<PAGE>

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

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


[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
                                  ACT OF 1934
                 For the quarterly period ended March 31, 2001
                                      OR
[]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                             EXCHANGE ACT OF 1934
    For the transition period from __________________ to __________________
Commission file number 1-9988

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


               Delaware                                75-2104131
      (State or other jurisdiction of              (I.R.S. employer
      incorporation or organization)              identification no.)

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


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


          Indicate by a check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  Yes [X] No [_]


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


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


          At May 15, 2001, 1,000 Shares of Common Stock, par value $0.01 per
Share, of Huntsman Polymers Corporation were outstanding.

================================================================================
<PAGE>

HUNTSMAN POLYMERS CORPORATION AND SUBSIDIARIES


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

                               TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                                                                Page
                                                                                                                                ----
<S>                                                                                                                             <C>
PART I.  FINANCIAL INFORMATION...............................................................................................     3
         Item 1.  Financial Statements.......................................................................................     3
           Consolidated Balance Sheets as of March 31, 2001 (unaudited) and December 31, 2000................................     3
           Consolidated Statements of Operations for the Three Months Ended March 31, 2001 and 2000 (unaudited) .............     4
           Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2001 and 2000 (unaudited)  ............     5
           Notes to Consolidated Financial Statements .......................................................................     6
         Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations   ...................    10
         Item 3.  Quantitative and Qualitative Disclosures About Market Risk.................................................    14

PART II. OTHER INFORMATION...................................................................................................    14
         Item 1.  Legal Proceedings..........................................................................................    14
         Item 6.  Exhibits and Reports on Form 8-K...........................................................................    14
</TABLE>

                                       2
<PAGE>

PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

                HUNTSMAN POLYMERS CORPORATION AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                                (In thousands)
<TABLE>
<CAPTION>
                                                                      (Unaudited)
                                                                    March 31, 2001     December 31, 2000
                                                                    ---------------    -----------------
                                    ASSETS
                                    ------
<S>                                                                 <C>                <C>
Current assets:
     Cash and cash equivalents                                          $        -            $        -
     Accounts and notes receivable, net                                     20,418                30,787
     Accounts and advances receivable - Affiliates                          37,083                44,245
     Inventories                                                            83,802                78,707
     Other current assets                                                    1,198                 1,317
     Deferred income taxes                                                  11,150                10,261
                                                                        ----------            ----------
      Total current assets                                                 153,651               165,317
Property, plant and equipment, net                                         880,508               895,355
Intangible assets, net                                                      43,973                44,858
Other noncurrent assets                                                     31,271                32,103
                                                                        ----------            ----------
     Total assets                                                       $1,109,403            $1,137,633
                                                                        ==========            ==========
                     LIABILITIES AND STOCKHOLDER'S EQUITY
                     ------------------------------------
Current liabilities:
     Accounts payable                                                   $   75,831            $   94,274
     Accounts payable - Affiliates                                           6,020                 2,030
     Accrued liabilities                                                    17,817                21,941
                                                                        ----------            ----------
      Total current liabilities                                             99,668               118,245
Long-term debt:
      Affiliates                                                           309,232               304,164
      Other                                                                174,882               174,882
Deferred income taxes                                                       68,163                85,053
Other noncurrent liabilities                                                33,354                32,517
                                                                        ----------            ----------
      Total liabilities                                                    685,299               714,861
                                                                        ----------            ----------

Stockholder's equity:
      Common Stock, par value $.01 per share; 1 million
        shares authorized and 1,000 issued and outstanding in
        2001 and 2000                                                            -                     -
      Additional paid-in capital                                           559,500               528,500
      Retained earnings (deficit)                                         (135,396)             (105,728)
                                                                        ----------            ----------
         Total stockholder's equity                                        424,104               422,772
                                                                        ----------            ----------
     Total liabilities and stockholder's equity                         $1,109,403            $1,137,633
                                                                        ==========            ==========
</TABLE>



