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SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-Q

|(Mark One)                                        |                                                                                         
|------------------------------------------------- | ----------------------------------------------------------------------------------------
|ý                                                 | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|For the quarterly period ended September 30, 2002
|OR                                               
|o                                                 | 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(State or other jurisdiction of incorporation or organization)                                                  |  | 75-2104131(I.R.S. Employer 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 ý    No o

APPLICABLE ONLY TO CORPORATE ISSUERS:

On November 13, 2002, 1,000 shares of the Common Stock, par value $0.01 per share, of Huntsman Polymers Corporation were outstanding. As of such date, all
such shares were held by Huntsman Polymers Holding Corporation, an affiliate of Huntsman Polymers Corporation. There is no established trading market for the shares of Huntsman Polymers Corporation.

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HUNTSMAN POLYMERS CORPORATION
FORM 10-Q FOR THE QUARTERLY PERIOD
ENDED SEPTEMBER 30, 2002

TABLE OF CONTENTS



|                             |  |         |  |                                                                                      
|---------------------------- |  | ------- |  | -------------------------------------------------------------------------------------
|PART IFINANCIAL INFORMATION
|                             |  | Item 1. |  | Financial Statements                                                                 
|                             |  |         |  | Consolidated Balance Sheets                                                          
|                             |  |         |  | Consolidated Statements of Operations                                                
|                             |  |         |  | Consolidated Statements of Stockholder's Equity (Deficit)                            
|                             |  |         |  | Consolidated Statements of Cash Flows                                                
|                             |  |         |  | Notes to Consolidated Financial Statements                                           
|                             |  | Item 2. |  | Management's Discussion and Analysis of Financial Condition and Results of Operations
|                             |  | Item 3. |  | Quantitative and Qualitative Disclosures About Market Risk                           
|                             |  | Item 4. |  | Controls and Procedures                                                              
|PART IIOTHER INFORMATION   
|                             |  | Item 2. |  | Changes in Securities and Use of Proceeds                                            
|                             |  | Item 3. |  | Defaults Upon Senior Securities                                                      
|                             |  | Item 6. |  | Exhibits and Reports on Form 8-K                                                     

Some
of the statements contained in this report are forward-looking in nature. In some cases, you can identify forward-looking statements by terminology such as "believes," "expects,"
"may," "will," "should" or "anticipates" or the negative of such terms or other comparable terminology, or by discussions of strategy. You are cautioned that our business and operations are subject to
a variety of risks and uncertainties, and, consequently, our actual results may differ materially 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.

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Huntsman Polymers Corporation and Subsidiaries        Consolidated Balance Sheets        (Unaudited)        (Dollars in Thousands)

|                                               |                                                                                                                               | September 30,
2002                                   |         | December 31,
2001 |        
|---------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------- | ------- | ----------------- | -------
|ASSETS                                         |                                                                                                                              
|Current Assets:                                |                                                                                                                               |                                                      |         |                   |        
|                                               | Cash and cash equivalents                                                                                                     |                                                      | $       |                  |        
|                                               | Accounts and notes receivable, net                                                                                            |                                                      |         | 5,413             |        
|                                               | Accounts and advances receivableAffiliates                                                                                   |                                                      |         | 30,915            |        
|                                               | Inventories                                                                                                                   |                                                      |         | 48,242            |        
|                                               | Other current assets                                                                                                          |                                                      |         | 10,754            |        
|                                               | Deferred income taxes                                                                                                         |                                                      |         | 9,117             |        
|                                               |                                                                                                                               |                                                      |         |                   |        
|                                               |                                                                                                                               | Total Current Assets                                 |         |                   | 104,441
|Properties, plant and equipment, net           |                                                                                                                               |                                                      | 359,680 |                   |        
|Intangible assets, net                         |                                                                                                                               |                                                      | 5,577   |                   |        
|Other noncurrent assets                        |                                                                                                                               |                                                      | 23,387  |                   |        
|                                               |                                                                                                                               |                                                      |         |                   |        
|                                               |                                                                                                                               | Total Assets                                         |         | $                 | 493,085
|                                               |                                                                                                                               |                                                      |         |                   |        
|LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT) |                                                                                                                              
|Current Liabilities:                           |                                                                                                                               |                                                      |         |                   |        
|                                               | Accounts payable                                                                                                              |                                                      | $       | 28,109            |        
|                                               | Accounts payableAffiliates                                                                                                   |                                                      |         | 5,717             |        
|                                               | Accrued liabilities                                                                                                           |                                                      |         | 14,266            |        
|                                               | Current portion of long-term debt                                                                                             |                                                      |         |                  |        
|                                               | Advance from affiliate                                                                                                        |                                                      |         |                  |        
|                                               | Current portion of long-term debtAffiliates                                                                                  |                                                      |         |                  |        
|                                               |                                                                                                                               |                                                      |         |                   |        
|                                               |                                                                                                                               | Total Current Liabilities                            |         |                   | 48,092 
|Long-term debt:                                |                                                                                                                               |                                                      |         |                   |        
|                                               | Affiliates                                                                                                                    |                                                      |         | 364,340           |        
|                                               | Other                                                                                                                         |                                                      |         | 36,802            |        
|Deferred income taxes                          |                                                                                                                               |                                                      | 9,117   |                   |        
|Other noncurrent liabilities                   |                                                                                                                               |                                                      | 30,837  |                   |        
|                                               |                                                                                                                               |                                                      |         |                   |        
|                                               |                                                                                                                               | Total Liabilities                                    |         |                   | 489,188
|                                               |                                                                                                                               |                                                      |         |                   |        
|Stockholder's Equity (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                                                                                                    |                                                      |         | 719,473           |        
|                                               | Retained deficit                                                                                                              |                                                      |         | (715,576          | )      
|                                               |                                                                                                                               |                                                      |         |                   |        
|                                               |                                                                                                                               | Total Stockholder's Equity (Deficit)                 |         |                   | 3,897  
|                                               |                                                                                                                               |                                                      |         |                   |        
|                                               |                                                                                                                               | Total Liabilities and Stockholder's Equity (Deficit) |         | $                 | 493,085
|                                               |                                                                                                                               |                                                      |         |                   |        

See
accompanying notes to consolidated financial statements

1

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Huntsman Polymers Corporation and Subsidiaries        Consolidated Statements of Operations        (Unaudited)        (Dollars in Thousands)

|                                    |                          | Three Months
Ended
September 30,
2002 |         | Three Months
Ended
September 30,
2001 |   | Nine Months
Ended
September 30,
2002 |        | Nine Months
Ended
September 30,
2001 |         
|----------------------------------- | ------------------------ | ------------------------------------- | ------- | ------------------------------------- | - | ------------------------------------ | ------ | ------------------------------------ | --------
|Revenues:                           |                          |                                       |         |                                       |   |                                      |        |                                      |         
|                                    | Trade sales and services |                                       | $       | 18,512                                |   | $                                    | 21,184 |                                      | $       
|                                    | Affiliate sales          |                                       |         | 83,193                                |   |                                      | 89,307 |                                      |         
|                                    |                          |                                       |         |                                       |   |                                      |        |                                      |         
|Total Revenues                      |                          |                                       | 101,705 |                                       |   | 110,491                              |        |                                      | 321,674 
|Cost of Goods Sold                  |                          |                                       | (95,918 | )                                     |   | (131,236                             | )      |                                      | (295,426
|                                    |                          |                                       |         |                                       |   |                                      |        |                                      |         
|Gross Profit (Loss)                 |                          |                                       | 5,787   |                                       |   | (20,745                              | )      |                                      | 26,248  
|Selling, General and Administrative |                          |                                       | (5,874  | )                                     |   | (5,427                               | )      |                                      | (15,408 
|Plant Closing / Restructuring Costs |                          |                                       | 5,386   |                                       |   | (110,200                             | )      |                                      | 5,386   
|                                    |                          |                                       |         |                                       |   |                                      |        |                                      |         
|Operating Income (Loss)             |                          |                                       | 5,299   |                                       |   | (136,372                             | )      |                                      | 16,226  
|Interest expense, net:              |                          |                                       |         |                                       |   |                                      |        |                                      |         
|                                    | Affiliate interest       |                                       |         | (4,877                                | ) |                                      | (7,840 | )                                    |         
|                                    | Other interest           |                                       |         | (5,931                                | ) |                                      | (5,273 | )                                    |         
|Other income (expense)              |                          |                                       |        |                                       |   | 29                                   |        |                                      |        
|                                    |                          |                                       |         |                                       |   |                                      |        |                                      |         
|Net Loss Before Income Taxes        |                          |                                       | (5,509  | )                                     |   | (149,456                             | )      |                                      | (16,134 
|Income tax benefit                  |                          |                                       |        |                                       |   | 43,954                               |        |                                      |        
|                                    |                          |                                       |         |                                       |   |                                      |        |                                      |         
|Net Loss                            |                          | $                                     | (5,509  | )                                     | $ | (105,502                             | )      | $                                    | (16,134 
|                                    |                          |                                       |         |                                       |   |                                      |        |                                      |         

