Edgar Filing: HUNTSMAN INTERNATIONAL LLC

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TABLE OF CONTENTS

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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 June 30, 2010
OR
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

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

001-32427	Huntsman Corporation 500 Huntsman Way Salt Lake City, Utah 84108 (801) 584-5700	Delaware	42-1648585
333-85141	Huntsman International LLC 500 Huntsman Way Salt Lake City, Utah 84108 (801) 584-5700	Delaware	87-0630358

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.


Huntsman Corporation	YES ý	NO o
Huntsman International LLC	YES ý	NO o

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


Huntsman Corporation	YES ý	NO o
Huntsman International LLC	YES o	NO o

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


Huntsman Corporation	Large accelerated filer ý	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o
Huntsman International LLC	Large accelerated filer o	Accelerated filer o	Non-accelerated filer ý	Smaller reporting company o

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


Huntsman Corporation	YES o	NO ý
Huntsman International LLC	YES o	NO ý

On July 29, 2010, 239,159,547 shares of common stock of Huntsman Corporation were outstanding and 2,728 units of membership interests of Huntsman International LLC were outstanding. There is no established trading market for Huntsman International LLC's units of membership interests. All of Huntsman International LLC's units of membership interests are held by Huntsman Corporation.

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

Table of Contents

HUNTSMAN CORPORATION AND SUBSIDIARIES
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTERLY PERIOD
ENDED JUNE 30, 2010

TABLE OF CONTENTS

			Page

PART I	FINANCIAL INFORMATION		3
ITEM 1.	Financial Statements:		3
	Huntsman Corporation and Subsidiaries:		3
		Condensed Consolidated Balance Sheets (Unaudited)	3
		Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)	4
		Condensed Consolidated Statements of Cash Flows (Unaudited)	6
		Condensed Consolidated Statements of Equity (Unaudited)	8
	Huntsman International LLC and Subsidiaries:		9
		Condensed Consolidated Balance Sheets (Unaudited)	9
		Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)	10
		Condensed Consolidated Statements of Cash Flows (Unaudited)	11
		Condensed Consolidated Statements of Equity (Unaudited)	13
	Huntsman Corporation and Subsidiaries and Huntsman International LLC and Subsidiaries:		14
		Notes to Condensed Consolidated Financial Statements (Unaudited)	14
ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations		71
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk		98
ITEM 4.	Controls and Procedures		99
PART II	OTHER INFORMATION		100
ITEM 1.	Legal Proceedings		100
ITEM 1A.	Risk Factors		100
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds		100
ITEM 6.	Exhibits		101

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In Millions, Except Share and Per Share Amounts)

			June 30, 2010			December 31, 2009

ASSETS
Current assets:
	Cash and cash equivalents		$	766		$	1,745
	Restricted cash			7			5
	Accounts and notes receivable (net of allowance for doubtful accounts of $54 and $56, respectively), ($618 and nil pledged as collateral, respectively)			1,468			1,018
	Accounts receivable from affiliates			15			1
	Inventories			1,324			1,184
	Prepaid expenses			29			42
	Deferred income taxes			35			36
	Other current assets			129			109

		Total current assets		3,773			4,140
Property, plant and equipment, net				3,241			3,516
Investment in unconsolidated affiliates				267			250
Intangible assets, net				107			125
Goodwill				94			94
Deferred income taxes				102			138
Notes receivable from affiliates				7			8
Other noncurrent assets				474			355

		Total assets	$	8,065		$	8,626

LIABILITIES AND EQUITY
Current liabilities:
	Accounts payable		$	822		$	730
	Accounts payable to affiliates			25			25
	Accrued liabilities			568			623
	Deferred income taxes			2			2
	Current portion of debt			168			431

		Total current liabilities		1,585			1,811
Long-term debt				3,699			3,781
Notes payable to affiliates				4			5
Deferred income taxes				312			289
Other noncurrent liabilities				795			875

		Total liabilities		6,395			6,761
Commitments and contingencies (Notes 14 and 15)
Equity
Huntsman Corporation stockholders' equity:
	Common stock $0.01 par value, 1,200,000,000 shares authorized, 239,159,547 and 237,225,258 issued and 236,419,475 and 234,081,490 outstanding in 2010 and 2009, respectively			2			2
	Additional paid-in capital			3,182			3,155
	Unearned stock-based compensation			(15	)		(11	)
	Accumulated deficit			(1,127	)		(1,015	)
	Accumulated other comprehensive loss			(395	)		(287	)

		Total Huntsman Corporation stockholders' equity		1,647			1,844
Noncontrolling interests in subsidiaries				23			21

		Total equity		1,670			1,865

		Total liabilities and equity	$	8,065		$	8,626

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

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HUNTSMAN CORPORATION AND SUBSIDIARIES

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

(In Millions, Except Per Share Amounts)

			Three months ended June 30,						Six months ended June 30,

			2010			2009			2010			2009
Revenues:
	Trade sales, services and fees, net		$	2,280		$	1,822		$	4,329		$	3,495
	Related party sales			63			24			108			31

		Total revenues		2,343			1,846			4,437			3,526
Cost of goods sold				1,958			1,613			3,771			3,144

Gross profit				385			233			666			382
Operating expenses:
	Selling, general and administrative			208			198			426			392
	Research and development			36			36			72			72
	Other operating income			(3	)		(1	)		(1	)		(9	)
	Restructuring, impairment and plant closing costs			17			62			20			76

		Total expenses		258			295			517			531

Operating income (loss)				127			(62	)		149			(149	)
Interest expense, net				(43	)		(58	)		(104	)		(113	)
Loss on accounts receivable securitization program				—			(6	)		—			(10	)
Equity income of investment in unconsolidated affiliates				16			1			17			2
Loss on early extinguishment of debt				(7	)		—			(162	)		—
(Expenses) income associated with the Terminated Merger and related litigation				(1	)		844			(1	)		837
Other income				1			—			1			—

Income (loss) from continuing operations before income taxes				93			719			(100	)		567
Income tax expense				(39	)		(311	)		(5	)		(449	)

Income (loss) from continuing operations				54			408			(105	)		118
Income (loss) from discontinued operations, net of tax				62			(2	)		49			(6	)

Net income (loss)				116			406			(56	)		112
Net (income) loss attributable to noncontrolling interests				(2	)		—			(2	)		4

Net income (loss) attributable to Huntsman Corporation			$	114		$	406		$	(58	)	$	116

Net income (loss)			$	116		$	406		$	(56	)	$	112
Other comprehensive (loss) income				(64	)		130			(108	)		48

Comprehensive income (loss)				52			536			(164	)		160
Comprehensive (income) loss attributable to noncontrolling interests				(2	)		—			(2	)		4

Comprehensive income (loss) attributable to Huntsman Corporation			$	50		$	536		$	(166	)	$	164

(continued)

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HUNTSMAN CORPORATION AND SUBSIDIARIES

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

(In Millions, Except Per Share Amounts)

	Three months ended June 30,					Six months ended June 30,

	2010		2009			2010			2009
Basic income (loss) per share:
Income (loss) from continuing operations attributable to Huntsman Corporation common stockholders	$	0.22	$	1.75		$	(0.46	)	$	0.52
Income (loss) from discontinued operations attributable to Huntsman Corporation common stockholders, net of tax		0.26		(0.01	)		0.21			(0.02	)

Net income (loss) attributable to Huntsman Corporation common stockholders	$	0.48	$	1.74		$	(0.25	)	$	0.50

Weighted average shares		236.4		234.0			235.6			233.8

Diluted income (loss) per share:
Income (loss) from continuing operations attributable to Huntsman Corporation common stockholders	$	0.21	$	1.52		$	(0.46	)	$	0.49
Income (loss) from discontinued operations attributable to Huntsman Corporation common stockholders, net of tax		0.26		(0.01	)		0.21			(0.02	)

Net income (loss) attributable to Huntsman Corporation common stockholders	$	0.47	$	1.51		$	(0.25	)	$	0.47

Weighted average shares		240.8		271.3			235.6			268.8

Amounts attributable to Huntsman Corporation common stockholders:
Income (loss) from continuing operations	$	52	$	408		$	(107	)	$	122
Income (loss) from discontinued operations, net of tax		62		(2	)		49			(6	)

Net income (loss)	$	114	$	406		$	(58	)	$	116

Dividends per share	$	0.10	$	0.10		$	0.20		$	0.20

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

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HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Dollars in Millions)

		Six months ended June 30,

		2010			2009
Operating Activities:
Net (loss) income		$	(56	)	$	112
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Equity income of investment in unconsolidated affiliates			(17	)		(2	)
Depreciation and amortization			196			226
Provision for losses on accounts receivable			4			5
Loss (gain) on disposal of businesses/assets, net			2			(1	)
Loss on early extinguishment of debt			162			—
Noncash interest expense			2			5
Noncash restructuring, impairment and plant closing costs			—			5
Deferred income taxes			34			255
Net unrealized gain on foreign currency transactions			(3	)		—
Stock-based compensation			12			9
Portion of insurance settlement representing cash provided by investing activities			(34	)		—
Other, net			4			(1	)
Changes in operating assets and liabilities:
	Accounts and notes receivable		(262	)		(26	)
	Accounts receivable from A/R Programs		(254	)		—
	Inventories		(205	)		352
	Prepaid expenses		12			20
	Other current assets		(24	)		5
	Other noncurrent assets		(80	)		—
	Accounts payable		127			(81	)
	Accrued liabilities		(44	)		(41	)
	Income taxes payable		14			174
	Other noncurrent liabilities		(32	)		(7	)

Net cash (used in) provided by operating activities			(442	)		1,009

Investing Activities:
Capital expenditures			(78	)		(100	)
Proceeds from insurance settlement			34			—
Proceeds from sale of businesses/assets, net of adjustments			—			1
Acquisition of business			—			(24	)
Investment in unconsolidated affiliates, net of cash received			(4	)		—
Change in restricted cash			(1	)		—
Other			—			3

Net cash used in investing activities			(49	)		(120	)

(continued)

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HUNTSMAN CORPORATION AND SUBSIDIARIES

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

(Dollars in Millions)

		Six months ended June 30,

		2010			2009
Financing Activities:
Net repayments under revolving loan facilities		$	(4	)	$	(8	)
Revolving loan facility from A/R Programs			254			—
Net borrowings on overdraft facilities			5			1
Repayments of short term debt			(94	)		(78	)
Borrowings on short term debt			115			57
Repayments of long-term debt			(895	)		(26	)
Proceeds from issuance of long-term debt			375			869
Repayments of notes payable			(22	)		(35	)
Borrowings on notes payable			4			18
Debt issuance costs paid			(17	)		—
Call premiums related to early extinguishment of debt			(153	)		—
Dividends paid to common stockholders			(48	)		(47	)
Repurchase and cancellation of stock awards			(6	)		—
Proceeds from issuance of common stock			2			—
Excess tax benefit related to stock-based compensation			4			—
Other, net			—			(4	)

Net cash (used in) provided by financing activities			(480	)		747

Effect of exchange rate changes on cash			(8	)		2

(Decrease) increase in cash and cash equivalents			(979	)		1,638
Cash and cash equivalents at beginning of period			1,745			657

Cash and cash equivalents at end of period		$	766		$	2,295

Supplemental cash flow information:
	Cash paid for interest	$	97		$	101
	Cash paid for income taxes		10			16

During the six months ended June 30, 2010 and 2009, the amount of capital expenditures in accounts payable decreased by $10 million and $25 million, respectively. The value of share awards that vested during the six months ended June 30, 2010 and 2009 was $18 million and $11 million, respectively. In connection with our June 23, 2009 acquisition of the Baroda Division of Metrochem Industries Limited, $5 million of payables from us to Metrochem Industries Limited were forgiven.

