to Three Months Ended March 31, 2000.

                                                             (Unaudited)
                                                        (Millions of Dollars)
                                                          Three months ended
                                                               March 31,
                                                            2001        2000
                                                        ----------   ----------
  Specialty Chemicals sales                               $    581     $    491
  Petrochemicals sales                                         343          322
  Tioxide sales                                                228          242
                                                        ----------   ----------
  Total revenues                                             1,152        1,055
  Cost of goods sold                                           986          874
                                                        ----------   ----------
  Gross profit                                                 166          181
  Expenses of selling, general, administrative,
    research and development                                    97           86
                                                        ----------   ----------
  Operating income                                              69           95
  Interest expense, net                                         60           54
  Loss on sale of accounts receivable                            2
  Other income                                                   6            -
                                                        ----------   ----------
  Net income before income taxes and minority interest          13           41
  Income tax expense                                             2            4
  Minority interests in subsidiaries                             1            1
                                                        ----------   ----------
  Net income before accounting change                           10           36
  Cumulative effect of accounting change                        (1)           -
                                                        ----------   ----------
  Net income                                                     9           36
                                                        ==========   ==========
  Depreciation and amortization                           $     58     $     53
                                                        ==========   ==========

  EBITDA (1)                                              $    131     $    148
  Loss on sale of accounts receivable (2)                        2            -
                                                        ----------   ----------
  Adjusted EBITDA                                         $    133     $    148
                                                        ==========   ==========

(1)      EBITDA is defined as earnings from continuing operations before
         interest expense, depreciation and amortization, and taxes. EBITDA is
         included in this report because it is a basis on which we assess our
         financial performance and debt service capabilities, and because
         certain covenants in our borrowing arrangements are tied to similar
         measures. However, EBITDA should not be considered in isolation or
         viewed as a substitute for cash flow from operations, net income or
         other measures of performance as defined by accounting principles
         generally accepted in the United States ("US GAAP") or as a measure of
         a company's profitability or liquidity. While EBITDA is frequently used
         by securities analysts, lenders and others in their evaluation of
         companies, EBITDA as used herein is not necessarily comparable to other
         similarly titled captions of other companies due to potential
         inconsistencies in the method of calculation.

(2)      For purposes of the Company's senior credit facility covenants, loss on
         sale of accounts receivable related to the securitization program is
         excluded from the computation of EBITDA.

Results of Operations

Three months ended March 31, 2001 compared to the three months ended March 31,
2000.

   Revenues. Revenues for the three months ended March 31, 2001 increased by $97
million, or 9%, to $1,152 million from $1,055 million during the same period in
2000.

Specialty Chemicals - Total MDI sales volumes increased by 9% from the 2000
period. A strong recovery in the Asian economies led to an increase in sales
volumes of 57% in that region, while in Europe, sales volumes grew by 13%. In
the Americas, sales volumes decreased by 7% from the prior year due to weaker
demand resulting from economic slowdown. Polyol sales volumes grew by 7% with
the increase attributable to the European and Asian region. These gains were
partially offset by a 3% decrease in average selling prices for both MDI and
polyols compared to the same period in 2000, a substantial portion which was due
to a weakening in the value of the euro versus the U.S. dollar. PO sales revenue
decreased 17% due to a 22% decrease in sales volumes which more than offset the
5% increase in average selling price for PO. MTBE sales revenue grew by 17% due
to a 25% increase in average selling price for MTBE. The

                                       19
<PAGE>

increase in average selling price for MTBE is primarily attributable to reduced
supply of MTBE and the continued strong demand for MTBE in reformulated
gasoline. Sales of TPU, Ethyleneamines and performance chemicals products
purchased from Huntsman Corporation were $60 million. These products were not
present in the comparable period in 2000.

Petrochemicals - Sales volumes of ethylene fell by 9% while sales volumes of
propylene increased by 1%. Ethylene production increased by 5% but the reduction
in sales was due to material on exchange with another producer to be returned
during our 2002 scheduled turnaround. In aromatics, sales volumes of benzene and
cyclohexane rose by 8% and 6%, respectively, while sales volumes of paraxylene
fell by 4%. Ethylene, propylene, benzene and paraxylene prices were 2%, 11%, 13%
and 9% higher, respectively. Average selling prices for all products rose
reflecting increases in feedstock prices since March 31, 2000.

Tioxide - Sales volumes decreased by 6% compared to the 2000 period due to
weakening of demand, particularly in the Asian and American markets. Average
selling prices increased by 1% as higher local currency selling prices more than
offset the weakness of the euro against the U.S. dollar.