See
accompanying notes to consolidated financial statements

2

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Huntsman Polymers Corporation and Subsidiaries        Consolidated Statements of Stockholder's Equity (Deficit)        (Unaudited)        (Dollars and Shares in Thousands)

|                            |  | Common Stock |  |   |   |  |   |         | 
|--------------------------- |  | ------------ |  | - | - |  | - | ------- | 
|
|
|Balance, January 1, 2002    |  | 1            |  | $ |  |  | $ | 559,500 | 
|Net Loss                    |  |             |  |   |  |  |   |        | 
|Additional Paid-in Capital  |  |             |  |   |  |  |   | 159,973 | 
|                            |  |              |  |   |   |  |   |         | 
|Balance, September 30, 2002 |  | 1            |  | $ |  |  | $ | 719,473 | 
|                            |  |              |  |   |   |  |   |         | 

See
accompanying notes to consolidated financial statements

3

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Huntsman Polymers Corporation and Subsidiaries        Consolidated Statements of Cash Flows        (Unaudited)        (Dollars in Thousands)

|                                                                                                                                                                                                                                                                        |                                                | Three Months
Ended
September 30, 2002             |         | Nine Months
Ended
September 30, 2002 |        
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------- | ------------------------------------------------- | ------- | ------------------------------------ | -------
|Operating Activities                                                                                                                                                                                                                                                    |                                                |                                                   |         |                                      |        
|Net loss                                                                                                                                                                                                                                                                |                                                | $                                                 | (16,134 | )                                    | $      
|Reconciliation to net cash used in operations:                                                                                                                                                                                                                          |                                                |                                                   |         |                                      |        
|                                                                                                                                                                                                                                                                        | Depreciation and amortization                  |                                                   |         | 21,057                               |        
|                                                                                                                                                                                                                                                                        | Deferred income taxes                          |                                                   |         |                                     |        
|                                                                                                                                                                                                                                                                        | Amortization of debt issuance costs            |                                                   |         | 652                                  |        
|                                                                                                                                                                                                                                                                        | Retirement of fixed assets                     |                                                   |         |                                     |        
|                                                                                                                                                                                                                                                                        | Non-cash charges to inventory and other assets |                                                   |         | (635                                 | )      
|                                                                                                                                                                                                                                                                        | Impairment of goodwill                         |                                                   |         |                                     |        
|                                                                                                                                                                                                                                                                        | Changes in operating working capital:          |                                                   |         |                                      |        
|                                                                                                                                                                                                                                                                        |                                                | Receivables                                       |         |                                      | (2,978 
|                                                                                                                                                                                                                                                                        |                                                | Inventories                                       |         |                                      | 4,847  
|                                                                                                                                                                                                                                                                        |                                                | Other current assets                              |         |                                      | (7,900 
|                                                                                                                                                                                                                                                                        |                                                | Accounts payable                                  |         |                                      | (10,566
|                                                                                                                                                                                                                                                                        |                                                | Other current liabilities                         |         |                                      | 1,564  
|                                                                                                                                                                                                                                                                        |                                                | Deferred charges and other noncurrent assets      |         |                                      | 3,625  
|                                                                                                                                                                                                                                                                        |                                                | Deferred credits and other noncurrent liabilities |         |                                      | 861    
|                                                                                                                                                                                                                                                                        |                                                |                                                   |         |                                      |        
|Net Cash Used in Operations                                                                                                                                                                                                                                             |                                                | $                                                 | (5,607  | )                                    | $      
|Investing Activities                                                                                                                                                                                                                                                    |                                                |                                                   |         |                                      |        
|Proceeds from sale of property                                                                                                                                                                                                                                          |                                                |                                                   |        |                                      |        
|Capital expenditures                                                                                                                                                                                                                                                    |                                                |                                                   | (5,673  | )                                    |        
|                                                                                                                                                                                                                                                                        |                                                |                                                   |         |                                      |        
|Net Cash Used in Investing Activities                                                                                                                                                                                                                                   |                                                |                                                   | (5,673  | )                                    |        
|Financing Activities                                                                                                                                                                                                                                                    |                                                |                                                   |         |                                      |        
|Intercompany borrowing from parent                                                                                                                                                                                                                                      |                                                |                                                   | 11,280  |                                      |        
|Proceeds of capital contribution by parent                                                                                                                                                                                                                              |                                                |                                                   |        |                                      |        
|                                                                                                                                                                                                                                                                        |                                                |                                                   |         |                                      |        
|Net Cash Provided by Financing Activities                                                                                                                                                                                                                               |                                                |                                                   | 11,280  |                                      |        
|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                                                                                                                                                                                                                                                  |                                                | $                                                 | 4,690   |                                      | $      
|Cash paid (refunded) for income taxes                                                                                                                                                                                                                                   |                                                | $                                                 |        |                                      | $      
|Supplemental Schedule of Noncash Financing Activities                                                                                                                                                                                                                   |                                                |                                                   |         |                                      |        
|On September 30, 2002, the Company received a noncash capital contribution from its parent, Huntsman Polymers Holdings Corporation, of $159,973 in exchange for Senior Notes of $138,080, unpaid accrued interest of $22,861, and deferred debt issuance
costs of $968. |                                                |                                                   |         |                                      |        

See
accompanying notes to consolidated financial statements

4

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HUNTSMAN POLYMERS CORPORATION AND SUBSIDIARIES        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS        (UNAUDITED)

1.    GENERAL



Huntsman Polymers Corporation and its subsidiaries (collectively, the "Company") 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, amorphous polyalphaolefin
("APAO") and ethylene (primarily for internal use).

The
Company is a wholly-owned subsidiary of Huntsman Polymers Holding Corporation ("Parent" or "HPHC"). Huntsman Company LLC, a Utah limited liability company ("Huntsman Company"), owns
all the stock of HPHC. Prior to its conversion into a Utah limited liability company on September 9, 2002, Huntsman Company, then named Huntsman Corporation, was a Utah corporation.



The accompanying consolidated financial statements of the Company are unaudited. However, in management's opinion, all adjustments, consisting only of normal
recurring adjustments necessary for a fair presentation of results of operations, financial position and cash flows for the periods shown, have been made. Results for interim periods are not
necessarily indicative of those to be expected for the full year. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes to
consolidated financial statements included in the Company's annual report on form 10-K for the year ended December 31, 2001.

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



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



The preparation of financial statements in conformity with generally accepted accounting principles in the United States 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.



For purposes of the statements of cash flows, the Company considers cash in checking accounts and cash in short-term highly liquid investments with an
original maturity of three months or less to be cash and cash equivalents.



Inventories are stated at the lower of cost or market, with cost determined using the average cost method.

5

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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. 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 are stated at cost (fair value at the time of acquisition) and are amortized using the straight-line method over the estimated
useful lives or over the life of the related agreement, ranging from five to fifteen years.



Other assets consist primarily of spare parts, capitalized loan fees and turnaround costs. Capitalized loan fees are amortized using the straight-line
method over the term of the related debt, ranging from five to ten 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.



The Company evaluates the carrying value of long-term assets based upon current and anticipated undiscounted cash flows, and recognizes an impairment
when such estimated cash flows will be less than the carrying value of the asset. Measurement of the amount of impairment, if any, is based upon the difference between carrying value and fair value.
For more information, see "Note 9Restructuring Costs and Impairment Charges."



The Company has no financial instruments or other contracts that are derivatives.



The Company uses the asset and liability method of accounting for income taxes. Deferred income taxes reflect the net tax effects of temporary differences between
the carrying amounts of assets and liabilities for financial and tax reporting purposes.



Other long-term liabilities include accrued pension and other post-retirement benefits, environmental reserves, insurance reserves and
other liabilities.



The Company has no subsidiaries outside the United States.

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The Company generates revenue through sales in the open market, raw material conversion agreements and long-term supply contracts. The Company
recognizes revenue when it is realized or realizable and earned, which is generally upon shipment of product in fulfillment of a customer order.



Research and development costs are expensed as incurred.



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.



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



On January 1, 2002, the Company adopted Statement of Financial Accounting Standards ("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 9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 not be significant.

In
October 2001, the Financial Accounting Standards Board ("FASB") 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, FASB 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.

7

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In
June 2002, the FASB issued SFAS No. 146, "Accounting For Costs Associated With Exit or Disposal Activities." SFAS
No. 146 requires recording costs associated with exit or disposal activities at their fair values when a liability has been incurred. Under previous guidance, certain exit costs were accrued
upon management's commitment to an exit plan, which is generally before an actual liability has been incurred. Adoption of this statement is required effective January 1, 2003. The Company has
not yet completed its evaluation of the impact of adopting this statement.

3.    INVENTORIES

Inventories consist of the following (dollars in thousands):

September 30, 2002

December 31, 2001Raw materials

$
11,598

$
9,007Work in progress


5,222


5,790Finished goods


31,422


38,292Total

$
48,242

$
53,089


4.    PROPERTY, PLANT AND EQUIPMENT

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

September 30, 2002

December 31, 2001Land

$
1,008

$
1,008Buildings


98,898


98,791Plant and equipment


491,776


502,871Construction in progress


3,471


2,937595,153


605,607Less accumulated depreciation


(235,473
)

(231,132
)Property, plant and equipment, net

$
359,680

$
374,475


5.    INTANGIBLE ASSETS

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

September 30, 2002

December 31, 2001Technology licenses

$
8,115

$
8,115Less accumulated amortization


(2,538
)

(1,949
)Intangible assets, net

$
5,577

$
6,166


In
the third quarter of 2001, goodwill was written off as part of plant closing and restructuring costs. For additional information, see "Note 9Restructuring Costs
and Impairment Charges" below.