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

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HUNTSMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)

(Dollars in Millions)

	Huntsman Corporation Stockholders

	Common Stock													Accumulated other comprehensive loss
	Common Stock					Additional paid-in capital		Unearned stock-based compensation			Accumulated deficit						Noncontrolling interests in subsidiaries		Total equity
	Shares			Amount		Additional paid-in capital		Unearned stock-based compensation			Accumulated deficit						Noncontrolling interests in subsidiaries		Total equity
Balance, January 1, 2010		234,081,490		$	2	$	3,155	$	(11	)	$	(1,015	)	$	(287	)	$	21	$	1,865
Net loss		—			—		—		—			(58	)		—			2		(56	)
Other comprehensive loss		—			—		—		—			—			(108	)		—		(108	)
Issuance of nonvested stock awards		—			—		10		(10	)		—			—			—		—
Vesting of stock awards		1,900,576			—		9		—			—			—			—		9
Recognition of stock-based compensation		—			—		2		6			—			—			—		8
Repurchase and cancellation of stock awards		(425,809	)		—		—		—			(6	)		—			—		(6	)
Stock options exercised		863,218			—		2		—			—			—			—		2
Excess tax benefit related to stock-based compensation		—			—		4		—			—			—			—		4
Dividends declared on common stock		—			—		—		—			(48	)		—			—		(48	)

Balance, June 30, 2010		236,419,475		$	2	$	3,182	$	(15	)	$	(1,127	)	$	(395	)	$	23	$	1,670

	Huntsman Corporation Stockholders

	Common Stock													Accumulated other comprehensive loss
	Common Stock					Additional paid-in capital		Unearned stock-based compensation			Accumulated deficit						Noncontrolling interests in subsidiaries			Total equity
	Shares			Amount		Additional paid-in capital		Unearned stock-based compensation			Accumulated deficit						Noncontrolling interests in subsidiaries			Total equity
Balance, January 1, 2009		233,553,515		$	2	$	3,141	$	(13	)	$	(1,031	)	$	(489	)	$	22		$	1,632
Net income		—			—		—		—			116			—			(4	)		112
Other comprehensive income		—			—		—		—			—			48			—			48
Issuance of nonvested stock awards		—			—		8		(8	)		—			—			—			—
Vesting of stock awards		548,489			—		—		—			—			—			—			—
Recognition of stock-based compensation		—			—		3		6			—			—			—			9
Repurchase and cancellation of stock awards		(134,377	)		—		—		—			—			—			—			—
Dividends declared on common stock		—			—		—		—			(47	)		—			—			(47	)

Balance, June 30, 2009		233,967,627		$	2	$	3,152	$	(15	)	$	(962	)	$	(441	)	$	18		$	1,754

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

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(Dollars in Millions)

			June 30, 2010			December 31, 2009

ASSETS
Current assets:
	Cash and cash equivalents		$	342		$	919
	Restricted cash			7			5
	Accounts and notes receivable (net of allowance for doubtful accounts of $54 and $56, respectively), ($618 and nil pledged as collateral, respectively)			1,468			1,018
	Accounts receivable from affiliates			80			32
	Inventories			1,324			1,184
	Prepaid expenses			27			42
	Deferred income taxes			33			33
	Other current assets			119			109

		Total current assets		3,400			3,342
Property, plant and equipment, net				3,093			3,357
Investment in unconsolidated affiliates				267			250
Intangible assets, net				111			129
Goodwill				94			94
Deferred income taxes				122			158
Notes receivable from affiliates				7			8
Other noncurrent assets				474			355

		Total assets	$	7,568		$	7,693

LIABILITIES AND EQUITY
Current liabilities:
	Accounts payable		$	821		$	715
	Accounts payable to affiliates			28			41
	Accrued liabilities			567			613
	Deferred income taxes			2			2
	Note payable to affiliate			100			25
	Current portion of debt			168			195

		Total current liabilities		1,686			1,591
Long-term debt				3,699			3,781
Notes payable to affiliates				439			530
Deferred income taxes				104			79
Other noncurrent liabilities				791			865

		Total liabilities		6,719			6,846
Commitments and contingencies (Notes 14 and 15)
Equity
Huntsman International LLC members' equity:
	Members' equity, 2,728 units issued and outstanding			3,036			3,021
	Accumulated deficit			(1,756	)		(1,847	)
	Accumulated other comprehensive loss			(454	)		(348	)

		Total Huntsman International LLC members' equity		826			826
Noncontrolling interests in subsidiaries				23			21

		Total equity		849			847

		Total liabilities and equity	$	7,568		$	7,693

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

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

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

(Dollars in Millions)

			Three months ended June 30,						Six months ended June 30,

			2010			2009			2010			2009
Revenues:
	Trade sales, services and fees, net		$	2,280		$	1,822		$	4,329		$	3,495
	Related party sales			63			24			108			31

		Total revenues		2,343			1,846			4,437			3,526
Cost of goods sold				1,955			1,610			3,763			3,136

Gross profit				388			236			674			390
Operating expenses:
	Selling, general and administrative			208			195			423			384
	Research and development			36			36			72			72
	Other operating income			(4	)		(1	)		(11	)		(9	)
	Restructuring, impairment and plant closing costs			17			62			20			76

		Total expenses		257			292			504			523

Operating income (loss)				131			(56	)		170			(133	)
Interest expense, net				(47	)		(58	)		(113	)		(113	)
Loss on accounts receivable securitization program				—			(6	)		—			(10	)
Equity income of investment in unconsolidated affiliates				16			1			17			2
Loss on early extinguishment of debt				(7	)		—			(16	)		—
Other income				2			—			2			—

Income (loss) from continuing operations before income taxes				95			(119	)		60			(254	)
Income tax expense				(38	)		(8	)		(16	)		(154	)

Income (loss) from continuing operations				57			(127	)		44			(408	)
Income (loss) from discontinued operations, net of tax				62			(2	)		49			(6	)

Net income (loss)				119			(129	)		93			(414	)
Net (income) loss attributable to noncontrolling interests				(2	)		—			(2	)		4

Net income (loss) attributable to Huntsman International LLC			$	117		$	(129	)	$	91		$	(410	)

Net income (loss)			$	119		$	(129	)	$	93		$	(414	)
Other comprehensive (loss) income				(63	)		130			(106	)		51

Comprehensive income (loss)				56			1			(13	)		(363	)
Comprehensive (income) loss attributable to noncontrolling interests				(2	)		—			(2	)		4

Comprehensive income (loss) attributable to Huntsman International LLC			$	54		$	1		$	(15	)	$	(359	)

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

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Dollars in Millions)

		Six months ended June 30,

		2010			2009
Operating Activities:
Net income (loss)		$	93		$	(414	)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Equity income of investment in unconsolidated affiliates			(17	)		(2	)
Depreciation and amortization			184			214
Provision for losses on accounts receivable			4			5
Loss (gain) on disposal of businesses/assets, net			2			(1	)
Loss on early extinguishment of debt			16			—
Noncash interest expense			11			12
Noncash restructuring, impairment and plant closing costs			—			5
Deferred income taxes			37			143
Net unrealized gain on foreign currency transactions			(3	)		—
Noncash compensation			11			5
Portion of insurance settlement representing cash provided investing activities			(34	)		—
Other			3			(1	)
Changes in operating assets and liabilities:
	Accounts and notes receivable		(262	)		(26	)
	Accounts receivable from A/R Programs		(254	)		—
	Inventories		(205	)		352
	Prepaid expenses		14			22
	Other current assets		(14	)		(8	)
	Other noncurrent assets		(80	)		—
	Accounts payable		132			(98	)
	Accrued liabilities		(21	)		(5	)
	Other noncurrent liabilities		(30	)		(4	)

Net cash (used in) provided by operating activities			(413	)		199

Investing Activities:
Capital expenditures			(78	)		(100	)
Proceeds from insurance settlement			34			—
Proceeds from sale of businesses/assets, net of adjustments			—			1
Acquisition of business			—			(24	)
Investment in unconsolidated affiliates, net of cash received			(4	)		—
Change in restricted cash			(1	)		—
Increase in receivable from affiliate			(46	)		(11	)
Other, net			—			3

Net cash used in investing activities			(95	)		(131	)

(continued)

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

(Dollars in Millions)

		Six months ended June 30,

		2010			2009
Financing Activities:
Net repayments under revolving loan facilities		$	(4	)	$	(8	)
Revolving loan facility from A/R Programs			254			—
Net borrowings on overdraft facilities			5			1
Repayments of short term debt			(94	)		(78	)
Borrowings on short term debt			115			57
Repayments of long-term debt			(659	)		(26	)
Proceeds from issuance of long-term debt			375			869
Repayments of notes payable to affiliate			(125	)		(403	)
Proceeds from notes payable to affiliate			110			529
Repayments of notes payable			(22	)		(34	)
Borrowings on notes payable			4			15
Debt issuance costs paid			(17	)		—
Call premiums related to early extinguishment of debt			(7	)		—
Dividends paid to parent			—			(23	)
Excess tax benefit related to stock-based compensation			4			—
Contribution from parent			—			236
Other, net			—			(4	)

Net cash (used in) provided by financing activities			(61	)		1,131

Effect of exchange rate changes on cash			(8	)		2

(Decrease) increase in cash and cash equivalents			(577	)		1,201
Cash and cash equivalents at beginning of period			919			87

Cash and cash equivalents at end of period		$	342		$	1,288

Supplemental cash flow information:
	Cash paid for interest	$	88		$	102
	Cash paid for income taxes		9			16

During the six months ended June 30, 2010 and 2009, the amount of capital expenditures in accounts payable decreased by $10 million and $25 million, respectively. During the six months ended June 30, 2010 and 2009, Huntsman Corporation contributed $11 million and $5 million, respectively, related to stock-based compensation. In connection with our June 23, 2009 acquisition of the Baroda Division of Metrochem Industries Limited, $5 million of payables from us to Metrochem Industries Limited were forgiven.

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

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CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)

(Dollars in Millions)

	Huntsman International LLC Members

	Members' equity							Accumulated other comprehensive loss
	Members' equity				Accumulated deficit						Noncontrolling interests in subsidiaries		Total equity
	Units		Amount		Accumulated deficit						Noncontrolling interests in subsidiaries		Total equity
Balance, January 1, 2010		2,728	$	3,021	$	(1,847	)	$	(348	)	$	21	$	847
Net income		—		—		91			—			2		93
Other comprehensive loss		—		—		—			(106	)		—		(106	)
Contribution from parent, net of distributions		—		11		—			—			—		11
Excess tax benefit related to stock-based compensation		—		4		—			—			—		4

Balance, June 30, 2010		2,728	$	3,036	$	(1,756	)	$	(454	)	$	23	$	849

	Huntsman International LLC Members

	Members' equity							Accumulated other comprehensive loss
	Members' equity				Accumulated deficit						Noncontrolling interests in subsidiaries			Total equity
	Units		Amount		Accumulated deficit						Noncontrolling interests in subsidiaries			Total equity
Balance, January 1, 2009		2,728	$	2,865	$	(1,414	)	$	(554	)	$	22		$	919
Net loss		—		—		(410	)		—			(4	)		(414	)
Other comprehensive income		—		—		—			51			—			51
Contribution from parent, net of distributions		—		241		—			—			—			241
Dividends paid to parent		—		—		(23	)		—			—			(23	)

Balance, June 30, 2009		2,728	$	3,106	$	(1,847	)	$	(503	)	$	18		$	774

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

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. GENERAL

CERTAIN DEFINITIONS

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

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

INTERIM FINANCIAL STATEMENTS

Our interim condensed consolidated financial statements (unaudited) and Huntsman International's interim condensed consolidated financial statements (unaudited) were prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP" or "U.S. GAAP") and in management's opinion, reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of results of operations, financial position and cash flows for the periods presented. Results for interim periods are not necessarily indicative of those to be expected for the full year. These condensed consolidated financial statements (unaudited) should be read in conjunction with the audited consolidated financial statements and notes to consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2009 for our Company and Huntsman International filed on February 19, 2010 and updated by our Form 8-K filed on June 8, 2010.

DESCRIPTION OF BUSINESS

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

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

1. GENERAL (Continued)

quarter of 2010 and report the results of that business as discontinued operations. See "Note 20. Discontinued Operations."

COMPANY

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

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

HUNTSMAN CORPORATION AND HUNTSMAN INTERNATIONAL FINANCIAL STATEMENTS

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

•: purchase accounting recorded at our Company for the 2003 step-acquisition of Huntsman International Holdings LLC, the former parent company of Huntsman International that was merged into Huntsman International in 2005;
•: the different capital structures;
•: a note payable from Huntsman International to us;
•: income (expenses) associated with our terminated merger with a subsidiary of Hexion (the "Terminated Merger" or the "Hexion Merger");
•: the $250 million 7% convertible notes due 2018 (the "Convertible Notes") issued in connection with our December 14, 2008 settlement agreement with Apollo, Hexion and certain of their affiliates (the "Apollo Settlement Agreement")(see "Note 8. Debt—Redemption of Notes" and "Note 18. (Expenses) Income Associated with the Terminated Merger and Related Litigation"), which we repurchased on January 11, 2010; and
•: the results of our settlement agreement (the "Texas Bank Litigation Settlement Agreement") in connection with our litigation (the "Texas Bank Litigation") against affiliates of Credit Suisse Securities (USA) LLC and Deutsche Bank Inc. (collectively, the "Banks") (see "Note 18. (Expenses) Income Associated with the Terminated Merger and Related Litigation").

PRINCIPLES OF CONSOLIDATION

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

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

1. GENERAL (Continued)

USE OF ESTIMATES

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

RECLASSIFICATIONS

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

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

RECENT DEVELOPMENTS

Settlement of Fire Insurance Claims

Prior to December 31, 2009, we received payments on insurance claims with respect to the fire totaling $365 million. On May 14, 2010, we entered into a Sworn Statement in Proof of Loss and Full and Final Settlement, Release, and Indemnity Agreement with the Reinsurers (including those Reinsurers that did not participate in the arbitration proceeding). Pursuant to the settlement agreement, through June 15, 2010, we received final payment totaling $110 million. Upon receipt of this payment, we agreed to the dismissal with prejudice of the legal and arbitration proceedings relating to our insurance claims.

As a result of this settlement, we recognized a gain of $110 million in discontinued operations during the second quarter of 2010, the proceeds of which were used to repay secured debt in accordance with relevant provisions of the agreements governing our senior secured credit facilities ("Senior Credit Facilities"). Of the $110 million payment, $34 million was reflected within the statement of cash flows as cash flows from investing activities and the remaining $76 million was reflected as cash flows from operating activities.

