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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

Form 10-Q

(Mark One)ý

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended March 31, 2010ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period
from                                to




Commission
File Number

Exact Name of Registrant as Specified in its Charter, Principal Office
Address and Telephone Number

State of Incorporation

I.R.S. Employer
Identification No.001-32427

Huntsman Corporation
500 Huntsman Way
Salt Lake City, Utah 84108
(801) 584-5700


Delaware


42-1648585333-85141

Huntsman International LLC
500 Huntsman Way
Salt Lake City, Utah 84108
(801) 584-5700


Delaware


87-0630358




Indicate
by 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.

Huntsman Corporation

YES ý

NO oHuntsman International LLC

YES ý

NO o


Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Huntsman Corporation

YES o

NO oHuntsman International LLC

YES o

NO o


Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of
"accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one):

Huntsman Corporation

Large accelerated filer ý

Accelerated filer o

Non-accelerated filer o

Smaller reporting company oHuntsman International LLC

Large accelerated filer o

Accelerated filer o

Non-accelerated filer ý

Smaller reporting company o


Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Huntsman Corporation

YES o

NO ýHuntsman International LLC

YES o

NO ý




On
April 27, 2010, 239,059,793 shares of common stock of Huntsman Corporation were outstanding and 2,728 units of membership interests of Huntsman International LLC were
outstanding. There is no established trading market for Huntsman International LLC's units of membership interests. All of Huntsman International LLC's units of membership interests are
held by Huntsman Corporation.



This
Quarterly Report on Form 10-Q presents information for two registrants: Huntsman Corporation and Huntsman International LLC. Huntsman
International LLC is a wholly owned subsidiary of Huntsman Corporation and is the principal operating company of Huntsman Corporation. The information reflected in this Quarterly Report on
Form 10-Q is equally applicable to both Huntsman Corporation and Huntsman International LLC, except
where otherwise indicated. Huntsman International LLC meets the conditions set forth in General Instructions H(1)(a) and (b) of Form 10-Q and, to the extent
applicable, is therefore filing this form with a reduced disclosure format.



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Table of Contents

HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTERLY PERIOD
ENDED MARCH 31, 2010



TABLE OF CONTENTS



PagePART I

FINANCIAL INFORMATION

3ITEM 1.

Financial Statements:

3Huntsman Corporation and Subsidiaries:

3Condensed Consolidated Balance Sheets (Unaudited)

3Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

4Condensed Consolidated Statements of Cash Flows (Unaudited)

6Condensed Consolidated Statements of Equity (Unaudited)

8Huntsman International LLC and Subsidiaries:

9Condensed Consolidated Balance Sheets (Unaudited)

9Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

10Condensed Consolidated Statements of Cash Flows (Unaudited)

11Condensed Consolidated Statements of Equity (Unaudited)

13Huntsman Corporation and Subsidiaries and Huntsman International LLC and Subsidiaries:

14Notes to Condensed Consolidated Financial Statements (Unaudited)

14ITEM 2.

Management's Discussion and Analysis of Financial Condition and Results of
Operations

69ITEM 3.

Quantitative and Qualitative Disclosures About Market Risk

87ITEM 4.

Controls and Procedures

88PART II

OTHER INFORMATION

89ITEM 1.

Legal Proceedings

89ITEM 1A.

Risk Factors

89ITEM 2.

Unregistered Sales of Equity Securities and Use of Proceeds

89ITEM 6.

Exhibits

90


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Table of Contents

PART I. FINANCIAL INFORMATION



ITEM 1.    FINANCIAL STATEMENTS



HUNTSMAN CORPORATION AND SUBSIDIARIES        CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)        (In Millions, Except Share and Per Share Amounts)

March 31,
2010

December 31,
2009ASSETSCurrent assets:Cash and cash equivalents

$
1,110

$
1,745Restricted cash


8


5Accounts and notes receivable (net of allowance for doubtful accounts of $55 and $56, respectively), ($538 and nil pledged as collateral, respectively)


1,371


1,018Accounts receivable from affiliates


12


1Inventories


1,248


1,184Prepaid expenses


36


42Deferred income taxes


36


36Other current assets


132


109Total current assets


3,953


4,140Property, plant and equipment, net


3,373


3,516Investment in unconsolidated affiliates


252


250Intangible assets, net


120


125Goodwill


94


94Deferred income taxes


154


138Notes receivable from affiliates


7


8Other noncurrent assets


434


355Total assets

$
8,387

$
8,626LIABILITIES AND EQUITYCurrent liabilities:Accounts payable

$
875

$
730Accounts payable to affiliates


23


25Accrued liabilities


564


623Deferred income taxes


2


2Current portion of debt


316


431Total current liabilities


1,780


1,811Long-term debt


3,859


3,781Notes payable to affiliates


5


5Deferred income taxes


289


289Other noncurrent liabilities


816


875Total liabilities


6,749


6,761Commitments and contingencies (Notes 13 and 14)EquityHuntsman Corporation stockholders' equity:Common stock $0.01 par value, 1,200,000,000 shares authorized, 239,066,356 and 237,225,258 issued and 236,323,524 and 234,081,490 outstanding in 2010 and
2009, respectively


2


2Additional paid-in capital


3,181


3,155Unearned stock-based compensation


(18
)

(11
)Accumulated deficit


(1,217
)

(1,015
)Accumulated other comprehensive loss


(331
)

(287
)Total Huntsman Corporation stockholders' equity


1,617


1,844Noncontrolling interests in subsidiaries


21


21Total equity


1,638


1,865Total liabilities and equity

$
8,387

$
8,626


See accompanying notes to condensed consolidated financial statements (unaudited).

3

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HUNTSMAN CORPORATION AND SUBSIDIARIES        CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND  COMPREHENSIVE LOSS (UNAUDITED)        (In Millions, Except Per
Share Amounts)

Three months
ended
March 31,2010

2009Revenues:Trade sales, services and fees, net

$
2,049

$
1,673Related party sales


45


7Total revenues


2,094


1,680Cost of goods sold


1,813


1,531Gross profit


281


149Operating expenses:Selling, general and administrative


218


194Research and development


36


36Other operating expense (income)


2


(8
)Restructuring, impairment and plant closing costs


3


14Total expenses


259


236Operating income (loss)


22


(87
)Interest expense, net


(61
)

(55
)Loss on accounts receivable securitization program





(4
)Equity in income of investment in unconsolidated affiliates


1


1Loss on early extinguishment of debt


(155
)

Expenses associated with the Terminated Merger and related litigation





(7
)Loss from continuing operations before income taxes


(193
)

(152
)Income tax benefit (expense)


34


(138
)Loss from continuing operations


(159
)

(290
)Loss from discontinued operations, net of tax


(13
)

(4
)Net loss


(172
)

(294
)Net loss attributable to noncontrolling interests





4Net loss attributable to Huntsman Corporation

$
(172
)
$
(290
)Net loss

$
(172
)
$
(294
)Other comprehensive loss


(44
)

(82
)Comprehensive loss


(216
)

(376
)Comprehensive loss attributable to noncontrolling interests





4Comprehensive loss attributable to Huntsman Corporation

$
(216
)
$
(372
)


(continued)

4

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Table of Contents

HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS (UNAUDITED) (Continued)

(In Millions, Except Per Share Amounts)

Three months
ended
March 31,2010

2009Basic loss per share:Loss from continuing operations attributable to Huntsman Corporation common stockholders

$
(0.68
)
$
(1.22
)Loss from discontinued operations attributable to Huntsman Corporation common stockholders, net of tax


(0.05
)

(0.02
)Net loss attributable to Huntsman Corporation common stockholders

$
(0.73
)
$
(1.24
)Weighted average shares


234.8


233.7Diluted loss per share:Loss from continuing operations attributable to Huntsman Corporation common stockholders

$
(0.68
)
$
(1.22
)Loss from discontinued operations attributable to Huntsman Corporation common stockholders, net of tax


(0.05
)

(0.02
)Net loss attributable to Huntsman Corporation common stockholders

$
(0.73
)
$
(1.24
)Weighted average shares


234.8


233.7Amounts attributable to Huntsman Corporation common stockholders:Loss from continuing operations

$
(159
)
$
(286
)Loss from discontinued operations, net of tax


(13
)

(4
)Net loss

$
(172
)
$
(290
)Dividends per share

$
0.10

$
0.10


See
accompanying notes to condensed consolidated financial statements (unaudited).

5

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Table of Contents



HUNTSMAN CORPORATION AND SUBSIDIARIES        CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)        (Dollars in Millions)

Three months
ended
March 31,2010

2009Operating Activities:Net loss

$
(172
)
$
(294
)Adjustments to reconcile net loss to net cash used in operating activities:Equity in income of investment in unconsolidated affiliates


(1
)

(1
)Depreciation and amortization


98


126Provision for losses on accounts receivable


3


4Loss (gain) on disposal of businesses/assets, net


1


(1
)Loss on early extinguishment of debt


155


Noncash interest expense


10


2Noncash restructuring, impairment and plant closing costs





4Deferred income taxes


(20
)

131Net unrealized (gain) loss on foreign currency transactions


(3
)

2Stock-based compensation


7


5Other, net


(2
)

(1
)Changes in operating assets and liabilities:Accounts and notes receivable


(114
)

57Accounts receivable from A/R Programs (Note 7)


(254
)

Inventories


(96
)

114Prepaid expenses


6


7Other current assets


(25
)

1Other noncurrent assets


(77
)

Accounts payable


153


(113
)Accrued liabilities


(56
)

(71
)Other noncurrent liabilities


(21
)

(10
)Net cash used in operating activities


(408
)

(38
)Investing Activities:Capital expenditures


(37
)

(61
)Proceeds from sale of businesses/assets, net of adjustments





(1
)Investment in unconsolidated affiliates, net of cash received


(3
)

Change in restricted cash


(3
)

Net cash used in investing activities


(43
)

(62
)


(continued)

6

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Table of Contents

HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Continued)

(Dollars in Millions)

Three months
ended
March 31,2010

2009Financing Activities:Net borrowings (repayments) under revolving loan facilities

$
3

$
(8
)Revolving loan facility from A/R Programs (Note 7)


254


Net repayments on overdraft facilities


(1
)

(1
)Repayments of short-term debt


(44
)

(73
)Borrowings on short-term debt


55


47Repayments of long-term debt


(611
)

(17
)Proceeds from issuance of long-term debt


375


Repayments of notes payable


(21
)

(23
)Borrowings on notes payable





14Debt issuance costs paid


(16
)

Call premiums related to early extinguishment of debt


(153
)

Dividends paid to common stockholders


(24
)

(23
)Repurchase and cancellation of stock awards


(6
)

Proceeds from issuance of common stock


2


Excess tax benefit related to stock-based compensation


4


Other, net


(1
)

Net cash used in financing activities


(184
)

(84
)Effect of exchange rate changes on cash





(3
)Decrease in cash and cash equivalents


(635
)

(187
)Cash and cash equivalents at beginning of period


1,745


657Cash and cash equivalents at end of period

$
1,110

$
470Supplemental cash flow information:Cash paid for interest

$
43

$
38Cash paid for income taxes


8


17


During
the three months ended March 31, 2010 and 2009, the amount of capital expenditures in accounts payable decreased by $11 million and $24 million, respectively.
The value of share awards that vested during the three months ended March 31, 2010 and 2009 was $18 million and $11 million, respectively.

See
accompanying notes to condensed consolidated financial statements (unaudited).

7

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Table of Contents

HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)

(Dollars in Millions)

Huntsman Corporation StockholdersCommon Stock







Accumulated
other
comprehensive
lossAdditional
paid-in
capital

Unearned
stock-based
compensation

Accumulated
deficit

Noncontrolling
interests in
subsidiaries

Total
equityShares

AmountBalance, January 1, 2010


234,081,490

$
2

$
3,155

$
(11
)
$
(1,015
)
$
(287
)
$
21

$
1,865Net loss














(172
)







(172
)Other comprehensive loss

















(44
)




(44
)Issuance of nonvested stock awards








10


(10
)










Vesting of stock awards


1,803,817





9














9Recognition of stock-based compensation








1


3











4Repurchase and cancellation of stock awards


(425,001
)










(6
)







(6
)Stock options exercised


863,218





2














2Excess tax benefit related to stock-based compensation








4














4Dividends declared on common stock














(24
)







(24
)Balance, March 31, 2010


236,323,524

$
2

$
3,181

$
(18
)
$
(1,217
)
$
(331
)
$
21

$
1,638




Huntsman Corporation StockholdersCommon Stock







Accumulated
other
comprehensive
lossAdditional
paid-in
capital

Unearned
stock-based
compensation

Accumulated
deficit

Noncontrolling
interests in
subsidiaries

Total
equityShares

AmountBalance, January 1, 2009


233,553,515

$
2

$
3,141

$
(13
)
$
(1,031
)
$
(489
)
$
22

$
1,632Net loss














(290
)




(4
)

(294
)Other comprehensive loss

















(82
)




(82
)Issuance of nonvested stock awards








8


(8
)










Vesting of stock awards


538,225




















Recognition of stock-based compensation








2


3











5Repurchase and cancellation of stock awards


(132,635
)



















Dividends declared on common stock














(23
)







(23
)Balance, March 31, 2009


233,959,105

$
2

$
3,151

$
(18
)
$
(1,344
)
$
(571
)
$
18

$
1,238


See accompanying notes to condensed consolidated financial statements (unaudited).

8

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Table of Contents



HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES        CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)        (Dollars in Millions)

March 31,
2010

December 31,
2009ASSETSCurrent assets:Cash and cash equivalents

$
551

$
919Restricted cash


8


5Accounts and notes receivable (net of allowance for doubtful accounts of $55 and $56, respectively), ($538 and nil pledged as collateral, respectively)


1,371


1,018Accounts receivable from affiliates


76


32Inventories


1,248


1,184Prepaid expenses


34


42Deferred income taxes


34


33Other current assets


122


109Total current assets


3,444


3,342Property, plant and equipment, net


3,220


3,357Investment in unconsolidated affiliates


252


250Intangible assets, net


123


129Goodwill


94


94Deferred income taxes


175


158Notes receivable from affiliates


7


8Other noncurrent assets


434


355Total assets

$
7,749

$
7,693LIABILITIES AND EQUITYCurrent liabilities:Accounts payable

$
873

$
715Accounts payable to affiliates


22


41Accrued liabilities


562


613Deferred income taxes


2


2Note payable to affiliate


100


25Current portion of debt


316


195Total current liabilities


1,875


1,591Long-term debt


3,859


3,781Notes payable to affiliates


330


530Deferred income taxes


82


79Other noncurrent liabilities


815


865Total liabilities


6,961


6,846Commitments and contingencies (Notes 13 and 14)EquityHuntsman International LLC members' equity:Members' equity, 2,728 units issued and outstanding


3,031


3,021Accumulated deficit


(1,873
)

(1,847
)Accumulated other comprehensive loss


(391
)

(348
)Total Huntsman International LLC members' equity


767


826Noncontrolling interests in subsidiaries


21


21Total equity


788


847Total liabilities and equity

$
7,749

$
7,693


See accompanying notes to condensed consolidated financial statements (unaudited).

9

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES        CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND  COMPREHENSIVE LOSS (UNAUDITED)        (Dollars in
Millions)

Three months ended
March 31,2010

2009Revenues:Trade sales, services and fees, net

$
2,049

$
1,673Related party sales


45


7Total revenues


2,094


1,680Cost of goods sold


1,808


1,526Gross profit


286


154Operating expenses:Selling, general and administrative


215


189Research and development


36


36Other operating income


(7
)

(8
)Restructuring, impairment and plant closing costs


3


14Total expenses


247


231Operating income (loss)


39


(77
)Interest expense, net


(66
)

(55
)Loss on accounts receivable securitization program





(4
)Equity in income of investment in unconsolidated affiliates


1


1Loss on early extinguishment of debt


(9
)

Loss from continuing operations before income taxes


(35
)

(135
)Income tax benefit (expense)


22


(146
)Loss from continuing operations


(13
)

(281
)Loss from discontinued operations, net of tax


(13
)

(4
)Net loss


(26
)

(285
)Net loss attributable to noncontrolling interests





4Net loss attributable to Huntsman International LLC

$
(26
)
$
(281
)Net loss

$
(26
)
$
(285
)Other comprehensive loss


(43
)

(79
)Comprehensive loss


(69
)

(364
)Comprehensive loss attributable to noncontrolling interests





4Comprehensive loss attributable to Huntsman International LLC

$
(69
)
$
(360
)


See
accompanying notes to condensed consolidated financial statements (unaudited).

10

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Table of Contents



HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES        CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)        (Dollars in Millions)

Three months
ended
March 31,2010

2009Operating Activities:Net loss

$
(26
)
$
(285
)Adjustments to reconcile net loss to net cash used in operating activities:Equity in income of investment in unconsolidated affiliates


(1
)

(1
)Depreciation and amortization


92


120Provision for losses on accounts receivable


3


4Loss (gain) on disposal of businesses/assets, net


1


(1
)Loss on early extinguishment of debt


9


Noncash interest expense


14


5Noncash restructuring, impairment and plant closing costs





4Deferred income taxes


(18
)

143Net unrealized (gain) loss on foreign currency transactions


(3
)

2Noncash compensation


6


1Changes in operating assets and liabilities:Accounts and notes receivable


(114
)

57Accounts receivable from A/R Programs (Note 7)


(254
)

Inventories


(96
)

114Prepaid expenses


8


10Other current assets


(14
)

1Other noncurrent assets


(77
)

Accounts payable


161


(128
)Accrued liabilities


(47
)

(39
)Other noncurrent liabilities


(20
)

(10
)Net cash used in operating activities


(376
)

(3
)Investing Activities:Capital expenditures


(37
)

(61
)Proceeds from sale of businesses/assets, net of adjustments





(1
)Investment in unconsolidated affiliates, net of cash received


(3
)

Change in restricted cash


(3
)

(Increase) decrease in receivable from affiliate


(50
)

7Net cash used in investing activities


(93
)

(55
)


(continued)

11

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Table of Contents

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Continued)

(Dollars in Millions)

Three months
ended
March 31,2010

2009Financing Activities:Net borrowings (repayments) under revolving loan facilities

$
3

$
(8
)Revolving loan facility from A/R Programs (Note 7)


254


Net repayments on overdraft facilities


(1
)

(1
)Repayments of short-term debt


(44
)

(73
)Borrowings on short-term debt


55


47Repayments of long-term debt


(375
)

(17
)Proceeds from issuance of long-term debt


375


Repayments of notes payable to affiliate


(125
)

Proceeds from notes payable to affiliate





529Repayments of notes payable


(21
)

(22
)Borrowings on notes payable





11Debt issuance costs paid


(16
)

Call premiums related to early extinguishment of debt


(7
)

Dividends paid to parent





(23
)Excess tax benefit related to stock-based compensation


4


Other, net


(1
)

1Net cash provided by financing activities


101


444Effect of exchange rate changes on cash





(3
)(Decrease) increase in cash and cash equivalents


(368
)

383Cash and cash equivalents at beginning of period


919


87Cash and cash equivalents at end of period

$
551

$
470Supplemental cash flow information:Cash paid for interest

$
34

$
38Cash paid for income taxes


6


17


During
the three months ended March 31, 2010 and 2009, the amount of capital expenditures in accounts payable decreased by $11 million and $24 million, respectively.
During the three months ended March 31, 2010 and 2009, Huntsman Corporation contributed $6 million and $1 million, respectively, related to stock-based compensation.

See
accompanying notes to condensed consolidated financial statements (unaudited).

12

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES        CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)        (Dollars in Millions)

Huntsman International LLC MembersMembers' equity



Accumulated
other
comprehensive
lossAccumulated
deficit

Noncontrolling
interests in
subsidiaries

Total
equityUnits

AmountBalance, January 1, 2010


2,728

$
3,021

$
(1,847
)
$
(348
)
$
21

$
847Net loss








(26
)







(26
)Other comprehensive loss











(43
)




(43
)Contribution from parent, net of distributions





6











6Excess tax benefit related to stock-based compensation





4











4Balance, March 31, 2010


2,728

$
3,031

$
(1,873
)
$
(391
)
$
21

$
788




Huntsman International LLC MembersMembers' equity



Accumulated
other
comprehensive
lossAccumulated
deficit

Noncontrolling
interests in
subsidiaries

Total
equityUnits

AmountBalance, January 1, 2009


2,728

$
2,865

$
(1,414
)
$
(554
)
$
22

$
919Net loss








(281
)




(4
)

(285
)Other comprehensive loss











(79
)




(79
)Contribution from parent, net of distributions





1











1Dividends paid to parent








(23
)







(23
)Balance, March 31, 2009


2,728

$
2,866

$
(1,718
)
$
(633
)
$
18

$
533


See
accompanying notes to condensed consolidated financial statements (unaudited).

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

1. GENERAL

CERTAIN DEFINITIONS

For convenience in this report, the terms "Company," "our," "us" or "we" may be used to refer to Huntsman Corporation and, unless the
context otherwise requires, its subsidiaries and predecessors. Any references to our "Company," "we," "us" or "our" as of a date prior to October 19, 2004 (the date of our Company's formation)
are to Huntsman Holdings, LLC and its subsidiaries (including their respective predecessors). In this report, "Huntsman International" refers to Huntsman International LLC (our 100%
owned subsidiary) and, unless the context otherwise requires, its subsidiaries; "HPS" refers to Huntsman Polyurethanes Shanghai Ltd. (our consolidated splitting joint venture with Shanghai
Chlor-Alkali Chemical Company, Ltd); and "SLIC" refers to
Shanghai Liengheng Isocyanate Company (our unconsolidated manufacturing joint venture with BASF AG and three Chinese chemical companies).

In
this report, we may use, without definition, the common names of competitors or other industry participants. We may also use the common names or abbreviations for certain chemicals or
products.

INTERIM FINANCIAL STATEMENTS

Our interim condensed consolidated financial statements (unaudited) and Huntsman International's interim condensed consolidated
financial statements (unaudited) were prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP" or "U.S. GAAP") and in management's opinion,
reflect 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 presented.
Results for interim periods are not necessarily indicative of those to be expected for the full year. These condensed consolidated financial statements (unaudited) should be read in conjunction with
the audited consolidated financial statements and notes to consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2009
for our Company and Huntsman International.

DESCRIPTION OF BUSINESS

We are a global manufacturer of differentiated organic chemical products and of inorganic chemical products. Our products comprise a
broad range of chemicals and formulations, which we market globally to a diversified group of consumer and industrial customers. Our products are used in a wide range of applications, including those
in the adhesives, aerospace, automotive, construction products, durable and non-durable consumer products, electronics, medical, packaging, paints and coatings, power generation, refining,
synthetic fiber, textile chemicals and dye industries. We are a leading global producer in many of our key product lines, including MDI, amines, surfactants, maleic anhydride, epoxy-based polymer
formulations, textile chemicals, dyes and titanium dioxide.

