<Page>

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

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   -----------

                                    FORM 10-Q

(Mark One)

/X/  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934
     For the quarterly period ended March 31, 2002

                                       OR

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

                          Commission file number 1-9988

                          HUNTSMAN POLYMERS CORPORATION
             (Exact name of registrant as specified in its charter)

              Delaware                                       75-2104131
-----------------------------------                   ----------------------
  (State or other jurisdiction of                       (I.R.S. Employer
   incorporation or organization)                       Identification No.)

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

          (Address of principal executive offices and telephone number)

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.

Yes   X   No
    ----     ----
                      APPLICABLE ONLY TO CORPORATE ISSUERS:

On May 14, 2002, 1,000 shares of the Common Stock, par value $0.01 per share, of
Huntsman Polymers Corporation were outstanding.

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

<Page>

                          HUNTSMAN POLYMERS CORPORATION
                       FORM 10-Q FOR THE QUARTERLY PERIOD
                              ENDED MARCH 31, 2002

                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                                                              Page
                                                                                                              ----
<S>                                                                                                              <C>
PART I. FINANCIAL INFORMATION.....................................................................................3
         ITEM 1.   FINANCIAL STATEMENTS...........................................................................3
                  Consolidated Balance Sheets as of March 31, 2002 and December 31, 2001(unaudited)...............3
                  Consolidated Statements of Operations for the Three months ended
                  March 31, 2002 and 2001 (unaudited).............................................................4
                  Consolidated Statements of Stockholder's Deficit for the Three
                   months ended March 31, 2002 (unaudited)........................................................5
                  Consolidated Statements of Cash Flows for the Three months ended March 31,
                   2002 and 2001 (unaudited)......................................................................6
                  Notes to Consolidated Financial Statements......................................................7
         ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.........19
         ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK....................................30
PART II - OTHER INFORMATION......................................................................................31
         ITEM 1.   LEGAL PROCEEDINGS.............................................................................31
         ITEM 3.   DEFAULTS UPON SENIOR SECURITIES...............................................................31
         ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K..............................................................31
</Table>

                                        2
<Page>

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

                          PART I. FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

HUNTSMAN POLYMERS CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Dollars In Thousands)

<Table>
<Caption>
                                                              MARCH 31, 2002        DECEMBER 31, 2001
         <S>                                                  <C>                   <C>
                           ASSETS
         CURRENT ASSETS:
              Cash and cash equivalents                       $           --        $             --
              Accounts and notes receivable, net                       7,819                   7,778
              Accounts and advances receivable - Affiliates           28,985                  25,572
              Inventories                                             46,329                  53,089
              Other current assets                                     5,160                   3,822
              Deferred income taxes                                    8,845                   8,845
                                                              --------------        ----------------
                  TOTAL CURRENT ASSETS                                97,138                  99,106
         Properties, plant and equipment, net                        370,001                 374,475
         Intangible assets, net                                        7,623                   8,044
         Other noncurrent assets                                      24,006                  25,786
                                                              --------------        ----------------
                  TOTAL ASSETS                                $      498,768        $        507,411
                                                              ==============        ================

                        LIABILITIES AND
                     STOCKHOLDER'S DEFICIT
         CURRENT LIABILITIES:
              Accounts payable                                $       33,870        $         36,740
              Accounts payable - Affiliates                            8,055                   7,652
              Accrued liabilities                                     35,540                  36,198
                 Current portion of long-term debt                   174,882                 174,882
              Advance from affiliate                                   6,070                   6,070
                 Current portion of long-term debt -                 343,403                 346,990
                  Affiliates
                                                              --------------        ----------------
                  TOTAL CURRENT LIABILITIES                          601,820                 608,532
         Long-term debt:
              Affiliates                                                  --                      --
              Other                                                       --                      --
         Deferred income taxes                                         8,845                   8,845
         Other noncurrent liabilities                                 30,777                  29,976
                                                              --------------        ----------------
                  TOTAL LIABILITIES                                  641,442                 647,353
                                                              --------------        ----------------

         STOCKHOLDER'S DEFICIT:
              Common Stock, par value $0.01 per share; 1
              million shares authorized and 1,000 shares
              issued and outstanding in 2002 and 2001                     --                      --
              Additional paid-in capital                             559,500                 559,500
              Retained deficit                                      (702,174)               (699,442)
                                                              --------------        ----------------
                  TOTAL STOCKHOLDER'S DEFICIT                       (142,674)               (139,972)
                                                              --------------        ----------------

                  TOTAL LIABILITIES AND STOCKHOLDER'S
                  DEFICIT                                     $      498,768        $        507,411
                                                              ==============        ================
</Table>

           See accompanying notes to consolidated financial statements

                                        3
<Page>

HUNTSMAN POLYMERS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (Dollars In Thousands)

<Table>
<Caption>
                                              Three Months         Three Months
                                                  Ended               Ended
                                             March 31, 2002       March 31, 2001
                                             --------------       --------------
<S>                                          <C>                  <C>
REVENUES:
     Trade sales and services                $      14,624        $      48,429
     Affiliate sales                                94,356               96,341
                                             -------------        -------------
TOTAL REVENUES                                     108,980              144,770
COST OF GOODS SOLD                                 (96,138)            (171,892)
                                             -------------        -------------
GROSS PROFIT (LOSS)                                 12,842              (27,122)
SELLING, GENERAL AND ADMINISTRATIVE                 (4,991)              (7,488)
                                             -------------        -------------
OPERATING INCOME (LOSS)                              7,851              (34,610)
Interest expense, net:
     Affiliate interest                             (4,977)              (6,960)
     Other interest                                 (5,606)              (5,262)
Other income (expense)                                  --                   45
                                             -------------        -------------
NET LOSS BEFORE INCOME TAXES                        (2,732)             (46,787)
Income tax benefit                                      --               17,119
                                             -------------        -------------
NET LOSS                                     $      (2,732)       $     (29,668)
                                             =============        =============
</Table>

           See accompanying notes to consolidated financial statements

                                        4
<Page>

HUNTSMAN POLYMERS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDER'S DEFICIT (UNAUDITED)
(Dollars and Shares In Thousands)

<Table>
<Caption>

                                               Common Stock             Paid-in          Retained
                                            Shares       Amount         Capital           Deficit           Total
                                          ----------    ---------     -------------    -------------     -----------
<S>                                             <C>      <C>           <C>              <C>               <C>
Balance, January 1, 2002                         1       $   --        $  559,500       $ (699,442)       $ (139,942)
Net loss                                        --           --                --           (2,732)           (2,732)
                                          --------      -------       -----------      -----------       -----------
Balance, March 31, 2002                          1       $   --        $  559,500       $ (702,174)       $ (142,674)
                                          ========      =======       ===========      ===========       ===========
</Table>

         See accompanying notes to consolidated financial statements.

                                        5
<Page>

HUNTSMAN POLYMERS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Dollars In Thousands)

<Table>
<Caption>
                                                                  Three Months             Three Months
                                                                      Ended                    Ended
                                                                 March 31, 2002           March 31, 2001
                                                                 --------------           --------------
         <S>                                                    <C>                     <C>
         OPERATING ACTIVITIES
         Net loss                                               $          (2,732)      $         (29,668)
         Reconciliation to net cash used in operations:
              Depreciation and amortization                                 6,357                  18,083
              Deferred income taxes                                            --                 (17,779)
              Amortization of debt issuance costs                             217                     217
              Changes in operating working capital:
                  Receivables                                              (3,454)                 17,531
                  Inventories                                               6,760                  (5,095)
                  Other current assets                                     (1,338)                    119
                  Accounts payable                                         (2,467)                (14,453)
                  Other current liabilities                                  (658)                 (4,124)
                  Deferred charges and other noncurrent
                  assets                                                    1,780                     832
                  Deferred credits and other noncurrent
                  liabilities                                                 801                     837
                                                                -----------------       -----------------
         NET CASH PROVIDED BY (USED IN) OPERATIONS                          5,266                 (33,500)

         INVESTING ACTIVITIES
         Capital expenditures                                              (1,679)                 (2,568)
                                                                -----------------       -----------------
         NET CASH USED IN INVESTING ACTIVITIES                             (1,679)                 (2,568)