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

2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

Accounting Pronouncements Adopted During 2010:

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

In January 2010, the FASB issued ASU No. 2010-06, Fair Value Measurements and Disclosures (Topic 820)—Improving Disclosures about Fair Value Measurements. This ASU clarifies existing disclosure requirements to provide a greater level of disaggregated information and to provide more information regarding valuation techniques and inputs to fair value measurements. It requires additional disclosure related to transfers between the three levels of fair value measurement, as well as information about purchases, sales, issuances, and settlements in the roll forward of activity for Level 3 measurements. The enhanced disclosures required by this ASU are effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity for Level 3 measurements, which is effective for interim and annual reporting periods beginning after December 15, 2010. See "Note 10. Fair Value."

Effective January 1, 2010, we adopted ASU No. 2009-17, Consolidations (Topic 810)—Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities, which codified Statement of Financial Accounting Standards ("SFAS") No. 167, Amendments to FASB Interpretation No. 46(R). This statement amends FASB Interpretation No. ("FIN") 46(R), Consolidation of Variable Interest Entities, to replace the quantitative-based risks and rewards calculation for determining which enterprise has a controlling financial interest in a variable interest entity ("VIE") with a qualitative approach. This new approach focuses on identifying which enterprise has the power to direct the activities of a VIE that most significantly impact the entity's economic performance and (1) the obligation to absorb losses of the entity or (2) the right to receive benefits from the entity. It also requires ongoing assessments of whether an enterprise is the primary beneficiary of a VIE, and amends the types of events that trigger a reassessment of whether an entity is a VIE. Further, it requires additional disclosures about an enterprise's involvement in variable interest entities. The adoption of this statement did not have a significant impact on our condensed consolidated financial statements (unaudited). See "Note 6. Variable Interest Entities."

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

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2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (Continued)

2010. See "Note 8. Debt—Accounts Receivable Securitization." Prior to the adoption of this statement, receivables transferred under our U.S. and European accounts receivable securitization programs (the "U.S. A/R Program," the "EU A/R Program" and collectively the "A/R Programs") qualified as sales.

Accounting Pronouncements Pending Adoption in Future Periods:

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

3. BUSINESS COMBINATIONS

BARODA ACQUISITION

On June 23, 2009, we announced the acquisition of the Baroda Division ("Baroda") of Metrochem Industries Limited ("MCIL"), a manufacturing facility for the production of intermediates and specialty dyes for textiles, located in Baroda, India. Baroda had been a significant supplier to our Textile Effects division and this acquisition strengthens the Textile Effects division's competitiveness and supports its development in Asia. We initially entered into an agreement to acquire Baroda on June 29, 2007. The initial agreement provided either party with the right to terminate the agreement if a transaction was not consummated by April 30, 2008. On February 6, 2009, we entered into a non-binding agreement in principle with MCIL under which the purchase price was revised to be approximately $35 million (U.S. dollar equivalents), which included receivables existing on the closing date due to MCIL from our affiliates, which were also settled at acquisition. Payment of the acquisition cost was phased in various tranches. The first tranche of $7 million was paid during 2008; additional tranches were paid during 2009; and a final payment of $2 million was made upon completion of the audit of net working capital acquired in the first quarter of 2010. In addition, $5 million of accounts payable by us to MCIL were forgiven in connection with this acquisition.

We have accounted for the Baroda acquisition using the acquisition method. As such, we analyzed the fair value of tangible and intangible assets acquired and liabilities assumed. The allocation of

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3. BUSINESS COMBINATIONS (Continued)

acquisition cost to the assets acquired and liabilities assumed is summarized as follows (dollars in millions):


Acquisition cost:
	Cash payments made in 2008	$	7
	Cash payments made in 2009		31
	Cash payments made in 2010		2
	Forgiveness of amounts payable from us to MCIL		(5	)

Total acquisition cost		$	35

Fair value of assets acquired and liabilities assumed:
	Accounts receivable	$	2
	Inventories		3
	Other current assets		2
	Property, plant and equipment		31
	Intangible assets		3
	Deferred tax asset		2
	Accounts payable		(3	)
	Short-term debt		(3	)
	Deferred tax liability		(2	)

Total fair value of net assets acquired		$	35

4. INVENTORIES

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

	June 30, 2010			December 31, 2009

Raw materials and supplies	$	311		$	240
Work in progress		83			77
Finished goods		988			917

Total		1,382			1,234
LIFO reserves		(58	)		(50	)

Net	$	1,324		$	1,184

As of June 30, 2010 and December 31, 2009, approximately 12% and 10%, respectively of inventories were recorded using the LIFO cost method.

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

4. INVENTORIES (Continued)

In the normal course of operations, we at times exchange raw materials and finished goods with other companies for the purpose of reducing transportation costs. The net non-monetary open exchange positions are valued at cost. The amounts included in inventory under non-monetary open exchange agreements receivable by us as of June 30, 2010 and December 31, 2009 were both $2 million, respectively. Other open exchanges are settled in cash and result in a net deferred profit margin. The amounts under these open exchange agreements receivable or payable by us at both June 30, 2010 and December 31, 2009 were nil.

5. INVESTMENT IN UNCONSOLIDATED AFFILIATES

In 2008, we contributed $44 million as our 50% equity contribution to the Arabian Amines Company, our ethyleneamines manufacturing joint venture in Jubail, Saudi Arabia. This joint venture's funding requirements will be satisfied through a combination of debt and equity, with the equity already provided on a 50/50 basis by us and Zamil Group. The joint venture obtained various loan commitments in the aggregate amount of approximately $195 million in U.S. dollar equivalents, of which $192 million had been drawn as of June 30, 2010. Trial production commenced in the second quarter of 2010 with final plant testing and certification expected to be complete in the third quarter of 2010. The plant will have approximate annual capacity of 60 million pounds. We will purchase and sell all of the production from this joint venture. We have provided certain guarantees of approximately $14 million for these commitments, which will terminate upon completion of the project and satisfaction of certain conditions. We have estimated that the fair value of these guarantees was nil as of the closing date of this transaction and, accordingly, no amounts have been recorded. While this joint venture was accounted for under the equity method during its development stage, we will consolidate this joint venture beginning in the third quarter of 2010.

During the second quarter of 2010, we recorded a non-recurring $15 million credit to equity income of investment in unconsolidated affiliates to appropriately reflect our investment in the Sasol-Huntsman GmbH and Co. KG joint venture. This credit represented a cumulative correction of an error that was individually immaterial in each year since our initial investment in the joint venture in 1997.

6. VARIABLE INTEREST ENTITIES

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

•: Rubicon LLC manufactures products for our Polyurethanes segment. The structure of the joint venture is such that the total equity investment at risk is not sufficient to permit the joint venture to finance its activities without additional financial support. By virtue of the operating agreement with this joint venture, we purchase a majority of the output, absorb a majority of the operating costs and provide a majority of the additional funding.
•: Pacific Iron Products Sdn Bhd manufactures products for our Pigments segment. In this joint venture we supply all the raw materials through a fixed cost supply contract, operate the

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6. VARIABLE INTEREST ENTITIES (Continued)

manufacturing facility and market the products of the joint venture to third party customers. Through a fixed price raw materials supply contract with the joint venture we are exposed to the risk related to the fluctuation of raw material pricing.

As the primary beneficiary of these two VIEs, the joint ventures' assets, liabilities and results of operations are included in our condensed consolidated financial statements (unaudited). The following table summarizes the carrying amount of the two joint ventures' assets and liabilities included in our condensed consolidated balance sheet (unaudited), before intercompany eliminations, as of June 30, 2010 (dollars in millions):


Current assets	$	87
Property, plant and equipment, net		15
Other noncurrent assets		37
Deferred income taxes		38

Total assets	$	177

Current liabilities	$	84
Long-term debt		3
Other noncurrent liabilities		94

Total liabilities	$	181

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

7. RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS

As of June 30, 2010 and December 31, 2009, accrued restructuring, impairment and plant closing costs by type of cost and initiative consisted of the following (dollars in millions):

	Workforce reductions(1)			Demolition and decommissioning			Non-cancelable lease costs		Other restructuring costs			Total(2)

Accrued liabilities as of January 1, 2010	$	50		$	1		$	3	$	21		$	75
2010 charges for 2005 initiatives		1			—			—		—			1
2010 charges for 2009 initiatives		2			—			—		3			5
2010 charges for 2010 initiatives		20			—			—		—			20
Reversal of reserves no longer required		(6	)		—			—		—			(6	)
2010 payments for 2005 initiatives		—			(1	)		—		—			(1	)
2010 payments for 2006 initiatives		(2	)		—			—		—			(2	)
2010 payments for 2008 initiatives		(4	)		—			—		—			(4	)
2010 payments for 2009 initiatives		(7	)		—			—		(3	)		(10	)
Net activity of discontinued operations		(24	)		—			—		4			(20	)
Foreign currency effect on reserve balance		(2	)		—			—		—			(2	)

Accrued liabilities as of June 30, 2010	$	28		$	—		$	3	$	25		$	56

(1): The total workforce reduction reserves of $28 million relate to the termination of 367 positions, of which 239 positions had not been terminated as of June 30, 2010.
(2): Accrued liabilities by initiatives were as follows (dollars in millions):

	June 30, 2010		December 31, 2009

2005 initiatives and prior	$	2	$	3
2006 initiatives		3		5
2008 initiatives		3		7
2009 initiatives		28		60
2010 initiatives		20		—

Total	$	56	$	75

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

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

	Polyurethanes			Performance Products		Advanced Materials			Textile Effects			Pigments			Discontinued Operations			Corporate & Other			Total

Accrued liabilities as of January 1, 2010	$	2		$	—	$	7		$	17		$	11		$	34		$	4		$	75
2010 charges for 2005 initiatives		—			—		—			—			1			—			—			1
2010 charges for 2009 initiatives		—			—		—			—			4			—			1			5
2010 charges for 2010 initiatives		—			—		—			15			—			—			5			20
Reversal of reserves no longer required		—			—		(2	)		—			(2	)		—			(2	)		(6	)
2010 payments for 2005 initiatives		—			—		—			—			(1	)		—			—			(1	)
2010 payments for 2006 initiatives		—			—		—			(2	)		—			—			—			(2	)
2010 payments for 2008 initiatives		(1	)		—		—			(2	)		(1	)		—			—			(4	)
2010 payments for 2009 initiatives		—			—		(2	)		(2	)		(4	)		—			(2	)		(10	)
Net activity of discontinued operations		—			—		—			—			—			(20	)		—			(20	)
Foreign currency effect on reserve balance		—			—		—			—			(2	)		—			—			(2	)

Accrued liabilities as of June 30, 2010	$	1		$	—	$	3		$	26		$	6		$	14		$	6		$	56

Current portion of restructuring reserves	$	1		$	—	$	2		$	26		$	4		$	14		$	6		$	53
Long-term portion of restructuring reserve		—			—		1			—			2			—			—			3
Estimated additional future charges for current restructuring projects
Estimated additional charges within one year		—			—		—			—			3			1			1			5
Estimated additional charges beyond one year		—			—		—			—			—			—			—			—

Details with respect to cash and non-cash restructuring charges for the periods ended June 30, 2010 and 2009 by initiative are provided below (dollars in millions):

		Three Months Ended June 30, 2010			Six Months Ended June 30, 2010

Cash charges:
	2010 charges for 2005 & prior initiatives	$	1		$	1
	2010 charges for 2009 initiatives		3			5
	2010 charges for 2010 initiatives		16			20
	Reversal of reserves no longer required		(3	)		(6	)

Total 2010 Restructuring, Impairment and Plant Closing Costs		$	17		$	20

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

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

		Three Months Ended June 30, 2009			Six Months Ended June 30, 2009

Cash charges:
	2009 charges for 2006 initiatives	$	1		$	1
	2009 charges for 2008 initiatives		—			2
	2009 charges for 2009 initiatives		62			71
	Reversal of reserves no longer required		(2	)		(3	)
Non-cash charges			1			5

Total 2009 Restructuring, Impairment and Plant Closing Costs		$	62		$	76

During the six months ended June 30, 2010, our Textile Effects segment recorded charges of $15 million primarily related to the consolidation of our Switzerland manufacturing facilities.

During the six months ended June 30, 2010, our Pigments segment recorded net charges of $3 million primarily related to the closure of our Grimsby, U.K. plant. We expect to incur additional charges of $3 million through December 31, 2011, primarily related to the closure of our Grimsby, U.K. plant.

During the six months ended June 30, 2010, we recorded net charges of $4 million in Corporate and other related to workforce reductions in connection with a reorganization and regional consolidation of our transactional accounting activities. We expect to incur additional charges of $1 million through December 31, 2011, primarily related to these activities.