We
operate in five segments: Polyurethanes, Performance Products, Advanced Materials, Textile Effects and Pigments. Our Polyurethanes, Performance Products, Advanced Materials and
Textile Effects segments produce differentiated organic chemical products and our Pigments segment produces inorganic chemical products. We ceased operation of our Australian styrenics business during
the first quarter of 2010 and report the results of that business as discontinued operations. See "Note 19. Discontinued Operations."

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

1. GENERAL (Continued)

COMPANY

Our Company, a Delaware corporation, was formed in 2004 to hold the Huntsman businesses. Jon M. Huntsman founded the predecessor
to our Company in the early 1970s as a small packaging company. Since then, we have grown through a series of acquisitions and now own a global portfolio of businesses.

Currently,
we operate all of our businesses through Huntsman International, our 100% owned subsidiary. Huntsman International is a Delaware limited liability company and was formed in
1999.

HUNTSMAN CORPORATION AND HUNTSMAN INTERNATIONAL FINANCIAL STATEMENTS

Except where otherwise indicated, these notes relate to the consolidated financial statements for both our Company and Huntsman
International. The differences between our financial statements and Huntsman International's financial statements relate primarily to the following:



PRINCIPLES OF CONSOLIDATION

Our condensed consolidated financial statements (unaudited) and Huntsman International's condensed consolidated financial statements
(unaudited) include the accounts of our wholly-owned and majority-owned and controlled subsidiaries and any variable interest entities for which we are the primary beneficiary. All intercompany
accounts and transactions have been eliminated.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

1. GENERAL (Continued)

VARIABLE INTEREST ENTITIES

We evaluate our investments and transactions to identify variable interest entities for which we are the primary beneficiary. We hold a
variable interest in two joint ventures for which we are the primary beneficiary.

One
joint venture manufactures products for our Polyurethanes segment. The structure of the joint venture is such that the total equity investment at risk is not sufficient to permit the
joint venture to finance its activities without additional financial support. By virtue of the operating agreement with this joint venture, we purchase a majority of the output, absorb a majority of
the operating costs and provide a majority of the additional funding.

The
other joint venture manufactures products for our Pigments segment. In this joint venture we supply all the raw materials through a fixed cost supply contract, operate the
manufacturing facility and market the products of the joint venture to third party customers. Through a fixed price raw materials supply contract with the joint venture we are exposed to the risk
related to the fluctuation of raw material pricing.

As
the primary beneficiary of these two variable interest entities, the joint ventures' assets, liabilities and results of operations are included in our condensed consolidated financial
statements (unaudited). The following table summarizes the carrying amount of the two joint ventures' assets and liabilities included in our condensed consolidated balance sheet (unaudited), before
intercompany eliminations, as of March 31, 2010 (dollars in millions):

Current assets

$
91Property, plant and equipment, net


16Other noncurrent assets


32Deferred income taxes


38Total assets

$
177Current liabilities

$
85Long-term debt


4Other noncurrent liabilities


93Total liabilities

$
182


USE OF ESTIMATES

The preparation of financial statements in conformity with GAAP 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.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

1. GENERAL (Continued)

RECLASSIFICATIONS

Certain amounts in the consolidated financial statements for prior periods have been reclassified to conform with the current
presentation. In connection with the closure and abandonment of our Australian styrenics operations in the first quarter of 2010, we have treated this business as discontinued operations beginning in
the first quarter of 2010. All relevant information for prior periods has been restated to reflect this change.

During
the first quarter of 2010, we began reporting our last-in, first-out ("LIFO") inventory valuation reserve charges as part of Corporate and other, which was
previously reported in our Performance Products segment. All segment information for prior periods has been restated to reflect this change.

RECENT DEVELOPMENTS

Repurchase of Convertible Notes

On January 11, 2010, we repurchased the entire $250 million principal amount of our outstanding Convertible Notes for
approximately $382 million from Apollo and its affiliates. The Convertible Notes were issued to Apollo in December 2008. The Convertible Notes, which would have matured on
December 23, 2018, bore interest at the rate of 7% per year and were convertible into approximately 31.8 million shares of our common stock at any time by the holders. As a result of the
repurchase of the Convertible Notes, we recorded a loss on early extinguishment of debt in the first quarter of 2010 of $146 million.

Senior Subordinated Note Offering

On March 17, 2010 we completed a $350 million offering of 8.625% senior subordinated notes due 2020 (the "2020
Subordinated Notes"). We used the net proceeds to redeem approximately €184 million (approximately $247 million) senior subordinated notes due 2013 and approximately
€59 million (approximately $79 million) senior subordinated notes due 2015. In connection with the redemption of these notes, we recorded a loss on early extinguishment
of debt in the first quarter of 2010 of $9 million. In connection with these redemptions and the issuance of the 2020 Subordinated Notes, Huntsman International entered into $350 million
notional amount of five-year euro/dollar cross-currency interest rate contracts. In accordance with these swap transactions, the interest payment on the 2020 Subordinated Notes will be
denominated in euros at an effective rate of approximately 8.41% for the next five years.

Amendment of Senior Credit Facilities

On March 9, 2010, Huntsman International entered into a Fifth Amendment to Credit Agreement (the "Amendment") with JPMorgan
Chase Bank, N.A. and the other financial institutions party thereto, which amended certain terms of Huntsman International's existing senior secured credit facilities (the "Senior Credit Facilities").
Among other things, the Amendment (i) replaces Deutsche Bank AG New York Branch as administrative agent, collateral agent and U.K. security trustee with JPMorgan Chase Bank, N.A. as
administrative agent and collateral agent and JPMorgan Chase Bank, N.A. or an affiliate

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

1. GENERAL (Continued)

thereof
as U.K. security trustee, (ii) extends the stated maturity of the revolving facility to March 9, 2014, and (iii) limits the aggregate amount of the revolving commitments
allowable under the revolving facility to an amount up to $300 million, including $225 million currently committed by the lenders. The Amendment increased the applicable LIBOR margin
range on the revolving loans by 1.75% to 3.50% per annum and increased the unused commitment fee percentage to a range of 0.50% to 0.75%.

Accounting for our Accounts Receivable Securitization Program

On January 1, 2010, in connection with the adoption of Accounting Standards Update ("ASU") No. 2009-16, we
have accounted for sales of accounts receivable under our accounts receivable securitization programs as secured borrowings. See "Note 2.
Recently Issued Accounting Pronouncements" and "Note 7. DebtAccounts Receivable Securitization."

2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

Accounting Pronouncements Adopted During 2010:

In February 2010, the Financial Accounting Standards Board ("FASB") issued and we adopted ASU No. 2010-09, Subsequent Events (Topic 855)Amendments
to Certain Recognition and Disclosure Requirements. This ASU provides a definition of the term "SEC
filer" and removes the requirement for entities that are SEC filers to disclose the date through which subsequent events have been evaluated. We evaluate subsequent events through the date the
financial statements are issued.

In
January 2010, the FASB issued ASU No. 2010-06,Fair Value Measurements and Disclosures (Topic 820)Improving
Disclosures about Fair Value Measurements. This ASU clarifies existing disclosure requirements to provide a greater level of disaggregated information and to provide more
information regarding valuation techniques and inputs to fair value measurements. It requires additional disclosure related to transfers between the three levels of fair value measurement, as well as
information about purchases, sales, issuances, and settlements in the roll forward of activity for Level 3 measurements. The enhanced disclosures required by this ASU are effective for interim
and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity for Level 3
measurements, which is effective for interim and annual reporting periods beginning after December 15, 2010. See "Note 9. Fair Value."

Effective
January 1, 2010, we adopted ASU No. 2009-17,Consolidations (Topic 810)Improvements to Financial Reporting
by Enterprises Involved with Variable Interest Entities, which codified Statement of Financial Accounting Standards ("SFAS") No. 167,Amendments
to FASB Interpretation No. 46(R). This statement amends FASB Interpretation No. ("FIN") 46(R),Consolidation of Variable Interest
Entities, to replace the quantitative-based risks and rewards calculation for determining which enterprise has a controlling financial interest in a variable interest entity
with a qualitative approach. This new approach focuses on identifying which enterprise has the power to direct the activities of a variable interest entity that most significantly impact the entity's
economic performance and (1) the obligation to absorb losses of the entity or (2) the right to receive benefits from the entity. It also requires ongoing assessments of whether an
enterprise is the primary beneficiary of a variable interest entity, and it requires additional disclosures about an enterprise's involvement in variable interest entities. The adoption of this

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (Continued)

statement
did not have a significant impact on our condensed consolidated financial statements (unaudited). See "Note 1. GeneralVariable Interest Entities."

Effective
January 1, 2010, we adopted ASU No. 2009-16,Transfers and Servicing (Topic 860)Accounting for Transfers
of Financial Assets, which codified SFAS No. 166,Accounting for Transfers of Financial Assetsan amendment of FASB Statement
No. 140. This statement removes the concept of a qualifying special-purpose entity ("QSPE") from SFAS No. 140 and removes the exception from applying
FIN 46(R) to QSPEs. SFAS No. 166 modifies the derecognition provisions in SFAS No. 140 and requires that a transferor recognize and initially measure at fair value all assets
obtained (including a transferor's beneficial interest) and liabilities incurred as a result of a transfer of financial assets accounted for as a sale. It also requires additional disclosures
regarding the transferor's continuing involvement with transferred financial assets and the related risks retained. Upon adoption of this statement, sales of accounts receivable under our accounts
receivable securitization programs no longer qualified for derecognition and were accounted for as secured borrowings beginning in January 2010. See "Note 7. DebtAccounts
Receivable Securitization." Prior to the adoption of this statement, receivables transferred under our U.S. and European accounts receivable securitization programs (the "U.S. A/R Program," the "EU
A/R Program" and collectively the "A/R Programs") qualified as sales.

Accounting Pronouncements Pending Adoption in Future Periods:

In October 2009, the FASB issued ASU No. 2009-13,Revenue Recognition
(Topic 605): Multiple-Deliverable Revenue Arrangementsa consensus of the FASB Emerging Issues Task Force. This ASU provides amendments to the criteria for
separating consideration in multiple-deliverable arrangements. The amendments in this ASU replace the term "fair value" in the revenue allocation guidance with "selling price" to clarify that the
allocation of revenue is based on entity-specific assumptions rather than assumptions of a marketplace participant, and they establish a selling price hierarchy for determining the selling price of a
deliverable. The amendments in this ASU will eliminate the residual method of allocation and require that arrangement
consideration be allocated at the inception of the arrangement to all deliverables using the relative selling price method, and they significantly expand the required disclosures related to
multiple-deliverable revenue arrangements. The amendments in this ASU will be effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning after
June 15, 2010. We are evaluating this ASU to determine its impact on our condensed consolidated financial statements (unaudited).

3. BUSINESS COMBINATIONS

BARODA ACQUISITION

On June 23, 2009, we announced the acquisition of the Baroda Division ("Baroda") of Metrochem Industries Limited
("MCIL"), a manufacturing facility for the production of intermediates and specialty dyes for textiles, located in Baroda, India. Baroda had been a significant supplier to our Textile
Effects division and this acquisition strengthens the Textile Effects division's competitiveness and supports its development in Asia. We initially entered into an agreement to acquire Baroda on
June 29, 2007. The initial agreement provided either party with the right to terminate the agreement if a transaction was not consummated by April 30, 2008. On February 6, 2009,
we entered into a non-binding agreement in

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

3. BUSINESS COMBINATIONS (Continued)

principle
with MCIL under which the purchase price was revised to be approximately $35 million (U.S. dollar equivalents), which included receivables existing on the closing date due to MCIL
from our affiliates, which were also settled at acquisition. Payment of the acquisition cost was phased in various tranches. The first tranche of $7 million was paid during 2008; additional
tranches were paid during 2009; and a final payment of $2 million was made upon completion of the audit of net working capital
acquired in the first quarter of 2010. In addition, $5 million of accounts payable by us to MCIL were forgiven in connection with this acquisition.

We
have accounted for the Baroda acquisition using the acquisition method. As such, we analyzed the fair value of tangible and intangible assets acquired and liabilities assumed. The
preliminary allocation of acquisition cost to the assets acquired and liabilities assumed is summarized as follows (dollars in millions):

Acquisition cost:Cash payments made in 2008

$
7Cash payments made in 2009


31Cash payments made in 2010


2Forgiveness of amounts payable from us to MCIL


(5
)Total acquisition cost

$
35Fair value of assets acquired and liabilities assumed:Accounts receivable

$
2Inventories


3Other current assets


2Property, plant and equipment


31Intangible assets


4Deferred tax asset


1Accounts payable


(3
)Short-term debt


(3
)Deferred tax liability


(2
)Total fair value of net assets acquired

$
35


The
acquisition cost allocation is preliminary pending finalization of the determination of the fair value of intangible assets and deferred taxes. For purposes of this preliminary
allocation of fair value, we have assigned any excess of acquisition cost of historical carrying values to amortizable intangible assets and no amounts have been allocated to goodwill. We expect that
it is reasonably possible that changes to this allocation could occur.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

4. INVENTORIES

Inventories are stated at the lower of cost or market, with cost determined using LIFO, first-in first-out, and average costs methods for different components of
inventory. Inventories consisted of the following (dollars in millions):

March 31,
2010

December 31,
2009Raw materials and supplies

$
269

$
240Work in progress


75


77Finished goods


965


917Total


1,309


1,234LIFO reserves


(61
)

(50
)Net

$
1,248

$
1,184


For
each of March 31, 2010 and December 31, 2009, approximately 10% of inventories were recorded using the LIFO cost method.

In
the normal course of operations, we at times exchange raw materials and finished goods with other companies for the purpose of reducing transportation costs. The net
non-monetary open exchange positions are valued at cost. The amounts included in inventory under
non-monetary open exchange agreements receivable by us as of March 31, 2010 and December 31, 2009 were $4 million and $3 million, respectively. Other open
exchanges are settled in cash and result in a net deferred profit margin. The amounts under these open exchange agreements receivable or payable by us at both March 31, 2010 and
December 31, 2009 were nil.

5. INVESTMENT IN UNCONSOLIDATED AFFILIATES

During the year ended December 31, 2008, we contributed $44 million as our 50% equity contribution to the Arabian Amines Company, our ethyleneamines manufacturing joint
venture in Jubail, Saudi Arabia. This joint venture's funding requirements will be satisfied through a combination of debt and equity, with the equity already provided on a 50/50 basis by us and Zamil
Group. The joint venture obtained various loan commitments in the aggregate amount of approximately $195 million in U.S. dollar equivalents, of which $177 million, including bridge
loans, was drawn as of March 31, 2010. The plant will have approximate annual capacity of 60 million pounds with production expected in early second quarter of 2010. We will purchase and
sell all of the production from this joint venture. We have provided certain guarantees of approximately $14 million for these commitments, which will terminate upon completion of the project
and satisfaction of certain conditions. We have estimated that the fair value of these guarantees was nil as of the closing date of this transaction and, accordingly, no amounts have been recorded.
This joint venture is currently accounted for under the equity method during its development stage.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

6. RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS

As of March 31, 2010 and December 31, 2009, accrued restructuring costs by type of cost and initiative consisted of the following (dollars in millions):

Workforce
reductions(1)

Demolition and
decommissioning

Non-cancelable
lease costs

Other
restructuring
costs

Total(2)Accrued liabilities as of January 1, 2010

$
50

$
1

$
3

$
21

$
752010 charges for 2009 initiatives


1








1


22010 charges for 2010 initiatives


4











4Reversal of reserves no longer required


(3
)










(3
)2010 payments for 2006 initiatives


(1
)










(1
)2010 payments for 2008 initiatives


(2
)










(2
)2010 payments for 2009 initiatives


(5
)







(2
)

(7
)Net activity of discontinued operations


(23
)







6


(17
)Foreign currency effect on reserve balance


(2
)










(2
)Accrued liabilities as of March 31, 2010

$
19

$
1

$
3

$
26

$
49


(1)The
total workforce reduction reserves of $19 million relate to the termination of 300 positions, of which 254 positions had not been terminated as
of March 31, 2010.(2)Accrued
liabilities by initiatives were as follows (dollars in millions):


March 31,
2010

December 31,
20092005 initiatives & prior

$
3

$
32006 initiatives


4


52008 initiatives


5


72009 initiatives


33


602010 initiatives


4


Total

$
49

$
75




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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

6. RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS (Continued)

Details with respect to our reserves for restructuring, impairment and plant closing costs are provided below by segment and initiative (dollars in millions):

Polyurethanes

Performance
Products

Advanced
Materials

Textile
Effects

Pigments

Discontinued
Operations

Corporate &
other

TotalAccrued liabilities as of January 1, 2010

$
2

$


$
7

$
17

$
11

$
34

$
4

$
752010 charges for 2009 initiatives














1





1


22010 charges for 2010 initiatives




















4


4Reversal of reserves no longer required








(2
)










(1
)

(3
)2010 payments for 2006 initiatives











(1
)










(1
)2010 payments for 2008 initiatives


(1
)







(1
)










(2
)2010 payments for 2009 initiatives








(1
)

(2
)

(3
)




(1
)

(7
)Net activity of discontinued operations

















(17
)




(17
)Foreign currency effect on reserve balance











(1
)

(1
)







(2
)Accrued liabilities as of March 31, 2010

$
1

$


$
4

$
12

$
8

$
17

$
7

$
49Current portion of restructuring reserves

$
1

$


$
3

$
12

$
5

$
17

$
7

$
45Long-term portion of restructuring reserves








1





3








4Estimated additional future charges for current restructuring projectsEstimated additional charges within one year

$


$


$
1

$


$
7

$


$
1

$
9Estimated additional charges beyond one year














3








3


Details with respect to cash and non-cash restructuring charges by initiative are provided below (dollars in millions):

Three months
ended
March 31, 2010Cash charges:2010 charges for 2009 initiatives

$
22010 charges for 2010 initiatives


4Reversal of reserves no longer required


(3
)Total 2010 Restructuring, Impairment and Plant Closing Costs

$
3


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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

6. RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS (Continued)



Three months
ended
March 31, 2009Cash charges:2009 charges for 2008 initiatives

$
22009 charges for 2009 initiatives


9Reversal of reserves no longer required


(1
)Non-cash charges


4Total 2009 Restructuring, Impairment and Plant Closing Costs

$
14


During
the three months ended March 31, 2010, our Advanced Materials segment reversed accruals of $2 million primarily related to workforce reductions in connection with a
reorganization towards a regional management structure.

During
the three months ended March 31, 2010, our Pigments segment recorded charges of $1 million primarily related to the closure of our Grimsby plant. We expect to incur
additional charges of $10 million through December 31, 2011, primarily related to the closure of our Grimsby, U.K. plant.

During
the three months ended March 31, 2010, we recorded net charges of $4 million in Corporate and other related to workforce reductions in connection with a
reorganization and regional consolidation of our transactional accounting activities.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

7. DEBT

Outstanding debt consisted of the following (dollars in millions):



March 31,
2010

December 31,
2009Senior Credit Facilities:Term loans

$
1,950

$
1,968Amounts outstanding under A/R programs


242


Senior notes


438


434Subordinated notes


1,268


1,294Australian credit facilities


38


34HPS (China) debt


179


163Convertible notes





236Other


60


83Total debtexcluding debt to affiliates

$
4,175

$
4,212Current portion of debt

$
316

$
431Long-term portion


3,859


3,781Total debtexcluding debt to affiliates

$
4,175

$
4,212Total debtexcluding debt to affiliates

$
4,175

$
4,212Notes payable to affiliates-noncurrent


5


5Total debt

$
4,180

$
4,217


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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

7. DEBT (Continued)



March 31,
2010

December 31,
2009Senior Credit Facilities:Term loans

$
1,950

$
1,968Amounts outstanding under A/R programs


242


Senior notes


438


434Subordinated notes


1,268


1,294Australian credit facilities


38


34HPS (China) debt


179


163Other


60


83Total debtexcluding debt to affiliates

$
4,175

$
3,976Current portion of debt

$
316

$
195Long-term portion


3,859


3,781Total debtexcluding debt to affiliates

$
4,175

$
3,976Total debtexcluding debt to affiliates

$
4,175

$
3,976Notes payable to affiliates-current


100


25Notes payable to affiliates-noncurrent


330


530Total debt

$
4,605

$
4,531


DIRECT AND SUBSIDIARY DEBT

Huntsman Corporation's direct debt and guarantee obligations consist of the following: our guarantees of certain debt of HPS (our
Chinese MDI joint venture); our guarantee of certain debt of the Arabian Amines Company (our ethyleneamines manufacturing joint venture in Jubail, Saudi Arabia); certain indebtedness incurred from
time to time to finance certain insurance premiums; and our guarantee of certain obligations of Huntsman International in its capacity as a contributor and servicer guarantor under the U.S. A/R
Program.

Substantially
all of our other debt, including the facilities described below, has been incurred by our subsidiaries (primarily Huntsman International); such subsidiary debt is
nonrecourse to us and we have no contractual obligation to fund our subsidiaries' respective operations.

TRANSACTIONS AFFECTING OUR DEBT

Senior Credit Facilities

As of March 31, 2010, our Senior Credit Facilities consisted of (i) our $225 million revolving facility
("Revolving Facility"); (ii) our $1,509 million term loan B facility ("Term Loan B"); and (iii) our $495 million ($441 million carrying value) term loan C facility
("Term Loan C" and, collectively with Term Loan B, the "Dollar Term Loans"). As of March 31, 2010, we had no borrowings outstanding under our Revolving Facility, and we had approximately
$40 million (U.S. dollar equivalents) of letters of credit and bank guarantees issued and outstanding under our Revolving

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

7. DEBT (Continued)

Facility.
All of our Senior Credit Facilities are obligations of Huntsman International and are not direct obligations of Huntsman Corporation.

On
March 9, 2010, Huntsman International entered into the Amendment with JPMorgan Chase Bank, N.A., as successor administrative agent and collateral agent, and the other financial
institutions party thereto, which amended certain terms of Huntsman International's existing Senior Credit Facilities. Among other things, the Amendment (i) replaces Deutsche Bank AG New York
Branch as administrative agent, collateral agent and U.K. security trustee with JPMorgan Chase Bank, N.A. as administrative agent and collateral agent and JPMorgan Chase Bank, N.A. or an affiliate
thereof as U.K. security trustee, (ii) extends the stated maturity of the Revolving Facility to March 9, 2014 and provides for optional extensions of such stated maturity date from time
to time with the consent of the lenders and subject to certain specified conditions and exceptions, (iii) limits the aggregate amount of the revolving commitments allowable under the Revolving
Facility to an amount up to $300 million, including $225 million currently obtained from the lenders, (iv) terminated the 2009 Waiver and (v) reduces the maximum letter of
credit sublimit to $75 million (not including existing letters of credit issued by Deutsche Bank AG New York Branch) and the maximum swing line sublimit to $25 million.