         FINANCING ACTIVITIES
         Intercompany (repayment to) borrowing from
         parent                                                            (3,587)                  5,068
         Proceeds of capital contribution by parent                            --                  31,000
                                                                -----------------      ------------------
         NET CASH (USED IN) PROVIDED BY FINANCING                          (3,587)                 36,068
                  ACTIVITIES

         INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                      --                      --

         CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                      --                      --
                                                                -----------------       -----------------
         CASH AND CASH EQUIVALENTS AT END OF PERIOD             $              --       $              --
                                                                =================       =================

         SUPPLEMENTAL CASH FLOW INFORMATION
         Cash paid for interest                                 $              --       $              --
         Cash paid (refunded) for income taxes                  $              --       $              --
</Table>

           See accompanying notes to consolidated financial statements

                                        6
<Page>

HUNTSMAN POLYMERS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

     1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     DESCRIPTION OF BUSINESS

     Huntsman Polymers Corporation and its subsidiaries manufacture products
used in a wide variety of industrial and consumer-related applications. The
Company's principal products are polyethylene (including low density
polyethylene ("LDPE") and linear low density polyethylene ("LLDPE")),
polypropylene and amorphous polyalphaolefin ("APAO").

     For convenience in this report, the terms "Huntsman Polymers," "Company,"
"our," "us" or "we" may be used to refer to Huntsman Polymers Corporation and,
where the context requires, its consolidated subsidiaries. Huntsman Polymers
Holding Corporation, the Company's direct parent corporation, may be referred to
as "Parent," or "HPHC."

     BASIS OF PRESENTATION

     The Company's consolidated financial statements have been prepared on a
going concern basis, which contemplates the realization of assets and
satisfaction of liabilities in the normal course of business. The consolidated
financial statements do not include any adjustments relating to the
recoverability and classifications of recorded amounts of assets and liabilities
that might be necessary should the Company be unable to continue as a going
concern. The Company's ability to continue as a going concern depends on a
number of significant factors, including, but not limited to, restructuring
Huntsman Corporation's current senior and subordinated debt financing,
restructuring the Company's 11 3/4% Senior Notes due 2004 (the "Senior Notes"),
obtaining additional debt and/or equity financing and generating sufficient cash
flows from operations to meet its obligations.

     As of March 31, 2002, the Company's current liabilities exceeded current
assets by $504.7 million, primarily due to the classification of all of its
outstanding debt as a current liability as discussed below. The Company has
sustained net losses in each of the prior three years and its stockholders
deficit is $142.7 million. Historically, the Company's primary source of
funding has been the intercompany loan agreement (the "Intercompany Loan
Agreement") from a subsidiary of Huntsman Corporation, the ultimate parent of
the Company. As of March 31, 2002, the Company has classified the outstanding
borrowings under the Intercompany Loan Agreement of $280.5 million as a
current liability because repayment may be accelerated by Huntsman
Corporation's lenders. On December 1, 2001, the Company failed to make
interest payments on its $174.9 million of Senior Notes. As a result of the
failure to pay interest as scheduled, the debt may be accelerated and has
also been classified as a current liability.

     As of March 31, 2002, Huntsman Corporation had borrowings of
approximately $1.5 billion outstanding under its senior secured credit
facilities. As collateral for its obligations under its credit facilities,
Huntsman Corporation has pledged its 100% ownership interest in HPHC, and
HPHC has pledged its 100% ownership interest in the Company. In addition, the
Company and HPHC are guarantors of Huntsman Corporation's obligations under
its credit facilities. The Company has granted security interests and liens
on substantially all of its assets to secure its obligations under its
guaranty to Huntsman Corporation's lenders, subject to certain limitations in
effect until such time as all of the Senior Notes have been indefeasibly
repaid, redeemed or repurchased in full. The guaranty provides that the
Company's maximum liability thereunder at any time will not exceed the amount
permitted to exist at such time under the Indenture. At this time, because of
the restrictions on incurring indebtedness and making investments contained
in the Indenture, the Company does not have any liability under the guaranty.

                                        7
<Page>

     On December 20, 2001, Huntsman Corporation, which is not in compliance
with certain financial covenants contained in its credit facilities entered
into amendment, forbearance and waiver agreements (collectively the
"Amendment Agreement"). Under the Amendment Agreement, existing defaults and
some future defaults were waived and the lenders agreed to forbear exercising
certain rights and remedies until March 15, 2002 (the "Forbearance Period").
On March 15, 2002, the Forbearance Period was extended until June 30, 2002.
Unless Huntsman Corporation's debt is restructured before June 30, 2002 or
the Forbearance Period is extended beyond June 30, 2002 or the rights of
Huntsman Corporation's lenders under its credit facilities are stayed,
Huntsman Corporation's lenders could pursue certain remedies under the credit
facilities including accelerating the debt due, enforcing the guaranties of
HPHC and the Company, foreclosing on the pledge of the equity of HPHC and the
Company, and foreclosing on the security interests and liens on the assets
securing the Company's obligations under the Guaranty to the extent the
Company has any liability under the Guaranty at the time of the foreclosure
and subject to the limitations on the security interests and liens referred
to above. Also, on January 1, 2002, Huntsman Corporation failed to make
interest payments on $600 million of its senior subordinated debt. As a
result of the failure to pay interest as scheduled, the debt may be
accelerated. The Amendment Agreement and the agreements governing Huntsman
Corporation's supplemental accounts receivable credit facility only permit
Huntsman Corporation to make specified investments in or payments to the
Company. These limitations specifically prohibit the Company from obtaining
additional equity investments from Huntsman Corporation. The Amendment
Agreement also contains a condition that would cause the Forbearance Period
to terminate if the Company makes interest payments on the Senior Notes.

     In summary, unless and until the Company secures restructured long-term
financing, lenders could pursue certain remedies under various agreements and
indentures. These remedies include accelerating the Company's debt and
foreclosing on security interests and liens on the Company's assets. The
foregoing uncertainties raise substantial doubt about the Company's ability to
continue as a going concern without some sort of financial restructuring.

     Huntsman Corporation and its financial advisor are actively engaged in
identifying and exploring strategic alternatives, including developing out of
court or court sanctioned financial restructuring plans. The Company expects to
meet its operating and capital needs in 2002 through a combination of:

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

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

     -  sales of inventory to Huntsman Corporation as permitted under Huntsman
        Corporation's supplemental accounts receivable credit facility and the
        Amendment Agreement; and

     -  targeted reductions in working capital and reduced capital expenditures.

     INTERIM FINANCIAL STATEMENTS

     The interim consolidated financial statements of the Company are unaudited,
but include all adjustments which the Company deems necessary for a fair
presentation of its financial position and results of operations. All such
adjustments are of a normal recurring nature. Results of operations for interim
periods are not necessarily indicative of results to be expected for the full
year. All significant accounting policies conform to those previously set forth
in the Company's 2001 annual report on Form 10-K.

     USE OF ESTIMATES

                                        8
<Page>

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

     PRINCIPLES OF CONSOLIDATION

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

     CASH AND CASH EQUIVALENTS

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

     INVENTORIES

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

     PROPERTY, PLANT AND EQUIPMENT

     Property, plant and equipment are stated at cost. Depreciation is provided
utilizing the straight line method over the estimated useful lives of the
assets. Plant and equipment have useful lives ranging from 3 to 15 years, and
buildings have useful lives ranging from 15 to 20 years. Periodic maintenance
and repairs applicable to major units of manufacturing facilities are accounted
for on the prepaid basis by capitalizing the costs of the turnaround and
amortizing the costs over the estimated period until the next turnaround. Normal
maintenance and repairs of all other plant and equipment are charged to expense
as incurred. Renewals, betterments and major repairs that materially extend the
useful life of the assets are capitalized, and the assets replaced, if any, are
retired. Interest costs are capitalized as part of major construction projects.
Upon disposal of assets, the cost and related accumulated depreciation are
removed from the accounts and the resulting gain or loss is included in other
income.