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

8. DEBT

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

Huntsman Corporation

		June 30, 2010		December 31, 2009

Senior Credit Facilities:
	Term loans	$	1,685	$	1,968
Amounts outstanding under A/R programs			226		—
Senior notes			442		434
Subordinated notes			1,234		1,294
Australian credit facilities			30		34
HPS (China) debt			183		163
Convertible notes			—		236
Other			67		83

Total debt—excluding debt to affiliates		$	3,867	$	4,212

Total Current portion of debt		$	168	$	431
Long-term portion			3,699		3,781

Total debt—excluding debt to affiliates		$	3,867	$	4,212

Total debt—excluding debt to affiliates		$	3,867	$	4,212
Notes payable to affiliates—noncurrent			4		5

Total debt		$	3,871	$	4,217

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

8. DEBT (Continued)

Huntsman International

		June 30, 2010		December 31, 2009

Senior Credit Facilities:
	Term loans	$	1,685	$	1,968
Amounts outstanding under A/R programs			226		—
Senior notes			442		434
Subordinated notes			1,234		1,294
Australian credit facilities			30		34
HPS (China) debt			183		163
Other			67		83

Total debt—excluding debt to affiliates		$	3,867	$	3,976

Total Current portion of debt		$	168	$	195
Long-term portion			3,699		3,781

Total debt—excluding debt to affiliates		$	3,867	$	3,976

Total debt—excluding debt to affiliates		$	3,867		3,976
Notes payable to affiliates—current			100		25
Notes payable to affiliates—noncurrent			439		530

Total debt		$	4,406	$	4,531

DIRECT AND SUBSIDIARY DEBT

Huntsman Corporation's direct debt and guarantee obligations consist of the following: guarantees of certain debt of HPS (our Chinese MDI joint venture); a guarantee of certain obligations of the Arabian Amines Company (our ethyleneamines manufacturing joint venture in Jubail, Saudi Arabia); a guarantee of certain debt of Huntsman Corporation Australia Pty Limited; certain indebtedness incurred from time to time to finance certain insurance premiums; and a guarantee of certain obligations of Huntsman International in its capacity as a contributor and servicer guarantor under the U.S. A/R Program. Substantially all of our other debt, including the facilities described below, has been incurred by our subsidiaries (primarily Huntsman International); such subsidiary debt is nonrecourse to us and we have no contractual obligation to fund our subsidiaries' respective operations.

TRANSACTIONS AFFECTING OUR DEBT

Senior Credit Facilities

As of June 30, 2010, our Senior Credit Facilities consisted of (i) our $225 million revolving facility ("Revolving Facility"); (ii) our $1,302 million term loan B facility ("Term Loan B"); and (iii) our $427 million ($383 million carrying value) term loan C facility ("Term Loan C" and, collectively with Term Loan B, the "Dollar Term Loans"). As of June 30, 2010, we had no borrowings outstanding

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8. DEBT (Continued)

under our Revolving Facility, and we had approximately $29 million (U.S. dollar equivalents) of letters of credit and bank guarantees issued and outstanding under our Revolving Facility. All of our Senior Credit Facilities are obligations of Huntsman International and are not direct obligations of Huntsman Corporation.

On March 9, 2010, Huntsman International entered into a Fifth Amendment to Credit Agreement (the "Amendment") with JPMorgan Chase Bank, N.A., as successor administrative agent and collateral agent, and the other financial institutions party thereto, which amended certain terms of our Senior Credit Facilities. Among other things, the Amendment

•: replaced Deutsche Bank AG New York Branch as administrative agent, collateral agent and U.K. security trustee with JPMorgan Chase Bank, N.A. as administrative agent and collateral agent and JPMorgan Chase Bank, N.A. or an affiliate thereof as U.K. security trustee;
•: extended the stated maturity of the Revolving Facility to March 9, 2014 and provides for optional extensions of such stated maturity date from time to time with the consent of the lenders and subject to certain specified conditions and exceptions;
•: limits the aggregate amount of the revolving commitments allowable under the Revolving Facility to an amount up to $300 million, including $225 million currently obtained from the lenders;
•: terminated a waiver that was entered into on April 16, 2009 with respect to the Leverage Covenant (as defined below) (the "2009 Waiver");
•: reduces the maximum letter of credit sublimit to $75 million (not including existing letters of credit issued by Deutsche Bank AG New York Branch) and the maximum swing line sublimit to $25 million;
•: increases the applicable LIBOR margin range on revolving loans by 1.75% to 3.50% per annum;
•: increases the unused commitment fee percentage to a range of 0.50% to 0.75%; and
•: amends the mandatory prepayment provisions to permit the reinvestment of certain insurance and condemnation proceeds.

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

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

8. DEBT (Continued)

During the six months ended June 30, 2010, we paid the annual scheduled repayment of $16 million on Term Loan B and $5 million on Term Loan C. In addition, we made the following prepayments on our Senior Credit Facilities:

•: On April 26, 2010, we prepaid $124 million on Term Loan B and $40 million on Term Loan C with cash flow from operations. In connection with this prepayment, we incurred a loss on early extinguishment of debt of $5 million.
•: On June 22, 2010, we prepaid $83 million on Term Loan B and $27 million on Term Loan C with proceeds from the final settlement of insurance claims. See "Note 1. General—Recent Developments" and "Note 17. Casualty Losses and Insurance Recoveries—Port Arthur, Texas Plant Fire." In connection with this prepayment, we incurred a loss on early extinguishment of debt of $2 million.

Accounts Receivable Securitization

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

As of June 30, 2010, under our A/R Programs, we had $226 million in U.S. dollar equivalents in loans outstanding (consisting of $55 million and €139 million (approximately $171 million)). As of June 30, 2010, $588 million of accounts receivable were pledged as collateral under the A/R Programs. As of December 31, 2009, the A/R Programs had $254 million in U.S. dollar equivalents in loans outstanding (consisting of $55 million and €139 million (approximately $199 million)).

2020 Subordinated Notes

On March 17, 2010, Huntsman International completed a $350 million offering of 8.625% subordinated notes due March 15, 2020 (the "2020 Subordinated Notes"). We used the net proceeds of $343 million to redeem a portion of our euro-denominated senior subordinated notes due 2013 (€184 million (approximately $253 million)) and a portion of our euro-denominated senior subordinated notes due 2015 (€59 million (approximately $81 million)). See "—Redemption of Notes" below.

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

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8. DEBT (Continued)

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

Redemption of Notes

On March 17, 2010, Huntsman International repaid €184 million (approximately $253 million) of its 6.875% senior subordinated notes due 2013. The amount paid to redeem the notes, excluding accrued interest, was €189 million (approximately $259 million), which included principal of €184 million (approximately $253 million) and premium of €5 million (approximately $7 million). As of June 30, 2010, the 6.875% senior subordinated notes due 2013 have a remaining balance of €216 million (approximately $265 million).

On March 17, 2010, Huntsman International repaid €59 million (approximately $81 million) of its 7.5% senior subordinated notes due 2015. The amount paid to redeem the notes, excluding accrued interest, was €59 million (approximately $81 million). As of June 30, 2010, the 7.5% senior subordinated notes due 2015 have a remaining balance of €76 million (approximately $93 million).

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

In connection with these redemptions, we recorded a loss on early extinguishment of debt of $155 million.

Other Debt

On April 1, 2010, our $25 million European overdraft facility was terminated. This facility was a demand facility used for the working capital needs of our European subsidiaries. We continue to maintain certain other foreign overdraft facilities used for working capital needs. We are in the process of replacing this facility with a new overdraft facility.

HPS obtained secured loans for the construction of its MDI production facility. This debt consists of various committed loans, including both U.S. dollar and RMB term loans and RMB working capital loans. During the six months ended June 30, 2010, HPS refinanced RMB 130 million (approximately $19 million) in working capital loans that were scheduled to be repaid during the quarter. The loans

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8. DEBT (Continued)

were refinanced for three years at the same interest rate of 90% of the Peoples Bank of China rate, which was 4.9% as of June 30, 2010.

On June 30, 2010 we amended certain facilities belonging to our Huntsman Corporation Australia subsidiaries (the "Australian Credit Facilities"). The amendment among other things, extended the maturity of the facility to June 2015 and amended the interest rate to the Australian index rate plus a margin of 3.75% for borrowings under the revolving facility and 3.5% under the term facility so long as a guarantee remains in place from Huntsman Corporation. In addition, the facility amended the revolver collateral to include the secured interest in eligible receivables of the borrower. The aggregate outstanding balances as of June 30, 2010 under the Australian Credit Facilities was A$34 million (approximately $30 million, of which $17 million is classified as current portion of long term debt).

Intercompany Note

Under an existing promissory note (the "Intercompany Note"), we have provided financing to Huntsman International. As of June 30, 2010, the outstanding total balance of the Intercompany Note was $535 million. Under the agreements governing our Senior Credit Facilities, Huntsman International cannot repay amounts under the Intercompany Note if there are any outstanding revolving loans, swing line loans or outstanding letters of credit that are not cash collateralized, unless, before and after giving effect to such payment on a pro forma basis, Huntsman International is in compliance with the Leverage Covenant. Huntsman International is currently in compliance with Leverage Covenant, and during the six months ended June 30, 2010, repaid a net $15 million under the Intercompany Note. As of June 30, 2010, and in accordance with the limitation contained in the agreements governing our Senior Credit Facilities as described above, Huntsman International would be permitted to repay the entire $535 million balance on the Intercompany Note.

The Intercompany Note is unsecured and $100 million of the outstanding amount is classified as current as of June 30, 2010 on the accompanying condensed consolidated balance sheets (unaudited). As of June 30, 2010, under the terms of the Intercompany Note, Huntsman International promises to pay us interest on the unpaid principal amount at a rate per annum based on the previous monthly average borrowing rate obtained under our U.S. A/R Program, less 10 basis points (provided that the rate shall not exceed an amount that is 25 basis points less than the monthly average borrowing rate obtained for the U.S. LIBOR-based borrowings under our Revolving Facility). Subject to the conditions of the Senior Credit Facilities, with our consent, the principal and accrued interest outstanding under the Intercompany Note may also be forgiven, capitalized or satisfied with any alternate form of consideration.

COMPLIANCE WITH COVENANTS

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

Our Senior Credit Facilities are subject to a single financial covenant (the "Leverage Covenant"), which applies only to the Revolving Facility and is tested at the Huntsman International level. The

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8. DEBT (Continued)

Leverage Covenant is applicable only if borrowings, letters of credit or guarantees are outstanding under the Revolving Facility (cash collateralized letters of credit or guarantees are not deemed outstanding). The Leverage Covenant is a net senior secured leverage ratio covenant, which requires that Huntsman International's ratio of senior secured debt to EBITDA (as defined in the applicable agreement) is no more than 3.75 to 1.

If in the future Huntsman International failed to comply with the Leverage Covenant, then we would not have access to liquidity under our Revolving Facility. If Huntsman International failed to comply with the Leverage Covenant at a time when we had loans or letters of credit outstanding under the Revolving Facility, Huntsman International would be in default under the Senior Credit Facilities, and, unless Huntsman International obtained a waiver or forbearance with respect to such default (as to which we can provide no assurance), Huntsman International could be required to pay off the balance of the Senior Credit Facilities in full, and we would not have further access to such facilities.

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

9. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

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

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

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

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9. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Continued)

Our cash flows and earnings are subject to fluctuations due to exchange rate variation. Our revenues and expenses are denominated in various currencies. From time to time, we may enter into foreign currency derivative instruments to minimize the short-term impact of movements in foreign currency rates. Where practicable, we generally net multicurrency cash balances among our subsidiaries to help reduce exposure to foreign currency exchange rates. Certain other exposures may be managed from time to time through financial market transactions, principally through the purchase of spot or forward foreign exchange contracts (generally with maturities of one year or less). We do not hedge our currency exposures in a manner that would eliminate the effect of changes in exchange rates on our cash flows and earnings. As of June 30, 2010, we had approximately $111 million notional amount (in U.S. dollar equivalents) outstanding in forward foreign currency contracts.

On December 9, 2009, we entered into a five-year interest rate contract to hedge the variability caused by monthly changes in cash flow due to associated changes in LIBOR under our Senior Credit Facilities. The notional value of the contract is $50 million and was designated as a cash flow hedge. The effective portion of the changes in the fair value of the swap was recorded in other comprehensive loss. We will pay a fixed 2.6% on the hedge and receive the one-month LIBOR rate. As of June 30, 2010, the fair value of the hedge was $2 million and is recorded in other noncurrent liabilities.

On January 19, 2010, we entered into an additional five-year interest rate contract to hedge the variability caused by monthly changes in cash flow due to associated changes in LIBOR under our Senior Credit Facilities. The notional value of the contract is $50 million and was designated as a cash flow hedge. The effective portion of the changes in the fair value of the swap was recorded in other comprehensive loss. We will pay a fixed 2.8% on the hedge and receive the one-month LIBOR rate. As of June 30, 2010, the fair value of the hedge was $2 million and is recorded in other noncurrent liabilities.

In conjunction with the issuance of our 2020 Subordinated Notes, we entered into cross-currency interest rate contracts with three counterparties. On March 17, 2010, we made payments of $350 million to these counterparties and received €255 million from these counterparties, and on maturity, March 15, 2015; we are required to pay €255 million to these counterparties and will receive $350 million from these counterparties. On March 15 and September 15 of each year, we will receive U.S. dollar interest payments of approximately $15 million (equivalent to an annual rate of 8.625%) and make interest payments of approximately €11 million (equivalent to an annual rate of approximately 8.41%). This swap is designated as a hedge of net investment for financial reporting purposes. As of June 30, 2010, the fair value of this swap was $51 million and was recorded as noncurrent assets in our condensed consolidated balance sheet (unaudited). For the three and six months ended June 30, 2010, the effective portion of the changes in the fair value of $32 million and $37 million, respectively, was recorded in other comprehensive income, with the ineffective portion of $15 million and $14 million, respectively, recorded as a reduction to interest expense. On July 15, 2010, we changed the method of assessing the effectiveness of this hedge from the spot method to the forward method, which we believe will reduce the ineffective portion and lower volatility in interest expense in future periods.