Additionally,
the Amendment increases the applicable LIBOR margin range on the revolving loans by 1.75% to 3.50% per annum and increases the unused commitment fee percentage to a range
of 0.50% to 0.75%. The Amendment also amends the mandatory prepayment provisions of the Senior Credit Facilities to permit the reinvestment of certain insurance and condemnation proceeds.

Our
Senior Credit Facilities are subject to a single financial covenant (the "Leverage Covenant") which applies only to the Revolving Facility and is tested at the Huntsman International
level. The Leverage Covenant is applicable only if borrowings, letters of credit or guarantees are outstanding under the Revolving Facility (cash collateralized letters of credit or guarantees are not
deemed outstanding). Following the termination of the 2009 Waiver, the Leverage Covenant is a net senior secured leverage ratio covenant, with a maximum ratio of senior secured debt to EBITDA (as
defined in the applicable agreement) of no more than 3.75 to 1.

At
the present time, borrowings under the Revolving Facility, Term Loan B and Term Loan C bear interest at LIBOR plus 3.50%, LIBOR plus 1.75% and LIBOR plus 2.25%, respectively. However,
the applicable interest rate of Term Loan B is subject to a reduction to LIBOR plus 1.5% upon achieving certain secured leverage ratio thresholds. The Revolving Facility matures on March 9,
2014 (subject to optional extensions from time to time with the consent of the lenders and subject to certain specified conditions and exceptions), Term Loan B matures in 2014 and Term Loan C matures
in 2016; provided, however, that the maturities of the Revolving Facility and the Dollar Term Loans will accelerate if we do not repay or refinance all but $100 million of Huntsman
International's outstanding debt securities on or before three months prior to the maturity dates of such debt securities.

During
the three months ended March 31, 2010, we paid the annual scheduled repayment of $16 million on our Term Loan B and $5 million on our Term Loan C. On
April 26, 2010, we prepaid $124 million of Term Loan B and $40 million of Term Loan C with the proceeds from excess cash flow.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

7. DEBT (Continued)

Accounts Receivable Securitization

Under our A/R Programs, we grant an undivided interest in certain of our trade receivables to bankruptcy-remote special purpose
entities ("SPEs"). This undivided interest serves as security for the issuance of debt. The A/R Programs provide for financing through a conduit program (in both U.S. dollars and euros). Receivables
transferred under the A/R Programs qualified as sales through December 31, 2009. Upon adoption of new accounting guidance in 2010, sales of accounts receivable under our A/R Programs no longer
meet the criteria for derecognition. Accordingly, the
amounts outstanding under our new A/R Programs are accounted for as secured borrowings as of January 1, 2010. See "Note 2. Summary of Significant Accounting Policies."

As
of March 31, 2010, the A/R Programs had $242 million in U.S. dollar equivalents in loans outstanding (consisting of $55 million and
€139 million (approximately $187 million)). As of March 31, 2010, $538 million of accounts receivable were pledged as collateral under the A/R Programs. As
of December 31, 2009, the A/R Programs had $254 million in U.S. dollar equivalents in loans outstanding (consisting of $55 million and €139 million
(approximately $199 million)).

U.S. ACCOUNTS RECEIVABLE SECURITIZATION PROGRAM

The maximum funding availability under the U.S. A/R Program is $250 million, which is divided between two facilities: a
$125 million three-year facility with a maturity of October 2012 and a $125 million two-year facility, with a maturity of October 2011. The amount of actual
availability under the U.S. A/R Program is subject to change based on the level of eligible receivables sold. Availability is further subject to changes in the credit ratings of Huntsman
International's customers, customer concentration levels, and certain characteristics of the accounts receivable being transferred. The yield on the three-year facility is based on the
LIBOR rate (as defined in the applicable agreement) plus a margin rate of 3.75% per annum and, in the case of the two-year facility, if funded by commercial paper ("CP") by the lender, the
CP Rate (as defined in the applicable agreement) plus a margin rate of 3.50% per annum. In addition, the U.S. SPE is obligated to pay commitment fees to the lenders based on the amount of each
lender's commitment.

The
U.S. A/R Program contains various customary affirmative and negative covenants and also contains customary default and termination provisions, which provide for acceleration of
amounts owed under the U.S. A/R Program upon the occurrence of certain specified events, including, but not limited to, failure by the U.S. SPE to pay interest and other amounts due, defaults on
certain indebtedness, certain judgments, change in control, certain events negatively affecting the overall credit quality of transferred accounts receivable, bankruptcy and insolvency events, and
failure of Huntsman International to maintain a minimum liquidity level of $400 million (the "Liquidity Requirement"). We guarantee certain obligations of Huntsman International in its capacity
as contributor and servicer guarantor under the U.S. A/R Program.

EUROPEAN ACCOUNTS RECEIVABLE SECURITIZATION PROGRAM

The maximum funding availability under the EU A/R Program is €225 million (approximately $302 million)
with a maturity of October 2011. The amount of actual availability under the EU A/R Program is subject to change based on the level of eligible receivables sold. Availability is further subject to
changes in the credit ratings of the originators' customers and country, customer

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7. DEBT (Continued)

concentration
levels, and certain characteristics of the accounts receivable being transferred. The yield is based on GBP LIBOR, USD LIBOR or EURIBOR (each as defined in the applicable agreement) plus
a margin rate of 3.75% per annum if funded by commercial paper by the lender. In addition, the EU SPE is obligated to pay a commitment fee to the lender based on the amount of the lender's commitment.

The
EU A/R Program contains various customary affirmative and negative covenants and also contains customary default and termination provisions, which provide for acceleration of amounts
owed under the EU A/R Program upon the occurrence of certain specified events, including, but not limited to, failure by the EU SPE to pay interest and other amounts due, defaults on certain
indebtedness, certain judgments, change in control, certain events negatively affecting the overall credit quality of transferred accounts receivable and bankruptcy and insolvency events and a cross
acceleration provision tied to the Liquidity Requirement.

2020 Subordinated Notes

On March 17, 2010, Huntsman International completed the $350 million offering of the 2020 Subordinated Notes. The 2020
Subordinated Notes bear interest at 8.625% per annum and are due March 15, 2020. We used the net proceeds of $343 million to redeem a portion of our euro-denominated senior
subordinated notes due 2013 (€184 million (approximately $247 million)) and a portion of our euro-denominated senior subordinated notes due 2015
(€59 million (approximately $79 million)). See "Redemption of Notes" below.

At
any time prior to March 15, 2013, Huntsman International may redeem up to 40% of the aggregate principal amount of the 2020 Subordinated Notes with the net cash proceeds of
certain equity offerings. Huntsman International may redeem the 2020 Subordinated Notes in whole or in part prior to March 15, 2015 at a price equal to 100% of the principal amount thereof plus
a
"make-whole" premium. The 2020 Subordinated Notes are redeemable on or after March 15, 2015 at 104.3125%, declining ratably to par on or after March 15, 2018.

Interest
is payable on the 2020 Subordinated Notes semiannually on March 15 and September 15 of each year. The 2020 Subordinated Notes are general unsecured senior
subordinated obligations of Huntsman International and are guaranteed on a general unsecured senior subordinated basis by our subsidiary guarantors (the "Subsidiary Guarantors"). The Indenture
governing the 2020 Subordinated Notes contains covenants relating to, among other things, the incurrence of additional indebtedness; the payment of dividends and the payment of certain other
restricted payments; transactions with affiliates; creating dividend or other payment restrictions affecting restricted subsidiaries; the merger or consolidation with any other person or any sale,
assignment, transfer, lease, conveyance or other disposition of all or substantially all of its assets; or the adoption of a plan of liquidation.

Redemption of Notes

On March 17, 2010, Huntsman International repaid €184 million (approximately $247 million) of its
6.875% senior subordinated notes due 2013. The amount paid to redeem the notes, excluding accrued interest, was €189 million (approximately $254 million), which included
principal of €184 million (approximately $247 million) and premium of €5 million (approximately $7 million). As of

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7. DEBT (Continued)

March 31,
2010, the 6.875% senior subordinated notes due 2013 have a remaining balance of €216 million (approximately $290 million).

On
March 17, 2010, Huntsman International repaid €59 million (approximately $79 million) of its 7.5% senior subordinated notes due 2015. Amount paid
to redeem the notes, excluding accrued interest, was €59 million (approximately $79 million). As of March 31, 2010, the 7.5% senior subordinated notes due 2015
have a remaining balance of €76 million (approximately $102 million).

For
information regarding the redemption of our Convertible Notes, see "Note 1. GeneralRecent DevelopmentsRepurchase of Convertible Notes."

Other Debt

On April 1, 2010, our $25 million European overdraft facility was terminated. This facility was a demand facility used
for the working capital needs of our European subsidiaries. As of both March 31, 2010 and December 31, 2009, we had nil U.S. dollar equivalents in borrowings outstanding under this
European overdraft facility. We also maintain other foreign overdraft facilities used for working capital needs.

HPS
obtained secured loans for the construction of its MDI production facility. This debt consists of various committed loans, including both U.S. dollar and RMB term loans and RMB
working capital loans. During the three months ended March 31, 2010, HPS refinanced 130 million in RMB (approximately $19 million) in working capital loans that were scheduled to
be repaid during the quarter. The loans were refinanced for three years at the same interest rate of 90% of the Peoples Bank of China rate, which was 4.9% as of March 31, 2010.

Our
Australian subsidiaries have credit facilities with a scheduled maturity of May 2010. We are in the process of refinancing a portion of these facilities with the existing lender. The
remaining portion will be repaid in connection with the shutdown of the Australian styrenics operations. See "Note 19. Discontinued Operations."

Intercompany Note

Under an existing promissory note (the "Intercompany Note"), we have provided financing to Huntsman International. As of
March 31, 2010, the outstanding total balance of the Intercompany Note was $425 million. Under the agreements governing our Senior Credit Facilities, Huntsman International cannot repay amounts
under the Intercompany Note if there are any outstanding revolving loans, swing line loans or outstanding letters of credit that are not cash collateralized, unless, before and after giving effect to
such payment on a pro forma basis, Huntsman International is in compliance with the Leverage Covenant. Huntsman International is currently in compliance with Leverage Covenant, and during the three
months ended March 31, 2010, repaid $125 million under the Intercompany Note. As of March 31, 2010, and in accordance with the limitation contained in the agreements governing the
Senior Credit Facilities as described above, Huntsman International would be permitted to repay up to approximately $425 million on the Intercompany Note.

The
Intercompany Note is unsecured and $100 million of the outstanding amount is classified as current as of March 31, 2010 on the accompanying condensed consolidated
balance sheets (unaudited). As of March 31, 2010, under the terms of the Intercompany Note, Huntsman International promises to

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7. DEBT (Continued)

pay
us interest on the unpaid principal amount at a rate per annum based on the previous monthly average borrowing rate obtained under our U.S. A/R Program, less 10 basis points (provided that the
rate shall not exceed an amount that is 25 basis points less than the monthly average borrowing rate obtained for the U.S. LIBOR-based borrowings under our Revolving Facility). Subject to the
conditions of the Senior Credit Facilities, with our consent, the principal and accrued interest outstanding under the Intercompany Note may also be forgiven, capitalized or satisfied with any
alternate form of consideration.

COMPLIANCE WITH COVENANTS

Our management believes that we are in compliance with the covenants contained in the agreements governing our material debt
instruments, including our Senior Credit Facilities, our A/R Programs and the indentures governing our notes.

Our
Senior Credit Facilities are subject to a single financial covenant, the Leverage Covenant, which applies only to the Revolving Facility and is tested at the Huntsman International
level. The Leverage Covenant is applicable only if borrowings, letters of credit or guarantees are outstanding under the Revolving Facility (cash collateralized letters of credit or guarantees are not
deemed outstanding). Following the termination of the 2009 Waiver, the Leverage Covenant is a net senior secured leverage ratio covenant, with a maximum ratio of senior secured debt to EBITDA (as
defined in the applicable agreement) of no more than 3.75 to 1.

If
in the future Huntsman International is not able to meet the secured leverage ratio under the Leverage Covenant, unless Huntsman International obtains an amendment or waiver (as to
which we can provide no assurance), then, for so long as Huntsman International did not meet such secured leverage ratio, we would not have access to the liquidity otherwise available under our
Revolving Facility. If Huntsman International fails to meet this secured leverage ratio at a time when we have loans or letters of credit outstanding under the Revolving Facility, Huntsman
International would be in default under our Senior Credit Facilities, and, unless we obtain a waiver or forbearance with respect to such default (as to which we can provide no assurance), we could be
required to pay off the balance of our Senior Credit Facilities in full and would not have further access to such facilities.

Our
A/R Programs consist of two facilities: Our $250 million U.S. A/R Program and our €225 million (approximately $302 million) EU A/R Program. The
agreements
governing our U.S. A/R Program and the agreements governing our EU A/R Program also contain certain financial covenants. Any material failure to meet the applicable A/R Program's covenants in the
future could lead to an event of default under the A/R Programs, which could require us to cease our use of such facilities. Under these circumstances, unless any default was remedied or waived, we
would likely lose the ability to obtain financing with respect to our trade receivables. A material default under the A/R Programs would also constitute an event of default under our Senior Credit
Facilities, which could require us to pay off the balance of the Senior Credit Facilities in full and could result in the loss of our Senior Credit Facilities.

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8. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

We are exposed to market risks, such as changes in interest rates, foreign exchange rates and commodity pricing risks. From time to time, we enter into transactions, including
transactions involving derivative instruments, to manage certain of these exposures.

All
derivatives, whether designated in hedging relationships or not, are recorded on our balance sheet at fair value. If the derivative is designated as a fair value hedge, the changes
in the fair value of the derivative and the hedged items are recognized in earnings. If the derivative is designated as a cash flow hedge, changes in the fair value of the derivative are recorded in
accumulated other comprehensive (loss) income, to the extent effective, and will be recognized in the income statement when the hedged item affects earnings. To the extent applicable, we perform
effectiveness assessments in order to use hedge accounting at each reporting period. For a derivative that does not qualify as a hedge, changes in fair value are recognized in earnings.

We
also hedge our net investment in certain European operations. Changes in the fair value of the hedge in the net investment of certain European operations are recorded in accumulated
other comprehensive (loss) income.

Our
cash flows and earnings are subject to fluctuations due to exchange rate variation. Our revenues and expenses are denominated in various currencies. From time to time, we may enter
into foreign currency derivative instruments to minimize the short-term impact of movements in foreign currency rates. Where practicable, we generally net multicurrency cash balances among
our subsidiaries to help reduce exposure to foreign currency exchange rates. Certain other exposures may be managed from time to time through financial market transactions, principally through the
purchase of spot or forward foreign exchange contracts (generally with maturities of one year or less). We do not hedge our currency exposures in a manner that would eliminate the effect of changes in
exchange rates on our cash flows and earnings. As of March 31, 2010, we had approximately $117 million notional amount (in U.S. dollar equivalents) outstanding in forward foreign
currency contracts.

On
December 9, 2009, we entered into a five-year interest rate contract to hedge the variability caused by monthly changes in cash flow due to associated changes in
LIBOR under our Senior Credit Facilities. The notional value of the contract is $50 million and was designated as a cash flow hedge. The effective portion of the changes in the fair value of
the swap was recorded in other comprehensive loss. We will pay a fixed 2.6% on the hedge and receive the one-month LIBOR rate. As of March 31, 2010, the fair value of the hedge was
less than $1 million and is recorded in other noncurrent liabilities.

On
January 19, 2010, we entered into a five-year interest rate contract to hedge the variability caused by monthly changes in cash flow due to associated changes in
LIBOR under our Senior Credit Facilities. The notional value of the contract is $50 million and was designated as a cash flow hedge. The effective portion of the changes in the fair value of
the swap was recorded in other comprehensive loss. We will pay a fixed 2.8% on the hedge and receive the one-month LIBOR rate. As of March 31, 2010, the fair value of the hedge was
less than $1 million and is recorded in other noncurrent liabilities.

In
conjunction with our 2020 Senior Subordinated Notes issuance, we entered into cross-currency interest rate contracts with three counterparties. On March 17, 2010, we made
payments of $350 million to these counterparties and received €255 million from these counterparties, and on maturity, March 15, 2015, we are required to pay
€255 million to these counterparties and will receive $350 million from these counterparties. On March 15 and September 15 of each year, we will receive

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8. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Continued)

U.S.
dollar interest payments of approximately $15 million (equivalent to an annual rate of 8.625%) and make interest payments of approximately €11 million (equivalent to
an annual rate of approximately 8.41%). This swap is designated as a hedge of net investment for financial reporting purposes. As of March 31, 2010, the fair value of this swap was
$4 million and was recorded as
noncurrent assets in our condensed consolidated balance sheet (unaudited). For the three months ended March 31, 2010, the effective portion of the changes in the fair value of $6 million
was recorded in other comprehensive income, with the ineffectiveness of $2 million recorded in interest expense.

As
of and for the three months ended March 31, 2010, the changes in fair value of the realized gains (losses) recorded in the accompanying condensed consolidated statements of
operations (unaudited) of our other outstanding foreign currency rate hedging contracts and derivatives were not considered significant.

A
significant portion of our intercompany debt is denominated in euros. We also finance certain of our non-U.S. subsidiaries with intercompany loans that are, in many cases,
denominated in currencies other than the entities' functional currency. We manage the net foreign currency exposure created by this debt through various means, including cross-currency swaps, the
designation of certain intercompany loans as permanent loans because they are not expected to be repaid in the foreseeable future ("permanent loans") and the designation of certain debt and swaps as
net investment hedges.

Foreign
currency transaction gains and losses on intercompany loans that are not designated as permanent loans are recorded in earnings. Foreign currency transaction gains and losses on
intercompany loans that are designated as permanent loans are recorded in other comprehensive loss. From time to time, we review such designation of intercompany loans.

From
time to time, we review our non-U.S. dollar denominated debt and swaps to determine the appropriate amounts designated as hedges. As of March 31, 2010, we have
designated approximately €441 million ($593 million) of euro-denominated debt and cross-currency interest rate swap as a hedge of our net investments. For the
three months ended March 31, 2010, the amount of gain recognized on the hedge of our net investments was $35 million and was recorded in other comprehensive loss. As of March 31,
2010, we had approximately €1,077 million ($1,447 million) in net euro assets.

9. FAIR VALUE

The fair values of our financial instruments were as follows (dollars in millions):

Huntsman Corporation

March 31, 2010

December 31, 2009Carrying
Amount

Estimated
Fair Value

Carrying
Amount

Estimated
Fair ValueNon-qualified employee benefit plan investments

$
11

$
11

$
10

$
10Cross-currency interest rate contracts


4


4





Interest rate contracts


(1
)

(1
)

(1
)

(1
)Long-term debt (including current portion)


(4,175
)

(4,248
)

(4,212
)

(4,390
)


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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

9. FAIR VALUE (Continued)

Huntsman International

March 31, 2010

December 31, 2009Carrying
Amount

Estimated
Fair Value

Carrying
Amount

Estimated
Fair ValueNon-qualified employee benefit plan investments

$
11

$
11

$
10

$
10Cross-currency interest rate contracts


4


4





Interest rate contracts


(1
)

(1
)

(1
)

(1
)Long-term debt (including current portion)


(4,175
)

(4,248
)

(3,976
)

(3,951
)


The
carrying amounts reported in the balance sheets for cash and cash equivalents, accounts receivable and accounts payable approximate fair value because of the immediate or
short-term maturity of these financial instruments. The fair value of non-qualified employee benefit plan investments is estimated using prevailing market prices. The estimated
fair values of our long-term debt other than the Convertible Notes are based on quoted market prices for
the identical liability when traded as an asset in an active market. The estimated fair value of our Convertible Notes at December 31, 2009 was based on the present value of estimated future
cash flows, calculated using management's best estimates of key assumptions including relevant interest rates, expected share volatility, dividend yields and the probabilities associated with certain
features of the Convertible Notes.

The
fair value estimates presented herein are based on pertinent information available to management as of March 31, 2010 and December 31, 2009. Although management is not
aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since
March 31, 2010, and current estimates of fair value may differ significantly from the amounts presented herein.

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9. FAIR VALUE (Continued)

The
following assets and liabilities are measured at fair value on a recurring basis (dollars in millions):

Fair Value Amounts UsingDescription

March 31,
2010

Quoted prices in
active
markets for
identical
assets (Level 1)

Significant
other
observable
inputs
(Level 2)

Significant
unobservable
inputs
(Level 3)Assets:Available-for-sale equity securities:Equity mutual funds

$
11

$
11

$


$
Derivatives:Cross-currency interest rate contracts(1)


4








4Total assets

$
15

$
11

$


$
4Liabilities:Derivatives:Interest rate contracts(2)

$
1

$


$
1

$



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9. FAIR VALUE (Continued)

The
following table shows a reconciliation of beginning and ending balances for assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3)
(dollars in millions):

Three months ended March 31, 2010Fair Value Measurements Using Significant
Unobservable Inputs (Level 3)

Retained Interest
in Securitized
Receivables

Cross-Currency
Interest Rate
Contracts

TotalBeginning balance

$
262

$


$
262Total gains or lossesIncluded in earnings (or changes in net assets)





(2
)

(2
)Included in other comprehensive income (loss)





6


6Purchases, issuances, sales and settlements(1)


(262
)




(262
)Ending balance

$


$
4

$
4The amount of total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets still
held at March 31, 2010

$


$
6

$
6


(1)Upon
adoption of ASU 2009-16, sales of our accounts receivable under our A/R Programs no longer met the criteria for derecognition. Accordingly,
beginning January 1, 2010, the amounts outstanding under the A/R Programs were accounted for as secured borrowings and the retained interest in securitized receivables was no longer relevant.


Gains
and losses (realized and unrealized) included in earnings (or changes in net assets) for the three months ended March 31, 2010 are reported in interest expense and other
comprehensive loss as follows (dollars in millions):

Interest expense

Other
comprehensive
lossTotal net (losses) gains included in earnings (or changes in net assets)

$
(2
)
$
Changes in unrealized gains (losses) relating to assets still held at March 31, 2010


(2
)

6


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10. EMPLOYEE BENEFIT PLANS

Components of the net periodic benefit costs for the three months ended March 31, 2010 and 2009 were as follows (dollars in millions):

Huntsman Corporation

Defined Benefit
Plans

Other Postretirement
Benefit PlansThree months ended
March 31,

Three months ended
March 31,2010

2009

2010

2009Service cost

$
17

$
16

$
1

$
1Interest cost


36


35


2


2Expected return on assets


(42
)

(35
)




Amortization of prior service cost


(1
)

(1
)

(1
)

(1
)Amortization of actuarial loss


6


9





1Special termination benefits





1





Net periodic benefit cost

$
16

$
25

$
2

$
3


Huntsman International

Defined Benefit
Plans

Other Postretirement
Benefit PlansThree months ended
March 31,

Three months ended
March 31,2010

2009

2010

2009Service cost

$
17

$
16

$
1

$
1Interest cost


36


35


2


2Expected return on assets


(42
)

(35
)




Amortization of prior service cost


(1
)

(1
)

(1
)

(1
)Amortization of actuarial loss


8


10





1Special termination benefits





1





Net periodic benefit cost

$
18

$
26

$
2

$
3


During
the three months ended March 31, 2010 and 2009, we made contributions to our pension and other postretirement benefit plans of $44 million and $30 million,
respectively. During the remainder of 2010, we expect to contribute an additional amount of $77 million to these plans.