                See accompanying notes to financial statements

                                       3
<PAGE>

                 HUNTSMAN POLYMERS CORPORATION AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
                                             Three Months Ended       Three Months Ended
                                               March 31, 2001           March 31, 2000
                                              ---------------           ---------------
                                                            (In thousands)
<S>                                           <C>                    <C>
Revenues:
   Trade sales and services                       $  48,429               $ 50,745
   Affiliate sales                                   96,341                116,545
                                                  ---------               --------
Total revenues                                      144,770                167,290
Cost of goods sold                                  171,892                159,500
                                                  ---------               --------
Gross profit (loss)                                 (27,122)                 7,790
Expenses:
   Selling, general and administrative                7,411                  6,934
                                                  ---------               --------
Operating income (loss)                             (34,533)                   856
Interest expense, net:
   Affiliate interest                                (6,960)                (6,440)
   Other interest                                    (5,262)                (5,270)
Other income (expense)                                  (32)                   (66)
                                                  ---------               --------
Loss before income taxes                            (46,787)               (10,920)
Income tax benefit                                  (17,119)                (4,149)
                                                  ---------               --------
Net loss                                          $ (29,668)              $ (6,771)
                                                  =========               ========
</TABLE>




          See accompanying notes to consolidated financial statements

                                       4
<PAGE>

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

<TABLE>
<CAPTION>
                                                                     Three Months             Three Months
                                                                         Ended                    Ended
                                                                    March 31, 2001           March 31, 2000
                                                                    --------------          ---------------
                                                                                (In thousands)
<S>                                                                 <C>                     <C>
Operating Activities
Net loss                                                             $ (29,668)                 $ (6,771)
Reconciliation to net cash used in operations:
   Depreciation and amortization                                        18,083                    18,629
   Deferred income taxes                                               (17,779)                   (4,149)
   Amortization of debt issuance costs                                     217                       217
   Changes in operating working capital:
      Receivables                                                       17,531                    (3,281)
      Inventories                                                       (5,095)                   (2,278)
      Other current assets                                                 119                       932
      Accounts payable                                                 (14,453)                    8,604
      Other current liabilities                                         (4,124)                   (3,088)
      Deferred charges and other noncurrent assets                         832                       509
      Deferred credits and other noncurrent liabilities                    837                      (537)
                                                                      --------                   -------
Net cash provided by (used in) operating activities                    (33,500)                    8,787

Investing Activities

Capital expenditures of continuing operations                           (2,568)                   (4,299)
                                                                      --------                   -------
Net cash used in investing activities                                   (2,568)                   (4,299)

Financing Activities
Intercompany (repayment to) borrowing from parent                        5,068                    (4,488)
Proceeds of capital contribution by parent                              31,000                         -
                                                                     ---------                   -------
Net cash (used in) provided by financing activities                     36,068                    (4,488)

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                                               $       -                  $     41
Cash paid for income taxes                                           $       -                  $      -
</TABLE>



          See accompanying notes to consolidated financial statements

                                       5
<PAGE>

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


1. Summary of Significant Accounting Policies

Description of Business

     Huntsman Polymers Corporation and its subsidiaries (collectively, the
"Company"), manufactures 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
styrene.

Interim Financial Statements

     The interim consolidated financial statements of the Company are
unaudited, but include all adjustments which the Company deems necessary for a
fair presentation of its financial position and results of operations.  All such
adjustments are of a normal recurring nature.  Results of operations for interim
periods are not necessarily indicative of results to be expected for the full
year.  All significant accounting policies conform to those previously set forth
in the Company's fiscal 2000 Annual Report on Form 10-K.

Use of Estimates

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

Principles of Consolidation

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

Cash and Cash Equivalents

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

Inventories

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

Property, Plant and Equipment

     Property, plant and equipment are stated at cost.  Depreciation is
provided utilizing the straight line method over the estimated useful lives of
the assets, ranging from 3 to 20 years.  Periodic maintenance and repairs
applicable to major units of manufacturing facilities are accounted for on the
prepaid basis by capitalizing the costs of the turnaround and amortizing the
costs over the estimated period until the next turnaround.  Normal maintenance
and repairs of all other plant and equipment are charged to expense as incurred.
Renewals, betterments and major repairs that materially extend the useful life
of the assets are capitalized, and the assets replaced, if any, are retired.

                                       6
<PAGE>

Interest costs are capitalized as part of major construction projects.  Upon
disposal of assets, the cost and related accumulated depreciation are removed
from the accounts and the resulting gain or loss is included in income.