As of and for the three and six months ended June 30, 2010, the changes in fair value of the realized gains (losses) recorded in the accompanying condensed consolidated statements of operations

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9. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Continued)

(unaudited) of our other outstanding foreign currency rate hedging contracts and derivatives were not considered significant.

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

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

From time to time, we review our non-U.S. dollar denominated debt and swaps to determine the appropriate amounts designated as hedges. As of June 30, 2010, we have designated approximately €475 million ($584 million) of euro-denominated debt and the cross-currency interest rate swap as a hedge of our net investments. For the three and six months ended June 30, 2010, the amount of gain recognized on the hedge of our net investments was $53 million and $88 million, respectively and was recorded in other comprehensive loss. As of June 30, 2010, we had approximately €1,168 million ($1,436 million) in net euro assets.

10. FAIR VALUE

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

Huntsman Corporation

	June 30, 2010						December 31, 2009

	Carrying Value			Estimated Fair Value			Carrying Value			Estimated Fair Value
Non-qualified employee benefit plan investments	$	10		$	10		$	10		$	10
Cross-currency interest rate contracts		51			51			—			—
Interest rate contracts		(4	)		(4	)		(1	)		(1	)
Long-term debt (including current portion)		(3,867	)		(3,798	)		(4,212	)		(4,390	)

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10. FAIR VALUE (Continued)

Huntsman International

	June 30, 2010						December 31, 2009

	Carrying Value			Estimated Fair Value			Carrying Value			Estimated Fair Value
Non-qualified employee benefit plan investments	$	10		$	10		$	10		$	10
Cross-currency interest rate contracts		51			51			—			—
Interest rate contracts		(4	)		(4	)		(1	)		(1	)
Long-term debt (including current portion)		(3,867	)		(3,798	)		(3,976	)		(3,951	)

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

The fair value estimates presented herein are based on pertinent information available to management as of June 30, 2010 and December 31, 2009. Although management is not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since June 30, 2010, and current estimates of fair value may differ significantly from the amounts presented herein.

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10. FAIR VALUE (Continued)

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

					Fair Value Amounts Using

Description			June 30, 2010		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets:
	Available-for-sale equity securities:
		Equity mutual funds	$	10	$	10	$	—	$	—
	Derivatives:
		Cross-currency interest rate contract(1)		51		—		—		51

Total assets			$	61	$	10	$	—	$	51

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

(1): The income approach is used to calculate the fair value of these instruments. Fair value represents the present value of estimated future cash flows, calculated using relevant interest rates, exchange rates, and yield curves at stated intervals.
(2): The income approach is used to calculate the fair value of these instruments. Fair value represents the present value of estimated future cash flows, calculated using relevant interest rates and yield curves at stated intervals.

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

		Three months ended June 30, 2010						Six months ended June 30, 2010

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)		Retained Interest in Securitized Receivables		Cross-Currency Interest Rate Contract		Total		Retained Interest in Securitized Receivables			Cross-Currency Interest Rate Contract		Total
Beginning balance		$	—	$	4	$	4	$	262		$	—	$	262
Total gains or losses
	Included in earnings (or changes in net assets)		—		15		15		—			14		14
	Included in other comprehensive income (loss)		—		32		32		—			37		37
Purchases, issuances, sales and settlements(1)			—		—		—		(262	)		—		(262	)

Ending balance		$	—	$	51	$	51	$	—		$	51	$	51

The amount of total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets still held at June 30, 2010		$	—	$	15	$	15	$	—		$	14	$	14

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

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10. FAIR VALUE (Continued)

Gains and losses (realized and unrealized) included in earnings (or changes in net assets) for the three months and six months ended June 30, 2010 are reported in interest expense and other comprehensive loss as follows (dollars in millions):

	Three months ended June 30, 2010				Six months ended June 30, 2010

	Interest Expense		Other comprehensive income (loss)		Interest Expense		Other comprehensive income (loss)
Total net (losses) gains included in earnings	$	15	$	—	$	14	$	—
Changes in unrealized gains (losses) relating to assets still held at June 30, 2010		15		32		14		37

11. EMPLOYEE BENEFIT PLANS

Components of the net periodic benefit costs for the three and six months ended June 30, 2010 and 2009 were as follows (dollars in millions):

Huntsman Corporation

	Defined Benefit Plans						Other Postretirement Benefit Plans

	Three Months Ended June 30,						Three Months Ended June 30,
	2010			2009			2010		2009
Service cost	$	16		$	17		$	1	$	1
Interest cost		35			35			2		2
Expected return on assets		(40	)		(35	)		—		—
Amortization of prior service cost		(2	)		(2	)		—		—
Amortization of actuarial loss		6			8			—		—
Curtailment gain		—			(1	)		—		—

Net periodic benefit cost	$	15		$	22		$	3	$	3

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11. EMPLOYEE BENEFIT PLANS (Continued)

	Defined Benefit Plans						Other Postretirement Benefit Plans

	Six Months Ended June 30,						Six Months Ended June 30,
	2010			2009			2010			2009
Service cost	$	33		$	33		$	2		$	2
Interest cost		71			70			4			4
Expected return on assets		(82	)		(70	)		—			—
Amortization of prior service cost		(3	)		(3	)		(1	)		(1	)
Amortization of actuarial loss		12			17			—			1
Special termination benefits		—			1			—			—
Curtailment gain		—			(1	)		—			—

Net periodic benefit cost	$	31		$	47		$	5		$	6

Huntsman International

	Defined Benefit Plans						Other Postretirement Benefit Plans

	Three Months Ended June 30,						Three Months Ended June 30,
	2010			2009			2010		2009
Service cost	$	16		$	17		$	1	$	1
Interest cost		35			35			2		2
Expected return on assets		(40	)		(35	)		—		—
Amortization of prior service cost		(2	)		(2	)		—		—
Amortization of actuarial loss		7			10			—		—
Curtailment gain		—			(1	)		—		—

Net periodic benefit cost	$	16		$	24		$	3	$	3

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11. EMPLOYEE BENEFIT PLANS (Continued)

	Defined Benefit Plans						Other Postretirement Benefit Plans

	Six Months Ended June 30,						Six Months Ended June 30,
	2010			2009			2010			2009
Service cost	$	33		$	33		$	2		$	2
Interest cost		71			70			4			4
Expected return on assets		(82	)		(70	)		—			—
Amortization of prior service cost		(3	)		(3	)		(1	)		(1	)
Amortization of actuarial loss		15			20			—			1
Special termination benefits		—			1			—			—
Curtailment gain		—			(1	)		—			—

Net periodic benefit cost	$	34		$	50		$	5		$	6

During the six months ended June 30, 2010 and 2009, we made contributions to our pension and other postretirement benefit plans of $72 million and $61 million, respectively. During the remainder of 2010, we expect to contribute an additional amount of $47 million to these plans.

On March 23, 2010, President Obama signed into law the Patient Protection and Affordable Care Act. On March 30, 2010, President Obama signed into law a reconciliation measure, the Health Care and Education Reconciliation Act of 2010. The passage of this legislation has resulted in comprehensive reform of health care in the U.S. We are currently evaluating the impact of this legislation on our results of operations and financial condition.

12. STOCKHOLDERS' EQUITY

COMMON STOCK DIVIDENDS

On each of June 30, 2010 and March 31, 2010, we paid cash dividends of $24 million, or $0.10 per share, to common stockholders of record as of June 15, 2010 and March 15, 2010, respectively. On each of March 31, 2009 and June 30, 2009, we paid cash dividends of approximately $23 million, or $0.10 per share, to common stockholders of record as of March 16, 2009 and June 15, 2009, respectively.

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13. OTHER COMPREHENSIVE INCOME (LOSS)

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

Huntsman Corporation

								Other comprehensive income (loss)

		Accumulated other comprehensive income (loss)						Three Months Ended					Six Months Ended
		June 30, 2010			December 31, 2009			June 30, 2010			June 30, 2009		June 30, 2010			June 30, 2009
Foreign currency translation adjustments, net of tax of $40 and $15 as of June 30, 2010 and December 31, 2009, respectively		$	161		$	274		$	(63	)	$	125	$	(113	)	$	40
Pension and other postretirement benefit adjustments, net of tax of $100 and $102 as of June 30, 2010 and December 31, 2009, respectively			(570	)		(580	)		4			4		10			11
Other comprehensive income (loss) of unconsolidated affiliates			7			7			—			—		—			(3	)
Other, net			1			6			(5	)		1		(5	)		—

	Total		(401	)		(293	)		(64	)		130		(108	)		48
Amounts attributable to noncontrolling interests			6			6			—			—		—			—

Amounts attributable to Huntsman Corporation		$	(395	)	$	(287	)	$	(64	)	$	130	$	(108	)	$	48

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13. OTHER COMPREHENSIVE INCOME (LOSS) (Continued)

Huntsman International

								Other comprehensive income (loss)

		Accumulated other comprehensive income (loss)						Three Months Ended					Six Months Ended
		June 30, 2010			December 31, 2009			June 30, 2010			June 30, 2009		June 30, 2010			June 30, 2009
Foreign currency translation adjustments, net of tax of $27 and $2 as of June 30, 2010 and December 31, 2009, respectively		$	159		$	273		$	(63	)	$	124	$	(114	)	$	41
Pension and other postretirement benefit adjustments, net of tax of $131 and $134 as of June 30, 2010 and December 31, 2009, respectively			(622	)		(635	)		5			6		13			13
Other comprehensive income (loss) of unconsolidated affiliates			7			7			—			—		—			(3	)
Other, net			(4	)		1			(5	)		—		(5	)		—

	Total		(460	)		(354	)		(63	)		130		(106	)		51
Amounts attributable to noncontrolling interests			6			6			—			—		—			—

Amounts attributable to Huntsman International LLC		$	(454	)	$	(348	)	$	(63	)	$	130	$	(106	)	$	51

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

14. COMMITMENTS AND CONTINGENCIES

LEGAL MATTERS

Asbestos Litigation

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

Where a claimant's alleged exposure occurred prior to our ownership of the relevant "premises," the prior owners generally have contractually agreed to retain liability for, and to indemnify us against, asbestos exposure claims. This indemnification is not subject to any time or dollar amount limitations.

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14. COMMITMENTS AND CONTINGENCIES (Continued)

Upon service of a complaint in one of these cases, we tender it to the prior owner. None of the complaints in these cases state the amount of damages being sought. The prior owner accepts responsibility for the conduct of the defense of the cases and payment of any amounts due to the claimants. In our sixteen-year experience with tendering these cases, we have not made any payment with respect to any tendered asbestos cases. We believe that the prior owners have the intention and ability to continue to honor their indemnity obligations, although we cannot assure you that they will continue to do so or that we will not be liable for these cases if they do not.

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

	Six months ended June 30,

	2010		2009
Unresolved at beginning of period		1,138		1,140
Tendered during period		21		6
Resolved during period(1)		14		11
Unresolved at end of period		1,145		1,135

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

We have never made any payments with respect to these cases. As of June 30, 2010, we had an accrued liability of $16 million relating to these cases and a corresponding receivable of $16 million relating to our indemnity protection with respect to these cases. We cannot assure you that our liability will not exceed our accruals or that our liability associated with these cases would not be material to our financial condition, results of operations or liquidity; however, we are not able to estimate the amount or range of loss in excess of our accruals. Additional asbestos exposure claims may be made against us in the future, and such claims could be material. However, because we are not able to estimate the amount or range of losses associated with such claims, we have made no accruals with respect to unasserted asbestos exposure claims as of June 30, 2010.

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

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

	Six months ended June 30,

	2010		2009
Unresolved at beginning of period		39		43
Filed during the period		1		1
Resolved during period		2		2
Unresolved at end of period		38		42

We paid gross settlement costs for asbestos exposure cases that are not subject to indemnification of $200,000 and nil during the six months ended June 30, 2010 and 2009, respectively. As of June 30, 2010, we had an accrual of $225,000 relating to these cases. We cannot assure you that our liability will not exceed our accruals or that our liability associated with these cases would not be material to our financial condition, results of operations or liquidity; however, we are not able to estimate the amount or range of loss in excess of our accruals. Additional asbestos exposure claims may be made against us in the future, and such claims could be material. However, because we are not able to estimate the amount or range of losses associated with such claims, we have made no accruals with respect to unasserted asbestos exposure claims as of June 30, 2010.