On
March 23, 2010, President Obama signed into law the Patient Protection and Affordable Care Act. On March 30, 2010, President Obama signed into law a reconciliation
measure, the Health Care and Education Reconciliation Act of 2010. The passage of these acts has resulted in comprehensive

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10. EMPLOYEE BENEFIT PLANS (Continued)

health
care reform legislation in the United States. We are currently evaluating the impact of this legislation on our condensed consolidated financial statements (unaudited).

11. STOCKHOLDERS' EQUITY

COMMON STOCK DIVIDENDS

On March 31, 2010 and March 31, 2009, we paid cash dividends of $24 million and $23 million, respectively,
or $0.10 per share each, to common stockholders of record as of March 15, 2010 and March 16, 2009, respectively.

12. OTHER COMPREHENSIVE LOSS

The components of other comprehensive loss were as follows (dollars in millions):

Huntsman Corporation

Other comprehensive lossAccumulated other
comprehensive lossThree months endedMarch 31,
2010

December 31,
2009

March 31,
2010

March 31,
2009Foreign currency translation adjustments, net of tax of $22 and $15 as of March 31, 2010 and December 31, 2009, respectively

$
224

$
274

$
(50
)
$
(85
)Pension and other postretirement benefit adjustments, net of tax of $100 and $102 as of March 31, 2010 and December 31, 2009,
respectively


(574
)

(580
)

6


7Other comprehensive income (loss) of unconsolidated affiliates


7


7





(3
)Other, net


6


6





(1
)Total


(337
)

(293
)

(44
)

(82
)Amounts attributable to noncontrolling interests


6


6





Amounts attributable to Huntsman Corporation

$
(331
)
$
(287
)
$
(44
)
$
(82
)


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12. OTHER COMPREHENSIVE LOSS (Continued)

Huntsman International

Other comprehensive lossAccumulated other
comprehensive lossThree months endedMarch 31,
2010

December 31,
2009

March 31,
2010

March 31,
2009Foreign currency translation adjustments, net of tax of $9 and $2 as of March 31, 2010 and December 31, 2009, respectively

$
222

$
273

$
(51
)
$
(83
)Pension and other postretirement benefit adjustments, net of tax of $132 and $134 as of March 31, 2010 and December 31, 2009,
respectively


(627
)

(635
)

8


7Other comprehensive income (loss) of unconsolidated affiliates


7


7





(3
)Other, net


1


1





Total


(397
)

(354
)

(43
)

(79
)Amounts attributable to noncontrolling interests


6


6





Amounts attributable to Huntsman International LLC

$
(391
)
$
(348
)
$
(43
)
$
(79
)


Items
of other comprehensive loss of our Company and our consolidated affiliates have been recorded net of tax, with the exception of the foreign currency translation adjustments related
to subsidiaries with earnings permanently reinvested. The tax effect is determined based upon the jurisdiction where the income or loss was recognized and is net of valuation allowances.

13. COMMITMENTS AND CONTINGENCIES

LEGAL MATTERS

Asbestos Litigation

We have been named as a "premises defendant" in a number of asbestos exposure cases, typically claims by non-employees of
exposure to asbestos while at a facility. In the past, these cases typically have involved multiple plaintiffs bringing actions against multiple defendants, and the complaints have not indicated which
plaintiffs were making claims against which defendants, where or how the alleged injuries occurred or what injuries each plaintiff claimed. These facts, which would be central to any estimate of
probable loss, generally have been learned only through discovery.

Where
a claimant's alleged exposure occurred prior to our ownership of the relevant "premises," the prior owners generally have contractually agreed to retain liability for, and to
indemnify us against, asbestos exposure claims. This indemnification is not subject to any time or dollar amount limitations. Upon service of a complaint in one of these cases, we tender it to the
prior owner. None of the complaints in these cases state the amount of damages being sought. The prior owner accepts responsibility for the conduct of the defense of the cases and payment of any
amounts due to the claimants. In our sixteen-year experience with tendering these cases, we have not made any payment

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13. COMMITMENTS AND CONTINGENCIES (Continued)

with
respect to any tendered asbestos cases. We believe that the prior owners have the intention and ability to continue to honor their indemnity obligations, although we cannot assure you that they
will continue to do so or that we will not be liable for these cases if they do not.

The
following table presents for the periods indicated certain information about cases for which service has been received that we have tendered to the prior owner, all of which have
been accepted.

Three months
ended
March 31,2010

2009Unresolved at beginning of period


1,138


1,140Tendered during period


6


6Resolved during period(1)


5


10Unresolved at end of period


1,139


1,136


(1)Although
the indemnifying party informs us when tendered cases have been resolved, it generally does not inform us of the settlement amounts relating to
such cases, if any. The indemnifying party has informed us that it typically manages our defense together with the defense of other entities in such cases and resolves claims involving multiple
defendants simultaneously, and that it considers the allocation of settlement amounts, if any, among defendants to be confidential and proprietary. Consequently, we are not able to provide the number
of cases resolved with payment by the indemnifying party or the amount of such payments.


We
have never made any payments with respect to these cases. As of March 31, 2010, we had an accrued liability of $16 million relating to these cases and a corresponding
receivable of $16 million relating to our indemnity protection with respect to these cases. We cannot assure you that our liability will not exceed our accruals or that our liability associated
with these cases would not be material to our financial condition, results of operations or liquidity; however, we are not able to estimate the amount or range of loss in excess of our accruals.
Additional asbestos exposure claims may be made against us in the future, and such claims could be material. However, because we are not able to estimate the amount or range of losses associated with
such claims, we have made no accruals with respect to unasserted asbestos exposure claims as of March 31, 2010.

Certain
cases in which we are a "premises defendant" are not subject to indemnification by prior owners or operators. The following table presents for the periods indicated certain
information about

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13. COMMITMENTS AND CONTINGENCIES (Continued)

these
cases. Cases include all cases for which service has been received by us. Certain prior cases that were filed in error against us have been dismissed.

Three months
ended
March 31,2010

2009Unresolved at beginning of period


39


43Filed during the period


1


0Resolved during period


1


2Unresolved at end of period


39


41


We
paid gross settlement costs for asbestos exposure cases that are not subject to indemnification of $75,000 during the three months ended March 31, 2010. We cannot assure you
that our liability will not exceed our accruals or that our liability associated with these cases would not be material to our financial condition, results of operations or liquidity; however, we are
not able to estimate the amount or range of loss in excess of our accruals. Additional asbestos exposure claims may be made against us in the future, and such claims could be material. However,
because we are not able to estimate the amount or range of losses associated with such claims, we have made no accruals with respect to unasserted asbestos exposure claims as of March 31, 2010.

Antitrust Matters

We have been named as a defendant in civil class action antitrust suits alleging that between 1999 and 2004 we conspired with Bayer,
BASF, Dow and Lyondell to fix the prices of MDI, TDI, polyether polyols, and related systems ("polyether polyol products") sold in the U.S. in violation of the federal Sherman Act. These cases are
consolidated as the "Polyether Polyols" cases in multidistrict litigation known as In re Urethane Antitrust Litigation, MDL No. 1616, Civil
No. 2:04-md-01616-JWL-DJW, pending in the U.S. District Court for the District of Kansas.

In
addition, we and the other Polyether Polyol defendants have also been named as defendants in three civil antitrust suits brought by certain direct purchasers of polyether polyol
products that opted out of the class certified in MDL No. 1616. While these opt out plaintiffs make similar claims as the class plaintiffs, the court denied defendants' motion to dismiss claims
of improper activity outside the class period. Accordingly, the relevant time frame for these cases is 1994-2006. These cases are referred to as the direct action cases and are pending in
the U.S. District Court for the District of New Jersey.

Merits
discovery was consolidated in the MDL No. 1616 for both the class and direct action cases and is ongoing. The trial is currently scheduled for February 2012.

Two
purported class action cases filed May 5 and 17, 2006 pending in the Superior Court of Justice, Ontario Canada and Superior Court, Province of Quebec, District of Quebec, by
direct purchasers of MDI, TDI and polyether polyols and by indirect purchasers of these products remain dormant. A purported class action case filed February 15, 2002 by purchasers of products
containing rubber and urethanes products and pending in Superior Court of California, County of San Francisco is stayed pending resolution of MDL No. 1616. Finally, we have been named in a
proposed third

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13. COMMITMENTS AND CONTINGENCIES (Continued)

amended
complaint by indirect purchasers of MDI, TDI, polyether polyols and polyester polyols pending against Bayer and Chemtura in the U.S. District Court for the District of Massachusetts. The
matter is currently stayed pending a settlement of previously asserted claims against Bayer and Chemtura. We filed papers opposing the motion for leave to file the proposed amended complaint adding us
as a defendant in that action. The plaintiffs in each of these matters make similar claims against the defendants as the class plaintiffs in MDL No. 1616.

Huntsman
International has been named as a defendant in two purported class action civil antitrust suits alleging that it and its co-defendants and other
co-conspirators conspired to fix prices of titanium dioxide sold in the U.S. between at least March 1, 2002 and the present. The cases were filed on February 9 and 12, 2010
in the U.S. District Court for the District of Maryland and a consolidated complaint was filed on April 12, 2010. The other defendants named in this matter are E.I. Dupont De Nemours and
Company, Kronos Worldwide Inc., Millenium Inorganic Chemicals, Inc. and the National Titanium Dioxide Company Limited (d/b/a Cristal).

In
all of the antitrust litigation currently pending against us the plaintiffs generally are seeking injunctive relief, treble damages, costs of suit and attorneys fees.

The
plaintiffs' pleadings in these various antitrust suits provide few specifics about any alleged illegal conduct on our part, and we are not aware of any illegal conduct by us or any
of our employees. For these reasons, we cannot estimate the possibility of loss or range of loss relating to these claims, and therefore we have not accrued a liability for these claims. Nevertheless,
we could incur losses due to these claims in the future and those losses could be material.

MTBE Litigation

We are named as a defendant in 18 lawsuits pending in litigation filed between March 23, 2007 and June 24, 2009 in New
York federal and state courts alleging liability related to MTBE contamination in groundwater. Numerous other companies, including refiners, manufacturers and sellers of gasoline, as well as
manufacturers of MTBE, were named as defendants in these and many other cases that were pending in U.S. courts. The plaintiffs in the 18 cases in which we are named are municipal water districts, a
regional water supply authority and municipal corporations that claim that defendants' conduct has caused MTBE contamination of their groundwater. Four cases are pending in the U.S. District Court for
the Southern District of New York and 14 are pending in the Supreme Court of the state of New York, nine in Nassau County and five in Suffolk County. The plaintiffs seek injunctive relief, such as
monitoring and abatement, compensatory damages, punitive damages and attorney fees. Together with other defendants, we have filed motions to dismiss all of the state court cases. At this time, while
we currently have insufficient information to meaningfully assess our potential exposure in these cases, we have joined with a larger group of defendants in an effort to mediate the plaintiffs'
claims. Mediation in late 2008 and early 2009 was unsuccessful. A further mediation session was held February 3, 2010 and resulted in a tentative settlement in each of the cases in which we
have been named. Our allocated portion of the total settlement is not material to our ongoing operations. We have accrued a liability for these claims equal to our allocated portion of the settlement.

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13. COMMITMENTS AND CONTINGENCIES (Continued)

Shareholder Litigation

From July 5 to July 13, 2007, four putative shareholder class action complaints were filed against our Company and our
directors alleging breaches of fiduciary duty in connection with our then-proposed sale to Basell and the receipt of a superior proposal from Hexion. Three actions were filed in Delaware:
Cohen v. Archibald, et al., No. 3070, in the Court of Chancery for the State of Delaware (filed July 5, 2007); Augenstein v. Archibald, et al., No. 3076, in the Court of Chancery
for the State of Delaware (filed July 9, 2007); and Murphy v. Huntsman, et al., No. 3094, in the Court of Chancery for the State of Delaware (filed July 13, 2007). Another action
was filed in Texas: Schwoegler v. Huntsman Corporation, et al., Cause No. 07-07-06993-CV, in the 9th Judicial District Court of Montgomery County,
Texas (filed July 6, 2007). As subsequently amended, these lawsuits together allege that we and our directors breached fiduciary duties to the stockholders by, among other things, engaging in
an unfair sales process, approving an unfair price per share for the Hexion Merger, and making inadequate disclosures to stockholders, and that Basell, Hexion and MatlinPatterson entities aided and
abetted these breaches of fiduciary duty. The lawsuits sought to enjoin the stockholder vote on the Hexion Merger.

On
September 20, 2007, the parties entered into a Memorandum of Understanding with plaintiffs' counsel in the Delaware and Texas actions to settle these four lawsuits. As part of
the proposed settlement, the defendants deny all allegations of wrongdoing, but we agreed to make certain additional disclosures in the final proxy statement that was mailed to our stockholders on or
about September 14, 2007. In connection with the settlement, the parties also reached an agreement with respect to any application that the plaintiffs' counsel would have made for an award of
customary attorneys' fees and expenses to be paid following the completion of the now Terminated Merger.

The
Memorandum of Understanding is now null and void and of no force and effect because the Hexion Merger was not consummated. The Texas action has been voluntarily dismissed and the
Delaware actions have been administratively closed.

Port Arthur Plant Fire Insurance Litigation

On August 31, 2007, an action was brought against our Company and Intermational Risk Insurance Company ("IRIC"), our captive
insurer, in the U.S. District Court for the Southern District of Texas, by seventeen reinsurance companies (the "Reinsurers") that reinsure risks under the property insurance policy issued by IRIC to
our Company for the period covering the April 29, 2006 fire at our manufacturing facility in Port Arthur, Texas. The action sought to compel our Company and IRIC to arbitrate with the
Reinsurers to resolve disputes related to the claim for losses caused by the fire or, in the alternative, to declare judgment in favor of the Reinsurers. On September 26, 2008, the court denied
motions to dismiss filed by our Company and IRIC, ordering the parties to engage in a short period of discovery on the issue of arbitrability. In a second and related action filed by our Company
against IRIC in state court in Jefferson County, Texas, IRIC filed a third party petition against the Reinsurers, who then removed that action to the U.S. District Court for the Eastern District of
Texas. Some of the Reinsurers filed answers and motions to compel arbitration, to stay these proceedings, and to change venue to the U.S. District Court for the Southern District of Texas in order to
consolidate the two actions. We filed a motion to remand that action to the state court and opposition to the

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13. COMMITMENTS AND CONTINGENCIES (Continued)

Reinsurers'
motions in that action. On April 23, 2008, the U.S. District Court for the Eastern District of Texas transferred the case to the U.S. District Court for the Southern District of
Texas. On September 26, 2008, the court denied our motion to remand that suit to the state court in which it was filed.

Pursuant
to a December 29, 2008 agreement among the parties to the actions referenced above: (1) a mediation was scheduled for February 24-25, 2009,
(2) if the disputes were not fully resolved in mediation, the parties would submit all coverage and quantum issues to a three-arbitrator panel in the second half of 2009, with a binding award
to be entered by September 30, 2009 (see current status in paragraph below), (3) the Reinsurers paid an additional $40 million on our claim on December 29, 2008 and agreed
that all monies paid by the participating Reinsurers on the claim to date are nonrefundable, (4) we waived our noncontractual claims against the Reinsurers, (5) the first action
referenced above is stayed pending final resolution and entry of judgment, and (6) the second action referenced above has been dismissed.

Because
the non-binding mediation was not successful, we and the Reinsurers are now participating in binding arbitration which began on November 2, 2009. The binding
arbitration is ongoing. Reinsurers responsible for a small percentage of our remaining claim were not parties to the two lawsuits and are not parties to the agreement; thus we may need to pursue
actions against them separately for their pro rata shares of the unpaid claim. We have paid our deductible on the claim of $60 million and have been paid $365 million to date by the
Reinsurers. Prior to the commencement of the arbitration proceedings, we had claimed an additional approximately $242 million plus interest as presently due and owing and unpaid under the
applicable policy (the "Policy") for losses caused by the fire. The arbitration panel has made a preliminary ruling disallowing our claim for interest. In addition,
the arbitration panel has made certain preliminary rulings on some of the discrete issues that so far effectively reduce the overall amount we have claimed by approximately $70 million. The
arbitration panel has requested additional briefing on the remaining matters and has not indicated when a final ruling will be issued. See "Note 16. Casualty Losses and Insurance
RecoveriesPort Arthur, Texas Plant Fire."

Other Proceedings

We are a party to various other proceedings instituted by private plaintiffs, governmental authorities and others arising under
provisions of applicable laws, including various environmental, products liability and other laws. Except as otherwise disclosed in this report, we do not believe that the outcome of any of these
matters will have a material adverse effect on our financial condition, results of operations or liquidity.

Guarantees

Our unconsolidated joint venture, the Arabian Amines Company, obtained various loan commitments in the aggregate amount of
approximately $195 million (U.S. dollar equivalents) of which $177 million, including bridge loans, was drawn and outstanding as of March 31, 2010. We have provided certain
guarantees of approximately $14 million for these commitments and our guarantees will terminate upon completion of the project and satisfaction of certain other conditions. We have

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13. COMMITMENTS AND CONTINGENCIES (Continued)

estimated
that the fair value of such guarantees was nil as of the closing date of this transaction and, accordingly, no amounts have been recorded.

14. ENVIRONMENTAL, HEALTH AND SAFETY MATTERS

General

We are subject to extensive federal, state, local and foreign laws, regulations, rules and ordinances relating to safety, 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 and occasional investigations by governmental enforcement authorities. In addition, our production facilities require
operating permits that are subject to renewal, modification and, in certain circumstances, revocation. Actual or alleged violations of safety laws, environmental laws or permit requirements could
result in restrictions or prohibitions on plant operations, substantial civil or criminal sanctions, as well as, under some environmental laws, the assessment of strict liability and/or joint and
several liability. Moreover, changes in environmental regulations could inhibit or interrupt our operations, or require us to modify our facilities or operations. Accordingly, environmental or
regulatory matters may cause us to incur significant unanticipated losses, costs or liabilities.

Environmental, Health and Safety Systems

We are committed to achieving and maintaining compliance with all applicable EHS legal requirements, and we have developed policies and
management systems that are intended to identify the multitude of EHS legal requirements applicable to our operations, enhance compliance with applicable legal requirements, ensure the safety of our
employees, contractors, community neighbors and customers and minimize the production and emission of wastes and other pollutants. Although EHS legal requirements are constantly changing and are
frequently difficult to
comply with, these EHS management systems are designed to assist us in our compliance goals while also fostering efficiency and improvement and minimizing overall risk to us.

EHS Capital Expenditures

We may incur future costs for capital improvements and general compliance under EHS laws, including costs to acquire, maintain and
repair pollution control equipment. For the three months ended March 31, 2010 and 2009, our capital expenditures for EHS matters totaled $9 million and $8 million, respectively.
Since capital expenditures for these matters are subject to evolving regulatory requirements and depend, in part, on the timing, promulgation and enforcement of specific requirements, we cannot
provide assurance that our recent expenditures will be indicative of future amounts required under EHS laws.

Remediation Liabilities

We have incurred, and we may in the future incur, liability to investigate and clean up waste or contamination at our current or former
facilities or facilities operated by third parties at which we may

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14. ENVIRONMENTAL, HEALTH AND SAFETY MATTERS (Continued)

have
disposed of waste or other materials. Similarly, we may incur costs for the cleanup of wastes that were disposed of prior to the purchase of our businesses. Under some circumstances, the scope of
our liability may extend to damages to natural resources.

Under
CERCLA and similar state laws, a current or former owner or operator of real property may be liable for remediation costs regardless of whether the release or disposal of hazardous
substances was in compliance with law at the time it occurred, and a current owner or operator may be liable regardless of whether it owned or operated the facility at the time of the release. We have
been notified by third parties of claims against us for cleanup liabilities at approximately 10 former facilities or third party sites, including, but not limited to, sites listed under CERCLA. Based
on current information and past experiences at other CERCLA sites, we do not expect any of these third party claims to result in material liability to us. Outside the U.S., analogous contaminated
property laws, such as those in effect in France and Australia, can hold past owners and/or operators liable for remediation at former facilities.

One
of these sites, the North Maybe Canyon Mine CERCLA site, includes an abandoned phosphorous mine near Soda Springs, Idaho that may have been operated by one of our predecessor
companies (El Paso Products Company). In 2004, the U.S. Forest Service notified us that we are a CERCLA Potentially Responsible Party (a "PRP") for the mine site involving selenium-contaminated
surface water. Under a 2004 administrative order, the current mine lessee, Nu-West Industries, Inc., began undertaking the investigation required for a CERLA removal process. In
2008, the site was transitioned to the CERCLA remedial action process, which requires a Remedial Investigation/Feasibility Study (an "RI/FS"). In 2009, the Forest Service notified the three PRPs (our
Company, Nu-West, and Wells Cargo) that it would undertake the RI/FS itself. On February 19, 2010, in conjunction with Wells Cargo, we agreed to jointly comply with a unilateral
administrative order (a "UAO") to conduct an RI/FS of the entire West Ridge of the site, although we are alleged to have had only a limited historical presence in the investigation area. The UAO has
not yet been executed by the Forest Service. In March 2010, following the initiation of litigation by Nu-West, the Forest Service assumed Nu-West's original investigation
obligations. We continue to coordinate with our insurers regarding policy coverage in this matter. At this time, we are unable to estimate the cost of the RI/FS or our ultimate liability in this
matter, but we do not believe it will be material to our financial condition.

In
addition, under RCRA, and similar state laws, we may be required to remediate contamination originating from our properties as a condition to our hazardous waste permit. Some of our
manufacturing sites have an extended history of industrial chemical manufacturing and use, including on-site waste disposal. We are aware of soil, groundwater or surface contamination from
past operations at some of our sites, and we may find contamination at other sites in the future. For example, our Port Neches, Texas, and Geismar, Louisiana, facilities are the subject of ongoing
remediation requirements under RCRA authority. Similar laws exist in a number of locations in which we currently operate manufacturing facilities, such as Australia, Switzerland and Italy.

In
June of 2006, an agreement was reached between the local regulatory authorities and our Advanced Materials site in Pamplona, Spain to relocate our manufacturing operations in order to
facilitate new urban development desired by the city. Subsequently, as required by the authorities, soil

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14. ENVIRONMENTAL, HEALTH AND SAFETY MATTERS (Continued)

and
groundwater sampling was performed and followed by a quantitative risk assessment. Although unresolved at this time, some level of remediation of site contamination may be required in the future,
but the estimated cost is unknown because the remediation approach and timing has not been determined.