Intangible Assets

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

Income Taxes

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

Environmental Expenditures

     Environmental related restoration and remediation costs and governmental
assessments are recorded as liabilities and expensed when site restoration and
environmental remediation and 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.

Reclassifications

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

New Accounting Standards

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

Income (Loss) per Share

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

                                       7
<PAGE>

2.  Inventories

      Inventories consist of the following (in thousands):

<TABLE>
<CAPTION>
                                                                    March 31, 2001               December 31, 2000
                                                                -----------------------      --------------------------

<S>                                                             <C>                          <C>
         Raw materials                                                          $14,696                         $17,551
         Work in progress                                                        11,119                           8,249
         Finished goods                                                          57,987                          52,907
                                                                -----------------------      --------------------------
Total                                                                           $83,802                         $78,707
                                                                =======================      ==========================
</TABLE>

3.   Property, Plant and Equipment

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

<TABLE>
<CAPTION>
                                                                        March 31, 2001                     December 31, 2000
                                                                ----------------------------      --------------------------------
<S>                                                               <C>                               <C>
         Property, plant and equipment                                            $1,076,265                            $1,073,697
         Less accumulated depreciation                                              (195,757)                             (178,342)
                                                                ----------------------------      --------------------------------
         Property, plant and equipment, net                                       $  880,508                            $  895,355
                                                                ============================      ================================
</TABLE>

4.   Intangible Assets

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

<TABLE>
<CAPTION>
                                                                        March 31, 2001                     December 31, 2000
                                                                --------------------------         -------------------------------
<S>                                                              <C>                                 <C>
         Debt issuance costs                                                     $ 7,173                                  $ 7,173
         Less accumulated amortization                                            (4,644)                                  (4,427)
                                                              --------------------------          -------------------------------
           Total debt issuance costs                                               2,529                                    2,746
                                                              --------------------------          -------------------------------

         Goodwill                                                                 42,406                                   42,406
         Less accumulated amortization                                            (7,563)                                  (7,035)
                                                              --------------------------           ------------------------------
           Total goodwill                                                         34,843                                   35,371
                                                              --------------------------           ------------------------------

         Other intangible assets                                                    7,973                                   7,973
         Less accumulated amortization                                             (1,372)                                 (1,232)
         Total other intangible assets                                              6,601                                   6,741
                                                               --------------------------          ------------------------------
         Intangible assets, net                                                   $43,973                                 $44,858
                                                               ==========================          ==============================
</TABLE>


5.   Long-Term Debt

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

<TABLE>
<CAPTION>
                                                                    March 31, 2001              December 31, 2000
                                                                ----------------------      -------------------------
<S>                                                              <C>                         <C>
Affiliates:
       Intercompany borrowings                                                $244,372                       $240,329
       Capital lease - Affiliate                                                64,860                         63,835
                                                                ----------------------      -------------------------
           Total affiliates                                                    309,232                        304,164
Other - 11 3/4% Senior Notes due 2004                                          174,882                        174,882
                                                                ----------------------      -------------------------
        Total                                                                 $484,114                       $479,046
                                                                ======================      =========================
</TABLE>


                                       8
<PAGE>

6. Contingencies

Environmental Regulation

     The Company and the industry in which it competes are subject to extensive
environmental laws and regulations concerning, among other things, emissions to
the air, discharges to surface and subsurface waters and the generation,
handling, storage, transportation, treatment and disposal of waste and other
materials.  The Company believes that, in light of its historical expenditures
and expected future results of operations, it will have adequate resources to
conduct its operations in compliance with currently applicable environmental and
health and safety laws and regulations.  However, in order to comply with
changing facility permitting and regulatory requirements, the Company may be
required to make additional significant site or operational modifications that
are not currently contemplated.  Further, the Company has incurred, and may in
the future incur, liability to investigate and clean up waste or contamination
at its current or former facilities, or which it may have disposed of at
facilities operated by third parties.

     On the basis of reasonable investigation and analysis, management believes
that the approximately $6.1 million accrued in the March 31, 2001 balance sheet
is adequate for the total potential environmental liability of the Company with
respect to contaminated sites.  Extensive environmental investigation of the
groundwater, soils and solid waste management units has been conducted at the
Odessa, Texas facility, the Company's primary manufacturing location.  Risk
assessments have been completed for a number of these units and corrective
measures have been defined and conducted.  As of March 31, 2001, the Texas
Natural Resource Conservation Commission ("TNRCC") has approved closure for 51
of the plant's solid waste management units.