Estimated
future annualized amortization expense for intangible assets through December 31, 2006 is as follows (dollars in millions):

2002 through 2004

$
0.82005 through 2006

$
0.7


8

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6.    LONG-TERM DEBT

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

September 30, 2002

December 31, 2001Affiliates:Intercompany borrowings

$
364,340

$
279,055Advance from affiliates





6,070Capital leaseaffiliates





67,935Total affiliates


364,340


353,060Less: Current portion





(353,060
)Total long-term debtaffiliates


364,340


Other113/4% Senior Notes due 2004


36,802


174,882Less: Current portion





(174,882
)Total long-term debtother


36,802


Total

$
401,142

$





As of September 30, 2002, the Company owed $364.3 million under the Intercompany Loan Agreement that it maintains with Huntsman Group Holdings
Finance Corporation ("HGHFC"), a subsidiary of Huntsman Company. The intercompany loans accrue interest at the prime rate (4.75% at September 30, 2002) plus a margin of 0.75% and are payable
upon demand. The Intercompany Loan Agreement is the Company's principal source of financing, and the intercompany loans are secured by a lien on substantially all the Company's assets.



The Company's 113/4% Senior Notes due 2004 ("Senior Notes") are unsecured senior obligations of the Company and are effectively junior in right of
payment to all existing and future secured indebtedness. 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 113/4%. The Company is not required to make mandatory redemption or sinking fund payments with respect
to the Senior Notes.

Prior
to September 30, 2002, $174.9 million in principal amount of the Senior Notes were outstanding. On September 30, 2002, MatlinPatterson Global Opportunities
Partners, L.P. (formerly known as CSFB Global Opportunities Partners, L.P.) ("GOP"), and Consolidated Press Holdings Limited ("CPH") held, in the aggregate, $138.1 million in principal amount
of the Senior Notes. On September 30, 2002, pursuant to an Amended and Restated Debt Exchange Agreement, dated as of September 17, 2002, the Senior Notes held by GOP and CPH were
exchanged for equity in a newly established holding company ("Huntsman Holdings"). Huntsman Holdings then contributed these Senior Notes to the capital of the Company, through HPHC, and such Senior
Notes were subsequently canceled. Accordingly, at present, $36.8 million in principal amount of the Senior Notes remain outstanding.

In
addition, prior to September 30, 2002, the Indenture governing the Senior Notes contained certain covenants that, among other things, limited 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. As discussed below in "Management's Discussion and AnalysisLiquidity and Capital

9

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ResourcesFinancial Restructuring," concurrent with the closing of the Restructuring, previously executed amendments to the Indenture became effective and virtually all the restrictive
covenants contained in the Indenture were eliminated.

On
December 1, 2001 and June 1, 2002, the Company failed to make interest payments on the Senior Notes. However, the Company reinstated its outstanding Senior Notes,
totaling $36.8 million in principal amount, by delivering to HSBC Bank USA, the trustee of the Senior Notes, payment in full of outstanding interest due of approximately $4.7 million on
such Senior Notes (comprised of the December 1, 2001 and June 1, 2002 interest payments plus the default interest on such overdue payments through October 22, 2002, the special
payment date established for payment of this interest). The special record date established for payment of the interest was October 15, 2002.



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 Capital Lease Agreement was amended and Estherwood Corporation assigned all its rights under the agreement to HGHFC. On
December 12, 2001, HGHFC assigned all of its rights under the Capital Lease Agreement to Huntsman Company.

On
September 30, 2002, the maturity date of the Capital Lease Agreement, the Company repaid the lease amount plus accrued interest, totaling $71.0 million, to Huntsman
Company. The Company satisfied this obligation through borrowings under the Intercompany Loan Agreement. Also on the maturity date of the Capital Lease Agreement, the Company exercised its option to
purchase the FPO facility from Huntsman Company for $1.

7.    COMMITMENTS AND CONTINGENCIES

The Company has various purchase commitments for materials and supplies entered into in the ordinary course of business. These agreements extend from 2 to
6 years and the purchase price is generally based on market prices.

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 Company 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 Company paid S&B $6.2 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
owed Huntsman Company $12.3 million (plus accrued interest) with respect to this matter, which was secured by the mechanics' lien that covered the Company's polypropylene facility. On
September 30, 2002, the Company repaid this obligation (including accrued interest) to Huntsman Company. The Company satisfied this obligation through borrowings under the Intercompany Loan
Agreement.

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 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 resolve such matters will
not be significant to the Company.

10

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8.    ENVIRONMENTAL AND HEALTH MATTERS



The operation of chemical manufacturing plants, the distribution of chemical products and the related production of by-products and wastes, entail
risk of adverse environmental effects. The Company is subject to extensive federal, state, local and foreign laws, regulations, rules and ordinances relating to pollution, the protection of the
environment and the generation, storage, handling, transportation, treatment, disposal and remediation of hazardous substances and waste materials. In the ordinary course of business, the Company is
subject continually to environmental inspections and monitoring by governmental enforcement authorities. The Company may incur substantial costs, including fines, damages and criminal or civil
sanctions, or experience interruptions in its operations for actual or alleged violations arising under any environmental laws. In addition, production facilities require operating permits that are
subject to renewal, modification and, in some circumstances, revocation. Violations of permit requirements can also result in restrictions or prohibitions on plant operations, substantial fines and
civil or criminal sanctions. The Company's operations involve the generation, handling, transportation, use and disposal of numerous hazardous substances. Changes in regulations regarding the
generation, handling, transportation, use and disposal of hazardous substances could inhibit or interrupt operations and have a material adverse effect on the Company's business. From time to time,
operations may result in violations under environmental laws, including spills or other releases of hazardous substances to the environment. In the event of a significant incident, the Company could
incur material costs to address and remediate the incident. In addition, following any such incident, the Company may incur higher costs to implement measures to prevent future incidents. Given the
nature of the Company's business, there can be no assurance that violations of environmental laws will not result in restrictions imposed on the Company's operating activities, substantial fines,
penalties, damages or other costs. In addition, potentially significant expenditures could be necessary in order to comply with existing or future environmental laws.

The
Company has established financial reserves relating to environmental restoration and remediation programs, which the Company believes are sufficient for known requirements.
Liabilities are recorded when site restoration and environmental remediation and clean-up obligations are either known or considered probable and can be reasonably estimated. These
liabilities are based upon all available facts, existing technology, past experience, and cost-sharing arrangements (as to which, the Company considers the viability of other parties). A
total of $6.8 million has been accrued related to environmental matters as of September 30, 2002. The Company does not anticipate that any future costs, in excess of those that have been
accrued by the Company, will be material to results of operations or financial position as a result of compliance with current environmental laws and regulations.

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 $2.6 million for 2002. Generally, the Company expects to incur between $1.5 million and $6.0 million annually in capital
spending to address the requirements of environmental laws. However, the Company cannot 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 many potential environmental liabilities from its 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 its Odessa, Texas facility, which are
regulated by the Texas Commission on Environmental Quality (the "TCEQ," formerly named the Texas Natural Resource Conservation Commission or TNRCC). This insurance satisfies the requirements of the
TCEQ governing the operation of these facilities.

11

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The Company, along with many other companies, has been named as a potentially responsible party under the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 ("CERCLA"), in connection with past disposal of waste at certain sites. The Company believes that its financial reserves are sufficient for its known requirements.



By letter dated January 28, 1999, the TCEQ 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 TCEQ of the start up and that excess emissions might result. The TCEQ 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 TCEQ claims were in violation of state law. The TCEQ sought penalties for all alleged violations. On January 30, 2002, the claims asserted by the TCEQ 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. Four 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 only other remaining filed case
involves a total of approximately 187 claimants. Although counsel to the Company believes that it has strong defenses to the remaining suit, it is too early to predict the outcome of such litigation.



As a result of a third-party environmental audit of the Company's Odessa operations starting in November 2000, the Company voluntarily disclosed to the
United States Environmental Protection Agency ("EPA") and the TCEQ certain potential violations of environmental law. EPA and the TCEQ have evaluated those disclosures to determine whether the
disclosures qualify for penalty mitigation under federal policy and state law. TCEQ has indicated to the Company that it has closed its file on the disclosures without imposing a penalty. The Company
has not heard finally from the EPA, although the Company does not anticipate that EPA will seek to impose a significant penalty.

As
a result of an 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. A tentative settlement involving civil penalties in the amount of $475,000 for this case has been tentatively reached subject to final
review by the Company and the negotiation of final settlement language acceptable to all parties.