By
letter dated March 7, 2006, our Base Chemicals and Polymers facility in West Footscray, Australia, was issued a clean-up notice by the Australian (Victorian) EPA
due to concerns about soil and groundwater contamination emanating from the site. The agency revoked the original clean-up notice on September 4, 2007 and issued a revised
clean-up notice due to "the complexity of contamination issues" at the site. On March 31, 2009, we submitted the required site remediation action plan to the agency which proposed
additional investigation and remediation method trials. We can provide no assurance that the EPA will agree with our proposed plan, will not seek to institute additional requirements for the site or
that additional costs will not be
associated with the clean up. Additionally, on September 8, 2009, we announced a decision to close this facility in early 2010. In the third quarter of 2009, we recorded a $30 million
liability related to estimated environmental remediation costs at this site.

In
many cases, our potential liability arising from historical contamination is based on operations and other events occurring prior to our ownership of a business or specific facility.
In these situations, we frequently obtained an indemnity agreement from the prior owner addressing remediation liabilities arising from pre-closing conditions. We have successfully
exercised our rights under these contractual covenants for a number of sites and, where applicable, mitigated our ultimate remediation liability. We cannot assure you, however, that all of such
matters will be subject to indemnity, that the prior owner will honor its indemnity or that our existing indemnities will be sufficient to cover our liabilities for such matters.

By
letter of March 15, 2010, the United States Department of Justice (the "DOJ") notified us that the U.S. EPA has requested that the DOJ bring an action in federal court against
us and other PRPs for recovery of costs incurred by the U.S. in connection with releases of hazardous substances from the State Marine Superfund Site in Port Arthur, Texas. As of August 31,
2007, the EPA had incurred and paid approximately $2.8 million in unreimbursed response costs related to the site. Prior to filing the complaint, the DOJ requested that PRPs sign and return a
standard tolling agreement (from March 31, 2010 through September 30, 2010) and participate in settlement discussions. Our Company originally responded to an information request
regarding this site on March 7, 2005 and identified historical transactions associated with a predecessor of a company we acquired. The prior owners have contractually agreed to indemnify us in
this matter. While the DOJ is aware of the indemnity, we may be required to participate in future settlement discussions, therefore on March 29, 2010, we submitted the signed tolling agreement
and offer to negotiate to the DOJ.

Based
on available information and the indemnification rights we believe are likely to be available, we believe that the costs to investigate and remediate known contamination will not
have a material adverse effect on our financial condition, results of operations or cash flows. However, if such indemnities are unavailable or do not fully cover the costs of investigation and
remediation or we are required to contribute to such costs, and if such costs are material, then such expenditures may have a material adverse effect on our financial condition, results of operations
or cash flows. At the current

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

14. ENVIRONMENTAL, HEALTH AND SAFETY MATTERS (Continued)

time,
we are unable to estimate the full cost, exclusive of indemnification benefits, to remediate any of the known contamination sites.

Environmental Reserves

We have accrued liabilities relating to anticipated environmental cleanup obligations, site reclamation and closure costs and known
penalties. Liabilities are recorded when potential liabilities are either known or considered probable and can be reasonably estimated. Our liability estimates are calculated using present value
techniques and are based upon requirements placed upon us by regulators, available facts, existing technology and past experience. The environmental liabilities do not include amounts recorded as
asset retirement obligations. We had accrued $41 million each for environmental liabilities as of both March 31, 2010 and December 31, 2009. Of these amounts, $7 million and
$5 million were classified as accrued liabilities in our consolidated balance sheets as of March 31, 2010 and December 31, 2009, respectively, and $34 million and
$36 million were classified as other noncurrent liabilities in our consolidated balance sheets as of March 31, 2010 and December 31, 2009, respectively. In certain cases, our
remediation liabilities may be payable over periods of up to 30 years. We may incur losses for environmental remediation in excess of the amounts accrued; however, we are not able to estimate
the amount or range of such potential excess.

REGULATORY DEVELOPMENTS

In December 2006, the EU parliament and EU council approved a new EU regulatory framework for chemicals called "REACH" (Registration,
Evaluation and Authorization of Chemicals). REACH took effect on June 1, 2007, and the program it establishes will be phased in over 11 years. Under the regulation, companies that
manufacture in or import into the EEA more than one metric tonne of a chemical substance per year will be required to register such chemical substances and isolated intermediates in a central
database. Use authorizations will be granted for a specific chemical if the applicants can show that the risks in using the chemical are adequately controlled; and for chemicals where there are no
suitable alternatives substances or technologies available and the applicant can demonstrate that the social and economic benefits of using the chemical outweigh the risks. In addition, specified uses
of some hazardous substances may be restricted. Furthermore, all applicants will have to study the availability of alternative chemicals. If an alternative is available, an applicant will have to
submit a "substitution" plan to the regulatory agency. The regulatory agency will only authorize persistent bio-accumulative and toxic substances if an alternative chemical is not
available. The registration, evaluation and authorization phases of the program will require expenditures and resource commitments in order to, for example, participate in mandatory
data-sharing forums; acquire, generate and evaluate data; prepare and submit dossiers for substance registration; obtain legal advice and reformulate products, if necessary. We have
established a cross-business European REACH team that is working closely with our businesses to identify and list all substances we purchase or manufacture in, or import into, the EEA. We met
pre-registration REACH compliance requirements by the November 30, 2008 regulatory deadline, with the exception of pre-registrations for two substances, for a total of
1,850 pre-registrations for substances that we intend to register. We are currently proceeding with the registration of the two substances as provided for under REACH, as well as of the
high-volume and high-priority chemicals under the program, which must be registered no later than

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14. ENVIRONMENTAL, HEALTH AND SAFETY MATTERS (Continued)

November 30,
2010. Although the total long-term cost for REACH compliance is not estimable at this time, we spent approximately $3 million, $2 million and
$3 million during the years ended December 31, 2009, 2008 and 2007, respectively, on REACH compliance.

GREENHOUSE GAS REGULATION

In the EU and other jurisdictions committed to compliance with the Kyoto Protocol, there is an increasing likelihood that our
manufacturing sites will be affected in some way over the next few years by regulation or taxation of GHG emissions. For example, Australia recently proposed its Carbon Pollution Reduction Scheme,
which may impact our Australian operations, and program implementation is currently scheduled for 2011. In addition, although the U.S. is not a signatory to the Kyoto Protocol, several states are
implementing their own GHG regulatory programs
and a federal program in the U.S. is likely for the future. Draft U.S. federal legislation and the recent U.S. EPA Clean Air Act endangerment findings for carbon dioxide have focused corporate
attention on the eventuality of measuring and reporting of GHG emissions for operations in the U.S. The U.S. EPA also recently mandated GHG reporting requirements for U.S. sources in excess of 25,000
tons beginning in 2010. Final details of a comprehensive U.S. GHG management approach are, as yet, uncertain. Nevertheless, we are already managing and reporting GHG emissions, to varying degrees, as
required by law for our sites in locations subject to Kyoto Protocol obligations and/or EU emissions trading scheme requirements. Although these sites are subject to existing GHG legislation, few have
experienced or anticipate significant cost increases as a result, although it is likely that GHG emission restrictions will increase over time. Potential consequences of such restrictions include
capital requirements to modify assets used to meet GHG restriction and/or increases in energy costs above the level of general inflation, as well as direct compliance costs. Currently, however, it is
not possible to estimate the likely financial impact of potential future regulation on any of our sites. Finally, it should be noted that some scientists have concluded that increasing concentrations
of greenhouse gases in the Earth's atmosphere may produce climate changes that have significant physical effects, such as increased frequency and severity of storms, droughts, and floods and other
climatic events. If any of those effects were to occur, they could have an adverse effect on our assets and operations.

CHEMICAL FACILITY ANTI-TERRORISM RULEMAKING

The DHS issued the final rule of their "Chemical Facility Anti-Terrorism Standard" in 2007. The initial phase of the rule
required all chemical facilities in the U.S. to evaluate their facilities against the DHS Appendix A list of "Chemicals of Interest." Facilities which have specified chemicals in designated
quantities on the Appendix A list were required to submit a "Top Screen" to DHS in 2008. A Top Screen is a questionnaire completed by a facility having Chemicals of Interest in designated
threshold quantities. In early 2008, we submitted Top Screens for all of our covered facilities. After reviewing the Top Screens, the DHS determined that four of our sites were "High Risk" facilities.
As a result, we were required to perform security vulnerability assessments at the High Risk sites. The security vulnerability assessments were completed and sent to DHS during the fourth quarter of
2008. Based on their assessment of the security vulnerability assessments, we received notice from DHS that one of our sites was elevated to a higher security risk tier. The DHS determined the other
three sites to be low security risk tiers. The three lower-tiered sites have submitted Site Security Plans ("SSPs") to

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14. ENVIRONMENTAL, HEALTH AND SAFETY MATTERS (Continued)

the
DHS. The SSPs are based on a list of 18 risk-based performance standards, but security improvements recommended from the SSPs are not anticipated to be material. The
tier-elevated site has also submitted an SSP to the DHS, and we believe that security upgrades to the that site will be required; however we do not know what these required updates will be
and thus cannot reasonably estimate associated costs at this time, but they could be material. Additionally, on November 26, 2008, the Transportation Safety Administration of the DHS published
a final rule regarding "rail security sensitive materials" that are received at, or shipped from, facilities. We have three sites that are subject to this new rule, but at this time do not anticipate
that the costs to comply will be material.

MTBE DEVELOPMENTS

We produce MTBE, an oxygenate that is blended with gasoline to reduce vehicle air emissions and to enhance the octane rating of
gasoline. Litigation or legislative initiatives restricting the use of MTBE in gasoline may subject us or our products to environmental liability or materially adversely affect our sales and costs.
Because MTBE has contaminated some water supplies, its use has become controversial in the U.S. and elsewhere, and its use has been effectively eliminated in the U.S. market. We currently market MTBE,
either directly or through third parties, to gasoline additive customers located outside the U.S., although there are additional costs associated with such outside-U.S. sales which may
result in decreased profitability compared to historical sales in the U.S. We may also elect to use all or a portion of our precursor tertiary butyl alcohol to produce saleable products other than
MTBE. If we opt to produce products other than MTBE, necessary modifications to our facilities will require significant capital expenditures and the sale of such other products may produce a lower
level of cash flow than that historically produced from the sale of MTBE.

Numerous
companies, including refiners, manufacturers and sellers of gasoline, as well as manufacturers of MTBE, have been named as defendants in more than 150 cases in U.S. courts that
allege MTBE contamination in groundwater. Many of these cases were settled after the parties engaged in mediation supervised by a court-appointed special settlement master. Beginning in March 2007 and
continuing through June 24, 2009, we have been named as a defendant in 18 of these lawsuits pending in New York state and federal courts. See "Note 13. Commitment and
ContingenciesLegal MattersMTBE Litigation." The plaintiffs in the MTBE groundwater contamination cases generally seek compensatory damages, punitive damages, injunctive
relief, such as monitoring and abatement, and attorney fees. While we currently have insufficient information to meaningfully assess our potential exposure in these cases, we have joined with a larger
group of defendants in an effort to mediate the plaintiffs' claims. Mediation in late 2008 and early 2009 was unsuccessful. A further mediation session was held February 3, 2010 which resulted
in a tentative settlement in each of the cases in which we have been named. Our allocated portion of the total settlement amount is not material and we have accrued a liability for the claims equal to
our allocated portion of the settlement. It is possible that we could be named as a defendant in additional existing or future MTBE contamination cases. We cannot provide assurances that adverse
results against us in existing or future MTBE contamination cases will not have a material adverse effect on our business, results of operations and financial position.

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14. ENVIRONMENTAL, HEALTH AND SAFETY MATTERS (Continued)

INDIA INVESTIGATION

We have initiated an internal investigation of the operations of Petro Araldite Pvt. Ltd. (PAPL), our majority owned joint
venture in India. PAPL manufactures and markets base liquid resins, base solid resins and formulated products in India. The investigation, which is ongoing, initially focused on allegations of illegal
disposal of hazardous waste and waste water discharge and related reporting irregularities. Based upon preliminary findings, the investigation was expanded to include a review of certain product sales
made by PAPL outside normal distribution channels as well as the accounting for the revenues from such sales and the legality under Indian law and U.S. law, including the U.S. Foreign Corrupt
Practices Act, of certain payments (less than $15,000 specifically identified to date) made by employees of the joint venture to government officials in India.

Even
though we have not completed the investigation, we have voluntarily contacted the regional pollution control regulators in India, the U.S. Securities and Exchange Commission and the
U.S. Department of Justice to advise them of our ongoing investigation and that we intend to cooperate fully with each of them. In addition, we have taken action to halt all known illegal activity.

The
internal investigation is not complete and no conclusion can be drawn at this time as to whether any government agencies will open formal investigations of these matters or what
remedies such agencies may seek. Governmental agencies could assess material civil and criminal penalties and fines against PAPL and potentially against us and could issue orders that adversely effect
the operations of PAPL. We cannot, however, determine at this time the magnitude of the penalties and fines that will be assessed, the costs to remediate the prior noncompliance, or the effects of
implementing any necessary corrective measures on the joint venture's operations.

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15. STOCK-BASED COMPENSATION PLANS

Under the Huntsman Stock Incentive Plan (the "Stock Incentive Plan"), a plan approved by stockholders, we may grant non-qualified stock options, incentive stock options,
stock appreciation rights, restricted stock, phantom stock, performance awards and other stock-based awards to our employees, directors and consultants and to employees and consultants of our
subsidiaries, provided that incentive stock options may be granted solely to employees. The terms of the grants are fixed at the grant date. We were authorized to grant up to 32.6 million
shares under the Stock Incentive Plan. As of March 31, 2010, we had 12.1 million shares remaining under the Stock Incentive Plan available for grant. Option awards have a maximum
contractual term of 10 years and generally must have an exercise price at least equal to the market price of our common stock on the date the option award is granted. Stock-based awards
generally vest over a three-year period.

The
compensation cost under the Stock Incentive Plan for our Company and Huntsman International was as follows (dollars in millions):

Three months
ended March 31,2010

2009Huntsman Corporation

$
7

$
5Huntsman International


6


1


The
total income tax benefit recognized in the statements of operations for us and Huntsman International for stock-based compensation arrangements was $2 million each for each of
the three months ended March 31, 2010 and 2009.

STOCK OPTIONS

The fair value of each stock option award is estimated on the date of grant using the Black-Scholes valuation model that uses the
assumptions noted in the following table. Expected volatilities are based on the historical volatility of our common stock through the grant date. The expected term of options granted was estimated
based on the contractual term of the instruments and employees' expected exercise and post-vesting employment termination behavior. The risk-free rate for periods within the
contractual life of the option was based on the U.S. Treasury yield curve in effect at the time of grant. The assumptions noted below represent the weighted average of the assumptions utilized for
stock options granted during the period.

Three months
ended March 31,2010

2009Dividend yield


3.0
%

15.4
%Expected volatility


69.0
%

70.4
%Risk-free interest rate


3.1
%

2.5
%Expected life of stock options granted during the period


6.6 years


6.6 years


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15. STOCK-BASED COMPENSATION PLANS (Continued)

A
summary of stock option activity under the Stock Incentive Plan as of March 31, 2010 and changes during the three months then ended is presented below:

Option Awards

Shares

Weighted
Average
Exercise
Price

Weighted
Average
Remaining
Contractual
Term

Aggregate
Intrinsic
Value(in thousands)



(years)

(in millions)Outstanding at January 1, 2010


11,677

$
11.30Granted


654


13.50Exercised


(863
)

2.59Forfeited


(75
)

21.27Outstanding at March 31, 2010


11,393


12.02


7.6

$
51Exercisable at March 31, 2010


6,771


17.29


6.5


14


The
weighted-average grant-date fair value of stock options granted during the three months ended March 31, 2010 was $6.97 per option. As of March 31, 2010,
there was $6 million of total unrecognized compensation cost related to nonvested stock option arrangements granted under the Stock Incentive Plan. That cost is expected to be recognized over a
weighted-average period of approximately 1.5 years.

The
total intrinsic value of stock options exercised during the three months ended March 31, 2010 was $9 million. During the three months ended March 31, 2009, no
stock options were exercised.

NONVESTED SHARES

Nonvested shares granted under the Stock Incentive Plan consist of restricted stock, which is accounted for as an equity award, and
phantom stock, which is accounted for as a liability award

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15. STOCK-BASED COMPENSATION PLANS (Continued)

because
it can be settled in either stock or cash. A summary of the status of our nonvested shares as of March 31, 2010 and changes during the three months then ended is presented below:

Equity Awards

Liability AwardsShares

Weighted
Average
Grant-Date
Fair Value

Shares

Weighted
Average
Grant-Date
Fair Value(in thousands)



(in thousands)Nonvested at January 1, 2010


3,428

$
5.20


1,880

$
3.61Granted


828


13.50


471


13.50Vested


(1,161
)(1)

6.89


(642
)

4.27Forfeited


(23
)

2.59





Nonvested at March 31, 2010


3,072


6.82


1,709


6.09


(1)As
of March 31, 2010, a total of 321,529 restricted stock units were vested, of which 58,130 vested during the three months ended March 31,
2010. These shares have not been reflected as vested shares in this table because, in accordance with the restricted stock unit agreements, shares of common stock are not issued for vested restricted
stock units until termination of employment.


As
of March 31, 2010, there was $37 million of total unrecognized compensation cost related to nonvested share compensation arrangements granted under the Stock Incentive
Plan. That cost is expected to be recognized over a weighted-average period of approximately 2.2 years. The value of share awards that vested during the three months ended March 31, 2010
and 2009 was $18 million and $11 million, respectively.

16. CASUALTY LOSSES AND INSURANCE RECOVERIES

PORT ARTHUR, TEXAS PLANT FIRE

On April 29, 2006, our former Port Arthur, Texas olefins manufacturing plant (which we sold in November 2007) experienced a
major fire. With the exception of cyclohexane operations at the site, which were restarted in June 2006, the operations at the site were shutdown until the fourth quarter of 2007. The Port Arthur
manufacturing plant was covered by property damage and business interruption insurance. With respect to coverage for this outage, the deductible for property damage is $10 million and business
interruption coverage does not apply for the first 60 days, subject to a combined deductible for property damage and business interruption of $60 million. See "Note 13.
Commitments and ContingenciesPort Arthur Texas Plant Fire Litigation." Future collections on this insured loss, if any, will represent additional income from discontinued operations for
us upon final settlement and will be used to repay secured debt in accordance with relevant provisions of agreements governing our Senior Credit Facilities.

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16. CASUALTY LOSSES AND INSURANCE RECOVERIES (Continued)

2005 U.S. GULF COAST STORMS

On September 22, 2005, we sustained property damage at our Port Neches and Port Arthur, Texas facilities as a result of a
hurricane. We maintain customary insurance coverage for property damage and business interruption. With respect to coverage of these losses, the deductible for property damage was $10 million,
while business interruption coverage does not apply for the first 60 days.

Through
March 31, 2010, we have recorded $48 million in payments in connection with our insurance claim for property damage and business interruption losses from the 2005
Gulf Coast storms. On July 29, 2009, the reinsurers filed a declaratory judgment action asking the Court to compel arbitration between the parties or to declare that the reinsurers owed nothing
further from the storm damage. We filed a counterclaim asking the Court to declare that the reinsurers owed us the remaining amount of our claim. Subsequently, the parties participated in mediation on
February 8-9, 2010, and signed a proof of loss and a full and final settlement agreement on March 22, 2010 that resolved the remainder of our insurance claim for a total of
$7 million. The reinsurers paid this amount within 30 days following the execution of the proof of loss and full and final settlement agreement. In connection with this settlement, we
recorded a $7 million pre-tax gain in discontinued operations during the first quarter of 2010, which is included in the $48 million of insurance recoveries referenced above.

17. INCOME (EXPENSES) ASSOCIATED WITH THE TERMINATED MERGER AND RELATED LITIGATION

On July 12, 2007, we entered into an agreement and plan of merger with Hexion (the "Terminated Merger Agreement" or the "Hexion Merger Agreement"). On June 18, 2008,
Hexion, Apollo and certain of their affiliates filed an action in Delaware Chancery Court seeking to terminate the Hexion Merger. We countersued Hexion and Apollo in the Delaware Chancery Court and
filed a separate action against Apollo and certain of its affiliates in the District Court of Montgomery County, Texas. On December 13, 2008, we terminated the Hexion Merger Agreement and, on
December 14, 2008, we entered into the Apollo Settlement Agreement to settle the Terminated Merger-related litigation and certain other related matters. Pursuant to the Apollo Settlement
Agreement, Hexion and certain Apollo affiliates have paid us an aggregate of $1 billion.

On
September 30, 2008, we filed suit in the 9th Judicial District Court in Montgomery County, Texas against the Banks that had entered into a commitment letter to provide
funding for the Hexion Merger. On June 22, 2009, we entered into the Texas Bank Litigation Settlement Agreement with the Banks. The Texas Bank Litigation was dismissed with prejudice on
June 23, 2009. In accordance with the Texas Bank Litigation Settlement Agreement, the Banks paid us a cash payment of $632 million, purchased the $600 million aggregate principal
amount 51/2% senior notes due 2016 (the "2016 Senior Notes") from Huntsman International, and provided Huntsman International with Term Loan C in the principal amount of
$500 million. The 2016 Senior Notes and Term Loan C borrowings were at favorable rates to us and were recorded at a combined fair value of $864 million. Accordingly, we recognized a gain
of $868 million in connection with the Texas Bank Litigation Settlement Agreement.

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17. INCOME (EXPENSES) ASSOCIATED WITH THE TERMINATED MERGER AND RELATED LITIGATION (Continued)

Expenses
associated with the Terminated Merger and related litigation incurred during the three months ended March 31, 2009 of $7 million related principally to legal fees
incurred in connection with the Texas Bank Litigation.

18. INCOME TAXES

For the three months ended March 31, 2010, in accordance with U.S. GAAP, we have computed our provision for income taxes based on the actual effective tax rate for the
year-to-date by applying the discrete method. The discrete method was used to calculate the income tax provision as the annual effective tax rate was not considered a reliable
estimate of year-to-date income tax expense.

We
use the asset and liability method of accounting for income taxes. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets
and liabilities for financial and tax reporting purposes. We evaluate deferred tax assets to determine whether it is more likely than not that they will be realized. Valuation allowances are reviewed
on a tax jurisdictional basis to analyze whether there is sufficient positive or negative evidence to support a change in judgment about the realizability of the related deferred tax assets for each
jurisdiction. During the three months ended March 31, 2010, we released a valuation allowance of $14 million on our Australia net deferred tax assets, primarily as a result of
discontinuing the operations of the styrenics business.

During
the three months ended March 31, 2010, we recorded a net decrease in unrecognized tax benefits with a corresponding income tax benefit of approximately $8 million,
resulting from the settlement of tax audits, the effective settlement of certain tax positions and the expiration of statutes of limitations. During the three months ended March 31, 2009, we
recorded a decrease in unrecognized tax benefits with a corresponding income tax benefit of approximately $18 million, resulting from of the effective settlement of prior year examinations.