Antitrust Matters

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

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

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

Two purported class action cases filed May 5 and 17, 2006 pending in the Superior Court of Justice, Ontario Canada and Superior Court, Province of Quebec, District of Quebec, by direct purchasers of MDI, TDI and polyether polyols and by indirect purchasers of these products remain dormant. A purported class action case filed February 15, 2002 by purchasers of products containing rubber and urethanes products and pending in Superior Court of California, County of San Francisco is

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14. COMMITMENTS AND CONTINGENCIES (Continued)

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

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

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

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

MTBE Litigation

We are named as a defendant in 18 lawsuits pending in litigation filed between March 23, 2007 and June 24, 2009 in New York federal and state courts alleging liability related to MTBE contamination in groundwater. Numerous other companies, including refiners, manufacturers and sellers of gasoline, as well as manufacturers of MTBE, were named as defendants in these and many other cases that were pending in U.S. courts. The plaintiffs in the 18 cases in which we are named are municipal water districts, a regional water supply authority and municipal corporations that claim that defendants' conduct has caused MTBE contamination of their groundwater. Four cases are pending in the U.S. District Court for the Southern District of New York and 14 are pending in the Supreme Court of the state of New York, nine in Nassau County and five in Suffolk County. The plaintiffs seek injunctive relief, such as monitoring and abatement, compensatory damages, punitive damages and attorney fees. We joined with a larger group of defendants in mediation with the plaintiffs and reached a tentative settlement with the plaintiffs on February 3, 2010 in each of the cases in which we have been named. On August 2, 2010, we paid our portion of the settlement and the settlement became final. Our allocated portion of the total settlement is not material to our ongoing operations. We have accrued a liability for these claims equal to our allocated portion of the settlement.

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14. COMMITMENTS AND CONTINGENCIES (Continued)

Port Arthur Plant Fire Insurance Litigation

On April 29, 2006, our former Port Arthur, Texas olefins manufacturing plant (which we sold to Flint Hills Resources in November 2007) experienced a major fire. The plant was covered by property damage and business interruption insurance through IRIC, our captive insurer, and certain Reinsurers. The property damage and business interruption insurance was subject to a combined deductible of $60 million. We, together with IRIC, asserted claims to the Reinsurers related to losses occurring as a result of this fire. On August 31, 2007, the Reinsurers brought an action against us in the U.S. District Court for the Southern District of Texas. The action sought to compel us to arbitrate with the Reinsurers to resolve disputes related to our claims or, in the alternative, to declare judgment in favor of the Reinsurers. Pursuant to a December 29, 2008 agreement, we participated with the Reinsurers in binding arbitration. We paid our deductible on the claim of $60 million and were paid $365 million by the Reinsurers prior to the commencement of binding arbitration. On May 14, 2010, we entered into a settlement agreement with the Reinsurers, including those Reinsurers that did not participate in the arbitration proceedings, that resolved the remainder of our insurance claim for a total amount of $110 million. The Reinsurers completed the payment of this amount on June 15, 2010. For more information, see "Note 1. General—Recent Developments" and "Note 17. Casualty Losses and Insurance Recoveries—Port Arthur, Texas Plant Fire."

Other Proceedings

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

Guarantees

Our unconsolidated joint venture, the Arabian Amines Company, obtained various loan commitments in the aggregate amount of approximately $195 million (U.S. dollar equivalents) of which $192 million, was drawn and outstanding as of June 30, 2010. We have provided certain guarantees of approximately $14 million for these commitments and our guarantees will terminate upon completion of the project and satisfaction of certain other conditions. We have estimated that the fair value of such guarantees was nil as of the closing date of this transaction and, accordingly, no amounts have been recorded.

15. ENVIRONMENTAL, HEALTH AND SAFETY MATTERS

GENERAL

We are subject to extensive federal, state, local and foreign laws, regulations, rules and ordinances relating to safety, pollution, protection of the environment and the generation, storage, handling, transportation, treatment, disposal and remediation of hazardous substances and waste materials. In the ordinary course of business, we are subject to frequent environmental inspections and monitoring and

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

ENVIRONMENTAL, HEALTH AND SAFETY SYSTEMS

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

EHS CAPITAL EXPENDITURES

We may incur future costs for capital improvements and general compliance under EHS laws, including costs to acquire, maintain and repair pollution control equipment. For the six months ended June 30, 2010 and 2009, our capital expenditures for EHS matters totaled $24 million and $17 million, respectively. Since capital expenditures for these matters are subject to evolving regulatory requirements and depend, in part, on the timing, promulgation and enforcement of specific requirements, we cannot provide assurance that our recent expenditures will be indicative of future amounts required under EHS laws.

REMEDIATION LIABILITIES

We have incurred, and we may in the future incur, liability to investigate and clean up waste or contamination at our current or former facilities or facilities operated by third parties at which we may have disposed of waste or other materials. Similarly, we may incur costs for the cleanup of wastes that were disposed of prior to the purchase of our businesses. Under some circumstances, the scope of our liability may extend to damages to natural resources.

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

One of these sites, the North Maybe Canyon Mine CERCLA site, includes an abandoned phosphorous mine near Soda Springs, Idaho that may have been operated by one of our predecessor companies (El Paso Products Company). In 2004, the U.S. Forest Service notified us that we are a CERCLA Potentially Responsible Party (a "PRP") for the mine site involving selenium-contaminated surface water. Under a 2004 administrative order, the current mine lessee, Nu-West Industries, Inc., began undertaking the investigation required for a CERLA removal process. In 2008, the site was transitioned to the CERCLA remedial action process, which requires a Remedial Investigation/Feasibility Study (an "RI/FS"). In 2009, the Forest Service notified the three PRPs (our Company, Nu-West, and Wells Cargo) that it would undertake the RI/FS itself. On February 19, 2010, in conjunction with Wells Cargo, we agreed to jointly comply with a unilateral administrative order (a "UAO") to conduct an RI/FS of the entire West Ridge of the site, although we are alleged to have had only a limited historical presence in the investigation area. In March 2010, following the initiation of litigation by Nu-West, the Forest Service assumed Nu-West's original investigation obligations. We continue to coordinate with our insurers regarding policy coverage in this matter. On June 15, 2010, we received the UAO which had been executed by the Forest Service. At this time, we are unable to estimate the cost of the RI/FS or our ultimate liability in this matter, but we do not believe it will be material to our financial condition.

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

In June of 2006, an agreement was reached between the local regulatory authorities and our Advanced Materials site in Pamplona, Spain to relocate our manufacturing operations in order to facilitate new urban development desired by the city. Subsequently, as required by the authorities, soil and groundwater sampling was performed and followed by a quantitative risk assessment. Although unresolved at this time, some level of remediation of site contamination may be required in the future, but the estimated cost is unknown because the remediation approach and timing has not been determined.

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By letter dated March 7, 2006, our Base Chemicals and Polymers facility in West Footscray, Australia, was issued a clean-up notice by the Australian (Victorian) EPA due to concerns about soil and groundwater contamination emanating from the site. The agency revoked the original clean-up notice on September 4, 2007 and issued a revised clean-up notice due to "the complexity of contamination issues" at the site. On March 31, 2009, we submitted the required site remediation action plan to the agency. The agency has since indicated that it intends to revoke the current notice and issue a revised notice that includes clean-up objectives and the requirement for a financial assurance from us for clean-up. Discussions with the agency on the revised notice are continuing. We can provide no assurance that the agency will agree with our proposal, will not seek to institute additional requirements for the site or that additional costs will not be associated with the clean up. This facility has been closed and demolition commenced in May 2010. In the third quarter of 2009, we recorded a $30 million liability related to estimated environmental remediation costs at this site.

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

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

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

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15. ENVIRONMENTAL, HEALTH AND SAFETY MATTERS (Continued)

ENVIRONMENTAL RESERVES

We have accrued liabilities relating to anticipated environmental cleanup obligations, site reclamation and closure costs and known penalties. Liabilities are recorded when potential liabilities are either known or considered probable and can be reasonably estimated. Our liability estimates are calculated using present value techniques and are based upon requirements placed upon us by regulators, available facts, existing technology and past experience. The environmental liabilities do not include amounts recorded as asset retirement obligations. We had accrued $40 million and $41 million for environmental liabilities as of June 30, 2010 and December 31, 2009, respectively. Of these amounts, $7 million and $5 million were classified as accrued liabilities in our consolidated balance sheets as of June 30, 2010 and December 31, 2009, respectively, and $33 million and $36 million were classified as other noncurrent liabilities in our consolidated balance sheets as of June 30, 2010 and December 31, 2009, respectively. In certain cases, our remediation liabilities may be payable over periods of up to 30 years. We may incur losses for environmental remediation in excess of the amounts accrued; however, we are not able to estimate the amount or range of such potential excess.

REGULATORY DEVELOPMENTS

Reach Regulations

In December 2006, the EU parliament and EU council approved a new EU regulatory framework for chemicals called "REACH" (Registration, Evaluation and Authorization of Chemicals). REACH took effect on June 1, 2007, and the program it establishes will be phased in over 11 years. Under the regulation, companies that manufacture in or import into the EEA more than one metric tonne of a chemical substance per year will be required to register such chemical substances and isolated intermediates in a central database. Use authorizations will be granted for a specific chemical if the applicants can show that the risks in using the chemical are adequately controlled; and for chemicals where there are no suitable alternatives substances or technologies available and the applicant can demonstrate that the social and economic benefits of using the chemical outweigh the risks. In addition, specified uses of some hazardous substances may be restricted. Furthermore, all applicants will have to study the availability of alternative chemicals. If an alternative is available, an applicant will have to submit a "substitution" plan to the regulatory agency. The regulatory agency will only authorize persistent bio-accumulative and toxic substances if an alternative chemical is not available. The registration, evaluation and authorization phases of the program will require expenditures and resource commitments in order to, for example, participate in mandatory data-sharing forums; acquire, generate and evaluate data; prepare and submit dossiers for substance registration; obtain legal advice and reformulate products, if necessary. We have established a cross-business European REACH team that is working closely with our businesses to identify and list all substances we purchase or manufacture in, or import into, the EEA. We met pre-registration REACH compliance requirements by the November 30, 2008 regulatory deadline, with the exception of pre-registrations for two substances, for a total of 1,850 pre-registrations for substances that we intend to register. We are currently proceeding with the registration of the two substances as provided for under REACH, as well as of the high-volume and high-priority chemicals under the program, which must be registered no later than November 30, 2010. Although the total long-term cost for REACH compliance is not estimable at this

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time, we spent approximately $3 million, $2 million and $3 million during the years ended December 31, 2009, 2008 and 2007, respectively, on REACH compliance.

Greenhouse Gas Regulation

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

Chemical Facility Anti-Terrorism Rulemaking

The DHS issued the final rule of their "Chemical Facility Anti-Terrorism Standard" in 2007. The initial phase of the rule required all chemical facilities in the U.S. to evaluate their facilities against the DHS Appendix A list of "Chemicals of Interest." Facilities which have specified chemicals in threshold quantities on the Appendix A list were required to submit a "Top Screen" to DHS in 2008. A Top Screen is a questionnaire completed by a facility having Chemicals of Interest in designated threshold quantities. In early 2008, we submitted Top Screens for all of our covered facilities. After reviewing the Top Screens, the DHS determined that four of our sites were "High Risk" facilities. As a result, we were required to perform security vulnerability assessments at the High Risk sites. The security vulnerability assessments were completed and sent to DHS during the fourth quarter of 2008. Based on their assessment of the security vulnerability assessments, we received notice from DHS that one of our sites was elevated to a high security risk tier. The DHS determined the other three sites to be lower security risk tiers. The three lower-tiered sites have submitted Site Security Plans ("SSPs") to the DHS. The SSPs are based on a list of 18 risk-based performance standards, but security improvements

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recommended from the SSPs are not anticipated to be material. The high tiered site also submitted an SSP to the DHS, and security upgrades as a result of DHS requirements are estimated to cost $8 million to $10 million to be spent during 2011 and 2012. Additionally, on November 26, 2008, the Transportation Safety Administration of the DHS published a final rule regarding "rail security sensitive materials" that are received at, or shipped from, facilities. We have three sites that are subject to this new rule, but at this time do not anticipate that the costs to comply will be material.

MTBE Developments

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

Numerous companies, including refiners, manufacturers and sellers of gasoline, as well as manufacturers of MTBE, have been named as defendants in more than 150 cases in U.S. courts that allege MTBE contamination in groundwater. Many of these cases were settled after the parties engaged in mediation supervised by a court-appointed special settlement master. Beginning in March 2007 and continuing through June 24, 2009, we have been named as a defendant in 18 of these lawsuits pending in New York state and federal courts. See "Note 14. Commitments and Contingencies—Legal Matters—MTBE Litigation." The plaintiffs in the MTBE groundwater contamination cases generally seek compensatory damages, punitive damages, injunctive relief, such as monitoring and abatement, and attorney fees. We joined with a larger group of defendants to mediate the plaintiffs' claims and reached a tentative settlement on February 3, 2010 in each of the cases in which we have been named. On August 2, 2010, we paid our portion of the settlement and the settlement became final. Our allocated portion of the total settlement amount is not material and we have accrued a liability for the claims equal to our allocated portion of the settlement. It is possible that we could be named as a defendant in additional existing or future MTBE contamination cases. We cannot provide assurances that adverse results against us in existing or future MTBE contamination cases will not have a material adverse effect on our business, results of operations and financial position.