The Company has been named as a "premises defendant" in a number of asbestos exposure lawsuits. These suits often involve multiple plaintiffs and multiple
defendants, and, generally, the complaint in the action does not indicate which plaintiffs are making claims against a specific defendant, where the alleged injuries were incurred or what injuries
each plaintiff claims. These facts must be learned through discovery. The Company currently has eighteen asbestos exposure cases

12

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pending against it. Among all the plaintiffs in those cases, 65 have, through the discovery process, claimed exposure to asbestos at the Company's facilities. Among the cases currently filed, the
Company is aware of two claims of mesothelioma, one claim of colon cancer and one claim of melanoma. The rest of the claims that the Company is aware of are for asbestosis. The Company does not have
sufficient information at the present time to estimate any liability in these cases. Although the Company cannot provide specific assurances, based on the Company's understanding of similar cases,
management believes that the Company's ultimate liability in these eighteen cases will not be material to the Company's financial position or results of operations.

9.    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.



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 were 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.

13

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During this time, Huntsman Company engaged a financial advisor and investment banker to assist it and its domestic, restricted subsidiaries in identifying and exploring strategic alternatives,
including developing out-of-court or court-sanctioned financial restructuring plans. In February 2002, the financial advisor 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; $5.1 million against inventories; and $23.5 million against cash and accrued liabilities.

During
2002, management received additional information regarding remaining restructuring obligations. In light of this additional information, in the third quarter of 2002, management
determined that it was appropriate to reduce the reserve balance by $5.4 million. This reduction is shown in the summary table below as part of the column titled "2002 Revision to Charge."

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

|                                         |  | 2001
Total
Charge |         | 2002
Revision
To Charge |   | Total Revised
Restructuring
Charge |   | Total
Non-cash
Charges |         | Total
Cash
Payments |   | Restructuring
Liabilities
September 30,
2002
|---------------------------------------- |  | ----------------- | ------- | ----------------------- | - | ---------------------------------- | - | ---------------------- | ------- | ------------------- | - | --------------------------------------------
|Work force reduction                     |  | $                 | 11,038  |                         | $ | (3,055                             | ) | $                      | 7,983   |                     | $ |                                            
|Styrene unit decommissioning/ demolition |  |                   | 2,601   |                         |   | 895                                |   |                        | 3,496   |                     |   |                                            
|Polypropylene Line 1 decommissioning     |  |                   | 200     |                         |   | 632                                |   |                        | 832     |                     |   |                                            
|Non-cancelable lease costs               |  |                   | 5,348   |                         |   | (3,223                             | ) |                        | 2,125   |                     |   |                                            
|Property and equipment                   |  |                   | 463,038 |                         |   |                                   |   |                        | 463,038 |                     |   | 463,038                                     
|Goodwill                                 |  |                   | 33,788  |                         |   |                                   |   |                        | 33,788  |                     |   | 33,788                                      
|Provision for unusable supply inventory  |  |                   | 8,565   |                         |   | (635                               | ) |                        | 7,930   |                     |   | 5,067                                       
|Other charges                            |  |                   | 823     |                         |   |                                   |   |                        | 823     |                     |   |                                            
|                                         |  |                   |         |                         |   |                                    |   |                        |         |                     |   |                                             
|Total restructuring costs                |  | $                 | 525,401 |                         | $ | (5,386                             | ) | $                      | 520,015 |                     | $ | 501,893                                     
|                                         |  |                   |         |                         |   |                                    |   |                        |         |                     |   |                                             

Cash
expenditures relating to workforce reductions and plant decommissioning are substantially completed. Cash outlays related to non-cancelable railcar leases will be
completed by 2008. The Company estimates that it has realized pretax savings in operating expenses of approximately $34 million from its cost reduction efforts.

10.  RECENT EVENTS



On September 30, 2002, concurrent with the closing of the restructuring discussed below, GOP and CPH exchanged the $138.1 million in principal
amount of the Senior Notes they held into equity in

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Huntsman Holdings. Accordingly, there are currently outstanding $36.8 million in principal amount of the Senior Notes. The Company has reinstated the outstanding Senior Notes by delivering to
HSBC
Bank USA, the trustee of the Senior Notes, payment in full of outstanding interest due of approximately $4.7 million on the Senior Notes (comprised of the December 1, 2001 and
June 1, 2002 interest payments plus the default interest on such overdue payments through October 22, 2002, the special payment date established for payment of this interest). The
special record date established for payment of such amounts was October 15, 2002. Huntsman Company also reinstated its outstanding HC Notes, totaling approximately $59 million in
principal amount, by paying approximately $5.4 million of interest that had accrued on the HC Notes to be reinstated since January 2002.



On September 30, 2002, Huntsman Company and the Company completed debt for equity exchanges (the "Restructuring") pursuant to an Amended and Restated Debt
Exchange Agreement, dated as of September 17, 2002. Huntsman Company obtained the required consent of all its bank lenders to complete the Restructuring on an
out-of-court basis. The Restructuring involved the following:



15

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As
a result of the Restructuring, Huntsman Company has eliminated approximately $763 million of consolidated debt claims, including approximately $161 million of debt
claims on the Senior Notes, and has reduced consolidated annual interest expense on such consolidated debt claims by approximately $63 million, including approximately $16 million of
annual interest expense with respect to the Senior Notes.



At present, the Senior Notes are listed for trading on the New York Stock Exchange (the "NYSE"). Because most of the trading in the Senior Notes occurs in
over-the-counter markets, on November 6, 2002, the Company filed an application with the Securities and Exchange Commission and the NYSE to withdraw the Senior Notes
from listing and registration on the NYSE. The Company expects the Senior Notes to be delisted effective in early December, 2002. Thereafter, trading in the Senior Notes will no longer occur on the
NYSE, but trading will continue in the over-the-counter bond markets.

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

General

Huntsman Polymers Corporation and its subsidiaries (collectively, the "Company," "our," "us" or "we") manufacture chemical products used in a wide variety of
industrial and consumer-related applications. Our principal products are polyethylene (including low density polyethylene ("LDPE") and linear low density polyethylene ("LLDPE")), polypropylene,
amorphous polyalphaolefin ("APAO") and ethylene (primarily for internal use).

Our
Company is a wholly-owned subsidiary of Huntsman Polymers Holding Corporation ("Parent" or "HPHC"). Huntsman Company LLC, a Utah limited liability company ("Huntsman Company"), owns
all the stock of HPHC. Prior to its conversion into a Utah limited liability company on September 9, 2002, Huntsman Company, then named Huntsman Corporation, was a Utah corporation.

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 Company. These products are sold at market prices with payment terms of net 30 days from the end of the
month. We expect that during the fourth quarter of 2002, we will terminate this arrangement with Huntsman Company and sell directly to customers. This change is expected to increase our payment terms
from approximately 30 days to an average of more than 45 days for such receivables.

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

Reinstatement of Senior Notes

On September 30, 2002, concurrent with the closing of the Restructuring, MatlinPatterson Global Opportunities Partners, L.P. (formerly known as CSFB Global
Opportunities Partners, L.P.) ("GOP") and Consolidated Press Holdings Limited ("CPH") exchanged the $138.1 million in principal amount of our 113/4% Senior Notes due 2004
("Senior Notes") they held into equity in Huntsman Holdings. Accordingly, there are currently outstanding $36.8 million in principal amount of our Senior Notes. We have reinstated our
outstanding Senior Notes by delivering to HSBC Bank USA, the trustee of the Senior Notes, payment in full of outstanding interest due of approximately $4.7 million on the Senior Notes
(comprised of the December 1, 2001 and June 1, 2002 interest payments plus the default interest on such overdue payments through October 22, 2002, the special payment date
established for payment of this interest). The special record date established for payment of such amounts was October 15, 2002. Huntsman Company also reinstated its outstanding subordinated
notes (the "HC Notes"), totaling approximately $59 million in principal amount, by paying approximately $5.4 million of interest that had accrued on the HC Notes to be reinstated since
January 2002. For more information, see "Liquidity and Capital ResourcesDebt" and "Financial Restructuring" below.

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Restructuring of Huntsman Company and the Company

On September 30, 2002, Huntsman Company and our Company completed debt for equity exchanges (the "Restructuring") pursuant to an Amended and Restated Debt
Exchange Agreement, dated as of September 17, 2002. Huntsman Company obtained the required consent of all its bank lenders to complete the Restructuring on an
out-of-court basis. The Restructuring involved the following:



As
a result of the Restructuring, Huntsman Company has eliminated approximately $763 million of consolidated debt claims, including approximately $161 million of debt
claims on the Senior Notes, and has reduced consolidated annual interest expense on such consolidated debt claims by approximately $63 million, including approximately $16 million of
annual interest expense with respect to the Senior Notes.

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Withdrawal of Senior Notes from Listing and Registration on the NYSE

At present, the Senior Notes are listed for trading on the New York Stock Exchange (the "NYSE"). Because most of the trading in the Senior Notes occurs in
over-the-counter markets, on November 6,
2002, we filed an application with the Securities and Exchange Commission and the NYSE to withdraw the Senior Notes from listing and registration on the NYSE. We expect the Senior Notes to be delisted
effective in early December, 2002. Thereafter, trading in the Senior Notes will no longer occur on the NYSE, but trading will continue in the over-the-counter bond markets.

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.