HUNTSMAN CORPORATION

In addition to the tax benefits of the valuation allowance release and unrecognized tax benefit items discussed above, during the three
months ended March 31, 2010, we recognized $12 million of tax benefit on the $155 million of loss on early extinguishment of debt (the majority of the loss is not tax deductible
for tax purposes) and during the three months ended March 31, 2009, we recorded a valuation allowance of $146 million against the net deferred tax assets in the U.K. Excluding these
items, we recorded income tax expense of nil and $10 million for the three months ended March 31, 2010 and 2009, respectively. Our tax obligations are affected by the mix of income and
losses in the tax jurisdictions in which we operate.

HUNTSMAN INTERNATIONAL

In addition to the tax benefits of the valuation allowance release and unrecognized tax benefit items discussed above during the three
months ended March 31, 2010, Huntsman International recognized $3 million of tax benefit on the $9 million of loss on early extinguishment of debt (the majority of the loss is not
tax deductible for tax purposes) and during the three months ended

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18. INCOME TAXES (Continued)

March 31,
2009, Huntsman International recorded a valuation allowance of $156 million as of March 31, 2009 against the net deferred tax assets in the U.K. Excluding these items,
Huntsman International recorded income tax expense of $3 million and $8 million, for the three months ended March 31, 2010 and 2009, respectively. Our tax obligations are affected
by the mix of income and losses in the tax jurisdictions in which we operate.

19. DISCONTINUED OPERATIONS

Australian Styrenics Business Shutdown

During the first quarter of 2010, we ceased operation of our former Australian styrenics business. The following results of operations
of our former Australian styrenics business have been presented as discontinued operations in the accompanying condensed consolidated statements of operations (unaudited):

Three months
ended March 31,2010

2009Revenues

$
25

$
13Costs and expenses


(45
)

(20
)Operating loss


(20
)

(7
)Income tax benefit


8


Loss from discontinued operations, net of tax

$
(12
)
$
(7
)


Beginning
in the first quarter of 2010, the EBITDA of our former Australian styrenics business was included in discontinued operations for all periods presented.

U.S. Base Chemicals and North American Polymers Dispositions

In 2007, we completed the sale of our former U.S. base chemicals business (the "U.S. Base Chemicals Disposition") and our North
American polymers business assets (the "North American Polymers Disposition"). The results of these former businesses are presented as discontinued operations in the accompanying condensed
consolidated statements of operations (unaudited).

During
the three months ended March 31, 2010, we recorded an after tax loss from discontinued operations of $1 million, which consisted of $8 million of loss
resulting principally from legal fees related to the ongoing arbitration of the fire insurance claim, offset in part by a $7 million pretax gain from the settlement of insurance claims related
to the 2005 U.S. gulf coast storms. See "Note 16. Casualty Losses and Insurance Recoveries." During the three months ended March 31, 2009, we recorded after tax income from discontinued
operations of $3 million related primarily to the revaluation of outstanding product exchange liabilities related to our former U.S. base chemicals business.

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20. NET LOSS PER SHARE

Basic (loss) income per share excludes dilution and is computed by dividing net loss attributable to Huntsman Corporation common stockholders by the weighted average number of shares
outstanding during the period. Diluted loss per share reflects potential dilution and is computed by dividing net loss available to common stockholders by the weighted average number of shares
outstanding during the period, increased by the number of additional shares that would have been outstanding if the potential dilutive units had been exercised or converted.

On
December 23, 2008, we issued the Convertible Notes in an aggregate principal amount of $250 million. Prior to their repurchase, the Convertible Notes were convertible
into common stock at a conversion price of $7.857 per share, subject to certain anti-dilution adjustments. On January 11, 2010, we repurchased the entire $250 million
principal amount of the Convertible Notes.

Basic
and diluted loss per share is determined using the following information:

Three Months Ended March 31,2010

2009Numerator:Basic and diluted loss from continuing operations:Loss from continuing operations attributable to Huntsman Corporation

$
(159
)
$
(286
)Convertible notes interest expense, net of tax





Loss from continuing operations attributable to Huntsman Corporation and assumed conversion


(159
)

(286
)Basic and diluted net loss:Net loss attributable to Huntsman Corporation


(172
)

(290
)Convertible notes interest expense, net of tax





Net loss attributable to Huntsman Corporation and assumed conversion

$
(172
)
$
(290
)Shares (denominator):Weighted average shares outstanding


234.8


233.7Dilutive securities:Stock-based awards





Convertible notes conversion





Total dilutive shares outstanding assuming conversion


234.8


233.7


Additional
stock-based awards of 16.9 million and 10.8 million weighted average equivalent shares of stock were outstanding during the three months ended March 31,
2010 and 2009, respectively. In addition, the Convertible Notes would have had a weighted average effect of 3.6 million shares and 31.8 million shares of common stock for the three
months ended March 31, 2010 and 2009, respectively, and interest expense, net of tax, of $1 million and $5 million would have been included as an adjustment to the numerator of
the diluted loss per share calculation for the three months ended March 31, 2010 and 2009, respectively. However, these stock-based awards and the potential effect of assumed conversion of the
Convertible Notes were not included in the computation of diluted earnings per share because the effect would be anti-dilutive.

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21. OPERATING SEGMENT INFORMATION

We derive our revenues, earnings and cash flows from the manufacture and sale of a wide variety of differentiated and commodity chemical products. We have reported our operations through
five segments: Polyurethanes, Performance Products, Advanced Materials, Textile Effects and Pigments. We have organized our business and derived our operating segments around differences in product
lines.

During
the first quarter of 2010, we began reporting our LIFO inventory valuation reserves as part of Corporate and other; these reserves were previously reported in our Performance
Products segment. Also during the first quarter of 2010, we began reporting the EBITDA of our former Australian styrenics business in discontinued operations, which was previously included in
Corporate and other. All segment information for prior periods has been restated to reflect this change.

The
major products of each reportable operating segment are as follows:

Segment

ProductsPolyurethanes

MDI, PO, polyols, PG, TPU, aniline and MTBEPerformance Products

amines, surfactants, LAB, maleic anhydride, other performance chemicals, EG, olefins and technology licensesAdvanced Materials

epoxy resin compounds and formulations; cross-linking, matting and curing agents; epoxy, acrylic and polyurethane- based adhesives and tooling resin formulationsTextile Effects

textile chemicals and dyesPigments

titanium dioxide


59

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Table of Contents

HUNTSMAN CORPORATION AND SUBSIDIARIES

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

21. OPERATING SEGMENT INFORMATION (Continued)

Sales
between segments are generally recognized at external market prices and are eliminated in consolidation. We use EBITDA to measure the financial performance of our global business
units and for reporting the results of our operating segments. This measure includes all operating items relating to the businesses. The EBITDA of operating segments excludes items that principally
apply to our Company as a whole. The revenues and EBITDA for each of our reportable operating segments are as follows (dollars in millions):

Three months ended
March 31,2010

2009Net Sales:Polyurethanes

$
767

$
600Performance Products


616


500Advanced Materials


291


257Textile Effects


195


152Pigments


269


196Eliminations


(44
)

(25
)Total

$
2,094

$
1,680Huntsman Corporation:Segment EBITDA(1):Polyurethanes

$
52

$
26Performance Products


60


63Advanced Materials


33


10Textile Effects





(11
)Pigments


28


(29
)Corporate and other(2)


(207
)

(26
)Subtotal


(34
)

33Discontinued Operations(3)


(21
)

(3
)Total


(55
)

30Interest expense, net


(61
)

(55
)Income tax benefit (expense)continuing operations


34


(138
)Income tax benefit (expense)discontinued operations


8


(1
)Depreciation and amortization


(98
)

(126
)Net loss attributable toHuntsman Corporation

$
(172
)
$
(290
)


60

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Table of Contents

HUNTSMAN CORPORATION AND SUBSIDIARIES

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

21. OPERATING SEGMENT INFORMATION (Continued)



Three months ended
March 31,2010

2009Huntsman International:Segment EBITDA(1):Polyurethanes

$
52

$
26Performance Products


60


63Advanced Materials


33


10Textile Effects





(11
)Pigments


28


(29
)Corporate and other(2)


(50
)

(15
)Subtotal


123


44Discontinued Operations(3)


(21
)

(3
)Total


102


41Interest expense, net


(66
)

(55
)Income tax benefit (expense)continuing operations


22


(146
)Income tax benefit (expense)discontinued operations


8


(1
)Depreciation and amortization


(92
)

(120
)Net loss attributable toHuntsman International LLC

$
(26
)
$
(281
)


(1)Segment
EBITDA is defined as net (loss) income attributable to Huntsman Corporation or Huntsman International LLC, as appropriate, before interest,
income tax, depreciation and amortization, and certain Corporate and other items.(2)Corporate
and other includes unallocated corporate overhead, loss on early extinguishment of debt, loss on A/R Programs (in 2009), foreign exchange gains or
losses, step purchase accounting impacts, LIFO inventory valuation reserve adjustments and other non-operating income (expense).(3)The
operating results of our former polymers, base chemicals and Australian styrenics businesses are classified as discontinued operations, and,
accordingly, the revenues of these businesses are excluded for all periods presented. The EBITDA of our former polymers, base chemicals and Australian styrenics businesses are included in discontinued
operations for all periods presented. For more information, see "Note 19. Discontinued Operations."


61

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Table of Contents

HUNTSMAN CORPORATION AND SUBSIDIARIES

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

22. CONDENSED CONSOLIDATING FINANCIAL INFORMATION OF HUNTSMAN INTERNATIONAL LLC (UNAUDITED)

The following condensed consolidating financial information (unaudited) of Huntsman International presents, in separate columns, financial information for the following: Huntsman
International (on a parent only basis), with its investment in subsidiaries recorded under the equity method; the Subsidiary Guarantors of Huntsman International's debt on a combined, and where
appropriate, consolidated basis; and non-guarantor subsidiaries on a combined, and where appropriate, consolidated basis. Additional columns present eliminating adjustments and
consolidated totals as of
March 31, 2010 and December 31, 2009 and for the three months ended March 31, 2010 and 2009. There are no contractual restrictions limiting transfers of cash from the Subsidiary
Guarantors to Huntsman International. Each Subsidiary Guarantor is 100% owned by Huntsman International and has fully and unconditionally guaranteed Huntsman International's debt on a joint and
several basis.

62

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Table of Contents

HUNTSMAN CORPORATION AND SUBSIDIARIES

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

22. CONDENSED CONSOLIDATING FINANCIAL INFORMATION OF HUNTSMAN INTERNATIONAL LLC (UNAUDITED) (Continued)

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES  CONDENSED CONSOLIDATING BALANCE SHEETS (UNAUDITED)  AS OF MARCH 31, 2010  (Dollars in Millions)

Parent
Company

Guarantors

Non-guarantors

Eliminations

Consolidated
Huntsman
International
LLCASSETSCurrent assets:Cash and cash equivalents

$
352

$
11

$
188

$


$
551Restricted cash








8





8Accounts and notes receivable, net


21


110


1,240





1,371Accounts receivable from affiliates


1,241


2,216


84


(3,465
)

76Inventories


87


205


969


(13
)

1,248Prepaid expenses


9


14


20


(9
)

34Deferred income taxes


10





29


(5
)

34Other current assets


131


1


103


(113
)

122Total current assets


1,851


2,557


2,641


(3,605
)

3,444Property, plant and equipment, net


429


900


1,889


2


3,220Investment in affiliates


4,268


1,144


108


(5,268
)

252Intangible assets, net


77


3


43





123Goodwill


(18
)

84


32


(4
)

94Deferred income taxes


246





125


(196
)

175Notes receivable from affiliates


65


928


7


(993
)

7Other noncurrent assets


57


190


187





434Total assets

$
6,975

$
5,806

$
5,032

$
(10,064
)
$
7,749LIABILITIES AND EQUITYCurrent liabilities:Accounts payable

$
27

$
255

$
591

$


$
873Accounts payable to affiliates


1,820


780


887


(3,465
)

22Accrued liabilities


92


172


419


(121
)

562Deferred income tax





7


2


(7
)

2Note payable to affiliate


100











100Current portion of debt


164





152





316Total current liabilities


2,203


1,214


2,051


(3,593
)

1,875Long-term debt


3,492


12


355





3,859Notes payable to affiliates


325





998


(993
)

330Deferred income taxes


11


85


68


(82
)

82Other noncurrent liabilities


177


135


504


(1
)

815Total liabilities


6,208


1,446


3,976


(4,669
)

6,961EquityHuntsman International LLC members' equity:Members' equity


3,031


4,422


2,032


(6,454
)

3,031Subsidiary preferred stock








1


(1
)

Accumulated deficit


(1,873
)

(93
)

(643
)

736


(1,873
)Accumulated other comprehensive (loss) income


(391
)

31


(349
)

318


(391
)Total Huntsman International LLC members' equity


767


4,360


1,041


(5,401
)

767Noncontrolling interests in subsidiaries








15


6


21Total equity


767


4,360


1,056


(5,395
)

788Total liabilities and equity

$
6,975

$
5,806

$
5,032

$
(10,064
)
$
7,749


63

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Table of Contents

HUNTSMAN CORPORATION AND SUBSIDIARIES

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

22. CONDENSED CONSOLIDATING FINANCIAL INFORMATION OF HUNTSMAN INTERNATIONAL LLC (UNAUDITED) (Continued)

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES  CONDENSED CONSOLIDATING BALANCE SHEETS (UNAUDITED)  AS OF DECEMBER 31, 2009  (Dollars in Millions)

Parent
Company

Guarantors

Non-guarantors

Eliminations

Consolidated
Huntsman
International
LLCASSETSCurrent assets:Cash and cash equivalents

$
688

$
24

$
207

$


$
919Restricted cash








5





5Accounts and notes receivable, net


17


85


916





1,018Accounts receivable from affiliates


1,040


2,178


83


(3,269
)

32Inventories


78


205


908


(7
)

1,184Prepaid expenses


11


27


21


(17
)

42Deferred income taxes


10





28


(5
)

33Other current assets


120


1


100


(112
)

109Total current assets


1,964


2,520


2,268


(3,410
)

3,342Property, plant and equipment, net


439


913


2,003


2


3,357Investment in affiliates


4,314


1,139


106


(5,309
)

250Intangible assets, net


82


3


44





129Goodwill


(19
)

84


33


(4
)

94Deferred income taxes


236





118


(196
)

158Notes receivable from affiliates


63


988


8


(1,051
)

8Other noncurrent assets


40


129


186





355Total assets

$
7,119

$
5,776

$
4,766

$
(9,968
)
$
7,693LIABILITIES AND EQUITYCurrent liabilities:Accounts payable

$
36

$
177

$
502

$


$
715Accounts payable to affiliates


1,702


744


863


(3,268
)

41Accrued liabilities


86


210


447


(130
)

613Deferred income tax





7


2


(7
)

2Note payable to affiliate


25











25Current portion of debt


39





156





195Total current liabilities


1,888


1,138


1,970


(3,405
)

1,591Long-term debt


3,675


12


94





3,781Notes payable to affiliates


525





1,056


(1,051
)

530Deferred income taxes


11


82


68


(82
)

79Other noncurrent liabilities


194


144


527





865Total liabilities


6,293


1,376


3,715


(4,538
)

6,846EquityHuntsman International LLC members' equity:Members' equity


3,021


4,464


1,986


(6,450
)

3,021Subsidiary preferred stock








1


(1
)

Accumulated deficit


(1,847
)

(125
)

(636
)

761


(1,847
)Accumulated other comprehensive(loss) income


(348
)

61


(315
)

254


(348
)Total Huntsman International LLC members' equity


826


4,400


1,036


(5,436
)

826Noncontrolling interests in subsidiaries








15


6


21Total equity


826


4,400


1,051


(5,430
)

847Total liabilities and equity

$
7,119

$
5,776

$
4,766

$
(9,968
)
$
7,693


64

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Table of Contents

HUNTSMAN CORPORATION AND SUBSIDIARIES

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

22. CONDENSED CONSOLIDATING FINANCIAL INFORMATION OF HUNTSMAN INTERNATIONAL LLC (UNAUDITED) (Continued)

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES        CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (UNAUDITED)        THREE MONTHS ENDED MARCH 31, 2010        (Dollars in Millions)

Parent
Company

Guarantors

Non-guarantors

Eliminations

Consolidated
Huntsman
International
LLCRevenues:Trade sales, services and fees, net

$
183

$
507

$
1,359

$


$
2,049Related party sales


58


108


228


(349
)

45Total revenues


241


615


1,587


(349
)

2,094Cost of goods sold


198


572


1,383


(345
)

1,808Gross profit


43


43


204


(4
)

286Selling, general and administrative


36


20


159





215Research and development


12


7


17





36Other operating (income) expense


(17
)

14


(4
)




(7
)Restructuring, impairment and plant closing costs


2





1





3Operating income


10


2


31


(4
)

39Interest (expense) income, net


(56
)

9


(19
)




(66
)Equity in (loss) income of investment in affiliates and subsidiaries


(2
)

(6
)




9


1Loss on early extinguishment of debt


(9
)










(9
)(Loss) income from continuing operations before income taxes


(57
)

5


12


5


(35
)Income tax benefit (expense)


24


(2
)







22(Loss) income from continuing operations


(33
)

3


12


5


(13
)Income (loss) from discontinued operations, net of tax


7





(20
)




(13
)Net (loss) income


(26
)

3


(8
)

5


(26
)Net loss attributable to noncontrolling interests














Net (loss) income attributable to Huntsman International LLC

$
(26
)
$
3

$
(8
)
$
5

$
(26
)


65

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Table of Contents

HUNTSMAN CORPORATION AND SUBSIDIARIES

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

22. CONDENSED CONSOLIDATING FINANCIAL INFORMATION OF HUNTSMAN INTERNATIONAL LLC (UNAUDITED) (Continued)

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES        CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (UNAUDITED)        THREE MONTHS ENDED MARCH 31, 2009        (Dollars in
Millions)

Parent
Company

Guarantors

Non-guarantors

Eliminations

Consolidated
Huntsman
International
LLCRevenues:Trade sales, services and fees, net

$
136

$
489

$
1,048

$


$
1,673Related party sales


33


74


125


(225
)

7Total revenues


169


563


1,173


(225
)

1,680Cost of goods sold


158


457


1,136


(225
)

1,526Gross profit


11


106


37





154Selling, general and administrative


32


31


126





189Research and development


12


7


17





36Other operating (income) expense


(22
)

12


2





(8
)Restructuring, impairment and plant closing costs


1





13





14Operating (loss) income


(12
)

56


(121
)




(77
)Interest (expense) income, net


(47
)

11


(19
)




(55
)Loss on accounts receivable securitization program


(2
)

(1
)

(1
)




(4
)Equity in (loss) income of investmentin affiliates and subsidiaries


(244
)

(248
)

3


490


1Loss from continuing operations before income taxes


(305
)

(182
)

(138
)

490


(135
)Income tax benefit (expense)


24


(23
)

(147
)




(146
)Loss from continuing operations


(281
)

(205
)

(285
)

490


(281
)Income (loss) from discontinued operations, net of tax





2


(6
)




(4
)Net loss


(281
)

(203
)

(291
)

490


(285
)Net loss attributable to noncontrolling interests








4





4Net loss attributable to Huntsman International LLC

$
(281
)
$
(203
)
$
(287
)
$
490

$
(281
)


66

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Table of Contents

HUNTSMAN CORPORATION AND SUBSIDIARIES

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

22. CONDENSED CONSOLIDATING FINANCIAL INFORMATION OF HUNTSMAN INTERNATIONAL LLC (UNAUDITED) (Continued)

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES        CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (UNAUDITED)        THREE MONTHS ENDED MARCH 31, 2010        (Dollars in
Millions)

Parent
Company

Guarantors

Non-guarantors

Eliminations

Consolidated
Huntsman
International
LLCNet cash (used in) provided by operating activities

$
(342
)
$
4

$
(37
)
$
(1
)
$
(376
)Investing activities:Capital expenditures


(2
)

(14
)

(21
)




(37
)Investment in unconsolidated affiliates, net of cash received





1


(4
)




(3
)Investment in affiliate


(27
)

5





22


Change in restricted cash








(3
)




(3
)Increase in receivable from affiliate


(50
)










(50
)Net cash used in investing activities


(79
)

(8
)

(28
)

22


(93
)Financing activities:Net borrowings under revolving loan facilities








3





3Revolving loan facility from A/R Programs


254











254Net repayments on overdraft facilities








(1
)




(1
)Repayments of short-term debt








(44
)




(44
)Proceeds from short-term debt








55





55Repayments of long-term debt


(355
)




(20
)




(375
)Proceeds from long-term debt


350





25





375Repayment of note payable to affiliate


(125
)










(125
)Intercompany repayments








(5
)

5


Repayments of notes payable


(18
)




(3
)




(21
)Debt issuance costs paid


(16
)










(16
)Call premiums paid related to early extinguishment of debt


(7
)










(7
)Contribution from parent, net





(9
)

36


(27
)

Excess tax benefit related to stock-based compensation


4











4Other, net


(2
)







1


(1
)Net cash provided by (used in) financing activities


85


(9
)

46


(21
)

101Effect of exchange rate changes on cash














Decrease in cash and cash equivalents


(336
)

(13
)

(19
)




(368
)Cash and cash equivalents at beginning of period


688


24


207





919Cash and cash equivalents at end of period

$
352

$
11

$
188

$


$
551


67

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Table of Contents

HUNTSMAN CORPORATION AND SUBSIDIARIES

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

22. CONDENSED CONSOLIDATING FINANCIAL INFORMATION OF HUNTSMAN INTERNATIONAL LLC (UNAUDITED) (Continued)

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES        CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (UNAUDITED)        THREE MONTHS ENDED MARCH 31, 2009        (Dollars in
Millions)

Parent
Company

Guarantors

Non-guarantors

Eliminations

Consolidated
Huntsman
International
LLCNet cash (used in) provided by operating activities

$
(72
)
$
54

$
15

$


$
(3
)Investing activities:Capital expenditures


(2
)

(27
)

(32
)




(61
)Proceeds from sale of businesses/assets, net of adjustments





(1
)







(1
)Investment in affiliate


(32
)

(27
)




59


Decrease in receivable from affiliate


7











7Other, net





(2
)

2





Net cash used in investing activities


(27
)

(57
)

(30
)

59


(55
)Financing activities:Net repayments under revolving loan facilities








(8
)




(8
)Net repayments on overdraft facilities








(1
)




(1
)Repayments of short-term debt








(73
)




(73
)Proceeds from short-term debt








47





47Repayments of long-term debt


(16
)




(1
)




(17
)Proceeds from note payable to affiliate


529











529Intercompany borrowings








27


(27
)

Repayments of notes payable


(11
)




(11
)




(22
)Borrowings on notes payable








11





11Contribution from parent, net





3


29


(32
)

Dividends paid to parent


(23
)










(23
)Other, net








1





1Net cash provided by financing activities


479


3


21


(59
)

444Effect of exchange rate changes on cash








(3
)




(3
)Increase in cash and cash equivalents


380





3





383Cash and cash equivalents at beginning of period





3


84





87Cash and cash equivalents at end of period

$
380

$
3

$
87

$


$
470


68

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Table of Contents

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

FORWARD-LOOKING STATEMENTS

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," "should," "anticipates," or "intends" 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.