TNRCC Flare Investigation

       By letter dated January 28, 1999, the TNRCC notified the Company of
allegations that the Company's olefins plant may have violated its air permit by
emitting visible smoke from its process/emergency flare in late December 1998 or
early January 1999.  During that period, the olefins plant was in the midst of
start up after extensive construction.  As required by Texas law, the Company
had given prior notice to the TNRCC of the start up and that excess emissions
might result.  The TNRCC investigated this matter after receiving numerous
complaints from residents of a subdivision near the Odessa facility.  A draft
Agreed Order with a proposed $15,000 penalty was sent by the TNRCC to the
Company.  Following discussions with the Company, the TNRCC re-drafted the
Agreed Order with a proposed $7,500 penalty.  The Company agreed to an Order
stipulating that $1,500 of the $7,500 be deferred, a $3,000 fine paid and $3,000
offset with a supplemental environmental project for a neighborhood monitoring
program near the facility.  When the Agreed Order was presented to the
Commission, Odessa residents attending the hearing opposed its entry.  The
Commission remanded the matter back to the Commission staff for further
consideration.  The staff has now informally proposed a $237,000 penalty
covering a series of upsets over the period from 1998 through 2000.  The
Company, in a written submission to the TNRCC, has taken issue with the
appropriateness, both factually and legally, of the proposed penalty.  Further
negotiations are anticipated.

       As a result of the start-up flaring during late December 1998 and January
1999, certain complaining citizens have hired counsel to consider bringing legal
action to recover damages alleged to have been caused by that flaring.  Three
such actions have been filed and one other has been threatened.  One of the
filed cases has been settled.  That case involved more than 3,900 plaintiffs.
The remaining filed cases involve a total of 187 claimants.  The one case that
has not been filed involves almost 300 claimants; a tentative settlement of that
case has also been reached.  Although Company lawyers believe that the Company
has strong defenses to the remaining suits, it is too early to predict the
outcome of such litigation.

Other Matters

       As a result of an EPA inspection of the Odessa Facility in April 1997 and
follow-up information requests from EPA, an enforcement action alleging Clean
Air Act violations has been threatened by the U.S. Department of Justice.  Civil
penalties of approximately $600,000 have been proposed by the government.  The
Company has met

                                       9
<PAGE>

once with EPA and the Department of Justice to determine if an
appropriate settlement can be reached.  It is expected that additional
settlement discussions will be held.

     In March 1999, in connection with a construction contract dispute, an
arbitration proceeding was initiated by S&B Engineers and Constructors, Ltd.
("S&B") against the Company.  S&B sought approximately $22.3 million in unpaid
invoices and bonuses under the contract and the Company sought in excess of $20
million in contract damages against S&B.  In August 2000, the arbitration panel
awarded S&B damages in the amount of $19.2 million plus pre-judgment interest,
attorneys' fees and costs, reserving decision on the amount of fees and costs.
In February 2001, the arbitration panel issued its final award, granting S&B
fees and costs in the amount of $3.7 million in addition to the damages
previously awarded.  The Company is appealing the award in state court in Texas,
seeking reversal or modification of the award on grounds that it was based in
part on erroneous conclusions of law.  A hearing on the appeal is scheduled for
June 21, 2001.  The Company has accrued $22 million for the arbitration award
based in part on evaluations provided by its outside legal counsel.

     The Company continually reviews its estimates of potential environmental
and other contingent liabilities. However, no assurance can be given that all
potential liabilities arising out of the Company's present or past operations
have been identified or fully assessed or that the amounts that might be
required to remediate such conditions will not be significant to the Company.

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

General
     The Company manufactures products used in a wide variety of industrial and
consumer-related applications.  The Company's principal products are
polyethylene (including LDPE and LLDPE), polypropylene, APAO and styrene.

     The markets in which the Company competes 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 the Company's products, such as APAO, are generally
less sensitive to economic cycles.  In addition, the Company's polyethylene and
polypropylene businesses are geared toward higher value-added, specialty grades,
which are less sensitive to cyclical swings experienced by commodity grades.