Under
Statement of Financial Accounting Standards ("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 Company engaged a financial advisor and investment banker to assist it and its domestic
subsidiaries, including the

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Company, in identifying and exploring strategic alternatives, including developing out of court or court sanctioned financial restructuring plans. In February 2002, the financial advisor
provided a valuation report to our management which indicated an impairment of our assets. As a result, in the fourth quarter of 2001, we assessed certain fixed assets for impairment as required under
SFAS No. 121.

We
performed an evaluation of the recoverability of our assets as described in SFAS No. 121. Management concluded from the results of this evaluation that a significant impairment
of long-lived assets had occurred. An impairment charge was required because the estimated fair value of these assets was less than their carrying value. The fair value of 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; $5.1 million against inventories; and $23.5 million against cash and accrued liabilities.

During
2002, our management received additional information regarding remaining restructuring obligations. In light of this additional information, in the third quarter of 2002,
management determined that it was appropriate to reduce the reserve balance by $5.4 million. This reduction is shown in the summary table below as part of the column titled "2002 Revision to
Charge."

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

|                                         |  | 2001
Total
Charge |         | 2002
Revision
To Charge |   | Total Revised
Restructuring
Charge |   | Total
Non-cash
Charges |         | Total
Cash
Payments |   | Restructuring
Liabilities
September 30,
2002
|---------------------------------------- |  | ----------------- | ------- | ----------------------- | - | ---------------------------------- | - | ---------------------- | ------- | ------------------- | - | --------------------------------------------
|Work force reduction                     |  | $                 | 11,038  |                         | $ | (3,055                             | ) | $                      | 7,983   |                     | $ |                                            
|Styrene unit decommissioning/ demolition |  |                   | 2,601   |                         |   | 895                                |   |                        | 3,496   |                     |   |                                            
|Polypropylene Line 1 decommissioning     |  |                   | 200     |                         |   | 632                                |   |                        | 832     |                     |   |                                            
|Non-cancelable lease costs               |  |                   | 5,348   |                         |   | (3,223                             | ) |                        | 2,125   |                     |   |                                            
|Property and equipment                   |  |                   | 463,038 |                         |   |                                   |   |                        | 463,038 |                     |   | 463,038                                     
|Goodwill                                 |  |                   | 33,788  |                         |   |                                   |   |                        | 33,788  |                     |   | 33,788                                      
|Provision for unusable supply inventory  |  |                   | 8,565   |                         |   | (635                               | ) |                        | 7,930   |                     |   | 5,067                                       
|Other charges                            |  |                   | 823     |                         |   |                                   |   |                        | 823     |                     |   |                                            
|                                         |  |                   |         |                         |   |                                    |   |                        |         |                     |   |                                             
|Total restructuring costs                |  | $                 | 525,401 |                         | $ | (5,386                             | ) | $                      | 520,015 |                     | $ | 501,893                                     
|                                         |  |                   |         |                         |   |                                    |   |                        |         |                     |   |                                             

Cash
expenditures relating to workforce reductions and plant decommissioning are substantially completed. Cash outlays related to non-cancelable railcar leases will be
completed by 2008. The Company estimates that it has realized pretax savings in operating expenses of approximately $34 million from its cost reduction efforts.

Results of Operations

Three Months Ended September 30, 2002 Compared to Three Months Ended September 30, 2001



Our revenues decreased $8.8 million, or 8%, to $101.7 million for the third quarter of 2002 from $110.5 million for the same period in 2001.
The major factors contributing to the decrease in revenues were the permanent closure of our styrene plant, the closure of polypropylene Line 1, and reduced

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sales in olefins due to lower pricing and lower by-product sales. These decreases were partially offset by higher revenues in the polyethylene and APAO businesses due mainly to improved
volumes as customers rebuilt inventories. The styrene plant closure resulted in a reduction of sales of $5.4 million. Polypropylene sales revenue decreased as a result of the closure of Line 1
in May 2002.



Our gross profit increased $26.5 million to profit of $5.8 million for the third quarter of 2002 from a loss of $20.7 million in the third
quarter of 2001. The increase in gross profit was mainly due to the decrease in raw material and energy prices attributable to lower natural gas prices, as well as reduced indirect fixed costs, and
increasing selling prices for polyethylene products. The indirect fixed cost savings are the direct result of our program to reduce fixed costs through job eliminations and job consolidations. Olefins
and other gross profit increased $9.0 million and polyethylene gross profit increased $15.2 million, in part because raw material and energy costs improvements outpaced the decreases in
our selling prices. Polypropylene gross profit increased $1.0 million due to reduced manufacturing and raw material costs. In addition, the permanent closure of our FPO facility resulted in a
gross profit improvement of $1.4 million as compared to the 2001 period because we eliminated losses in our FPO business.



Our selling, general and administrative expenses were stable for the three months ended September 30, 2002 as compared to the same period in 2001,
increasing $0.5 million, or less than 1%, to $5.9 million from $5.4 million.



Interest expense, net in the three months ended September 30, 2002 decreased $2.3 million to $10.8 million from $13.1 million in third
quarter 2001 as a result of reductions in market interest rates, partially offset by an increase in average outstanding balances on affiliate debt and accrued interest on the unpaid interest on the
Senior Notes. The average amount of debt outstanding and the average interest rate for the Senior Notes, the affiliate capital lease and the intercompany borrowing for third quarter 2002 and 2001 were
as follows:

|                                      |  | Senior Notes(1) |       | Affiliate Capital Lease(2) |   | Intercompany Borrowing(2) |  
|------------------------------------- |  | --------------- | ----- | -------------------------- | - | ------------------------- | -
|Three Months Ended September 30, 2002 |  |                 |       |                            |   |                           |  
|Average Amount of Debt                |  | $               | 174.9 |                            | $ | 70.5                      |  
|Average Interest Rate                 |  |                 | 11.75 | %                          |   | 5.50                      | %
|Three Months Ended September 30, 2001 |  |                 |       |                            |   |                           |  
|Average Amount of Debt                |  | $               | 174.9 |                            | $ | 66.4                      |  
|Average Interest Rate                 |  |                 | 11.75 | %                          |   | 9.17                      | %

---

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Our income tax benefit decreased $44.0 million for the three months ended September 30, 2002 from the same period in 2001. The effective income tax
benefit rate in 2001 was 29.4% and differed from the statutory rate due to the non-deductibility of the write down of goodwill. In 2002, the effective income tax benefit rate is 0.0% due
to the net operating loss valuation allowance.



The Company's net loss decreased $100.0 million to $5.5 million for the third quarter of 2002 from $105.5 million for the same period in
2001. The decreased net loss is primarily due to the reasons stated above.

Nine Months Ended September 30, 2002 Compared to Nine Months Ended September 30, 2001



Our revenues decreased $58.9 million, or 16%, to $321.7 million for the nine months ended September 30, 2002 from $380.6 million for
the same period in 2001, primarily due to the permanent closure of our styrene plant and a decrease in sales prices and volumes in by-products. Our styrene plant closure resulted in a
reduction of sales of $37.0 million. Olefins sales revenue decreased $26.9 million to $57.9 million, due primarily to lower ethylene production and lower by-product
sales resulting from a change in feedstock mix. Polypropylene sales revenue increased $2.7 million to $55.8 million due to improved pricing and increased volumes. The additional sales
were due to improved customer demand caused by pre-buying as a result of the closure of Line 1 effective May 25, 2002.



Our gross profit increased $89.8 million to profit of $26.2 million for the nine months ended September 30, 2002 from a loss of
$63.6 million in the same period in 2001. The increase in gross profit was mainly due to the decrease in raw material and energy prices 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.
Olefins gross profit increased $25.9 million and polyethylene gross profit increased $30.1 million, in part because raw materials and energy costs improved more than our selling prices
declined. Polypropylene gross profit increased $16.2 million due to pre-buying as a result of our Line 1 closure and lower raw material and manufacturing costs. Gross profit
increased $12.5 million due to the permanent closure of the styrene and FPO units. APAO gross profit increased $1.4 million due primarily to lower raw material costs and product mix.



Our selling, general and administrative expenses decreased $4.2 million to $15.4 million for the nine months ended September 30, 2002 from
$19.6 million for the same period in 2001. The decrease in selling, general and administrative expenses was mainly due to reduced costs resulting from our cost reduction efforts described in
"Restructuring Costs and Impairment Charges" above.

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Interest expense, net in the nine months ended September 30, 2002 decreased $4.3 million to $32.4 million from $36.7 million in the
nine months ended September 30, 2001 as a result of reductions in market interest rates, partially offset by an increase in average outstanding balances on affiliate debt and accrued interest
on the unpaid interest on the Senior Notes. The average amount of debt outstanding and the average interest rate for the Senior Notes, the affiliate capital lease and the intercompany borrowing for
the nine months ended September 30, 2002 and 2001 were as follows:

|                                     |  | Senior Notes(1) |       | Affiliate Capital Lease(2) |   | Intercompany Borrowing(2) |  
|------------------------------------ |  | --------------- | ----- | -------------------------- | - | ------------------------- | -
|Nine Months Ended September 30, 2002 |  |                 |       |                            |   |                           |  
|Average Amount of Debt               |  | $               | 174.9 |                            | $ | 69.5                      |  
|Average Interest Rate                |  |                 | 11.75 | %                          |   | 5.50                      | %
|Nine Months Ended September 30, 2001 |  |                 |       |                            |   |                           |  
|Average Amount of Debt               |  | $               | 174.9 |                            | $ | 65.4                      |  
|Average Interest Rate                |  |                 | 11.75 | %                          |   | 8.75                      | %

---



Our income tax benefit decreased $85.4 million for the nine months ended September 30, 2002 from the same period in 2001. The effective income tax
benefit rate in 2001 was 32.8% and differed from the statutory rate due to the non-deductibility of the write down of goodwill. In 2002, the effective income tax benefit rate is 0.0% due
to the net operating loss valuation allowance.