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.
Any forward-looking statements should be considered in light of the risks referenced in "Part I. Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year
ended December 31, 2009.

OVERVIEW

Business

We are a global manufacturer of differentiated organic chemical products and of inorganic chemical products. Our products comprise a
broad range of chemicals and formulations, which we market globally to a diversified group of consumer and industrial customers. Our products are used in a wide range of applications, including those
in the adhesives, aerospace, automotive, construction products, durable and non-durable consumer products, electronics, medical, packaging, paints and coatings, power generation, refining,
synthetic fiber, textile chemicals and dye industries. We are a leading global producer in many of our key product lines, including MDI, amines, surfactants, maleic anhydride, epoxy-based polymer
formulations, textile chemicals, dyes and titanium dioxide. We had revenues for the three months ended March 31, 2010 and 2009 of $2,094 million and $1,680 million, respectively.

We
operate in five segments: Polyurethanes, Performance Products, Advanced Materials, Textile Effects and Pigments. Our Polyurethanes, Performance Products, Advanced Materials and
Textile Effects segments produce differentiated organic chemical products and our Pigments segment produces
inorganic chemical products. We ceased operation of our Australian styrenics operations during the first quarter of 2010 and report the results of that business as discontinued operations. See
"Note 19. Discontinued Operations" to our condensed consolidated financial statements (unaudited).

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RECENT DEVELOPMENTS

Repurchase of Convertible Notes

On January 11, 2010, we repurchased the entire $250 million principal amount of our outstanding Convertible Notes for
approximately $382 million from Apollo and its affiliates. The Convertible Notes were issued to Apollo in December 2008. The Convertible Notes, which would have matured on December 23,
2018, bore interest at the rate of 7% per year and were convertible into approximately 31.8 million shares of our common stock at any time by the holders. As a result of the repurchase of the
Convertible Notes, we recorded a loss on early extinguishment of debt in the first quarter of 2010 of $146 million.

Senior Subordinated Note Offering

On March 17, 2010 we completed a $350 million offering of 8.625% senior subordinated notes due 2020. We used the net
proceeds to redeem approximately €184 million (approximately $247 million) senior subordinated notes due 2013 and approximately €59 million
(approximately $79 million) senior subordinated notes due 2015. In connection with the redemption of these notes, we recorded a loss on early extinguishment of debt in the first quarter of 2010
of $9 million. In connection with these redemptions and the issuance of the 2020 Subordinated Notes, Huntsman International entered into $350 million notional amount of five-year
euro/dollar cross-currency interest rate contracts. In accordance with these swap transactions, the interest payment on the 2020 Subordinated Notes will be denominated in euros at an effective rate of
approximately 8.41% for the next five years.

Amendment of Senior Credit Facilities

On March 9, 2010, Huntsman International entered into the Amendment with JPMorgan Chase Bank, N.A. and the other financial
institutions party thereto, which amended certain terms of Huntsman International's existing Senior Credit Facilities. Among other things, the Amendment (i) replaces Deutsche Bank AG New York
Branch as administrative agent, collateral agent and U.K. security trustee with JPMorgan Chase Bank, N.A. as administrative agent and collateral agent and JPMorgan Chase Bank, N.A. or an affiliate
thereof as U.K. security trustee, (ii) extends the stated maturity of the revolving facility to March 9, 2014, and (iii) limits the aggregate amount of the revolving commitments
allowable under the revolving facility to an amount up to $300 million, including $225 million currently obtained from the lenders. The Amendment increases the applicable LIBOR margin
range on the revolving loans by 1.75% to 3.50% per annum and increased the unused commitment fee percentage to a range of 0.50% to 0.75%.

Accounting for our Accounts Receivable Securitization Program

On January 1, 2010, in connection with the adoption of ASU No. 2009-16, we have accounted for sales of
accounts receivable under our accounts receivable securitization programs as secured borrowings. See "Note 2. Recently Issued Accounting Pronouncements" and "Note 7.
DebtAccounts Receivable Securitization" to our condensed consolidated financial statements (unaudited) included elsewhere in this report.

OUTLOOK

Our positive demand momentum suggests that second quarter 2010 sales volumes should continue to improve. We are aggressively working to
increase our product prices to offset the increase we are seeing in raw materials.

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RESULTS OF OPERATIONS

For each of our Company and Huntsman International, the following tables set forth the unaudited condensed consolidated results of
operations (dollars in millions):

Huntsman Corporation

Three months ended
March 31,Percent
Change2010

2009Revenues

$
2,094

$
1,680


25
%Cost of goods sold


1,813


1,531


18
%Gross profit


281


149


89
%Operating expenses


256


222


15
%Restructuring, impairment and plant closing costs


3


14


(79
)%Operating income (loss)


22


(87
)

NMInterest expense, net


(61
)

(55
)

11
%Loss on accounts receivable securitization program





(4
)

NMEquity in income of investment in unconsolidated affiliates


1


1


Loss on early extinguishment of debt


(155
)




NMExpenses associated with the Terminated Merger and related litigation





(7
)

NMLoss from continuing operations before income taxes


(193
)

(152
)

27
%Income tax benefit (expense)


34


(138
)

NMLoss from continuing operations


(159
)

(290
)

(45
)%Loss from discontinued operations, net of tax


(13
)

(4
)

225
%Net loss


(172
)

(294
)

(41
)%Net loss attributable to noncontrolling interests





4


NMNet loss attributable to Huntsman Corporation


(172
)

(290
)

(41
)%Interest expense, net


61


55


11
%Income tax (benefit) expense from continuing operations


(34
)

138


NMIncome tax (benefit) expense from discontinued operations


(8
)

1


NMDepreciation and amortization


98


126


(22
)%EBITDA(1)

$
(55
)
$
30


NMNet cash used in operating activities

$
(408
)
$
(38
)

974
%Net cash used in investing activities


(43
)

(62
)

(31
)%Net cash used in financing activities


(184
)

(84
)

119
%


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Huntsman International

Three months ended
March 31,Percent
Change2010

2009Revenues

$
2,094

$
1,680


25
%Cost of goods sold


1,808


1,526


18
%Gross profit


286


154


86
%Operating expenses


244


217


12
%Restructuring, impairment and plant closing costs


3


14


(79
)%Operating income (loss)


39


(77
)

NMInterest expense, net


(66
)

(55
)

20
%Loss on accounts receivable securitization program





(4
)

NMEquity in income of investment in unconsolidated affiliates


1


1


Loss on early extinguishment of debt


(9
)




NMLoss from continuing operations before income taxes


(35
)

(135
)

(74
)%Income tax benefit (expense)


22


(146
)

NMLoss from continuing operations


(13
)

(281
)

(95
)%Loss from discontinued operations, net of tax


(13
)

(4
)

225
%Net loss


(26
)

(285
)

(91
)%Net loss attributable to noncontrolling interests





4


NMNet loss attributable to Huntsman International LLC


(26
)

(281
)

(91
)%Interest expense, net


66


55


20
%Income tax (benefit) expense from continuing operations


(22
)

146


NMIncome tax (benefit) expense from discontinued operations


(8
)

1


NMDepreciation and amortization


92


120


(23
)%EBITDA(1)

$
102

$
41


149
%Net cash used in operating activities

$
(376
)
$
(3
)

NMNet cash used in investing activities


(93
)

(55
)

69
%Net cash provided by financing activities


101


444


(77
)%


NMNot
Meaningful


72

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For
each of our Company and Huntsman International, the following tables set forth certain items of income (expense) included in EBITDA (dollars in millions):

Huntsman Corporation

Three months ended
March 31,2010

2009Foreign exchange gainsunallocated

$
1

$
2Loss on early extinguishment of debt


(155
)

Loss on accounts receivable securitization program





(4
)Amounts included in discontinued operations


(21
)

(3
)Acquisition expenses





(1
)Expenses associated with the Terminated Merger and related litigation





(7
)Restructuring, impairment and plant closing credits (costs):Polyurethanes





(1
)Performance Products





Advanced Materials


2


Textile Effects





1Pigments


(1
)

(13
)Corporate and other


(4
)

(1
)Total restructuring, impairment and plant closing costs


(3
)

(14
)Total

$
(178
)
$
(27
)


Huntsman International

Three months ended
March 31,2010

2009Foreign exchange gainsunallocated

$
1

$
2Loss on early extinguishment of debt


(9
)

Loss on accounts receivable securitization program





(4
)Amounts included in discontinued operations


(21
)

(3
)Acquisition expenses





(1
)Restructuring, impairment and plant closing credits (costs):Polyurethanes





(1
)Performance Products





Advanced Materials


2


Textile Effects





1Pigments


(1
)

(13
)Corporate and other


(4
)

(1
)Total restructuring, impairment and plant closing costs


(3
)

(14
)Total

$
(32
)
$
(20
)


---

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Huntsman Corporation

March 31,Percent
Change2010

2009EBITDA

$
(55
)
$
30


NMDepreciation and amortization


(98
)

(126
)

(22
)%Interest expense, net


(61
)

(55
)

11
%Income tax benefit (expense) from continuing operations


34


(138
)

NMIncome tax benefit (expense) from discontinued operations


8


(1
)

NMNet loss attributable to Huntsman Corporation


(172
)

(290
)

(41
)%Net loss attributable to noncontrolling interests





(4
)

NMNet loss


(172
)

(294
)

(41
)%Equity in income of investment in unconsolidated affiliates


(1
)

(1
)

Depreciation and amortization


98


126


(22
)%Loss (gain) on disposal of businesses/assets, net


1


(1
)

NMNoncash restructuring, impairment and plant closing costs





4


NMLoss on early extinguishment of debt


155





NMNoncash interest expense


10


2


400
%Deferred income taxes


(20
)

131


NMNet unrealized (gain) loss on foreign currency transactions


(3
)

2


NMOther, net


8


8


Changes in operating assets and liabilities


(484
)

(15
)

NMNet cash used in operating activities

$
(408
)
$
(38
)

974
%


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Huntsman International

March 31,Percent
Change2010

2009EBITDA

$
102

$
41


149
%Depreciation and amortization


(92
)

(120
)

(23
)%Interest expense, net


(66
)

(55
)

20
%Income tax benefit (expense) from continuing operations


22


(146
)

NMIncome tax benefit (expense) from discontinued operations


8


(1
)

NMNet loss attributable to Huntsman International LLC


(26
)

(281
)

(91
)%Net loss attributable to noncontrolling interests





(4
)

NMNet loss


(26
)

(285
)

(91
)%Equity in income of investment in unconsolidated affiliates


(1
)

(1
)

Depreciation and amortization


92


120


(23
)%Loss (gain) on disposal of businesses/assets, net


1


(1
)

NMNoncash restructuring, impairment and plant closing costs





4


NMLoss on early extinguishment of debt


9





NMNoncash interest expense


14


5


180
%Deferred income taxes


(18
)

143


NMNet unrealized (gain) loss on foreign currency transactions


(3
)

2


NMOther, net


9


5


80
%Changes in operating assets and liabilities


(453
)

5


NMNet cash used in operating activities

$
(376
)
$
(3
)

NM


NMNot
Meaningful


Three Months Ended March 31, 2010 Compared with Three Months Ended March 31, 2009

For the three months ended March 31, 2010, the net loss attributable to Huntsman Corporation was $172 million on revenues
of $2,094 million, compared with net loss attributable to Huntsman Corporation of $290 million on revenues of $1,680 million for the same period of 2009. For the three months
ended March 31, 2010, the net loss attributable to Huntsman
International LLC was $26 million on revenues of $2,094 million, compared with net loss attributable to Huntsman International LLC of $281 million on revenues of
$1,680 million for the same period of 2009. The decrease of $118 million in net loss attributable to Huntsman Corporation and the decrease of $255 million in net loss attributable
to Huntsman International LLC was the result of the following items:



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Segment Analysis

During the first quarter of 2010, we began reporting our LIFO inventory valuation reserves as part of Corporate and other; these
reserves were previously reported in our Performance Products segment. All segment information for prior periods has been restated to reflect this change.

Three Months Ended
March 31,Percent
Change2010

2009RevenuesPolyurethanes

$
767

$
600


28
%Performance Products


616


500


23
%Advanced Materials


291


257


13
%Textile Effects


195


152


28
%Pigments


269


196


37
%Eliminations


(44
)

(25
)

76
%Total

$
2,094

$
1,680


25
%Huntsman CorporationSegment EBITDAPolyurethanes

$
52

$
26


100
%Performance Products


60


63


(5
)%Advanced Materials


33


10


230
%Textile Effects





(11
)

NMPigments


28


(29
)

NMCorporate and other


(207
)

(26
)

696
%Subtotal


(34
)

33


NMDiscontinued Operations


(21
)

(3
)

600
%Total

$
(55
)
$
30


NMHuntsman InternationalSegment EBITDAPolyurethanes

$
52

$
26


100
%Performance Products


60


63


(5
)%Advanced Materials


33


10


230
%Textile Effects





(11
)

NMPigments


28


(29
)

NMCorporate and other


(50
)

(15
)

233
%Subtotal


123


44


180
%Discontinued Operations


(21
)

(3
)

600
%Total

$
102

$
41


149
%


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Average
Selling
Price(1)

Sales
Volumes(1)Current Year-Over-Prior Year Increase (Decrease)Polyurethanes


37
%

(11
)%Performance Products


4
%

21
%Advanced Materials


(1
)%

16
%Textile Effects


8
%

18
%Pigments


4
%

33
%




Average
Selling
Price(1)

Sales
Volumes(1)First Quarter 2010 vs. Fourth Quarter 2009 Increase (Decrease)Polyurethanes


13
%

(22
)%Performance Products


4
%

7
%Advanced Materials


(2
)%

12
%Textile Effects


3
%

1
%Pigments


(1
)%

11
%


(1)Excludes
revenues and sales volumes from tolling arrangements and byproducts. NMNot
meaningful


Polyurethanes

The increase in revenues in our Polyurethanes segment for the three months ended March 31, 2010 compared to the same period in
2009 was primarily due to higher MDI sales volumes and higher average selling prices for MTBE. MDI sales volumes were higher with demand recovery across all major markets as a result of the worldwide
economic recovery while average selling prices for MTBE increased in response to higher raw material costs and tight supply due in part to a 60-day planned maintenance outage at our Port
Neches, Texas PO/MTBE facility. PO/MTBE sales volumes decreased due to the planned outage. Average MDI selling prices decreased primarily due to competitive pressures and lower raw material costs. The
increase in EBITDA was primarily due to higher MDI sales volumes partially offset by the approximate $40 million impact of the planned maintenance outage at our Port Neches, Texas PO/MTBE
facility.

Performance Products

The increase in revenues in our Performance Products segment for the three months ended March 31, 2010 compared to the same
period in 2009 was due to higher sales volumes and higher average selling prices. Sales volumes increased primarily due to higher demand across nearly all product groups and additional sales of a
portion of our ethylene glycol production no longer tolled. Average selling prices increased across most product groups in response to the strength of major European currencies and the Australian
dollar against the U.S. dollar and higher raw material costs. The decrease in EBITDA was primarily due to mechanical shut downs at our Port Neches, Texas ethylene and ethylene oxide units which
resulted in higher costs of approximately $11 million.

Advanced Materials

The increase in revenues in our Advanced Materials segment for the three months ended March 31, 2010 compared to the same period
in 2009 was due to higher sales volumes partially offset by lower average selling prices. Sales volumes increased primarily due to the worldwide economic recovery. Average selling prices decreased in
our specialty components business primarily as a result of

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changes
in our product mix and competitive pressure in the wind generation and coating systems markets. Average selling prices decreased in our base resins business primarily due to lower raw material
costs. There was no change in average selling prices within our formulation systems business. The increase in EBITDA was primarily due to higher sales volumes across our businesses, higher
contribution margins in our core formulations systems and specialty components businesses and lower fixed costs.

Textile Effects

The increase in revenues in our Textile Effects segment for the three months ended March 31, 2010 compared to the same period in
2009 was due to higher sales volumes and higher average selling prices. Sales volumes increased across all business lines and in all regions primarily due to the worldwide economic recovery. Average
selling prices increased primarily due to the strength of the euro, Indian rupee and Brazilian real against the U.S. dollar as well as favorable changes in product mix. The increase in EBITDA was
primarily due to higher sales volumes and higher contribution margins, partially offset by higher fixed costs in part due to our second quarter 2009 acquisition of Baroda.

Pigments

The increase in revenues in our Pigments segment for three months ended March 31, 2010 compared to the same period in 2009 was
due to higher sales volumes and higher average selling prices. Sales volumes increased primarily due to demand recovery in all regions as a result of the worldwide economic recovery. Average selling
prices increased primarily as a result of the strength of major European currencies against the U.S. dollar and higher local currency selling prices in Asia, Africa, Latin America and Middle East
regions and higher selling prices in Europe. The
increase in EBITDA in our Pigments segment was primarily due to higher sales volumes, lower raw material and energy costs and lower restructuring, impairment and plant closing costs. During the three
months ended March 31, 2010 and 2009, our Pigments segment recorded restructuring, impairment and plant closing charges of $1 million and $13 million, respectively. For more
information concerning restructuring activities, see "Note 6. Restructuring, Impairment and Plant Closing Costs" to our condensed consolidated financial statements (unaudited) included
elsewhere in this report.

Corporate and otherHuntsman Corporation

Corporate and other includes unallocated corporate overhead, unallocated foreign exchange gains and losses, LIFO inventory valuation
reserve adjustments, loss on early extinguishment of debt, income (expenses) associated with the Terminated Merger and related litigation, net income (loss) attributable to noncontrolling interests,
unallocated restructuring impairment and plant closing costs and non-operating income and expense. For the three months ended March 31, 2010, EBITDA from Corporate and other items
decreased by $181 million to a loss of $207 million from a loss of $26 million for the same period in 2009. The decrease in EBITDA from Corporate and other for the three months
ended March 31, 2010 resulted primarily from a $155 million loss on early extinguishment of debt and to an increase of LIFO inventory valuation expense of $30 million. For more
information regarding the loss on early extinguishment of debt, see "Note 1. GeneralRecent Developments" to our condensed consolidated financial statements (unaudited) included
elsewhere in this report.

Corporate and otherHuntsman International

Corporate and other includes unallocated corporate overhead, unallocated foreign exchange gains and losses, LIFO inventory valuation
reserve adjustments, loss on early extinguishment of debt, net income (loss) attributable to noncontrolling interests, unallocated restructuring impairment and plant closing costs, gain and loss on
the disposition of assets and non-operating income and expense. For the

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three
months ended March 31, 2010, EBITDA from Corporate and other items decreased by $35 million to a loss of $50 million from a loss of $15 million for the same period in
2009. The decrease in EBITDA from Corporate and other for the three months ended March 31, 2010 resulted primarily from an increase of LIFO inventory valuation expense of $30 million and
to $9 million from a loss on early extinguishment of debt for the partial redemption of senior subordinated notes. For more information regarding the loss on early extinguishment of debt
associated with the partial redemption of senior subordinates notes, see "Note 1. GeneralRecent Developments" to our condensed consolidated financial statements (unaudited)
included elsewhere in this report.

Discontinued Operations

The operating results of our former polymers, base chemicals and Australian styrenics businesses are classified as discontinued
operations, and, accordingly, the revenues of these businesses are excluded from revenues for all periods presented. The EBITDA of these former businesses are included in discontinued operations for
all periods presented. The income (loss) from discontinued operations represents the operating results, partial fire insurance settlement gains and related litigation costs, and restructuring,
impairment and plant closing costs and gain (loss) on disposal with respect to our former businesses. See "Note 19. Discontinued Operations" and "Note 16. Casualty Losses and Insurance
Recoveries" to our condensed consolidated financial statements (unaudited) included elsewhere in this report.

LIQUIDITY AND CAPITAL RESOURCES

The following is a discussion of our liquidity and capital resources and does not include separate information with respect to Huntsman
International in accordance with General Instructions H(1)(a) and (b) of Form 10-Q.

Cash

Net cash used in operating activities for the three months ended March 31, 2010 and 2009 was $408 million and
$38 million, respectively. The increase in cash used in operations was primarily attributable to a $469 million unfavorable variance in operating assets and liabilities for the three
months ended March 31, 2010 as compared with the same period in 2009, offset in part by an increase in operating income as described in "Results of Operations" above. Upon the
adoption of new accounting guidance on January 1, 2010, sales of accounts receivable under our A/R Programs no longer meet the criteria for derecognition and off-balance sheet treatment.
Accordingly, the amounts outstanding under our A/R Programs are accounted for as secured borrowings and are now on balance sheet. As a result of the adoption of this new guidance, accounts receivable
increased by $254 million and a corresponding increase in cash used in operating activities was reflected in the statement of cash flows for the three months ended March 31, 2010.

Net
cash used in investing activities for the three months ended March 31, 2010 and 2009 was $43 million and $62 million, respectively. During the three months ended
March 31, 2010 and 2009, we
paid $37 million and $61 million, respectively, for capital expenditures. This reduction in capital expenditures was largely attributable to higher 2009 spending on various projects,
including the maleic anhydride and MDI expansion projects at our Geismar, Louisiana site.

Net
cash used in financing activities for the three months ended March 31, 2010 was $184 million as compared with $84 million in the 2009 period. This increase in
net cash used in financing activities was primarily due to higher net repayments of debt in the 2010 period as compared to the 2009 period and the resulting call premiums paid in association with that
debt, partially offset by the revolving loan facility from the A/R Programs that no longer meet the criteria for derecognition upon adoption of new accounting guidance.

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Changes in Financial Condition

The following information summarizes our working capital position (dollars in millions):

March 31, 2010

December 31, 2009

(Decrease)
Increase

Percent
ChangeCash and cash equivalents

$
1,110

$
1,745

$
(635
)

(36
)%Restricted cash


8


5


3


60
%Accounts receivable, net


1,383


1,019


364


36
%Inventories


1,248


1,184


64


5
%Prepaid expenses


36


42


(6
)

(14
)%Deferred income taxes


36


36





Other current assets


132


109


23


21
%Total current assets


3,953


4,140


(187
)

(5
)%Accounts payable


898


755


143


19
%Accrued liabilities


564


623


(59
)

(9
)%Deferred income taxes


2


2





Current portion of debt


316


431


(115
)

(27
)%Total current liabilities


1,780


1,811


(31
)

(2
)%Working capital

$
2,173

$
2,329

$
(156
)

(7
)%


Our
working capital decreased by $156 million as a result of the net impact of the following significant changes:



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Direct and Subsidiary Debt

Huntsman Corporation's direct debt and guarantee obligations consist of the following: our guarantees of certain debt of HPS (our
Chinese MDI joint venture); our guarantee of certain debt of the Arabian Amines Company; certain indebtedness incurred from time to time to finance certain insurance premiums; and our guarantee of
certain obligations of Huntsman International in its capacity as a contributor and servicer guarantor under the U.S. A/R Program.