     INTANGIBLE ASSETS

     Debt issuance costs are amortized over the term of the related debt,
ranging from five to ten years. Goodwill is amortized over a period of 20
years. Other intangible assets are amortized using the straight-line method
over their estimated useful lives of 5 to 15 years or over the life of the
related agreement.

     INCOME TAXES

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

     ENVIRONMENTAL EXPENDITURES

     Environmental related restoration and remediation costs and governmental
assessments are recorded as liabilities and expensed when site restoration and
environmental remediation, clean-up and assessment obligations are either known
or considered probable and the related costs can be reasonably estimated. Other
environmental expenditures, which are principally maintenance or preventative in
nature, are recorded when expended and are expensed or capitalized as
appropriate.

                                        9
<Page>

     RECLASSIFICATIONS

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

     RECENT FINANCIAL ACCOUNTING STANDARDS

     On January 1, 2001, the Company adopted SFAS No. 133, "ACCOUNTING FOR
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES." SFAS No. 133, as amended and
interpreted, establishes accounting and reporting standards for derivatives and
for hedging activities. It requires an entity to recognize all derivatives as
either assets or liabilities in the statement of financial position and measure
those instruments at fair value. The adoption of SFAS No. 133 did not have a
material effect on the Company's financial position as the financial instruments
and other contracts held by and entered into by the Company either do not meet
the definition of a derivative or qualify for the normal purchases and sales
exemption.

     On January 1, 2002, the Company adopted SFAS No. 142, "GOODWILL AND OTHER
INTANGIBLE ASSETS." SFAS No. 142 changes the accounting for goodwill and
intangible assets with indefinite lives from an amortization method to an
impairment-only approach. With the adoption of SFAS No. 142, the Company
reassessed the useful lives of all acquired intangible assets. Based on the
assessment, no adjustments were made to the amortization period of intangible
assets. As discussed below in "Note 7, Restructuring Costs and Impairment
Charges," the Company recorded an impairment charge in 2001 which reduced
recorded goodwill to zero. As a result, the adoption of SFAS No. 142 had no
impact on the Company's financial statements. The pro forma effect on net loss,
assuming the change in this accounting principle was applied retroactively to
January 1, 2001, would be zero.

     In October 2001, the Financial Accounting Standards Board issued SFAS
No. 144, "ACCOUNTING FOR THE IMPAIRMENT OR DISPOSAL OF LONG-LIVED ASSETS."
This Statement establishes a single accounting model for the impairment or
disposal of long-lived assets. As required by SFAS No. 144, the Company
adopted this new accounting standard on January 1, 2002. Adoption of this
pronouncement did not have a material effect on the Company's financial
statements.

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

     INCOME (LOSS) PER SHARE

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

2.   INVENTORIES

     Inventories consist of the following (dollars in thousands):

<Table>
<Caption>
                                          March 31, 2002         December 31, 2001
                                         -----------------       -----------------
         <S>                             <C>                     <C>
         Raw materials                   $           8,902       $           9,007
         Work in progress                            6,930                   5,790
         Finished goods                             30,497                  38,292
                                         -----------------       -----------------
         Total                           $          46,329       $          53,089
                                         =================       =================
</Table>

                                       10
<Page>

3.   PROPERTY, PLANT AND EQUIPMENT

     The cost and accumulated depreciation of property, plant and equipment are
as follows (dollars in thousands):

<Table>
<Caption>
                                                          March 31, 2002        December 31, 2001
                                                          --------------        -----------------
         <S>                                            <C>                     <C>
         Land                                           $           1,008       $           1,008
         Buildings                                                 98,645                  98,791
         Plant and equipment                                      489,078                 502,871
         Construction in progress                                   2,999                   2,937
                                                        -----------------       -----------------
                                                                  591,730                 605,607
         Less accumulated depreciation                           (221,729)               (231,132)
                                                        -----------------       -----------------
         Property, plant and equipment, net             $         370,001       $         374,475
                                                        =================       =================
</Table>

4.   INTANGIBLE ASSETS

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

<Table>
<Caption>
                                                         March 31, 2002         December 31, 2001
                                                         --------------         -----------------
         <S>                                            <C>                     <C>
         Debt issuance costs                            $           7,173       $           7,173
         Less accumulated amortization                             (5,512)                 (5,295)
                                                        -----------------       -----------------
              Total debt issuance costs                             1,661                   1,878
                                                        -----------------       -----------------

         Other intangible assets                                    8,109                   8,115
         Less accumulated amortization                             (2,147)                 (1,949)
                                                        -----------------       -----------------
              Total other intangible assets                         5,962                   6,166
                                                        -----------------       -----------------
         Intangible assets, net                         $           7,623       $           8,044
                                                        =================       =================
</Table>

     In the third quarter of 2001, goodwill was written off as part of plant
closing and restructuring costs. For additional information, see "Note 7, Plant
Closing/Restructuring Costs" below.

     Amortization of debt issuance costs and other intangible assets will be
$1.5, $1.4, $1.3, $0.7 and $2.7 million for the years ended 2002, 2003, 2004,
2005 and thereafter.

5.   LONG-TERM DEBT

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

<Table>
<Caption>
                                                                  March 31, 2002        December 31, 2001
                                                                  --------------        -----------------
           <S>                                                  <C>                     <C>
           Affiliates:
                Intercompany borrowings                         $         274,443       $         279,055
                Advance from affiliates                                     6,070                   6,070
                Capital lease - affiliates                                 68,960                  67,935
                                                                -----------------       -----------------
                    Total affiliates                                      349,473                 353,060
                Less: Current portion                                    (349,473)               (353,060)
                                                                -----------------       -----------------
                    Total long-term debt - affiliates                           -                       -
           Other - 11 3/4% Senior Notes due 2004                          174,882                 174,882
                Less: Current portion                                    (174,882)               (174,882)
                                                                -----------------       -----------------
                    Total long-term debt - other                                -                       -
                                                                -----------------       -----------------
                Total                                           $               -       $               -
                                                                =================       =================
</Table>

     INTERCOMPANY BORROWING

     As of March 31, 2002, the Company owed $280.5 million under the
Intercompany Loan Agreement that it maintains with Huntsman Group Holdings
Finance Corporation ("HGHFC"), a subsidiary of Huntsman Corporation. The
intercompany loans accrue interest at prime rate (4.75% at March 31, 2002) plus
a margin of 0.75% and are payable upon demand. The Intercompany Loan Agreement
is the Company's principal source of financing. The Company's ability to borrow
under the Intercompany Loan Agreement is subject to the limitations imposed by
the indenture governing the Company's Senior

                                       11
<Page>

Notes (the "Indenture"). In addition, as discussed in the following paragraphs,
the Company's ability to obtain additional financing under the Intercompany Loan
Agreement has been significantly limited.

     As of March 31, 2002, Huntsman Corporation had borrowings of
approximately $1.5 billion outstanding under its senior secured credit
facilities. As collateral for its obligations under the credit facilities,
Huntsman Corporation has pledged its 100% ownership interest in the Parent,
and the Parent has pledged its 100% ownership interest in the Company. In
addition, the Company and its Parent are guarantors of Huntsman Corporation's
obligations under its credit facilities. The Company has granted security
interests and liens on substantially all of its assets to secure its
obligations under its guaranty to Huntsman Corporation's lenders, subject to
certain limitations in effect until such time as all of the Senior Notes have
been indefeasibly repaid, redeemed or repurchased in full. The guaranty
provides that the Company's maximum liability thereunder at any time will not
exceed the amount permitted to exist at such time under the Indenture. At
this time, because of the restrictions on incurring indebtedness and making
investments contained in the Indenture, the Company does not have any
liability under the guaranty.