  Gross profit. Gross profit for the three months ended March 31, 2001 decreased
by $15 million, or 8%, to $166 million from $181 million in 2000.

Specialty Chemicals - While MDI and polyols benefited from increased sales
volumes, this benefit was more than offset by higher raw material and energy
costs. Gross profit on MDI and polyols decreased 11% and 14%, respectively.  The
price of benzene increased by 15% in the European market compared to the 2000
period. Improved average selling prices for MTBE were more than offset by a
significant increase in the cost of key PO/MTBE raw materials including
isobutane, methanol and higher energy costs.  In addition, the PO/MTBE plant ran
at less than full capacity during the first half of the quarter due to operating
constraints.  In addition, gross profit was further reduced by lower sales
volumes.

Petrochemicals - The Petrochemicals gross profit increased by 144% due to higher
average selling prices and the lower prices of our main raw material, naphtha.

Tioxide - Gross profit decreased by 1% for the period as cost reductions from
our on-going manufacturing excellence program were more than offset by lower
revenues and increased raw material and utility costs.

  Selling, general and administrative expenses (including research and
development expenses).   Selling, general and administrative expenses (including
research and development expenses) ("SG&A") in the three months ended March 31,
2001 increased by $11 million, or 13%, to $97 million from $86 million in 2000.

Specialty Chemicals - SG&A (including R&D) in 2001 increased by 23% largely due
to the acquisition of businesses since March 31, 2000.

Petrochemicals - SG&A (including R&D) in 2001 was relatively unchanged as
compared to 2000.

Tioxide - SG&A (including R&D) in 2001 decreased by 6% primarily due to
restructuring activities, including personnel reductions within selling
organizations in Europe, Asia Pacific and the U.S.

  Interest expense. Net interest expense in the three months ended March 31,
2001 increased by $6 million, or 11%, to $60 million from $54 million in 2000.
The increase was due to the decreased fair value of the Company's interest rate
derivative contracts.

  Other income. Other income increased by $6 million, principally as a result of
the Company's interest in Nippon Polyurethane Industry Co. Limited being sold.

  Income taxes. Income taxes in 2001 decreased by $2 million, to $2 million from
$4 million in 2000. The effective income tax rate in 2001 increased from the
2000 period because a greater proportion of income was earned outside of the
U.S. and was subject to income tax at local rates.

                                       20
<PAGE>

  Net income. Net income in 2001 decreased by $27 million to $9 million from $36
million during 2000 as a result of the factors discussed above.

Liquidity and Capital Resources

Net cash used in operating activities for the three months ended March 31, 2001
was $42.3 million, as compared to net cash provided by operating activities of
$14.7 million in the same period in 2000. The increase in cash used was
attributable to lower net income and a net increase in working capital during
the 2001 period.

Net cash used in investing activities for the three months ended March 31, 2001
was $251.5 million, as compared to $58.5 million for the same period in 2000.
The increase in cash used was attributable to increased capital expenditures,
increased spending on acquisitions during the 2001 period and cash put on
deposit to fund the acquisition of the Albright & Wilson surfactants business.
See "Acquisition of Surfactants Business".

Net cash provided by financing activities for the three months ended March 31,
2001 was $296.2 million, as compared to net cash used in financing activities of
$25.8 million for the same period in 2000. During the 2001 period, the Company
issued additional senior subordinated notes. The Company utilized borrowing
under its credit facilities to fund acquisitions, capital expenditures and a
portion of net working capital investment.

Capital expenditures for the three months ended March 31, 2001 were $45.6
million, an increase of $17.6 million as compared to the same period in 2000.
The increase was primarily attributable to spending associated with the ongoing
expansion of the Company's Greatham, UK titanium dioxide plant. The Company
expects to spend approximately $200.0 to $225.0 million during the balance of
2001 on capital projects.

As of March 31, 2001 the Company had $140.0 million of outstanding borrowings
under our $400 million revolving credit facility and had approximately $56.0
million in cash balances. We also maintain $80 million of short-term overdraft
facilities, of which $68 million was available on March 31, 2001. We anticipate
that borrowings under the credit facilities and cash flow from operations will
be sufficient for us to make required payments of principal and interest on our
debt when due, as well as to fund capital expenditures.