Substantially
all of our other debt has been incurred by our subsidiaries (primarily Huntsman International); such subsidiary debt is nonrecourse to us and we have no contractual
obligation to fund our subsidiaries' respective operations.

Transactions Affecting our Debt

Senior Credit Facilities

As of March 31, 2010, our Senior Credit Facilities consisted of (i) our $225 million Revolving Facility;
(ii) our $1,509 million Term Loan B; and (iii) our $495 million ($441 million carrying value) Term Loan C. As of March 31, 2010, we had no borrowings
outstanding under our Revolving Facility, and we had approximately $40 million (U.S. dollar equivalents) of letters of credit and bank guarantees issued and outstanding under our Revolving
Facility. All of our Senior Credit Facilities are obligations of Huntsman International.

On
March 9, 2010, Huntsman International entered into the Amendment with JPMorgan Chase Bank, N.A., as successor administrative agent and collateral agent, and the other financial
institutions party thereto, which amended certain terms of Huntsman International's existing Senior Credit Facilities. Among other things, the Amendment (i) replaces Deutsche Bank AG New York
Branch as administrative agent, collateral agent and U.K. security trustee with JPMorgan Chase Bank, N.A. as administrative agent and collateral agent and JPMorgan Chase Bank, N.A. or an affiliate
thereof as U.K. security trustee, (ii) extends the stated maturity of the Revolving Facility to March 9, 2014 and provides for optional extensions of such stated maturity date from time
to time with the consent of the lenders and subject to certain specified conditions and exceptions, (iii) limits the aggregate amount of the revolving commitments allowable under the Revolving
Facility to an amount up to $300 million, including $225 million currently committed by the lenders, (iv) terminated the 2009 Waiver and (v) reduces the maximum letter of
credit sublimit to $75 million (not including existing letters of credit issued by Deutsche Bank AG New York Branch) and the maximum swing line sublimit to $25 million.

Additionally,
the Amendment increases the applicable LIBOR margin range on the revolving loans by 1.75% to 3.50% per annum and increases the unused commitment fee percentage to a range
of 0.50% to 0.75%. The Amendment also amends the mandatory prepayment provisions of the Senior Credit Facilities to permit the reinvestment of certain insurance and condemnation proceeds.

Our
Senior Credit Facilities are subject to a single financial covenant, the Leverage Covenant, which applies only to the Revolving Facility and is tested at the Huntsman International
level. The Leverage Covenant is applicable only if borrowings, letters of credit or guarantees are outstanding under the Revolving Facility (cash collateralized letters of credit or guarantees are not
deemed outstanding). Following the termination of the 2009 Waiver, the Leverage Covenant is a net senior secured leverage ratio covenant, with a maximum ratio of senior secured debt to EBITDA (as
defined in the applicable agreement) of no more than 3.75 to 1.

At
the present time, borrowings under the Revolving Facility, Term Loan B and Term Loan C bear interest at LIBOR plus 3.50%, LIBOR plus 1.75% and LIBOR plus 2.25%, respectively. However,
the

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applicable
interest rate of Term Loan B is subject to a reduction to LIBOR plus 1.5% upon achieving certain secured leverage ratio thresholds. The Revolving Facility matures on March 9, 2014
(subject to optional extensions from time to time with the consent of the lenders and subject to certain specified conditions and exceptions), Term Loan B matures in 2014 and Term Loan C matures in
2016; provided, however, that the maturities of the Revolving Facility and the Dollar Term Loans will accelerate if we do not repay or refinance all but $100 million of Huntsman International's
outstanding debt securities on or before three months prior to the maturity dates of such debt securities.

During
the three months ended March 31, 2010, we paid the annual scheduled repayment of $16 million on our Term Loan B and $5 million on our Term Loan C. On
April 26, 2010, we prepaid $124 million of Term Loan B and $40 million of Term Loan C with proceeds from excess cash flow.

Accounts Receivable Securitization

Under our A/R Programs, we grant an undivided interest in certain of our trade receivables to bankruptcy-remote special purpose
entities. This undivided interest serves as security for the issuance of debt. The A/R Programs provide for financing through a conduit program (in both U.S. dollars and euros). Receivables
transferred under the A/R Programs qualified as sales through December 31, 2009. Upon adoption of new accounting guidance in 2010, sales of accounts receivable under our A/R Programs no longer
meet the criteria for derecognition. Accordingly, the amounts outstanding under our new A/R Programs are accounted for as secured borrowings as of January 1, 2010. See "Note 2. Summary
of Significant Accounting Policies" to our condensed consolidated financial statements (unaudited) included elsewhere in this report.

As
of March 31, 2010, the A/R Programs had $242 million in U.S. dollar equivalents in loans outstanding (consisting of $55 million and
€139 million (approximately $187 million)). As of March 31, 2010, $538 million of accounts receivable were pledged as collateral under the A/R Programs. As
of December 31, 2009, the A/R Programs had $254 million in U.S. dollar equivalents in loans outstanding (consisting of $55 million and €139 million
(approximately $199 million)).

COMPLIANCE WITH COVENANTS

Our management believes that we are in compliance with the covenants contained in the agreements governing our material debt
instruments, including our Senior Credit Facilities, our A/R Programs and the indentures governing our notes.

Our
Senior Credit Facilities are subject to a single financial covenant, the Leverage Covenant, which applies only to the Revolving Facility and is tested at the Huntsman International
level. The Leverage Covenant is applicable only if borrowings, letters of credit or guarantees are outstanding under the Revolving Facility (cash collateralized letters of credit or guarantees are not
deemed outstanding). Following the termination of the 2009 Waiver, the Leverage Covenant is a net senior secured leverage ratio covenant, with a maximum ratio of senior secured debt to EBITDA (as
defined in the applicable agreement) of no more than 3.75 to 1.

If
in the future Huntsman International is not able to meet the secured leverage ratio under the Leverage Covenant, unless Huntsman International obtains an amendment or waiver (as to
which we can provide no assurance), then, for so long as Huntsman International did not meet such secured leverage ratio, we would not have access to the liquidity otherwise available under our
Revolving Facility. If Huntsman International fails to meet this secured leverage ratio at a time when we have loans or letters of credit outstanding under the Revolving Facility, Huntsman
International would be in default under our Senior Credit Facilities, and, unless we obtain waiver or forbearance with respect to such default (as to which we can provide no assurance), we could be
required to pay off the balance of our Senior Credit Facilities in full and would not have further access to such facilities.

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Our
A/R Programs consist of two facilities: Our $250 million U.S. A/R Program and our €225 (approximately $302 million) EU A/R Program. The agreements
governing our U.S. A/R Program and the agreements governing our EU A/R Program also contain certain financial covenants. Any material failure to meet the applicable A/R Program's covenants in the
future could lead to an event of default under the A/R Programs, which could require us to cease our use of such facilities. Under these circumstances, unless any default was remedied or waived, we
would likely lose the ability to obtain financing with respect to our trade receivables. A material default under the A/R Programs would also constitute an event of default under our Senior Credit
Facilities, which could require us to pay off the balance of the Senior Credit Facilities in full and could result in the loss of our Senior Credit Facilities.

Short-Term and Long-Term Liquidity

We depend upon our cash, credit facilities, A/R Programs and other debt instruments to provide liquidity for our operations and working
capital needs. As of March 31, 2010, we had $1,468 million of combined cash and unused borrowing capacity, consisting of $1,118 million in cash and restricted cash,
$185 million in availability under our Revolving Facility, and $165 million in availability under our A/R Programs.

On
March 9, 2010, Huntsman International entered into the Amendment to its existing Senior Credit Facilities. Among other things the Amendment limits the aggregate amount of
revolving commitments allowable under the Revolving Facility to an amount up to $300 million, including $225 million currently committed by lenders. As of March 31, 2010 we had no
borrowings outstanding under our Revolving Facility, and we had approximately $40 million (U.S. dollar equivalents) of letters of credit and bank guarantees issued and outstanding under our
Revolving Facility

Our
liquidity can be significantly impacted by various factors. Concerning changes in working capital components for the year ended March 31, 2010, our accounts receivable
(excluding the $254 million effect of the on-balance sheet treatment of the A/R Programs) and inventory, net of accounts payable, increased by approximately $57 million, as reflected in
our condensed consolidated statement of cash flows (unaudited) included elsewhere in this report. We expect volatility in our working capital components to continue.

On
September 8, 2009, we announced the closure of our styrenics facility located at West Footscray, Australia. We ceased operation of the Australian styrenics operations during
the first quarter of 2010. During 2009, we recorded closure costs of approximately $63 million ($25 million primarily in severance, $8 million of contract termination costs and a
$30 million preliminary estimate of environmental remediation costs) and incurred other closure related costs of approximately $5 million in the first quarter of 2010. We can provide no
assurance that the eventual environmental remediation costs will not be materially different from our current estimate. The closure costs are expected to be funded as they are incurred over the next
several years, with severance costs to be paid primarily in 2010. During the three months ended March 31, 2010, we paid approximately $23 million of related restructuring costs and have
remaining accruals of approximately $45 million for restructuring and environmental remediation costs as of March 31, 2010 to be paid out at a later date. For a discussion of
restructuring, impairment and plant closing costs, see "Note 6. Restructuring, Impairment and Plant Closing Costs" to our condensed consolidated financial statements (unaudited) included
elsewhere in this report.

On
April 29, 2006, we experienced fire damage at our Port Arthur, Texas facility. This facility has been subsequently rebuilt and sold. In connection with this fire damage, we
have received partial insurance proceeds to date of $365 million. Binding arbitration to settle our claims began on November 2, 2009. The binding arbitration is ongoing. Prior to the
commencement of the arbitration proceedings, we had claimed an additional approximately $242 million plus interest as presently due and owing and unpaid under the Policy for losses caused by
the fire. The arbitration panel has made a

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preliminary
ruling disallowing our claim for interest. In addition, the arbitration panel has made certain preliminary rulings on some of the discrete issues that so far effectively reduce the overall
amount we have claimed by approximately $70 million. The arbitration panel has requested additional briefing on the remaining matters and has not indicated when a final ruling will be issued.
Collections on this insured loss, if any, will represent additional income from discontinued operations for us upon final settlement and will be used to repay secured debt in accordance with relevant
provisions of agreements governing our Senior Credit Facilities. See "Note 13. Commitments and ContingenciesPort Arthur Plant Fire Insurance Litigation" and "Note 16
Casualty Losses and Insurance RecoveriesPort Arthur, Texas Plant Fire" to our condensed consolidated financial statements (unaudited) included elsewhere in this report.

During
the three months ended March 31, 2010, we made contributions to our pension and postretirement benefit plans of $44 million. During the remainder of 2010, we expect
to contribute and additional amount of approximately $77 million to these plans.

As
of March 31, 2010, we currently have $316 million classified as current portion of debt which consists of certain scheduled term payments and various short term
facilities, including but not limited to, a Term loan prepayment made on April 26, 2010 of $164 million, HPS draft discounting facility in China with $70 million outstanding, our
Australian credit facilities with $38 million outstanding and certain other short term facilities and scheduled amortization payments totaling $44 million. Although we cannot provide
assurances, we intend to renew, repay or extend the majority of these short-term facilities in the current period. In addition, on January 11, 2010 we redeemed the entire
$250 million principal amount ($236 million carrying value) of our outstanding Convertible Notes for approximately $382 million. The carrying value of $236 million relating
to the Convertible Notes was classified as current as of December 31, 2009. See "Note 7. DebtConvertible Notes" to our condensed consolidated financial statements
(unaudited) included elsewhere in this report.

Due
to our ample liquidity in 2010, we believe that the potentially negative effects of the current credit environment have been limited with regard to our need to access the credit
markets. Huntsman International was able to successfully access the credit markets during the three months ended March 31, 2010 to raise $350 million of subordinated debt to redeem
existing subordinated debt and completed an amendment to our Senior Credit Facilities which, among other things, extended the maturity of our Revolving Facility by four years to March 2014. See
"Note 7 Debt" to our condensed consolidated financial statements (unaudited) included elsewhere in this report.

Capital Expenditures

During 2010, we expect to spend between $250 million and $275 million for capital expenditures. We expect to fund capital
expenditures through a combination of available cash and cash flows from operations.

Receivables Securitization

Receivables transferred under the A/R Programs qualified as sales through December 31, 2009. Upon adoption of new accounting
guidance in 2010, sales of accounts receivable under our A/R Programs no longer meet the criteria for derecognition. Accordingly, the amounts outstanding under our new A/R Programs are accounted for
as secured borrowings as of January 1, 2010. For a discussion of our A/R Programs, see "Note 7. DebtAccounts Receivable Securitization" to our condensed consolidated
financial statements (unaudited) included elsewhere in this report.

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Off-Balance Sheet Arrangements

Guarantees

Our unconsolidated joint venture, the Arabian Amines Company, obtained various loan commitments in the aggregate amount of
approximately $195 million (U.S. dollar equivalents) of which $177 million, including bridge loans, was drawn and outstanding as of March 31,
2010. We have provided certain guarantees of approximately $14 million for these commitments and our guarantees will terminate upon completion of the project and satisfaction of certain other
conditions. We have estimated that the fair value of such guarantees was nil as of the closing date of this transaction and, accordingly, no amounts have been recorded.

Restructuring, Impairment and Plant Closing Costs

For a discussion of restructuring, impairment and plant closing costs, see "Note 6. Restructuring, Impairment and Plant Closing
Costs" to our condensed consolidated financial statements (unaudited) included elsewhere in this report.

Legal Proceedings

For a discussion of legal proceedings, see "Note 13. Commitments and ContingenciesLegal Matters" to our condensed
consolidated financial statements (unaudited) included elsewhere in this report.

Environmental, Health and Safety Matters

For a discussion of environmental, health and safety matters, see "Note 14. Environmental, Health and Safety Matters" to our
condensed consolidated financial statements (unaudited) included elsewhere in this report.

Recently Issued Accounting Pronouncements

For a discussion of recently issued accounting pronouncements, see "Note 2. Recently Issued Accounting Pronouncements" to our
condensed consolidated financial statements (unaudited) included elsewhere in this report.

Critical Accounting Policies

Our critical accounting policies are presented in Management's Discussion and Analysis of Financial Condition and Results of Operations
included in our Annual Report on Form 10-K for the year ended December 31, 2009.

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

On January 19, 2010, we entered into a five-year interest rate contract to hedge the variability caused by monthly
changes in cash flow due to associated changes in LIBOR under our Senior Credit Facilities. The notional value of the contract is $50 million and was designated as a cash flow hedge. The
effective portion of the changes in the fair value of the swap was recorded in other comprehensive loss. We will pay a fixed 2.8% on the hedge and receive the one-month LIBOR rate. As of
March 31, 2010, the fair value of the hedge was less than $1 million and is recorded in other noncurrent liabilities.

In
conjunction with our 2020 Senior Subordinated Note issuance, we entered into cross-currency interest rate contracts with three counterparties. On March 17, 2010, we made
payments of $350 million to these counterparties and received €255 million from these counterparties, and on maturity, March 15, 2015, we are required to pay
€255 million to these counterparties and will receive

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$350 million
from these counterparties. On March 15 and September 15 of each year, we will receive U.S. dollar interest payments of approximately $15 million (equivalent to
an annual rate of 8.625%) and make interest payments of approximately €11 million (equivalent to an annual rate of approximately 8.41%). This swap is designated as a hedge of
net investment for financial reporting purposes. As of March 31, 2010 the fair value of this swap was $4 million and was recorded as noncurrent assets in our condensed consolidated
balance sheet (unaudited). For the three months ended March 31, 2010, the effective portion of the changes in the fair value of $6 million was recorded in other comprehensive income,
with the ineffectiveness of $2 million recorded in interest expense.

Otherwise,
we do not believe there are any material changes to our market risks from those disclosed in our Annual Report on Form 10-K for the year ended
December 31, 2009.

ITEM 4.    CONTROLS AND PROCEDURES

Our management, with the participation of our chief executive officer and chief financial officer, has evaluated the effectiveness of
our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act")) as of
March 31, 2010. Based on this evaluation, our chief executive officer and chief financial officer have concluded that, as of March 31, 2010, our disclosure controls and procedures were
effective, in that they ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported
within the time periods specified in the Commission's rules and forms, and (2) accumulated and communicated to our management, including our chief executive officer and chief financial officer,
as appropriate to allow timely decisions regarding required disclosure.

No
changes to our internal control over financial reporting occurred during the three months ended March 31, 2010 that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). However, we can only give
reasonable assurance that our internal controls over financial reporting will prevent or detect material misstatements on a timely basis. Ineffective internal controls over financial reporting could
cause investors to lose confidence in our reported financial information and could result in a lower trading price for our securities.

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PART II. OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

On occasion, we receive notices of violation, enforcement or other complaints from regulatory agencies alleging
non-compliance with applicable EHS laws. Based on currently available information and our past experience, we do not believe that the resolution of any pending or threatened environmental
enforcement proceedings will have a material impact on our financial condition, results of operations or cash flows.

In
May 2007, our operation in Wilton, U.K., allegedly caused a discharge of wastewater effluent to be made to Northumbrian Water's Bran Sands treatment facility that contained elevated
levels of
nitrobenzene. Northumbrian Water alleges that this discharge caused a disruption of its treatment facility which, in turn, exceeded its discharge consent from the U.K. Environmental Agency. The
Environmental Agency is investigating a possible prosecution against Northumbrian Water and/or us for the breach. Northumbrian Water has threatened to prosecute our subsidiary in the U.K. To date,
however, no charges have been filed.

During
the period from 2007 through 2009, our Performance Products business' surfactants manufacturing facility located in New South Wales, Australia experienced four reported releases
of ethylene oxide and propylene oxide, both raw materials used in the manufacturing process. As a consequence of these releases, the site has received and responded to information requests and
physical inspections from WorkCover NSW and/or the Department of Environment and Climate Change NSW, both regulatory agencies with oversight authority for the facility. Although regulatory enforcement
action in this matter is a possibility, no monetary sanctions have been proposed by either agency and this matter remains unresolved at the current time.

OTHER LEGAL PROCEEDINGS

For a discussion of other legal proceedings, see "Note 13. Commitments and ContingenciesLegal Matters" and
"Note 14. Environmental, Health and Safety MattersRemediation Liabilities" to our condensed consolidated financial statements (unaudited) included elsewhere in this report.

ITEM 1A.    RISK FACTORS

For information regarding risk factors, see "Part I. Item 1A. Risk Factors," in our Annual Report on
Form 10-K for the year ended December 31, 2009.

ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

ISSUER PURCHASES OF EQUITY SECURITIES

The following table presents shares of restricted stock granted under our stock incentive plan that we withheld upon vesting to satisfy
our tax withholding obligations during the three months ended March 31, 2009. We have no publicly announced plans or programs to repurchase our common stock.

Period

Total Number
of Shares
Purchased

Average Price
Paid per Share

Total Number
of Shares
Purchased as Part of
Publicly Announced
Plans or Programs

Maximum Number
(or Approximate Dollar
Value) of Shares that
May Yet Be Purchased
Under the Plans or
ProgramsJanuary




$






February


72,816


13.46





March


285,565


13.61





Total


358,381

$
13.58








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ITEM 6.    EXHIBITS

3.1

Third Amended and Restated Bylaws of Huntsman Corporation effective March 24, 2010 (incorporated by reference to Exhibit 3.1(i) to our current report on Form 8-K filed on March 26, 2010)4.1

Indenture, dated as of March 17, 2010, by and among Huntsman International LLC, the subsidiary guarantors therein and Wells Fargo Bank, National Association, as trustee (incorporated by reference to
Exhibit 4.1 to our current report on Form 8-K filed on March 19, 2010)4.2

Form of 85/8% Senior Subordinated Note (incorporated by reference to Exhibit 4.2 to our current report on Form 8-K filed on March 19, 2010)4.3

Form of Guarantee (incorporated by reference to Exhibit 4.3 to our current report on Form 8-K filed on March 19, 2010)10.1

Fifth Amendment to Credit Agreement, dated as of March 9, 2010, by and among Huntsman International LLC, JPMorgan Chase Bank, N.A. and the other financial institutions party thereto10.2

Registration Rights Agreement, dated as of March 17, 2010, by and among Huntsman International LLC, the subsidiary guarantors named therein and Goldman, Sachs & Co., J.P. Morgan
Securities Inc., Barclays Capital Inc., Banc of America Securities LLC, Citigroup Global Markets Inc. and Credit Suisse Securities (USA) LLC (incorporated by reference to Exhibit 10.1 to our current report on
Form 8-K filed on March 19, 2010)31.1

Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2

Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1

Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2

Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their
behalf by the undersigned thereunto duly authorized.

Dated:
May 7, 2010

HUNTSMAN CORPORATION
    HUNTSMAN INTERNATIONAL LLCBy:

/s/ J. KIMO ESPLIN J. Kimo Esplin Executive Vice President and Chief Financial Officer
(Authorized Signatory and Principal Financial Officer)By:

/s/ L. RUSSELL HEALY L. Russell Healy Vice President and Controller
(Authorized Signatory and Principal Accounting Officer)


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EXHIBIT INDEX

3.1

Third Amended and Restated Bylaws of Huntsman Corporation effective March 24, 2010 (incorporated by reference to Exhibit 3.1(i) to our current report on Form 8-K filed on March 26, 2010)4.1

Indenture, dated as of March 17, 2010, by and among Huntsman International LLC, the subsidiary guarantors therein and Wells Fargo Bank, National Association, as trustee (incorporated by reference to
Exhibit 4.1 to our current report on Form 8-K filed on March 19, 2010)4.2

Form of 85/8% Senior Subordinated Note (incorporated by reference to Exhibit 4.2 to our current report on Form 8-K filed on March 19, 2010)4.3

Form of Guarantee (incorporated by reference to Exhibit 4.3 to our current report on Form 8-K filed on March 19, 2010)10.1

Fifth Amendment to Credit Agreement, dated as of March 9, 2010, by and among Huntsman International LLC, JPMorgan Chase Bank, N.A. and the other financial institutions party thereto10.2

Registration Rights Agreement, dated as of March 17, 2010, by and among Huntsman International LLC, the subsidiary guarantors named therein and Goldman, Sachs & Co., J.P. Morgan
Securities Inc., Barclays Capital Inc., Banc of America Securities LLC, Citigroup Global Markets Inc. and Credit Suisse Securities (USA) LLC (incorporated by reference to Exhibit 10.1 to our current report on
Form 8-K filed on March 19, 2010)31.1

Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2

Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1

Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2

Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


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