The Company's net loss decreased $158.7 million to $16.1 million for the nine months ended September 30, 2002 from $174.8 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 used in operating activities in the nine months ended September 30, 2002 was $5.6 million, as compared to $71.9 million in the same
period in 2001. This $66.3 million change is primarily attributable to a $89.8 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 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 decreased $10.5 million in the nine months ended September 30, 2002 as compared to an increase of $17.6 million in the same period in 2001.
The net decrease of $28.1 million is primarily the result of:



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In
the past, our sales of polyethylene, polypropylene and APAO have been made to Huntsman Company. These products have been sold at market prices with payment terms of net 30 days
from the end of the month. We expect that during the fourth quarter of 2002, we will terminate this arrangement with Huntsman Company and sell directly to customers. We expect that this change will
have a net unfavorable effect on cash because we expect that it will increase our payment terms from approximately 30 days to an average of more than 45 days for such receivables.

Net
cash used in investing activities for the nine months ended September 30, 2002 was $5.7 million, as compared to $8.0 million used in the same period in 2001.
This decrease was attributable to a decrease in the Company's capital expenditures.

Net
cash provided by financing activities for the nine months ended September 30, 2002 was $11.3 million, as compared to $79.9 million provided by financing
activities in the same period in 2001.
The net change of $68.6 million is primarily attributable to our improved operating performance as described above.

Debt

As of September 30, 2002, we had borrowings of $364.3 million under the Intercompany Loan Agreement that we maintain with HGHFC and
$36.8 million under our Senior Notes. As of September 30, 2002, we fully repaid our obligations, totaling $71.0 million, under our capital lease with Huntsman Company from
borrowings under the Intercompany Loan Agreement.

Intercompany Loan Agreement.The intercompany loans accrue interest at the prime rate (4.75% at September 30, 2002)
plus a margin of 0.75% and are payable upon demand. The Intercompany Loan Agreement is our principal source of financing. Prior to the Restructuring, Huntsman Company was limited in its ability to
make investments in, or loans to, our Company because of restrictions in Huntsman Company's forbearance arrangements with its bank lenders. Accordingly, prior to September 30, 2002, we were
significantly limited in our ability to obtain financing under the Intercompany Loan Agreement. However, these restrictions were not carried forward in Huntsman Company's bank credit facilities after
the Restructuring. As a result, we currently are able to borrow under the Intercompany Loan Agreement.

Senior Notes.We did not make the December 1, 2001 and June 1, 2002 interest payments due on our Senior Notes.
Huntsman Company did not make the January 1 and July 1, 2002 interest payments on the HC Notes. The failure to make these interest payments within 30 days of the respective due
dates constituted an event of default under the Senior Notes and the HC Notes. We have reinstated our outstanding Senior Notes, totaling $36.8 million in principal amount, by delivering to the
trustee of the Senior Notes, payment in full of outstanding interest due of approximately $4.7 million on the Senior Notes (comprised of the December 1, 2001 and June 1, 2002
interest payments plus the default interest on such overdue payments through October 22, 2002, the special payment date established for payment of this interest). The special record date
established for payment of such amounts was

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October 15, 2002. Huntsman Company also reinstated its outstanding HC Notes, totaling approximately $59 million in principal amount, by paying approximately $5.4 million of
interest that had accrued on the HC Notes to be reinstated since January 2002.

Pursuant
to previously adopted amendments to the indentures governing the Senior Notes and the HC Notes, which became effective upon completion of the Restructuring, most of the
restrictive covenants in these indentures have been eliminated. The elimination of these covenants permits, among other things, our Company to guarantee Huntsman Company's bank debt on a full senior
secured basis, and to pledge our assets to secure Huntsman Company's bank debt, without the senior secured debt limitations and lien limitations formerly contained in the Indenture.

Capital Lease.On March 8, 1997, we entered into a Capital Lease Agreement with the Estherwood Corporation to finance
the construction of our flexible polyolefins ("FPO") facility at Odessa, Texas. On August 27, 1997, the Capital Lease Agreement was amended and Estherwood Corporation assigned all its rights
under the agreement to HGHFC. On December 12, 2001, HGHFC assigned all of its rights under the Capital Lease Agreement to Huntsman Company.

On
September 30, 2002, the maturity date of the Capital Lease Agreement, we repaid the lease amount plus accrued interest, totaling $71.0 million, to Huntsman Company. We
satisfied this obligation through borrowings under the Intercompany Loan Agreement. Also on the maturity date of the Capital Lease Agreement, we exercised our option to purchase the FPO facility from
Huntsman Company for $1.

Collateralization of Huntsman Company Debt.As of September 30, 2002, Huntsman Company had borrowings of approximately
$1.44 billion outstanding under its bank credit facilities. As collateral for its obligations under its bank credit facilities, Huntsman Company has pledged its 100% ownership interest in our
Parent, and our Parent has pledged its 100% ownership interest in our Company. In addition, we and our Parent are guarantors of Huntsman Company's obligations under its bank credit facilities. We have
granted security interests and liens on substantially all our assets to secure our obligations under our guaranty to Huntsman Company's bank lenders. The Intercompany Loan Agreement is also secured by
a lien on substantially all of our assets.

No Credit Support from Huntsman International.Huntsman International Holdings LLC ("Huntsman International Holdings") and
Huntsman International LLC ("Huntsman International") have not guaranteed or provided any other credit support to the obligations of Huntsman Company under its credit facilities or under the HC Notes.
Neither events of default under Huntsman Company'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 Huntsman International Holdings or Huntsman International or the senior secured credit facilities of Huntsman International, except insofar as
foreclosure on the stock of Huntsman Specialty Chemicals Holdings Corporation ("HSCHC"), pledged to secure the obligations of Huntsman Company under its credit facilities, would constitute a "change
in control" under the senior secured credit facilities of Huntsman International and would give certain put rights to the holders of the high-yield notes of Huntsman International Holdings
and Huntsman International.

Financial Restructuring

On September 30, 2002, Huntsman Company and our Company completed debt for equity exchanges (the "Restructuring") pursuant to an Amended and Restated Debt
Exchange Agreement, dated as of September 17, 2002. Huntsman Company obtained the required consent of all its bank lenders to complete the Restructuring on an
out-of-court basis. The Restructuring involved the following:



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As
a result of the Restructuring, Huntsman Company has eliminated approximately $763 million of consolidated debt claims and has reduced annual interest expense on such debt
claims by approximately $63 million.

Delaware Chancery Court Proceeding

In connection with the Restructuring, the shareholders of Huntsman Company formed a Delaware corporation ("Equity Holdings") to hold all the outstanding stock of
Huntsman Corporation (prior to its conversion under Utah law into a limited liability company). Equity Holdings then guaranteed the HC Notes held by GOP and CPH. Thereafter, Equity Holdings commenced
a proceeding in the Delaware Court of Chancery under Section 102(b)(2) of the Delaware General Corporation Law. This action sought the court's sanction of Equity Holdings' compromise of its
guarantee obligations in the manner contemplated by certain agreements among Huntsman Company, GOP and CPH. On September 23, 2002, the court granted Equity Holdings' application. These actions
in the Delaware Court of Chancery will not affect Huntsman Company's obligations to its creditors, other than GOP and CPH.

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Liquidity

We currently expect that cash generated by our business together with borrowings under the Intercompany Loan Agreement will provide us with sufficient liquidity
to allow us to fund our operations, make capital expenditures and service our debt obligations in the ordinary course of business.

Capital Expenditures

Capital expenditures for the nine months ended September 30, 2002 were $5.7 million, as compared to $8.6 million for the nine months ended
September 30, 2001. We expect to spend approximately $8 million to $10 million during 2002 on capital projects.

Environmental and Health Matters



Our capital expenditures relating to environmental matters for the nine months ended September 30, 2002 and 2001 were approximately $1.6 and
$2.4 million, respectively. Capital costs relating to environmental matters in 2002 are expected to total approximately $2.9 million. Generally, we expect to incur between
$1.5 million and $6.0 million annually in capital spending to address the requirements of environmental laws. Capital expenditures relating to environmental matters are subject to
evolving regulatory requirements and will depend on the timing of the promulgation of specific standards which impose requirements on our operations. As a result, capital expenditures beyond those
currently anticipated may be required under applicable environmental laws.