     Principal raw materials purchased by the Company consist of ethane and
propane extracted from natural gas liquids ("NGLs"), propylene and benzene (all
four of which are referred to as "feedstocks") for the polyethylene,
polypropylene and styrene businesses.  Management believes the feedstock
supplies available in Odessa, Texas are currently adequate for the Company's
requirements.

Results of Operations

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

Revenues

     The Company's revenue decreased $22.5 million to $144.8 million for the
three months ended March 31, 2001 from $167.3 million for the same period in
2000.  The major factors contributing to the decrease in revenue were reduced
sales volumes in all major product lines except olefins.  The lower sales
volumes resulted from new capacity additions and the effects of a slowing U.S.
economy, as well as a continued weakening demand in Asia.  Polyethylene revenue
decreased $11.8 million to $66.2 million, primarily due to a volume decrease of
13.2 percent.  Styrene revenue decreased $11.1 million to $17.2 million, due
primarily to a volume decrease of 41.2 percent.  Polypropylene revenue decreased
$3.9 million to $19.4 million, as a result of a volume decrease of 13.8 percent.

                                       10
<PAGE>

Olefins revenue increased $6.7 million to $35.7 million, primarily due to a
price increase of 20.2 percent caused by increased raw material costs.

Gross Profit (Loss)

      The Company's gross profit decreased $34.9 million to a loss of $27.1
million for the three months ended March 31, 2001 from profit of $7.8 million
for the same period in 2000.  The decrease in gross profit is due mainly to the
significant rise in raw material and energy costs.  Olefins gross profit
decreased $13.4 million to a loss of $8.9 million, polyethylene gross profit
decreased $12.2 million to a loss of $8.5 million, polypropylene gross profit
decreased $4.3 million to a loss of $2.7 million, and styrene gross profit
decreased $4.0 million to a loss of $6.3 million.

Selling, General and Administrative

      The Company's selling, general and administrative expenses remained
relatively consistent for the three months ended March 31, 2001 as compared to
the same period in 2000.

Affiliate Interest

      The Company's affiliate interest remained relatively consistent for the
three months ended March 31, 2001 as compared to the same period in 2000.

Income Tax Benefit

      The Company's income tax benefit increased $13.0 million to $17.1 million
for the three months ended March 31, 2001 from $4.1 million in the same period
in 2000, due to decreased operating results for the reasons stated above.

Net Loss

      The Company's net loss increased $22.9 million to $29.7 million for the
three months ended March 31, 2001 from $6.8 million for the same period in 2000.
The decrease is a result of the reasons stated above.

Liquidity and Capital Resources

      Net cash used in operating activities for the three months ended March 31,
2001 was $33.5 million, as compared to $8.8 million provided by operating
activities in the same period in 2000.  This increase is attributable to a
larger net loss and a net increase in working capital during the 2001 period.

      Net cash used in investing activities for the three months ended March 31,
2001 was $2.6 million, as compared to $4.3 million for the same period in 2000.
This decrease is attributable to a decrease in capital expenditures in the 2001
period.

      Net cash provided by financing activities for the three months ended March
31, 2001 was $36.1 million, as compared to net cash used of $4.5 million for the
same period in 2000. The increase was primarily attributable to a net increase
in intercompany borrowings and capital contributions from the Company's parent
during the 2001 period, as compared to repayment of intercompany borrowings
during the 2000 period.

      The Company maintains an intercompany loan agreement (the "Intercompany
Loan Agreement") with Huntsman Group Holdings Finance Corporation, a wholly-
owned subsidiary of Huntsman Corporation.  As of  March 31, 2001, the Company
owed $244.4 million under the Intercompany Loan Agreement.  Subject to certain
terms and conditions, the Company may borrow additional amounts under the
Intercompany Loan Agreement.   The

                                       11
<PAGE>

Company has guaranteed on a secured basis, subject to the limitations imposed by
the indenture (the "Indenture") governing the Company's 11 3/4% Senior Notes
(the "Senior Notes"), Huntsman Corporation's senior secured borrowings on a pari
passu basis with substantially all of Huntsman Corporation's domestic
subsidiaries.