INDIA INVESTIGATION

We have initiated an internal investigation of the operations of Petro Araldite Pvt. Ltd. ("PAPL"), our majority owned joint venture in India. PAPL manufactures and markets base liquid resins, base solid resins and formulated products in India. The investigation, which is ongoing, initially focused on allegations of illegal disposal of hazardous waste and waste water discharge and related reporting

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irregularities. Based upon preliminary findings, the investigation was expanded to include a review of certain product sales made by PAPL outside normal distribution channels as well as the accounting for the revenues from such sales and the legality under Indian law and U.S. law, including the U.S. Foreign Corrupt Practices Act, of certain payments (less than $15,000 specifically identified to date) made by employees of the joint venture to government officials in India.

Although we have not completed the investigation, in May 2010 we voluntarily contacted the regional pollution control regulators in India, the U.S. Securities and Exchange Commission and the U.S. Department of Justice to advise them of our ongoing investigation and that we intend to cooperate fully with each of them. In addition, we have taken action to halt all known illegal activity and have terminated certain employees.

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

16. STOCK-BASED COMPENSATION PLANS

Under the Huntsman Stock Incentive Plan (the "Stock Incentive Plan"), a plan approved by stockholders, we may grant non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, phantom stock, performance awards and other stock-based awards to our employees, directors and consultants and to employees and consultants of our subsidiaries, provided that incentive stock options may be granted solely to employees. The terms of the grants are fixed at the grant date. We were authorized to grant up to 32.6 million shares under the Stock Incentive Plan. As of June 30, 2010, we had 12.1 million shares remaining under the Stock Incentive Plan available for grant. Option awards have a maximum contractual term of 10 years and generally must have an exercise price at least equal to the market price of our common stock on the date the option award is granted. Stock-based awards generally vest over a three-year period.

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

	Three months ended June 30,				Six months ended June 30,

	2010		2009		2010		2009
Huntsman Corporation	$	5	$	4	$	12	$	9
Huntsman International	$	5	$	4	$	11	$	5

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16. STOCK-BASED COMPENSATION PLANS (Continued)

The total income tax benefit recognized in the statements of operations for us and Huntsman International for stock-based compensation arrangements was $3 million for each of the six months ended June 30, 2010 and 2009.

STOCK OPTIONS

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

	Three Months ended June 30,				Six Months ended June 30,

	2010		2009		2010			2009
Dividend yield		NA		NA		3.0	%		15.4	%
Expected volatility		NA		NA		69.0	%		70.4	%
Risk-free interest rate		NA		NA		3.1	%		2.5	%
Expected life of stock options granted during the period		NA		NA		6.6 years			6.6 years

During each of the three months ended June 30, 2010 and 2009, no stock options were granted.

A summary of stock option activity under the Stock Incentive Plan as of June 30, 2010 and changes during the six months then ended is presented below:

Option Awards	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value

	(in thousands)					(years)		(in millions)
Outstanding at January 1, 2010		11,677		$	11.30
Granted		654			13.50
Exercised		(863	)		2.59
Forfeited		(75	)		21.27

Outstanding at June 30, 2010		11,393			12.02		7.3	$	33

Exercisable at June 30, 2010		6,800			17.30		6.3		9

The weighted-average grant-date fair value of stock options granted during the six months ended June 30, 2010 was $6.97 per option. As of June 30, 2010, there was $6 million of total unrecognized compensation cost related to nonvested stock option arrangements granted under the Stock Incentive Plan. That cost is expected to be recognized over a weighted-average period of approximately 1.8 years.

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16. STOCK-BASED COMPENSATION PLANS (Continued)

The total intrinsic value of stock options exercised during the six months ended June 30, 2010 was $9 million. During the six months ended June 30, 2009, no stock options were exercised.

NONVESTED SHARES

Nonvested shares granted under the Stock Incentive Plan consist of restricted stock, which is accounted for as an equity award, and phantom stock, which is accounted for as a liability award because it can be settled in either stock or cash. A summary of the status of our nonvested shares as of June 30, 2010 and changes during the six months then ended is presented below:

	Equity Awards					Liability Awards

	Shares			Weighted Average Grant-Date Fair Value		Shares			Weighted Average Grant-Date Fair Value
	(in thousands)					(in thousands)
Nonvested at January 1, 2010		3,428		$	5.20		1,880		$	3.61
Granted		847			13.41		472			13.50
Vested		(1,254)	(1)		7.03		(647	)		4.37
Forfeited		(23	)		2.59		(2	)		13.50

Nonvested at June 30, 2010		2,998			6.77		1,703			6.04

(1): As of June 30, 2010, a total of 323,352 restricted stock units were vested, of which 59,953 vested during the six months ended June 30, 2010. These shares have not been reflected as vested shares in this table because, in accordance with the restricted stock unit agreements, shares of common stock are not issued for vested restricted stock units until termination of employment.

As of June 30, 2010, there was $28 million of total unrecognized compensation cost related to nonvested share compensation arrangements granted under the Stock Incentive Plan. That cost is expected to be recognized over a weighted-average period of approximately 1.9 years. The value of share awards that vested during the six months ended June 30, 2010 and 2009 was $18 million and $11 million, respectively.

17. CASUALTY LOSSES AND INSURANCE RECOVERIES

PORT ARTHUR, TEXAS PLANT FIRE

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17. CASUALTY LOSSES AND INSURANCE RECOVERIES (Continued)

Prior to December 31, 2009, we received payments on insurance claims with respect to the fire totaling $365 million. On May 14, 2010, we entered into a settlement agreement with the Reinsurers (including those Reinsurers that did not participate in the arbitration proceeding). Pursuant to the settlement agreement, we received a final payment totaling $110 million. Upon receipt of this payment, we agreed to the dismissal with prejudice of the legal and arbitration proceedings relating to our insurance claims.

As a result of this settlement, we recognized a pretax gain of $110 million in discontinued operations during the second quarter of 2010, the proceeds of which were used to repay secured debt in accordance with relevant provisions of the agreements governing our Senior Credit Facilities. Of the $110 million payment, $34 million was reflected within the statement of cash flows as cash flows from investing activities and the remaining $76 million was reflected as cash flows from operating activities.

2005 U.S. GULF COAST STORMS

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

Through December 31, 2009 we received $41 million in payments in connection with our insurance claim for property damage and business interruption losses from the 2005 Gulf Coast storms. On July 29, 2009, the reinsurers filed a declaratory judgment action seeking to compel arbitration between the parties or to declare that the reinsurers owed nothing further from the storm damage. We filed a counterclaim seeking to declare that the reinsurers owed us the remaining amount of our claim. Subsequently, the parties participated in mediation on February 8-9, 2010 and resolved the remainder of our insurance claim for a total of $7 million. The reinsurers paid that amount within 30 days following the execution of the proof of loss and settlement agreement and represents income from discontinued operations.

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

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

On September 30, 2008, we filed suit in the 9th Judicial District Court in Montgomery County, Texas against the Banks that had entered into a commitment letter to provide funding for the Hexion

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

Merger. On June 22, 2009, we entered into the Texas Bank Litigation Settlement Agreement with the Banks. The Texas Bank Litigation was dismissed with prejudice on June 23, 2009. In accordance with the Texas Bank Litigation Settlement Agreement, the Banks paid us a cash payment of $632 million, purchased the $600 million aggregate principal amount 5¹/2% senior notes due 2016 (the "2016 Senior Notes") from Huntsman International, and provided Huntsman International with Term Loan C in the principal amount of $500 million. The 2016 Senior Notes and Term Loan C borrowings were at favorable rates to us and were recorded at a combined fair value of $864 million. Accordingly, we recognized a gain of $868 million in connection with the Texas Bank Litigation Settlement Agreement.

Income associated with the Terminated Merger and related litigation incurred during the three and six months ended June 30, 2009 was $844 million and $837 million, respectively, related principally to the gain recognized in connection with the Texas Bank Litigation Settlement Agreement, offset in part by legal fees and employee retention bonuses. Expenses associated with the Terminated Merger and related litigation incurred during the three and six months ended June 30, 2010 were $1 million each, related to legal fees.

19. INCOME TAXES

For the three months and six months ended June 30, 2010 we have computed our provision for income taxes based on the actual effective tax rate for the year-to-date by applying the discrete method. The discrete method was used to calculate the income tax provision as the annual effective tax rate was not considered a reliable estimate of year-to-date income tax expense.

We use the asset and liability method of accounting for income taxes. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial and tax reporting purposes. We evaluate deferred tax assets to determine whether it is more likely than not that they will be realized. Valuation allowances are reviewed on a tax jurisdictional basis to analyze whether there is sufficient positive or negative evidence to support a change in judgment about the realizability of the related deferred tax assets for each jurisdiction. During the six months ended June 30, 2010, we released a valuation allowance of $14 million on our Australia net deferred tax assets, primarily as a result of discontinuing the operations of the styrenics business.

During the six months ended June 30, 2010, we recorded a net decrease in unrecognized tax benefits with a corresponding income tax benefit of approximately $7 million, resulting from the settlement of tax audits, the effective settlement of certain tax positions and the expiration of statutes of limitations net of current year additions.

HUNTSMAN CORPORATION

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19. INCOME TAXES (Continued)

recorded discrete tax expense of $310 million related to the $837 million of income related to the Terminated Merger and related litigation and we recorded a valuation allowance of $146 million against the net deferred tax assets in the U.K. Excluding these items, we recorded income tax expense of $39 and income tax benefit of $7 million for the six months ended June 30, 2010 and 2009, respectively. Our tax obligations are affected by the mix of income and losses in the tax jurisdictions in which we operate.

HUNTSMAN INTERNATIONAL

In addition to the tax benefits resulting from the valuation allowance release and the unrecognized tax benefit items discussed above, during the six months ended June 30, 2010, Huntsman International recognized $5 million of tax benefit on the $16 million of loss on early extinguishment of debt and during the six months ended June 30, 2009, Huntsman International recorded a valuation allowance of $156 million against the net deferred tax assets in the U.K. Excluding these items, Huntsman International recorded income tax expense of $42 million and income tax benefit of $2 million, for the six months ended June 30, 2010 and 2009, respectively. Our tax obligations are affected by the mix of income and losses in the tax jurisdictions in which we operate.

20. DISCONTINUED OPERATIONS

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

	Three months ended June 30,						Six months ended June 30,

	2010			2009			2010			2009
Revenues	$	10		$	20		$	35		$	33
Costs and expenses		(17	)		(19	)		(62	)		(38	)

Operating (loss) income		(7	)		1			(27	)		(5	)
Income tax benefit		1			—			9			—

(Loss) income from discontinued operations, net of tax	$	(6	)	$	1		$	(18	)	$	(5	)

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

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

During the three and six months ended June 30, 2010, we recorded after tax income from discontinued operations related to our former U.S. base chemicals and North American polymers

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20. DISCONTINUED OPERATIONS (Continued)

businesses of $68 million and $67 million, respectively, which consisted of a $110 million pretax gain recorded in connection with the final settlement of insurance claims related to the 2006 fire at our former Port Arthur, Texas plant and a pretax gain of $7 million from the settlement of insurance claims related to the 2005 gulf coast storms, offset in part by income taxes and legal fees related to the arbitration of the fire insurance claim. See "Note 17. Casualty Losses and Insurance Recoveries." During the three and six months ended June 30, 2009, we recorded an after tax loss from discontinued operations of $3 million and $1 million, respectively, related primarily to the revaluation of outstanding product exchange liabilities related to our former U.S. base chemicals business.

21. NET INCOME (LOSS) PER SHARE

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

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

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21. NET INCOME (LOSS) PER SHARE (Continued)

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

		Three Months Ended June 30,				Six Months Ended June 30,

		2010		2009		2010			2009
Numerator:
Basic and diluted income (loss) from continuing operations:
Income (loss) from continuing operations attributable to Huntsman Corporation		$	52	$	408	$	(107	)	$	121
Convertible notes interest expense, net of tax			—		5		—			9

Income (loss) from continuing operations attributable to Huntsman Corporation—diluted			52		413		(107	)		130

Basic and diluted net income (loss):
Net income (loss) attributable to Huntsman Corporation—basic			114		406		(58	)		116
Convertible notes interest expense, net of tax			—		5		—			9

Net income (loss) attributable to Huntsman Corporation—diluted		$	114	$	411	$	(58	)	$	125

Shares (denominator):
Weighted average shares outstanding			236.4		234.0		235.6			233.8
Dilutive securities:
	Stock-based awards		4.4		5.5		—			3.2
	Convertible notes conversion		—		31.8		—			31.8

Total dilutive shares outstanding			240.8		271.3		235.6			268.8

Additional stock-based awards of 6.9 million and 6.4 million weighted average equivalent shares of stock were outstanding during the three months ended June 30, 2010 and 2009, respectively, and additional stock-based awards of 6.6 million and 6.6 million weighted average equivalent shares of stock were outstanding during the six months ended June 30, 2010 and 2009. The Convertible Notes would have had a weighted average effect of 1.8 million shares of common stock for the six months ended June 30, 2010 and interest expense, net of tax, of $1 million would have been included as an adjustment to the numerator of the diluted loss per share calculation for the six months ended June 30, 2010. However, these stock-based awards and the potential effect of assumed conversion of the Convertible Notes were not included in the computation of diluted earnings per share because the effect would be anti-dilutive.