On March 13, 2001, the Company completed an offering of its 10-1/8% Senior
Subordinated Notes due 2009, resulting in net proceeds of approximately
(Euro)204.0 million, including (Euro)4.0 million of interest accrued from
January 1, 2001 paid by the purchasers. The terms of these notes are
substantially similar to the terms of its outstanding senior subordinated notes.
Huntsman International used the proceeds of this offering to finance our
acquisition of Albright & Wilson's European surfactants business. See
"Acquisition of Surfactants Business". As of March 31, 2001, the Company held a
restricted deposit classified as other current assets pending the closing of the
acquisition.

                                       21
<PAGE>

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risk, including changes in interest rates, currency
exchange rates, and certain commodity prices. Our exposure to foreign currency
market risk is limited since sales prices are typically denominated in euros or
U.S. dollars. To the extent we have material foreign currency exposure on known
transactions, hedges are put in place monthly to mitigate such market risk. Our
exposure to changing commodity prices is also limited (on an annual basis) since
the majority of raw material is acquired at posted or market related prices, and
sales prices for finished products are generally at market related prices which
are set on a quarterly basis in line with industry practice. To manage the
volatility relating to these exposures, we enter into various derivative
transactions. We hold and issue derivative financial instruments for economic
hedging purposes only.

Our cash flows and earnings are subject to fluctuations due to exchange rate
variation. Short-term exposures to changing foreign currency exchange rates at
certain of our foreign subsidiaries were managed, and will continue to be
managed, through financial market transactions, principally through the purchase
of forward foreign exchange contracts (with maturities of six months or less)
with various financial institutions. While the overall extent of our currency
hedging activities has not changed significantly, we have altered the scope of
our currency hedging activities to reflect the currency denomination of our cash
flows. In addition, we are now conducting our currency hedging activities for
our exposures arising in our businesses with various financial institutions. We
do not hedge our currency exposures in a manner that would entirely eliminate
the effect of changes in exchange rates on our cash flows and earnings. As of
March 31, 2001, we had no outstanding foreign exchange forward contracts with
third party banks. Predominantly our hedging activity is to sell forward the
majority of our surplus non-U.S. dollar receivables for U.S. dollars. Using
sensitivity analysis, the foreign exchange loss due to these derivative
instruments from an assumed 10% unfavorable change in year-end rates, when
considering the effects of the underlying hedged firm commitment, is not
material.

Under the terms of our senior secured credit facilities, we are required to
hedge a significant portion of our floating rate debt. As of March 31, 2001, we
had entered into approximately $644 million notional amount of interest rate
swap, cap and collar transactions, approximately $294 million of which have
terms ranging from approximately three years to five years. The majority of
these transactions hedge against movements in U.S. dollar interest rates. The
U.S. dollar swap transactions obligate us to pay fixed amounts ranging from
approximately 5.80% to approximately 7.00%. The U.S. dollar collar transactions
carry floors ranging from 5.00% to 6.25% and caps ranging from 6.60% to 7.50%.
We have also entered into a euro-denominated swap transaction that obligates us
to pay a fixed rate of approximately 4.30%. We do not hedge our interest rate
exposure in a manner that would entirely eliminate the effects of changes in
market interest rates on our cash flow and earnings. Assuming a 1% (100 basis
point) increase in U.S. dollar interest rates, the effect on the annual interest
expense would be an increase of approximately $15.4 million. This increase would
be reduced by approximately $4.3 million as a result of the effects of the
interest rate swap, cap and collar transactions described above.

In order to reduce our overall raw material costs, our petrochemical business
enters into various commodity contracts to hedge its purchase of commodity
products. We do not hedge our commodity exposure in a manner that would entirely
eliminate the effects of changes in commodity prices on our cash flows and
earnings. At March 31, 2001, the Company had forward purchase and sales
contracts for 141,000 and 206,000 tonnes (naphtha and other hydrocarbons),
respectively, which do not qualify for hedge accounting. Assuming a 10% increase
or a 10% decrease in the price per tonnes of naphtha, the change would result in
gains or losses of approximately $0.7 million, respectively.

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<PAGE>

                                    PART II


ITEM 6. REPORTS ON FORM 8-K

          1)   The Company filed no reports on Form 8-K for the quarter ended
March 31, 2001.

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<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, Huntsman International LLC has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized, in the city of
Everberg, Country of Belgium, on the 15th day of May, 2001.


                                  Huntsman International LLC



                                  By:          /s/ L. Russell Healy
                                     ----------------------------------------
                                                 L. Russell Healy
                                            Senior Vice President and
                                                 Finance Director
                                            (Authorized Signatory and
                                   Principal Financial and Accounting Officer)

                                      24