     On December 20, 2001, Huntsman Corporation, which is not in compliance
with certain financial covenants contained in its credit facilities, entered
into the Amendment Agreement. Under the Amendment Agreement, existing
defaults and some future defaults were waived and the lenders agreed to
forbear exercising certain rights and remedies during the Forbearance Period.
On March 15, 2002, the Forbearance Period was extended until June 30, 2002.
Unless Huntsman Corporation's debt is restructured before June 30, 2002 or
the Forbearance Period is extended beyond June 30, 2002 or the rights of the
lenders under Huntsman Corporation's credit facilities are stayed, Huntsman
Corporation's lenders could pursue certain remedies under the credit
facilities, including accelerating the debt due, enforcing the Company's
guaranty or the guaranty of the Parent and foreclosing on the pledge of the
equity of the Parent and the Company, and foreclosing on the security
interests and liens on the assets securing the Company's obligations under
its guaranty to the extent the Company has any liability under its guaranty
at the time of the foreclosure and subject to the limitations on the security
interests and liens referred to above. Although there can be no assurance
that Huntsman Corporation will be successful in restructuring its debt,
Huntsman Corporation is currently in discussions with the agent bank
concerning the amendment and restatement of its credit facilities and the
refinancing of its supplemental accounts receivable credit facility.

     On December 20, 2001, Huntsman Corporation also entered into a supplemental
accounts receivable credit agreement (the "HC Supplemental Credit Agreement")
with certain of its lenders under its credit facilities pursuant to which a
revolving loan facility of $40 million and a term loan facility of $110 million
were made available to it. As of March 31, 2002, other than a DE MINIMIS letter
of credit, no portion of the revolving commitment under the HC Supplemental
Credit Agreement has been utilized. Proceeds from the HC Supplemental Credit
Facility are being used, among other things, to provide liquidity to Huntsman
Corporation and certain of its affiliates. Pursuant to the Amendment Agreement
and the HC Supplemental Credit Facility, Huntsman Corporation is only permitted
to make certain investments in or payments to the Company, including ordinary
course payments in respect of existing commercial arrangements, payments
representing the reasonably equivalent value of assets purchased by Huntsman
Corporation from the Company, accruals of interest expense and overhead
allocations, payments to purchase a certain mechanic's lien from S&B Engineers
and Constructors, Ltd. and additional loans, not to exceed $5 million, made
through the Intercompany Loan Agreement. These limitations also prohibit the
Company from obtaining additional equity investments from Huntsman Corporation.

     The acceleration by Huntsman Corporation's lenders of the debt under
Huntsman Corporation's credit facilities would cause an acceleration of the
Company's obligations under the Intercompany Loan Agreement. As a result, as of
June 30, 2001, the Company reclassified the intercompany borrowings portion of
affiliate debt as a current liability. Acceleration of the debt under Huntsman
Corporation's

                                       12
<Page>

credit facilities and of the Company's obligations under the Intercompany Loan
Agreement would constitute an event of default under the Senior Notes, which
could result in an acceleration of the Company's obligations under the Senior
Notes by the trustee or the holders of at least 25% in principal amount of the
then outstanding Senior Notes.

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

     Huntsman International Holdings LLC ("HIH") and Huntsman International
LLC ("HI") have not guaranteed or provided any other credit support to the
obligations of Huntsman Corporation under its credit facilities or under
Huntsman Corporation's outstanding high-yield notes (the "HC Notes"). Neither
events of default under Huntsman Corporation's credit facilities or the HC
Notes nor the exercise of any remedy by the lenders thereunder will cause any
cross-defaults or cross-accelerations under the outstanding high-yield notes
of HIH or HI or the senior secured credit facilities of HI, except insofar as
foreclosure on the stock of Huntsman Specialty Chemicals Holdings
Corporation, pledged to secure the obligations of Huntsman Corporation under
its credit facilities, would constitute a "change in control" under the
senior secured credit facilities of HI and would give certain put rights to
the holders of the high-yield notes of HIH and HI.

     CAPITAL LEASE

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

     On December 12, 2001, the agreement was amended and HGHFC assigned all of
its rights under the agreement to Huntsman Corporation. The principal economic
terms of the lease agreement were not altered. Although there can be no
assurance that the Company will obtain an extension, the Company is currently in
discussions with Huntsman Corporation concerning an extension of the maturity
date of the Capital Lease Agreement.

     SENIOR NOTES

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

     The Indenture governing the Senior Notes contains certain covenants that,
among other things, limit the ability of the Company to incur additional
indebtedness and to repurchase subordinated indebtedness, incur or suffer to
exist certain liens, pay dividends, make certain investments, sell significant
fixed assets and engage in mergers and consolidations.

                                       13
<Page>

     On December 1, 2001, the Company failed to make interest payments on the
Senior Notes. As a result of the failure to make interest payments, the debt may
be accelerated and has been classified as a current liability. For more
information, see "Item 2--Management's Discussion and Analysis of Results of
Operations and Financial Condition--Recent Events--Failure to Pay Interest."

6.   CONTINGENCIES

ENVIRONMENTAL REGULATION

     GENERAL

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

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

     The Company may also incur future costs for capital improvements and
general compliance under environmental laws, including costs to acquire,
maintain and repair pollution control equipment. Environmental capital spending
is estimated at $3.3 for 2002. Generally, the Company expects to incur between
$1.5 million and $6.0 million annually in capital spending to address the
requirements of environmental laws. However, the Company cannot ensure that
material capital expenditures beyond those currently anticipated will not be
required under environmental laws.

     The Company carries pollution legal liability insurance to address some of
the potential environmental liabilities, subject to the policy terms, limits,
exclusions and deductibles, on both a sudden and accidental basis and on a
gradual basis for occurrences first commencing after July 1, 1997. The Company
also carries pollution legal liability and closure and post-closure insurance on
certain facilities at the Odessa Facility, which are regulated by the Texas
Natural Resources Conservation Commission (the "TNRCC"). This insurance
satisfies the requirements of the TNRCC governing the operation of these
facilities.

                                       14
<Page>

     Further, the Company has incurred, and may in the future incur, liability
to investigate and clean up waste or contamination at its current or former
facilities or facilities operated by third parties at which it may have disposed
of waste or other materials.

     TNRCC FLARE INVESTIGATION

     By letter dated January 28, 1999, the TNRCC notified the Company of
allegations that the Company's olefins plant may have violated its air permit by
emitting visible smoke from its process/emergency flare in late December 1998
and early January 1999. During that period, the olefins plant was in the midst
of start up after extensive construction. As required by Texas law, the Company
had given prior notice to the TNRCC of the start up and that excess emissions
might result. The TNRCC investigated this matter after receiving numerous
complaints from residents of a subdivision near the Odessa Facility. In
addition, since January 1999, the Company's Odessa Facility experienced upsets
on several occasions that led to flaring or excess emissions which the TNRCC
claims were in violation of state law. The TNRCC sought penalties for all
alleged violations. On January 30, 2002, the claims asserted by the TNRCC were
settled in an agreed order. In the order, the Company denied any liability, but
agreed to a $140,000 penalty, $70,000 of which was paid to the State and $70,000
of which was paid to the City of Odessa to fund a supplemental environmental
project.

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

     SOLID WASTES

     In March 1994, the TNRCC granted the Company a permit to operate
hazardous waste management units at the Odessa Facility, as
treatment/storage/disposal facilities under RCRA. This permit and an
accompanying compliance plan require certain corrective actions with respect
to existing soil and groundwater contamination at a number of the solid waste
management units at the Odessa Facility. Pursuant to the permit and
compliance plan, the Company has installed groundwater recovery systems,
investigated the extent of on-site contamination, conducted a soils risk
assessment to determine the level of risk presented to human health and the
environment, developed a corrective measures study on the ways to remediate
the contamination, and implemented a remediation plan approved by the TNRCC.
As of March 31, 2002, the TNRCC has approved closure for 55 of the plant's
solid waste management units. A program for the remediation of existing
contamination both at the Odessa Facility and at third-party sites is
ongoing. In addition, the permit has recently been modified to reflect
closure of one of the original three hazardous waste management units.

                                       15
<Page>

     AIR EMISSIONS

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

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

     ADDITIONAL ENVIRONMENTAL ISSUES

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

     By letter of April 24, 2002, from counsel for Agrium U.S. Inc., Nu-West
Industries, Inc., and Nu-West Mining, Inc., the Company was put on notice of a
potential contribution claim against the Company for site investigation,
remediation and other costs and fees relating to closure of a former industrial
site in Georgetown Canyon, Bear Lake County, Idaho. The potential claim
allegedly arises out of the allegation that El Paso Natural Gas Products Company
owned mining claims and lots at the site during the 1960s. The site was
apparently known as the Idaho Phosphate Works. The Company has retained counsel
and is in the very early stages of evaluating the potential claim. Whether the
Company has any liability for the costs and fees at issue is unclear. Moreover,
what the potential magnitude of the closure costs will be is unknown since it
does not appear that any comprehensive site investigation has been done. The
Idaho Department of Environmental Quality has only recently issued a proposed
consent order to Agrium U.S. Inc. that would require such an investigation
followed by remedial action.