      Huntsman Corporation and its lenders are currently discussing amendments
to the credit documents governing its senior secured borrowings which would
modify the financial covenants in those credit documents. As of May 15, 2001
Huntsman Corporation is not in compliance with certain of those financial
covenants. If the amendments are not approved, and if Huntsman Corporation's
lenders do not permit continued borrowings, then Huntsman Corporation may no
longer be able to provide funds to the Company under the Intercompany Loan
Agreement. Until such amendments are effected, Huntsman Corporation's lenders
could pursue their remedies including acceleration of the senior secured
borrowings, which would also cause an acceleration of the Company's obligations
under the Intercompany Loan Agreement. This would constitute an event of default
under the Senior Notes. The Company could also be required to make payment to
Huntsman Corporation's lenders pursuant to the Company's guaranty of the senior
secured borrowings. While there can be no assurance that approval of the
amendments will be obtained, Huntsman Corporation believes that the amendments
will be approved by its lenders.

      Capital expenditures for the three months ended March 31, 2001 were $2.6
million, a decrease of $1.7 million as compared to the same period in 2000.  The
Company expects to spend approximately $10 million during the balance of 2001 on
capital projects.

      The Company believes that, based on current levels of operation and
anticipated growth, its cash flow from operations, together with other available
sources of liquidity, will be adequate to make scheduled payments of interest on
the Senior Notes, to permit anticipated capital expenditures, to make other
payments, including the arbitration award in the S&B lawsuit discussed in Part
II, Item 1 below, and to fund working capital requirements. However, the ability
of the Company to satisfy these obligations depends on a number of significant
assumptions, including but not limited to, the demand for the Company's
products, raw material costs and continued borrowing availability under the
Intercompany Loan Agreement.

      A number of potential environmental liabilities exist which relate to
certain contaminated property.  In addition, a number of potential environmental
costs relate to pending or proposed environmental regulations.  No assurance can
be given that all of the potential liabilities arising out of the Company's
present or past operations have been identified or that the amounts that might
be required to investigate and remediate such sites or comply with pending or
proposed environmental regulations can be accurately estimated.  The Company has
approximately $6.1 million accrued in the March 31, 2001 balance sheet as an
estimate of its total potential environmental liability with respect to
investigating and remediating known and assessed site contamination.  Extensive
environmental investigation of the groundwater, soil and solid waste management
units has been conducted at the Odessa facility.  Risk assessments have been
completed for a number of these units and corrective measures have been defined
and conducted.  If, however, additional liabilities with respect to
environmental contamination are identified, there is no assurance that
additional amounts that might be required to investigate and remediate such
potential sites would not have a material adverse effect on the financial
position, results of operations or cash flows of the Company.  In addition,
future regulatory developments could restrict or possibly prohibit existing
methods of environmental compliance.  At this time, the Company is unable to
determine the potential consequences such possible future regulatory
developments would have on its financial condition.  Management continually
reviews its estimates of potential environmental liabilities.  The Company
carries Pollution Legal Liability insurance to address many of the potential
environmental liabilities, subject to its terms, limits, exclusions and
deductibles, on both a sudden and accidental basis and on a gradual basis for
occurrences commencing after July 1, 1997 on its operations.  The Company also
carries Pollution Legal Liability and Closure and Post Closure insurance on
certain facilities at the Odessa manufacturing location which are regulated by
the TNRCC. This insurance satisfies requirements of the TNRCC governing
operations at this location.

Recent Events

      On April 23, 2001 the Company announced the closure of its styrene
production unit located at its Odessa, Texas manufacturing facility.  In
conjunction with the shutdown, the Company also announced an initiative to
restructure and eliminate costs at the site.  It is estimated that between 100
and 120 jobs will be eliminated.  A

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one-time charge related to these efforts will be recorded in the second quarter
of this year. The cash component of the one-time charge is expected to be $15
million to $20 million, which will be disbursed over the next six to nine
months.