The
operation of chemical manufacturing plants, the distribution of chemical products and the related production of by-products and wastes, entail risk of adverse
environmental effects. We are subject to extensive federal, state, local and foreign laws, regulations, rules and ordinances relating to pollution, the protection of the environment and the
generation, storage, handling, transportation, treatment, disposal and remediation of hazardous substances and waste materials. In the ordinary course of business, we are subject continually to
environmental inspections and monitoring by governmental enforcement authorities. We may incur substantial costs, including fines, damages and criminal or civil sanctions, or experience interruptions
in our operations for actual or alleged violations arising under any environmental laws. In addition, our production facilities require operating permits that are subject to renewal, modification and,
in some circumstances, revocation. Violations of permit requirements can also result in restrictions or prohibitions on our plant operations, substantial fines and civil or criminal sanctions. Our
operations involve the generation, handling, transportation, use and disposal of numerous hazardous substances. Changes in regulations regarding the generation, handling, transportation, use and
disposal of hazardous substances could inhibit or interrupt operations and have a material adverse effect on our business. From time to time, these operations may result in violations under
environmental laws, including spills or other releases of hazardous substances to the environment. In the event of a significant incident, we could incur material costs to address and remediate the
incident. In addition, following any such incident, we may incur higher costs to implement measures to prevent future incidents. Given the nature of our business, there can be no assurance that
violations of environmental laws will not result in restrictions imposed on our operating activities, substantial fines, penalties, damages or other costs. In addition, potentially significant
expenditures could be necessary in order to comply with existing or future environmental laws.

We
have established financial reserves relating to environmental restoration and remediation programs, which we believe, are sufficient for known requirements. Liabilities are recorded
when site restoration and environmental remediation and clean-up obligations are either known or considered probable and can be reasonably estimated. These liabilities are based upon all
available facts, existing technology, past experience, and cost-sharing arrangements (as to which, we consider the viability of

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other parties). A total of $6.8 million has been accrued related to environmental matters as of September 30, 2002. We do not anticipate that any future costs, in excess of those that
have been accrued, will be material to our results of operations or financial position as a result of compliance with current environmental laws and regulations.

We
carry pollution legal liability insurance to address many potential environmental liabilities from our operations. Such coverage is subject to customary terms, limits, exclusions and
deductibles. We also carry pollution legal liability and closure and post-closure insurance on certain facilities at our Odessa, Texas facility, which are regulated by the Texas Commission
on Environmental Quality (the "TCEQ," formerly named the Texas Natural Resource Conservation Commission or TNRCC). This insurance satisfies the requirements of the TCEQ governing the operation of
these facilities.



We, along with many other companies, have been named as a potentially responsible party under the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 ("CERCLA"), in connection with past disposal of waste at certain sites. We believe that our financial reserves are sufficient for our known requirements.

By
letter of April 24, 2002, from counsel for Agrium U.S. Inc., Nu-West Industries, Inc., and Nu-West Mining, Inc., we were put on
notice of a potential contribution claim against our 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. We have retained counsel and are evaluating the potential claim. Whether we have any liability for the costs and fees at issue is unclear. Moreover, what
the potential magnitude of the investigative and remedial and related costs will be is unknown since we know of no comprehensive site investigation having been done to date. By letter of
August 2, 2002, Agrium notified us that a proposed consent judgment has been proposed to Agrium by the Idaho Attorney General. Under that consent judgment, Agrium would have to perform a site
investigation and remedial action relating to any contaminants found to be at actionable levels on the site.

We
were 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 us, we believe that
our Company has one or more complete defenses to the suit and that even if the court rejects those defenses, the percentage contribution we would likely be required to pay would not be material to our
financial condition.
Nevertheless, the potential exists for significant liability in such a case because of joint and several liability.

In
December of 2000, the New Mexico Environmental Bureau's Oil Conservation Division ("OCD") gave notice that it is alleging that we 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 Products and Kimbell and McNutt. We notified the OCD that we have never had an ownership interest
in the site and do not believe that we acquired any liability relating to the site from its previous owners. In addition, the State of New Mexico contacted Rexene Corporation 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

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bankruptcy. However, if a court ultimately finds that OCD does have an actionable claim, the potential exists for significant remediation liability.

By
letter dated January 28, 1999, the TCEQ notified us of allegations that our 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, we had
given prior notice to the TCEQ of the start up and that excess emissions might result. The TCEQ investigated this matter after receiving numerous complaints from residents of a subdivision near the
Odessa facility. In addition, since January 1999, our Odessa facility experienced upsets on several occasions that led to flaring or excess emissions which the TCEQ claims were in violation of
state law. The TCEQ sought penalties for all alleged violations. On January 30, 2002, the claims asserted by the TCEQ were settled in an agreed order. In the order, we denied any liability, but
agreed to a $140,000 penalty, $70,000 of which was paid to the State and $70,000 of which was paid to the City of Odessa to fund a supplemental environmental project.

As
a result of the start-up flaring during late December 1998 and early January 1999, certain complaining citizens hired counsel to consider bringing legal
action to recover damages alleged to have been caused by that flaring. Five such actions have been filed. Four of the filed cases, involving over 4,200 plaintiffs, have been settled. Many of those
plaintiffs have now filed an action against certain of our contractors and design engineers, one of whom has sought indemnity against us. The only other remaining filed case involves a total of
approximately 187 claimants. Although our counsel believes that we have strong defenses to the remaining suits, it is too early to predict the outcome of such litigation.

As
a result of a third-party environmental audit of our Odessa operations starting in November 2000, we voluntarily disclosed to the United States Environmental Protection Agency
("EPA") and the TCEQ certain potential violations of environmental law. EPA and the TCEQ have evaluated those disclosures to determine whether the disclosures qualify for penalty mitigation under
federal policy and state law. TCEQ has indicated to us that it has closed its file on the disclosures without imposing a penalty. We
have not heard finally from the EPA, although we do not anticipate that EPA will seek to impose a significant penalty.

As
a result of an 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. A tentative settlement involving civil penalties in the amount of $475,000 for this case has been tentatively reached subject to final
review by us and the negotiation of final settlement language acceptable to all parties.

We
have been named as a "premises defendant" in a number of asbestos exposure lawsuits. These suits often involve multiple plaintiffs and multiple defendants, and, generally, the
complaint in the action does not indicate which plaintiffs are making claims against a specific defendant, where the alleged injuries were incurred or what injuries each plaintiff claims. These facts
must be learned through discovery. We currently have eighteen asbestos exposure cases pending against us. Among all the plaintiffs in those cases, 65 have, through the discovery process, claimed
exposure to asbestos at our facilities. Among the cases currently filed, we are aware of two claims of mesothelioma, one claim of colon cancer and one claim of melanoma. The rest of the claims that we
are aware of are for asbestosis. We do not have sufficient information at the present time to estimate any liability in these cases. Although we cannot provide specific assurances, based on our
understanding of similar cases, our management believes that our ultimate liability in these eighteen cases will not be material to our financial position or results of operations.

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Changes in Financial Condition

|Selected Cash Flow Information (in thousands) |                           | September 30, 2002 |         | December 31, 2001 |   | Difference |        
|--------------------------------------------- | ------------------------- | ------------------ | ------- | ----------------- | - | ---------- | -------
|Cash and cash equivalents                     |                           | $                  |        |                   | $ |           |        
|Accounts and notes receivable, net            |                           |                    | 5,413   |                   |   | 7,778      |        
|Accounts and advances receivable-Affiliates   |                           |                    | 30,915  |                   |   | 25,572     |        
|Inventories                                   |                           |                    | 48,242  |                   |   | 53,089     |        
|Other current assets                          |                           |                    | 10,754  |                   |   | 3,822      |        
|Deferred income taxes                         |                           |                    | 9,117   |                   |   | 8,845      |        
|                                              |                           |                    |         |                   |   |            |        
|                                              | Total current assets      |                    |         | 104,441           |   |            | 99,106 
|Accounts payable                              |                           | $                  | 28,109  |                   | $ | 36,740     |        
|Accounts payableAffiliates                   |                           |                    | 5,717   |                   |   | 7,652      |        
|Accrued liabilities                           |                           |                    | 14,266  |                   |   | 36,198     |        
|Current portion of long-term debt             |                           |                    |        |                   |   | 174,882    |        
|Advance from affiliate                        |                           |                    |        |                   |   | 6,070      |        
|Current portion of long-term debt-Affiliate   |                           |                    |        |                   |   | 346,990    |        
|                                              |                           |                    |         |                   |   |            |        
|                                              | Total current liabilities |                    |         | 48,092            |   |            | 608,532
|Working capital                               |                           | $                  | 56,349  |                   | $ | (509,426   | )      
|Affiliate borrowings                          |                           | $                  | 364,340 |                   | $ |           |        
|Other113/4% Senior Notes due 2004            |                           |                    | 36,802  |                   |   |           |        
|                                              |                           |                    |         |                   |   |            |        
|                                              | Total long-term debt      |                    | $       | 401,142           |   | $          |       

At
September 30, 2002, our net working capital position was a positive $56.3 million, as compared to a negative $509.4 million at December 31, 2001, resulting
in an increase of $565.8 million. The $565.8 million increase is primarily the result of our financial restructuring, which is discussed in "Liquidity and Capital
ResourcesFinancial Restructuring" above. This restructuring enabled us to reclassify our long-term debt, which was classified as current at December 31, 2001, back to
long-term, improving our net working capital position.