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

     In December of 2000, the New Mexico Environmental Bureau's Oil Conservation
Division ("OCD") gave notice that it is alleging that the Company may be a
responsible party in the cleanup of an abandoned refinery located in Bloomfield,
New Mexico. Although the site is contaminated and was evaluated in about 1990
under the state's superfund program and the federal superfund program, it was
not pursued under either of those programs. The site was previously owned by El
Paso Energy, El Paso

                                       16
<Page>

Products, and Kimbell and McNutt. Huntsman Polymers notified the OCD that
Huntsman Polymers has never had an ownership interest in the site and does not
believe that it acquired any liability relating to the site from its previous
owners. In addition, the State of New Mexico contacted Rexene about the site in
1990, had notice of the Rexene bankruptcy in 1991-1992, made a claim against
Rexene regarding another site but did not make a claim in the bankruptcy
proceeding regarding this site. Consequently, even if the OCD had a claim
against Rexene at one time, the claim may have been extinguished by the
bankruptcy. However, if a court ultimately finds that OCD does have an
actionable claim, the potential exists for significant remediation liability.

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

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

     The Company continually reviews its estimates of potential environmental
liabilities, and it has approximately $6.6 million accrued in its March 31, 2002
balance sheet as an estimate of its total potential environmental liability with
respect to investigating and remediating known and assessed site contamination.
However, no assurance can be given that all potential liabilities arising out of
the Company's present or past operations have been identified or fully assessed
or that the amount that might be required to investigate and remediate such
conditions will not be significant to the Company.

     OTHER

     On August 30, 2001, following arbitration and court proceedings and
mediation, the Company settled a dispute with S&B Engineers and Constructors,
Ltd. ("S&B") for a total amount of $22.1 million. Under the terms of the
settlement agreement, the Company paid S&B $10.0 million on September 14, 2001.
In accordance with agreements with its lenders, Huntsman Corporation paid S&B
$6.1 million on December 31, 2001, taking a partial assignment of the mechanics'
lien securing the Company's obligations to S&B. On April 2, 2002, Huntsman
Corporation paid S&B $6.3 million, the remaining portion under the settlement
agreement including interest, and at that time took a complete assignment of the
mechanic's lien. The Company currently owes Huntsman Corporation $12.4 million
with respect to this matter.

     The Company is also a party to various lawsuits arising in the ordinary
course of business and does not believe that the outcome of any of these
lawsuits will have a material adverse effect on the Company's financial
position, results of operations or cash flows. The Company continually reviews
its estimates of potential environmental and other contingent liabilities.
However, no assurance can be given that all potential liabilities arising out of
the Company's present or past operations have been identified or fully assessed
or that the amounts that might be required to remediate such conditions will not
be significant to the Company.

7.   RESTRUCTURING COSTS AND IMPAIRMENT CHARGES

     The Company incurred restructuring costs and impairment charges of
$525.4 million during the second, third and fourth quarters of 2001. The
restructuring costs were recorded in two phases.

     -  Phase I, which resulted in a charge of $29.8 million during the second
        quarter of 2001, was the result of the closure of the Company's styrene
        production unit and the concurrent cost restructuring and elimination
        initiative, both of which were announced on April 23, 2001. The

                                       17
<Page>

        program included a workforce reduction at the Odessa Facility of 97
        regular employees. Approximately $5.2 million was accrued for
        termination benefits, all of which had been paid as of September 30,
        2001. Additionally, decommissioning costs of $2.6 million for the
        styrene unit, $4.8 million in non-cancelable lease charges, an $8.9
        million write-down of the styrene unit fixed assets and a $7.6 million
        write-off of unusable material and supplies inventory were recorded in
        connection with Phase I. Phase I was substantially completed by the end
        of the third quarter of 2001.

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

     Under SFAS No. 121, "ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS AND
FOR LONG-LIVED ASSETS TO BE DISPOSED OF," companies must review the carrying
amount of long-lived assets and certain intangibles, including related goodwill,
whenever events or changes in circumstances indicate that the carrying amount of
an asset or a group of assets may not be recoverable.

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

     The Company performed an evaluation of the recoverability of its assets as
described in SFAS No. 121. Management concluded from the results of this
evaluation that a significant impairment of long-lived assets had occurred. An
impairment charge was required because the estimated fair value of these assets
was less than their carrying value. The fair value of the Company's net assets
was determined by discounting estimated future cash flows using a discount rate
commensurate with the risks involved. Fair value estimates, by their very
nature, rely upon considerable management judgment; accordingly, actual results
may vary significantly from the Company's estimates.

     The restructuring costs and impairment charges were recorded against the
following accounts: $463.0 million against property, plant and equipment; $33.8
million against goodwill; $5.4 million against inventories; and $23.2 million
against cash and accrued liabilities.

                                       18
<Page>

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

<Table>
<Caption>
                                                                                                        Restructuring
                                                                                                         Liabilities
                                                                                                             at
                                             Total                Non-Cash               Cash              March 31,
                                             Charge                Charges             Payments              2002
                                           -----------           -----------          ----------        -------------
<S>                                        <C>                   <C>                  <C>                 <C>
Work force reduction                       $    11,038           $        --          $    7,676          $   3,362
Styrene unit decommissioning                     2,601                    --               1,001              1,600
Polypropylene Line 1 decommissioning               200                    --                  --                200
Non-cancelable lease costs                       5,348                    --               1,484              3,864
Property and equipment                         463,038               463,038                  --                 --
Goodwill                                        33,788                33,788                  --                 --
Provision for unusuable supply
   Inventory                                     8,565                 5,436               3,120                  9
Other charges                                      823                    --                 823                 --
                                           -----------           -----------          ----------          ----------
Total restructuring costs                  $   525,401           $   502,262          $   14,104          $   9,035

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

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

GENERAL

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

     The markets in which we compete are generally cyclical markets that are
sensitive to relative changes in supply and demand as well as general economic
conditions. Historically, these products have experienced alternating periods of
tight supply, rising prices and increased profits followed by periods of large
capacity additions resulting in oversupply, lower selling prices and lower
profits. Certain of our products, such as APAO, are generally less sensitive to
economic cycles. In addition, our polyethylene and polypropylene businesses are
geared toward higher value-added, specialty grades, which are less sensitive to
cyclical swings experienced by commodity grades.

     Our sales of polyethylene, polypropylene and APAO are made to Huntsman
Corporation. These products are sold at market prices with payment terms of
net 30 days from the end of the month. This arrangement allows receivables
from the resale by Huntsman Corporation of these products to be included in
its supplemental accounts receivable credit facility.

     The principal raw materials that we purchase for the polyethylene,
polypropylene and APAO businesses consist of ethane and propane extracted from
natural gas liquids and propylene (all of which are referred to as
"feedstocks"). We believe that the feedstock supplies available in Odessa, Texas
are currently adequate for our requirements.

RECENT EVENTS

NEGOTIATIONS WITH MAJORITY HOLDER OF SENIOR NOTES

     We are in the advanced stages of negotiating with an affiliate of Credit
Suisse First Boston, holder of approximately 78% of our 11 3/4% Senior Notes due
2004 (the "Senior Notes") to restructure our

                                       19
<Page>

obligations under the Senior Notes. We can give no assurance that we will reach
an agreement with the holders of the Senior Notes, or that any such agreement
will be on terms which are favorable to our debt holders. In addition, a
restructuring of our obligations could result in a number of outcomes, including
modifications to the terms governing our debt, exchange of our existing debt
into new debt securities, conversion of our debt into new equity securities,
agreements by our debt holders to receive less than the full amount that is owed
to them, or other outcomes. For more information, see "--Liquidity and Capital
Resources--Financial Restructuring."