Cautionary Statement for Forward Looking Information

     Certain information set forth in this report contains "forward-looking
statements" within the meaning of federal securities laws.  Forward-looking
statements include statements concerning the Company's plans, objectives, goals,
strategies, future events, future revenues or performance, capital expenditures,
financing needs, plans or intentions relating to acquisitions and other
information that is not historical information.  In some cases, forward-looking
statements can be identified by terminology such as "believes," "expects,"
"may," "should," or "anticipates", or the negative of such terms or other
comparable terminology, or by discussions of strategy.  The Company may also
make additional forward-looking statements from time to time.  All such
subsequent forward-looking statements, whether written or oral, by the Company
or on its 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 its current
expectations and various assumptions.  The Company's expectations, beliefs and
projections are expressed in good faith and the Company believes there is a
reasonable basis for them, but there can be no assurance that the Company's
expectations, beliefs and projections will result or be achieved.  All forward-
looking statements apply only as of the date made.  The Company undertakes no
obligation to publicly update or revise forward-looking statements that may be
made to reflect events or circumstances after the date made or to reflect the
occurrence of unanticipated events.

      There are a number of risks and uncertainties that could cause the
Company's 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 the Company's actual results
to differ materially from the forward-looking statements. Any forward-looking
statements should be considered in light of these factors.

     1.   The cyclical nature of the Company's business

     2.   Changes in the availability and/or price of feedstocks

     3.   Environmental and safety requirements, including permitting,
             enforcement activities and the possibility of related litigation

     4.   Changes in product mix and utilization of production facilities

     5.   Unavailability of, and substantial delays in, transportation of raw
             materials and products

     6.   Inability to obtain new customers or retain existing ones

     7.   Significant changes in competitive factors affecting the Company

     8.   Significant changes from expectations in actual capital expenditures
             and operating expenses and unanticipated project delays

     9.   Occurrences affecting the Company's ability to obtain funds from
             operations, debt or equity to finance needed capital expenditures
             and other investments

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         10.  Significant changes in the Company's relationship with its
                 employees and the potential adverse effects if labor disputes
                 or grievances were to occur

         11.  Significant changes in tax rates or policies or in rates of
                 inflation or interest

         12.  Changes in economic conditions

         13.  Changes in management or control of the Company

         14.  Changes in accounting principles and/or the application of such
                 principles to the Company

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 also has
market risk with respect to $175 million of its 11 3/4% Senior Notes due 2004.
The market value of this debt was $164 million and $134 million on March 31,
2001 and December 31, 2000, respectively. The senior notes are redeemable at
prices up to 105.875% of par value through 2004.

         The Company's exposure to foreign currency market risk is minimal since
sales prices are typically denominated in U.S. dollars.  The Company's exposure
to changing commodity prices is also minimal since substantially all raw
material is acquired at posted or market related prices, and sales prices for
finished products are generally at market related prices, rather than fixed-
price long-term contracts.


PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

         In March 1999, in connection with a construction contract dispute, an
arbitration proceeding was initiated by S&B Engineers and Constructors, Ltd.
("S&B") against the Company.  S&B sought approximately $22.3 million in unpaid
invoices and bonuses under the contract and the Company sought in excess of $20
million in contract damages against S&B.  In August 2000, the arbitration panel
awarded S&B damages in the amount of $19.2 million plus pre-judgment interest,
attorneys' fees and costs, reserving decision on the amount of fees and costs.
In February 2001, the arbitration panel issued its final award, granting S&B
fees and costs in the amount of $3.7 million in addition to the damages
previously awarded.  The Company is appealing the award in state court in Texas,
seeking reversal or modification of the award on grounds that it was based in
part on erroneous conclusions of law.  A hearing on the appeal is scheduled for
June 21, 2001.  The Company has accrued $22 million for the arbitration award
based in part on evaluations provided by its outside legal counsel.

         The Company is a party to various other lawsuits arising in the
ordinary course of business and does not believe that the outcome of any of
these lawsuits will have a material adverse effect on the Company's financial
position, results of operations or cash flows.

Item 6.  Exhibits and Reports on Form 8-K

         (a)       Exhibits

                   N/A

         (b)       Reports Submitted on Form 8-K:

                   There were no reports submitted on Form 8-K during the first
                   quarter of 2001.

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     SIGNATURE

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

                              HUNTSMAN POLYMERS CORPORATION
                              Registrant

                                  /s/ J. Kimo Esplin
Date: May 15, 2001            By: ------------------
                                     J. Kimo Esplin
                                     Senior Vice President and
                                     Chief Financial Officer
                                     (Authorized Signatory and Principal
                                     Financial and Accounting Officer)

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