We
generally maintain a daily cash balance of approximately zero because of our participation in a consolidated Huntsman Company cash management system wherein Huntsman Company's
domestic subsidiaries' daily cash surpluses and deficits are generally swept to Huntsman Company.

Cautionary Statement for Forward-looking Information

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

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

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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.



Recent Financial Accounting Standards

In August 2001, FASB 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.

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In
June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated With Exit or Disposal Activities." SFAS
No. 146 requires recording costs associated with exit or disposal activities at their fair values when a liability has been incurred. Under previous guidance, certain exit costs were accrued
upon management's commitment to an exit plan, which is generally before an actual liability has been incurred. Adoption of this statement is required effective January 1, 2003. We have not yet
completed our evaluation of the impact of adopting this statement.

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 following table summarizes the Company's fixed and variable rate debt obligations by contractual maturity date as of September 30, 2002.

|Debt (Dollars in Thousands) |                                               | 2004   |       | Thereafter |      | Total   |       | Fair Value
|--------------------------- | --------------------------------------------- | ------ | ----- | ---------- | ---- | ------- | ----- | ----------
|Fixed Rate                  |                                               | 36,802 |       |           |      | 36,802  |       | 22,081    
|                            | Average interest rate                         |        | 11.75 | %          |     |         | 11.75 | %         
|Variable Rate               |                                               |       |       | 364,340    |      | 364,340 |       | 364,340   
|                            | Average interest rate (Prime rate plus 0.75%) |        |      |            | 5.50 | %       | 5.50  | %         

The
Company's exposure to foreign currency market risk is immaterial because sales prices for the Company's products are typically denominated in U.S. 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 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.

Item 4. Controls and Procedures

(a)  Under
the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation
of our disclosure controls and procedures, as such term is defined under Rule 13a-14(c) promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
within 90 days of the filing date of this report. Based on this evaluation, our principal executive officer and principal accounting officer
concluded that our disclosure controls and procedures are effective in alerting them on a timely basis to material information relating to our Company (including its consolidated subsidiaries)
required to be included in our reports filed or submitted under the Exchange Act.

(b)  There
have been no significant changes (including corrective actions with regard to significant deficiencies or material weaknesses) in our internal controls or in other
factors that could significantly affect these controls subsequent to the date of the evaluation referenced in paragraph (a) above.

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PART IIOTHER INFORMATION

Item 2. Changes in Securities and Use of Proceeds

On June 14, 2002, GOP, which at that time held 78.9% of the outstanding Senior Notes, consented to, and our Company and HSBC Bank USA, as trustee, entered
into, an Amended and Restated Indenture. Upon completion of the Restructuring on September 30, 2002, the Amended and Restated Indenture eliminated substantially all the restrictive covenants
set forth in the Indenture governing the Senior Notes.

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 Senior Notes. During the second quarter of 2002, we did not
make the June 1, 2002 interest payment due on our Senior Notes. Our failure to make these scheduled interest payments within 30 days of the due date constituted an event of default under
the Senior Notes. However, we reinstated our outstanding Senior Notes by delivering to the trustee of the Senior Notes, payment in full of outstanding interest due of approximately $4.7 million
on the Senior Notes (comprised of the December 1, 2001 and June 1, 2002 interest payments plus the default interest on such overdue payments through October 22, 2002, the special
payment date established for payment of this interest). The special record date established for payment of such amounts was October 15, 2002. For more information, see "Item
2Managements' Discussion and AnalysisLiquidity and Capital ResourcesDebt" and "Financial Restructuring." As of the date of this report, there is no
interest in arrears on the Senior Notes. The total outstanding principal amount of the Senior Notes is $36.8 million.

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Item 6. Exhibits and Reports On Form 8-K

(a)  Exhibits

| |  | 4.1  | Amended and Restated Indenture, dated as of June 14, 2002, between Huntsman Polymers Corporation (formerly Rexene Corporation) and HSBC Bank USA (successor to Bank One, Texas, N.A.), as trustee (filed as
Exhibit 10.1 to Huntsman Polymers Corporation's Current Report on Form 8-K on June 17, 2002 and incorporated herein by reference).                                                                                                      
| |  | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 10.1 | Amended and Restated Debt Exchange Agreement, dated as of September 17, 2002, by and among Huntsman Company LLC, Huntsman Polymers Corporation, MatlinPatterson Global Opportunities Partners L.P., Huntsman Family Holdings II Company LLC, HMP
Equity Holdings Corporation, Jon M. Huntsman, Consolidated Press (Finance) Ltd (ACN 001 557 035), Consolidated Press Holding Limited (ACN 008 394 509), and the individual investors named therein.
| |  | 10.2 | First Amendment to the Amended and Restated Debt Exchange Agreement, dated as of September 30, 2002, by and among Huntsman Company LLC, Huntsman Polymers Corporation, HMP Equity Holdings Corporation, Huntsman Family Holdings II Company LLC,
MatlinPatterson Global Opportunities Partners L.P., and Consolidated Press (Finance) Ltd (ACN 001 557 035).                                                                                        
| |  | 10.3 | Revolving Credit Agreement, dated as of September 30, 2002, by and among Huntsman Company LLC, Huntsman Petrochemical Corporation, Huntsman Expandable Polymers Company, LC, Huntsman Polymers Corporation, Huntsman Fuels, L.P., Huntsman
International Trading Corporation and the financial institutions party thereto.                                                                                                                          
| |  | 10.4 | Amended and Restated Credit Agreement, dated as of September 30, 2002, by and among Huntsman Company LLC and the financial institutions party thereto.                                                                                                                                                                                                                                                                                              
| |  | 99.1 | Certification of Chief Executive Officer                                                                                                                                                                                                                                                                                                                                                                                                            
| |  | 99.2 | Certification of Chief Financial Officer                                                                                                                                                                                                                                                                                                                                                                                                            

(b)  Reports
on Form 8-K:

We
filed a report on Form 8-K on July 2, 2002 to report that, on June 28, 2002, Huntsman Company LLC's (formerly known as Huntsman Corporation) bank
lenders had agreed to extend the forbearance period under certain agreements relating to Huntsman Company's bank credit agreements until August 15, 2002.

We
filed a report on Form 8-K on October 21, 2002 to report that, on September 30, 2002, Huntsman Company and Huntsman Polymers Corporation completed
debt for equity exchanges.

34

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SIGNATURE

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

| | HUNTSMAN POLYMERS CORPORATION                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------------------------------------
| | /s/J. KIMO ESPLINJ. KIMO ESPLIN Senior Vice President and
Chief Financial Officer(Authorized Signatory and Principal
Financial and Accounting Officer)

Date:
November 13, 2002

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CERTIFICATIONS

I,
Peter R. Huntsman, certify that:





Date:
November 13, 2002

| | /s/PETER R. HUNTSMANPeter R. Huntsman Chief Executive Officer
| | -------------------------------------------------------------

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I,
J. Kimo Esplin, certify that:





Date:
November 13, 2002

| | /s/J. KIMO ESPLINJ. Kimo Esplin Senior Vice President and
Chief Financial Officer
| | ---------------------------------------------------------------------------------

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Exhibit Index

|4.1  |  | Amended and Restated Indenture, dated as of June 14, 2002, between Huntsman Polymers Corporation (formerly Rexene Corporation) and HSBC Bank USA (successor to Bank One, Texas, N.A.), as trustee (filed as Exhibit 10.1 to Huntsman Polymers
Corporation's Current Report on Form 8-K on June 17, 2002 and incorporated herein by reference).                                                                                                      
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1 |  | Amended and Restated Debt Exchange Agreement, dated as of September 17, 2002, by and among Huntsman Company LLC, Huntsman Polymers Corporation, MatlinPatterson Global Opportunities Partners L.P., Huntsman Family Holdings II Company LLC, HMP
Equity Holdings Corporation, Jon M. Huntsman, Consolidated Press (Finance) Ltd (ACN 001 557 035), Consolidated Press Holding Limited (ACN 008 394 509), and the individual investors named therein.
|10.2 |  | First Amendment to the Amended and Restated Debt Exchange Agreement, dated as of September 30, 2002, by and among Huntsman Company LLC, Huntsman Polymers Corporation, HMP Equity Holdings Corporation, Huntsman Family Holdings II Company LLC,
MatlinPatterson Global Opportunities Partners L.P., and Consolidated Press (Finance) Ltd (ACN 001 557 035).                                                                                        
|10.3 |  | Revolving Credit Agreement, dated as of September 30, 2002, by and among Huntsman Company LLC, Huntsman Petrochemical Corporation, Huntsman Expandable Polymers Company, LC, Huntsman Polymers Corporation, Huntsman Fuels, L.P., Huntsman
International Trading Corporation and the financial institutions party thereto.                                                                                                                          
|10.4 |  | Amended and Restated Credit Agreement, dated as of September 30, 2002, by and among Huntsman Company LLC and the financial institutions party thereto.                                                                                                                                                                                                                                                                                              
|99.1 |  | Certification of Chief Executive Officer                                                                                                                                                                                                                                                                                                                                                                                                            
|99.2 |  | Certification of Chief Financial Officer                                                                                                                                                                                                                                                                                                                                                                                                            

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