HUNTSMAN CORPORATION ACCOUNTS RECEIVABLE FINANCING AND AMENDMENT AGREEMENT

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

FAILURE TO PAY INTEREST

     In the fourth quarter of 2001, we did not make the December 1, 2001
interest payment due on our Senior Notes. Our failure to make this interest
payment within 30 days of the due date constituted an event of default under the
Senior Notes. We have interest payments due on June 1, and December 1, 2002. The
payment of interest on the Senior Notes would result in a termination of the
Forbearance Period under the Amendment Agreement; therefore, it is unlikely that
we will make the upcoming interest payments on our Senior Notes. See
"--Liquidity and Capital Resources--Debt" and "--Financial Restructuring."

     In addition, we, along with Huntsman Corporation and our financial advisor,
Dresdner Kleinwort Wasserstein, Inc. ("DrKW"), are engaged in discussions with
our note holders (including an affiliate of Credit Suisse First Boston, the
holder of approximately 78% of our Senior Notes), concerning the restructuring
of our debt. A restructuring could be undertaken under court supervision or
outside of court, and could result in a number of outcomes, including the
following: modifications to the terms governing our debt, exchange of our
existing debt into new debt securities, conversion of our debt into new equity
securities, agreements by our debt holders to receive less than the full amount
that is owed to them, or other outcomes. While we believe our discussions are
progressing toward a restructuring of our debt, there can be no assurance as to
the final outcome of these discussions. If we are unsuccessful in our efforts to
restructure our debt, we likely would seek a court sanctioned resolution. For
more information, see "--Liquidity and Capital Resources--Debt," "--Financial
Restructuring" and "--Changes in Financial Condition."

                                       20
<Page>

DISMISSAL OF INVOLUNTARY BANKRUPTCY PETITION

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

ISSUANCE OF PATENT TO COMPETITOR

     On April 2, 2002, a United States patent was issued to one of our
competitors. This patent contains claims to certain processes for
manufacturing copolymers. We, together with our counsel, are evaluating the
scope, validity and enforceability of this patent, in order to determine
whether or not we believe the issuance of this patent will have a material
impact on our business.

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2002 COMPARED TO THREE MONTHS ENDED MARCH 31, 2001

     REVENUES

     Our revenues decreased $35.8 million to $109.0 million for the first
quarter of 2002 from $144.8 million for the same period in 2001. The major
factors contributing to the decrease in revenues were the permanent closure
of our styrene plant along with reduced sales prices in olefins and lower
prices in polyethylene, resulting from continued industry excess capacity of
such products. The styrene plant closure resulted in a reduction of sales of
$17.2 million. Olefins sales revenue decreased $17.8 million to $17.8 million
from $35.6 million, due primarily to a 49% average selling price decline. The
olefins price decrease resulted from weak industry conditions and declining
raw material prices. Polyethylene sales revenue decreased $8.5 million to
$57.6 million due primarily to a 24% decrease in the average sales price,
offset somewhat by a 14% volume improvement. Polypropylene sales revenue
increased $6.1 million due primarily to a temporary surge in demand caused by
customers pre-buying as a result of the announcement of the Line 1 closure.
APAO sales revenue increased $1.7 million due mainly to a 22% increase in
sales volume.

     GROSS PROFIT (LOSS)

     Our gross profit increased $39.9 million to profit of $12.8 million for the
first quarter of 2002 from a loss of $27.1 million in the first quarter of 2001.
The increase in gross profit was mainly due to the decrease in raw material and
energy pricing attributable to lower natural gas prices, and reduced indirect
fixed costs outpacing the drop in our selling prices. The indirect fixed cost
savings are the direct result of our program to reduce fixed costs through job
eliminations and consolidations. Polypropylene gross profit increased $12.0
million due to pre-buying as a result of our Line 1 closure and lower raw
material costs. Olefins gross profit increased $10.6 million and polyethylene
gross profit increased $6.6 million, each because raw material and energy costs
improved more than our selling prices declined. Closing our styrene plant
resulted in a $6.3 million reduction in loss. APAO gross profit increased $1.4
million, primarily due to improved sales volumes.

     SELLING, GENERAL AND ADMINISTRATIVE

     Our selling, general and administrative expenses decreased $2.5 million to
$5.0 million for the three months ended March 31, 2002 from $7.5 million for the
same period in 2001. The decrease in selling,

                                       21
<Page>

general and administrative expenses was mainly due to reduced costs resulting
from plant closure and restructuring costs incurred during 2001 described below.

     RESTRUCTURING COSTS AND IMPAIRMENT CHARGES

     We incurred restructuring costs and impairment charges of $525.4 million
during the second, third and fourth quarters of 2001. The restructuring costs
were recorded in two phases.

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

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

     Under SFAS No. 121, "ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS AND
FOR LONG-LIVED ASSETS TO BE DISPOSED OF," companies must review the carrying
amount of long-lived assets and certain intangibles, including related goodwill,
whenever events or changes in circumstances indicate that the carrying amount of
an asset or a group of assets may not be recoverable.

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

     We performed an evaluation of the recoverability of our assets as described
in SFAS No. 121. Management concluded from the results of this evaluation that a
significant impairment of long-lived assets had occurred. An impairment charge
was required because the estimated fair value of these assets

                                       22
<Page>

was less than their carrying value. The fair value of our net assets was
determined by discounting estimated future cash flows using a discount rate
commensurate with the risks involved. Fair value estimates, by their very
nature, rely upon considerable management judgment; accordingly, actual results
may vary significantly from our estimates.

     The restructuring costs and impairment charges were recorded against the
following accounts: $463.0 million against property, plant and equipment; $33.8
million against goodwill; $5.4 million against inventories; and $23.2 million
against cash and accrued liabilities.

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

<Table>
<Caption>
                                                                                                        Restructuring
                                                                                                         Liabilities
                                                                                                             at
                                              Total                Non-Cash              Cash             March 31,
                                             Charge                Charges             Payments             2002
                                           -----------           -----------          ----------        -------------
<S>                                        <C>                   <C>                  <C>                 <C>
Work force reduction                       $    11,038           $        --          $    7,676          $   3,362
Styrene unit decommissioning                     2,601                    --               1,001              1,600
Polypropylene Line 1 decommissioning               200                    --                  --                200
Non-cancelable lease costs                       5,348                    --               1,484              3,864
Property and equipment                         463,038               463,038                  --                 --
Goodwill                                        33,788                33,788                  --                 --
Provision for unusuable supply
   Inventory                                     8,565                 5,436               3,120                  9
Other charges                                      823                    --                 823                 --
                                           -----------           -----------          ----------          ---------
Total restructuring costs                  $   525,401           $   502,262          $   14,104          $   9,035
</Table>

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

     INTEREST EXPENSE, NET

     Interest expense, net in first quarter 2002 decreased $1.6 million to
$10.6 million from $12.2 million in first quarter 2001, as a result of
reductions in market interest rates, partially offset by an increase in
average outstanding balances. The average amount of debt outstanding and the
average interest rate for the Senior Notes, the affiliate capital lease and
the intercompany borrowing for first quarter 2002 and 2001 were as follows:

<Table>
<Caption>
                                        Senior Notes        Affiliate Capital Lease       Intercompany Borrowing
                                    --------------------   -------------------------     -------------------------
<S>                                     <C>                    <C>                          <C>
Three Months Ended March 31,
2002
Average Amount of Debt                  $      174.9           $           68.4             $          282.8
Average Interest Rate                          11.75%                      5.50%                        6.00%
Three Months Ended March 31,
2001
Average Amount of Debt                  $      174.9           $           64.3             $          242.4
Average Interest Rate                          11.75%                      9.25%                        9.75%
</Table>

     INCOME TAX BENEFIT

     Our income tax benefit decreased $17.1 million for the three months
ended March 31, 2002 from the same period in 2001. In 2002, the income tax
benefit is fully offset by a valuation allowance which reduces the benefit to
zero.

                                       23
<Page>

     NET LOSS

     The Company's net loss decreased $27.0 million to $2.7 million for the
first quarter of 2002 from $29.7 million for the same period in 2001. The
decreased net loss is a result of the reasons stated above.

LIQUIDITY AND CAPITAL RESOURCES

CASH

     Net cash provided by operating activities in the three months ended March
31, 2002 was $5.3 million, as compared to $33.5 million used in operating
activities in the same period in 2001. This $38.8 million change is primarily
attributed to a $39.9 million improvement in gross profit over the same period
in 2001 as explained above, partially offset by a corresponding decrease in the
Company's income tax benefit for the same period. Depreciation was also lower in
the first quarter of 2002 as compared to the same period in 2001 due to the
impairment charge taken on fixed assets at the end of 2001.

     Operating working capital increased $1.4 million in the first quarter
2002, compared to a decline of $4.4 million in the same period in 2001. The
net change of $5.8 million is primarily the result of substantial raw
material price declines that occurred in the first quarter of 2001 as natural
gas, crude oil and other raw material prices significantly backed off their
beginning-of-year highs, and due to a decline in selling prices as underlying
raw materials prices decreased.

     Net cash used in investing activities for the three months ended March 31,
2002 was $1.7 million, as compared to $2.6 million used in the same period in
2001. This decrease was attributable to a decrease in the Company's capital
expenditures.

     Net cash used in financing activities for the three months ended March 31,
2002 was $3.6 million, as compared to $36.1 million provided by financing
activities in the same period in 2001. The net change of $39.7 is primarily
attributable to the fact that we received no capital contributions from Huntsman
Corporation in the first quarter of 2002, compared to $31 million contributed in
the same quarter in 2001. Also, we generated positive operating cash flow in
2002 and repaid $3.5 million on our intercompany borrowings as compared to $5.1
million of borrowings received in the same period in 2001.

DEBT

     As of March 31, 2002, we owed $280.5 million under the Intercompany Loan
Agreement that we maintain with HGHFC, $174.9 million under our Senior Notes and
$69.0 million pursuant to a capital lease with Huntsman Corporation.

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

     As of March 31, 2002, Huntsman Corporation had borrowings of approximately
$1.5 billion outstanding under its senior secured credit facilities. As
collateral for its obligations under its credit facilities, Huntsman Corporation
has pledged its 100% ownership interest in our Parent, and our Parent has
pledged its 100% ownership interest in the Company. In addition, we and our
Parent are guarantors of Huntsman Corporation's obligations under its credit
facilities. We have granted security interests and liens on substantially all of
our assets to secure our obligations under our guaranty to Huntsman
Corporation's lenders, subject to certain limitations in effect until such time
as all of the Senior Notes have been indefeasibly repaid, redeemed or
repurchased in full. The guaranty provides that our maximum liability thereunder
at any time will not exceed the amount permitted to exist at such time under the
Indenture. At this time, because of the restrictions on incurring indebtedness
and making investments contained in the Indenture, we do not have any liability
under the guaranty.

                                       24
<Page>

     On December 20, 2001, Huntsman Corporation, which is not in compliance
with certain financial covenants contained in its credit facilities, entered
into the Amendment Agreement. Under the Amendment Agreement, existing
defaults and some future defaults were waived and the lenders agreed to
forbear exercising certain rights and remedies during the Forbearance Period.
On March 15, 2002, the Forbearance Period was extended until June 30, 2002.
Unless Huntsman Corporation's debt is restructured before June 30, 2002 or
the Forbearance Period is extended beyond June 30, 2002 or the rights of the
lenders under Huntsman Corporation's credit facilities are stayed, Huntsman
Corporation's lenders could pursue certain remedies under the credit
facilities, including accelerating the debt due, enforcing our guaranty and
the guaranty of our Parent, foreclosing on the pledge of the equity of our
Parent and the Company, and foreclosing on the security interests and liens
on the assets securing our obligations under the guaranty to the extent we
have any liability under the guaranty at the time of the foreclosure and
subject to the limitations on the security interests and liens referred to
above. Although there can be no assurance that Huntsman Corporation will be
successful in restructuring its debt, Huntsman Corporation is currently in
discussions with the agent bank concerning the amendment and restatement of
its credit facilities and the refinancing of its supplemental accounts
receivable credit facility.

     On December 20, 2001, Huntsman Corporation entered into a supplemental
accounts receivable credit agreement (the "HC Supplemental Credit Agreement")
with certain of its lenders under its credit facilities pursuant to which a
revolving loan facility of $40 million and a term loan facility of $110 million
were made available to it. As of March 31, 2002, other than a DE MINIMIS letter
of credit, no portion of the revolving commitment under the HC Supplemental
Credit Agreement has been utilized. Proceeds from the HC Supplemental Credit
Facility are being used, among other things, to provide liquidity to Huntsman
Corporation and certain of its affiliates. Pursuant to the Amendment Agreement
and the HC Supplemental Credit Facility, Huntsman Corporation is only permitted
to make certain investments in or payments to the Company, including ordinary
course payments in respect of existing commercial arrangements, payments
representing the reasonably equivalent value of assets purchased by Huntsman
Corporation from the Company, accruals of interest expense and overhead
allocations, payments to purchase a certain mechanic's lien from S&B Engineers
and Constructors, Ltd. and additional loans, not to exceed $5 million, made
through the Intercompany Loan Agreement. These limitations also prohibit us from
obtaining additional equity investments from Huntsman Corporation.

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

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

     Huntsman International Holdings LLC ("HIH") and Huntsman International
LLC ("HI") have not guaranteed or provided any other credit support to the
obligations of Huntsman Corporation under its credit facilities or under
Huntsman Corporation's outstanding high-yield notes (the "HC Notes"). Neither

                                       25
<Page>

events of default under Huntsman Corporation's credit facilities or the HC Notes
nor the exercise of any remedy by the lenders thereunder will cause any
cross-defaults or cross-accelerations under the outstanding high-yield notes of
HIH or HI or the senior secured credit facilities of HI, except insofar as
foreclosure on the stock of Huntsman Specialty Chemicals Holdings Corporation,
pledged to secure the obligations of Huntsman Corporation under its credit
facilities, would constitute a "change in control" under the senior secured
credit facilities of HI and would give certain put rights to the holders of the
high-yield notes of HIH and HI.

FINANCIAL RESTRUCTURING

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

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

     We are in the advanced stages of negotiating with an affiliate of Credit
Suisse First Boston, holder of approximately 78% of the Senior Notes to
restructure our obligations under the Senior Notes. We can give no assurance
that we will reach an agreement with the holders of the Senior Notes, or that
any such agreement will be on terms which are favorable to our debt holders. In
addition, a restructuring of our obligations could result in a number of
outcomes, including modifications to the terms governing our debt, exchange of
our existing debt into new debt securities, conversion of our debt into new
equity securities, agreements by our debt holders to receive less than the full
amount that is owed to them, or other outcomes.

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

     The foregoing uncertainties, together with our recurring losses from
operations, negative working capital position and net stockholder's capital
deficiency, have raised significant concerns about our ability to continue our
operations without some form of financial restructuring. Consistent with these
circumstances, the audit opinion on our Consolidated Financial Statements for
the year ended December 31, 2001 expressed substantial doubt about our ability
to continue as a going concern.

     We currently expect that cash provided by our business will provide us with
sufficient liquidity to allow us to continue our operations for the near term.
We anticipate that we will continue to fund our operations in this manner until
our debt is restructured, either by agreement with the holders of our Senior

                                       26
<Page>

Notes and our other lenders or pursuant to a court sanctioned plan of
restructuring. Accordingly, we intend to meet our operating and capital needs in
2002 through a combination of:

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

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

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

     -  Targeted reductions in working capital and reduced capital expenditures.

CAPITAL EXPENDITURES

     Capital expenditures for the first quarter 2002 were $1.7 million, as
compared to $2.6 million for the first quarter 2001.

POTENTIAL ENVIRONMENTAL LIABILITIES

     A number of potential environmental liabilities exist which relate to
certain contaminated property. In addition, we will need to address a number of
potential environmental costs relating to pending or proposed environmental
regulations. No assurance can be given that all of the potential liabilities
arising out of our present or past operations have been identified or that the
amounts that might be required to investigate and remediate such sites or comply
with pending or proposed environmental regulations can be accurately estimated.
We have approximately $6.6 million accrued in the March 31, 2002 balance sheet
as an estimate of our total potential environmental liability with respect to
investigating and remediating known and assessed site contamination.

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

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

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

                                       27
<Page>

CHANGES IN FINANCIAL CONDITION

<Table>
<Caption>
Selected Cash Flow Information (in                March 31, 2002            December 31, 2001          Difference
   thousands)
                                              ------------------------    ----------------------    ---------------
<S>                                               <C>                         <C>                      <C>
Cash and cash equivalents                         $            --             $          --            $        --
Accounts and notes receivable, net                          7,819                     7,778                     41
Accounts and advances receivable -Affiliates               28,985                    25,572                  3,413
Inventories                                                46,329                    53,089                 (6,760)
Other current assets                                        5,160                     3,822                  1,338
Deferred income taxes                                       8,845                     8,845                     --
                                                  ---------------             -------------            -----------
   Total current assets                                    97,138                    99,106                 (1,968)

Accounts payable                                  $        33,870             $      36,740            $    (2,870)
Accounts payable - Affiliates                               8,055                     7,652                    403
Accrued liabilities                                        35,540                    36,198                   (658)
Current portion of long-term debt                         174,882                   174,882                     --
Advance from affiliate                                      6,070                     6,070                     --
Current portion of long-term debt--Affiliate              343,403                   346,990                 (3,587)
                                                  ---------------             -------------            -----------
   Total current liabilities                              601,820                   608,532                 (6,712)

Working capital                                   $      (504,682)            $    (509,426)           $     4,744

Affiliate borrowings                              $            --             $          --            $        --
Other - 11 3/4% Senior Notes due 2004                          --                        --                     --
                                                  ---------------             -------------            -----------
   Total long-term debt                           $            --             $          --            $        --
</Table>

     At March 31, 2002, our net working capital position was a negative
$504.7 million, as compared to a negative $509.4 million at December 31,
2001, resulting in an increase of $4.7 million. The $4.7 million increase is
primarily the result of positive operating cash flow in the first quarter of
2002. The primary reason for the negative working capital reflected above is
attributable to the Company's long-term debt of $518.2 and $521.7 as of March
31, 2002 and December 31, 2001, respectively, being reclassified as current
for the reasons discussed in "--Liquidity and Capital Resources--Debt" above.

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

     For the first quarter 2002, total long-term debt remained unchanged from
December 31, 2001 due to reclassification of the current portion of long-term
debt in both periods.

CAUTIONARY STATEMENT FOR FORWARD-LOOKING INFORMATION

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

     All forward-looking statements, including without limitation, management's
examination of historical operating trends, are based upon our current
expectations and various assumptions. Our expectations, beliefs and projections
are expressed in good faith and we believe there is a reasonable basis for them,
but, there can be no assurance that management's expectations, beliefs and
projections will result or be

                                       28
<Page>

achieved. All forward-looking statements apply only as of the date made. We
undertake no obligation to publicly update or revise forward-looking statements
to reflect events or circumstances after the date made or to reflect the
occurrence of unanticipated events.

     There are a number of risks and uncertainties that could cause our actual
results to differ materially from the forward-looking statements contained in or
contemplated by this report. The following are among the factors that could
cause actual results to differ materially from the forward-looking statements.
There may be other factors, including those discussed elsewhere in this report,
that may cause our actual results to differ materially from the forward-looking
statements. Any forward-looking statements should be considered in light of the
risk factors specified in our 2001 annual report on Form 10-K, some of which are
summarized below.

     -  Our financial condition, and the current financial condition of Huntsman
        Corporation, create a number of serious risks and uncertainties for our
        business.

     -  Our failure to pay interest on our Senior Notes within 30 days of the
        December 1, 2001 constituted an event of default under the Senior Notes
        and could result in an acceleration of the obligations thereunder.

     -  Our financial circumstances, including without limitation the issues
        noted under "--Financial Condition" above and the receipt of our
        independent auditor's "going concern" qualification in the audit opinion
        on our Consolidated Financial Statements for the year ended December 31,
        2001 may have an adverse effect on our business.

     -  A "change of control" could be triggered by certain events affecting
        Huntsman Corporation.

     -  The markets for our products are cyclical, and, currently, several of
        our markets are experiencing periods of oversupply, causing depressed
        pricing for our products in these markets.

     -  The prices for a large portion of our raw materials are similarly
        cyclical, and we may not be able to pass on increases in the cost of raw
        materials to our customers.

     -  The industries in which we operate are highly competitive.

     -  We are subject to extensive federal, state, local and foreign laws,
        regulations, rules and ordinances relating to pollution, protection of
        the environment and the use or cleanup of hazardous substances and
        wastes.

     -  Terrorist attacks, such as the attacks in New York and Washington, D.C.,
        on September 11, 2001, and other attacks or acts of war may adversely
        affect the markets in which we operate, our operations and our
        profitability.

     -  We also face a number of other uncertainties, including:

        -  changes in economic conditions,

        -  inability to obtain new customers or retain existing ones,

        -  changes in product mix and utilization of production facilities,

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

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

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<Page>

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

        -  changes in management or control of the Company, and

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

RECENT FINANCIAL ACCOUNTING STANDARDS

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

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The Company has interest and market risk with respect to certain
intercompany debt, which bears interest at floating rates. The Company's
remaining Senior Notes bear interest at fixed rates.

     The Company's exposure to foreign currency market risk is minimal
because sales prices for the Company's products are typically denominated in
United States dollars.

     The Company is exposed to commodity price market risk. The Company's
exposure to changing commodity prices may be limited by the fact that
substantially all raw materials are acquired at posted or market related prices,
and, generally, sales prices for the Company's finished products are at market
prices which reflect changes in underlying commodity prices. Nevertheless, the
Company may be negatively impacted in markets where economic conditions do not
permit it to pass on increased raw

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<Page>

material costs to its customers. The Company typically does not enter into
fixed-price long-term contracts. The Company also typically does not hedge
against commodity price market risk.

     The following table summarizes the Company's fixed and variable rate debt
obligations by contractual maturity date as of March 31, 2002:

<Table>
<Caption>
Debt (Dollars in Thousands)                     2002           2004        Thereafter        Total        Fair Value
---------------------------                     ----           ----        ----------        -----        ----------
<S>                                               <C>           <C>             <C>            <C>           <C>
Fixed Rate.............................                -        174,882               -        174,882         47,218
     Average interest rate.............                -          11.75%              -          11.75%             -
Variable Rate..........................           68,960              -         280,513        349,473        349,473
     Average interest rate (Prime rate
plus 0.5% to 2.0%)...................               5.50%             -            6.00%          5.91%             -
</Table>

                           PART II - OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

     We are a party to various lawsuits arising in the ordinary course of
business. At the present time, we do not believe that the outcome of any of
these lawsuits will have a material adverse effect on our financial position,
results of operations or cash flows.

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

     In the fourth quarter of 2001, we did not make the December 1, 2001
interest payment due on our 11 3/4% Senior Notes due 2004. Our failure to make
this interest payment within 30 days of the due date constituted an event of
default under the Senior Notes. We have interest payments due on June 1, and
December 1, 2002. The payment of interest on the Senior Notes would result in a
termination of the Forbearance Period under the Amendment Agreement; therefore
it is unlikely that we will make the upcoming interest payments on our Senior
Notes. See "Item 2--Management's Discussion and Analysis of Financial Condition
and Results of Operations--Liquidity and Capital Resources--Debt" and
"--Financial Restructuring." As of the date of this report, the total amount of
interest in arrears on the Senior Notes is $17.6 million. The total outstanding
principal amount of the Senior Notes is $174.9 million.

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

      (a)    Exhibits

             None.

      (b)    Reports Submitted on Form 8-K:

             There were no reports submitted on Form 8-K during the first
             quarter of 2002.

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                                    SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                   HUNTSMAN POLYMERS CORPORATION

                                   /s/ J. Kimo Esplin
                                   ---------------------------------------------
                                   J. KIMO ESPLIN
                                   Senior Vice President and
                                   Chief Financial Officer
                                   (Authorized Signatory and Principal
                                   Financial and Accounting Officer)

Date: May 14, 2002

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