22. OPERATING SEGMENT INFORMATION

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

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22. OPERATING SEGMENT INFORMATION (Continued)

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

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

Segment		Products

Polyurethanes		MDI, PO, polyols, PG, TPU, aniline and MTBE
Performance Products		amines, surfactants, LAB, maleic anhydride, other performance chemicals, EG, olefins and technology licenses
Advanced Materials		epoxy resin compounds and formulations; cross-linking, matting and curing agents; epoxy, acrylic and polyurethane-based adhesives and tooling resin formulations
Textile Effects		textile chemicals and dyes
Pigments		titanium dioxide

Sales between segments are generally recognized at external market prices and are eliminated in consolidation. We use EBITDA to measure the financial performance of our global business units and for reporting the results of our operating segments. This measure includes all operating items relating to the businesses. The EBITDA of operating segments excludes items that principally apply to our

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

22. OPERATING SEGMENT INFORMATION (Continued)

Company as a whole. The revenues and EBITDA for each of our reportable operating segments are as follows (dollars in millions):

				Three Months Ended June 30,						Six Months Ended June 30,

				2010			2009			2010			2009
Net Sales:
	Polyurethanes			$	932		$	695		$	1,699		$	1,295
	Performance Products				669			482			1,285			982
	Advanced Materials				320			255			611			512
	Textile Effects				213			179			408			331
	Pigments				287			254			556			450
	Eliminations				(78	)		(19	)		(122	)		(44	)

			Total	$	2,343		$	1,846		$	4,437		$	3,526

Huntsman Corporation:
Segment EBITDA(1):
	Polyurethanes			$	70		$	86		$	122		$	112
	Performance Products				116			31			176			94
	Advanced Materials				52			(1	)		85			9
	Textile Effects				(7	)		(20	)		(7	)		(31	)
	Pigments				47			(26	)		75			(55	)
	Corporate and other(2)				(47	)		806			(254	)		780

		Subtotal			231			876			197			909
			Discontinued Operations(3)		100			(2	)		79			(5	)

			Total		331			874			276			904
Interest expense, net					(43	)		(58	)		(104	)		(113	)
Income tax expense—continuing operations					(39	)		(311	)		(5	)		(449	)
Income tax (expense) benefit—discontinued operations					(37	)		1			(29	)		—
Depreciation and amortization					(98	)		(100	)		(196	)		(226	)

		Net income (loss) attributable to Huntsman Corporation		$	114		$	406		$	(58	)	$	116

Huntsman International:
Segment EBITDA(1):
	Polyurethanes			$	70		$	86		$	122		$	112
	Performance Products				116			31			176			94
	Advanced Materials				52			(1	)		85			9
	Textile Effects				(7	)		(20	)		(7	)		(31	)
	Pigments				47			(26	)		75			(55	)
	Corporate and other(2)				(47	)		(38	)		(97	)		(53	)

		Subtotal			231			32			354			76
			Discontinued Operations(3)		100			(2	)		79			(5	)

			Total		331			30			433			71
Interest expense, net					(47	)		(58	)		(113	)		(113	)
Income tax expense—continuing operations					(38	)		(8	)		(16	)		(154	)
Income tax (expense) benefit—discontinued operations					(37	)		1			(29	)		—
Depreciation and amortization					(92	)		(94	)		(184	)		(214	)

		Net income (loss) attributable to Huntsman International LLC		$	117		$	(129	)	$	91		$	(410	)

(1): Segment EBITDA is defined as net income (loss) attributable to Huntsman Corporation or Huntsman International LLC, as appropriate, before interest, income tax, depreciation and amortization, and certain Corporate and other items.

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HUNTSMAN CORPORATION AND SUBSIDIARIES

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

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

22. OPERATING SEGMENT INFORMATION (Continued)

(2): Corporate and other includes unallocated corporate overhead, unallocated foreign exchange gains and losses, LIFO inventory valuation reserve adjustments, loss on early extinguishment of debt, income (expenses) associated with the Terminated Merger and related litigation (Huntsman Corporation only), net income (loss) attributable to noncontrolling interests, unallocated restructuring impairment and plant closing costs, step accounting impacts (Huntsman Corporation only) and non-operating income and expense.
(3): The operating results of our former polymers, base chemicals and Australian styrenics businesses are classified as discontinued operations, and, accordingly, the revenues of these businesses are excluded for all periods presented. The EBITDA of our former polymers, base chemicals and Australian styrenics businesses are included in discontinued operations for all periods presented. For more information, see "Note 20. Discontinued Operations."

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

The following condensed consolidating financial information (unaudited) of Huntsman International presents, in separate columns, financial information for the following: Huntsman International (on a parent only basis), with its investment in subsidiaries recorded under the equity method; the Subsidiary Guarantors of Huntsman International's debt on a combined, and where appropriate, consolidated basis; and non-guarantor subsidiaries on a combined, and where appropriate, consolidated basis. Additional columns present eliminating adjustments and consolidated totals as of June 30, 2010 and December 31, 2009 and for the three and six months ended June 30, 2010 and 2009. There are no contractual restrictions limiting transfers of cash from the Subsidiary Guarantors to Huntsman International. Each Subsidiary Guarantor is 100% owned by Huntsman International and has fully and unconditionally guaranteed Huntsman International's debt on a joint and several basis.

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HUNTSMAN CORPORATION AND SUBSIDIARIES

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

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

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

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEETS (UNAUDITED)
AS OF JUNE 30, 2010
(Dollars in Millions)

			Parent Company			Guarantors		Non-guarantors			Eliminations			Consolidated Huntsman International LLC

ASSETS
Current assets:
	Cash and cash equivalents		$	101		$	12	$	229		$	—		$	342
	Restricted cash			—			—		7			—			7
	Accounts and notes receivable, net			18			126		1,324			—			1,468
	Accounts receivable from affiliates			1,210			2,328		64			(3,522	)		80
	Inventories			71			243		1,019			(9	)		1,324
	Prepaid expenses			4			—		23			—			27
	Deferred income taxes			10			—		28			(5	)		33
	Other current assets			161			1		100			(143	)		119

		Total current assets		1,575			2,710		2,794			(3,679	)		3,400
Property, plant and equipment, net				418			890		1,783			2			3,093
Investment in affiliates				4,441			1,226		122			(5,522	)		267
Intangible assets, net				72			3		36			—			111
Goodwill				(16	)		84		30			(4	)		94
Deferred income taxes				213			—		122			(213	)		122
Notes receivable from affiliates				46			885		7			(931	)		7
Other noncurrent assets				100			189		185			—			474

		Total assets	$	6,849		$	5,987	$	5,079		$	(10,347	)	$	7,568

LIABILITIES AND EQUITY
Current liabilities:
	Accounts payable		$	25		$	194	$	602		$	—		$	821
	Accounts payable to affiliates			1,828			780		942			(3,522	)		28
	Accrued liabilities			83			203		424			(143	)		567
	Deferred income tax			—			7		2			(7	)		2
	Note payable to affiliate			100			—		—			—			100
	Current portion of long-term debt			—			—		168			—			168

		Total current liabilities		2,036			1,184		2,138			(3,672	)		1,686
Long-term debt				3,362			12		325			—			3,699
Notes payable to affiliates				435			—		935			(931	)		439
Deferred income taxes				11			126		66			(99	)		104
Other noncurrent liabilities				179			137		475			—			791

		Total liabilities		6,023			1,459		3,939			(4,702	)		6,719
Equity
Huntsman International LLC members' equity:
	Members' equity			3,036			4,428		2,128			(6,556	)		3,036
	Subsidiary preferred stock			—			—		1			(1	)		—
	(Accumulated deficit) retained earnings			(1,756	)		81		(587	)		506			(1,756	)
	Accumulated other comprehensive (loss) income			(454	)		19		(419	)		400			(454	)

		Total Huntsman International LLC members' equity		826			4,528		1,123			(5,651	)		826
Noncontrolling interests in subsidiaries				—			—		17			6			23

		Total equity		826			4,528		1,140			(5,645	)		849

	Total liabilities and equity		$	6,849		$	5,987	$	5,079		$	(10,347	)	$	7,568

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HUNTSMAN CORPORATION AND SUBSIDIARIES

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

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

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

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

			Parent Company			Guarantors			Non-guarantors			Eliminations			Consolidated Huntsman International LLC

ASSETS
Current assets:
	Cash and cash equivalents		$	688		$	24		$	207		$	—		$	919
	Restricted cash			—			—			5			—			5
	Accounts and notes receivable, net			17			85			916			—			1,018
	Accounts receivable from affiliates			1,040			2,178			83			(3,269	)		32
	Inventories			78			205			908			(7	)		1,184
	Prepaid expenses			11			27			21			(17	)		42
	Deferred income taxes			10			—			28			(5	)		33
	Other current assets			120			1			100			(112	)		109

		Total current assets		1,964			2,520			2,268			(3,410	)		3,342
Property, plant and equipment, net				439			913			2,003			2			3,357
Investment in affiliates				4,314			1,139			106			(5,309	)		250
Intangible assets, net				82			3			44			—			129
Goodwill				(19	)		84			33			(4	)		94
Deferred income taxes				236			—			118			(196	)		158
Notes receivable from affiliates				63			988			8			(1,051	)		8
Other noncurrent assets				40			129			186			—			355

		Total assets	$	7,119		$	5,776		$	4,766		$	(9,968	)	$	7,693

LIABILITIES AND EQUITY
Current liabilities:
	Accounts payable		$	36		$	177		$	502		$	—		$	715
	Accounts payable to affiliates			1,702			744			863			(3,268	)		41
	Accrued liabilities			86			210			447			(130	)		613
	Deferred income tax			—			7			2			(7	)		2
	Note payable to affiliate			25			—			—			—			25
	Current portion of long-term debt			39			—			156			—			195

		Total current liabilities		1,888			1,138			1,970			(3,405	)		1,591
Long-term debt				3,675			12			94			—			3,781
Notes payable to affiliates				525			—			1,056			(1,051	)		530
Deferred income taxes				11			82			68			(82	)		79
Other noncurrent liabilities				194			144			527			—			865

		Total liabilities		6,293			1,376			3,715			(4,538	)		6,846
Equity
Huntsman International LLC members' equity:
	Members' equity			3,021			4,464			1,986			(6,450	)		3,021
	Subsidiary preferred stock			—			—			1			(1	)		—
	Accumulated deficit			(1,847	)		(125	)		(636	)		761			(1,847	)
	Accumulated other comprehensive (loss) income			(348	)		61			(315	)		254			(348	)

		Total Huntsman International LLC members' equity		826			4,400			1,036			(5,436	)		826
Noncontrolling interests in subsidiaries				—			—			15			6			21

		Total equity		826			4,400			1,051			(5,430	)		847

	Total liabilities and equity		$	7,119		$	5,776		$	4,766		$	(9,968	)	$	7,693

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HUNTSMAN CORPORATION AND SUBSIDIARIES

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

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

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

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (UNAUDITED)
THREE MONTHS ENDED JUNE 30, 2010
(Dollars in Millions)

		Parent Company			Guarantors			Non-guarantors			Eliminations			Consolidated Huntsman International LLC

Revenues:
	Trade sales, services and fees, net	$	207		$	650		$	1,423		$	—		$	2,280
	Related party sales		67			140			269			(413	)		63

Total revenues			274			790			1,692			(413	)		2,343
Cost of goods sold			233			665			1,463			(406	)		1,955

Gross profit			41			125			229			(7	)		388
Selling, general and administrative			34			24			150			—			208
Research and development			12			7			17			—			36
Other operating (income) expense			(10	)		19			(13	)		—			(4	)
Restructuring, impairment and plant closing costs			—			—			17			—			17

Operating income			5			75			58			(7	)		131
Interest (expense) income, net			(41	)		9			(15	)		—			(47	)
Equity income of investment in affiliates and subsidiaries			177			55			19			(235	)		16
Loss on early extinguishment of debt			(7	)		—			—			—			(7	)
Other (expense) income			(10	)		—			2			10			2

Income from continuing operations before income taxes			124			139			64			(232	)		95
Income tax benefit (expense)			11			(33	)		(16	)		—			(38	)

Income from continuing operations			135			106			48			(232	)		57
(Loss) income from discontinued operations, net of tax			(18	)		68			12			—			62

Net income			117			174			60			(232	)		119
Net income attributable to noncontrolling interests			—			(1	)		(2	)		1			(2	)

Net income attributable to Huntsman International LLC		$	117		$	173		$	58		$	(231	)	$	117

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HUNTSMAN CORPORATION AND SUBSIDIARIES

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

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

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

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (UNAUDITED)
THREE MONTHS ENDED JUNE 30, 2009
(Dollars in Millions)

		Parent Company			Guarantors			Non-guarantors			Eliminations			Consolidated Huntsman International LLC

Revenues:
	Trade sales, services and fees, net	$	156		$	489		$	1,177		$	—		$	1,822
	Related party sales		47			89			142			(254	)		24

Total revenues			203			578			1,319			(254	)		1,846
Cost of goods sold			174			456			1,213			(233	)		1,610

Gross profit			29			122			106			(21	)		236
Selling, general and administrative			24			34			137			—			195
Research and development			13			8			15			—			36
Other operating (income) expense			(5	)		(27	)		31			—			(1	)
Restructuring, impairment and plant closing costs			5			2			55			—			62

Operating (loss) income			(8	)		105			(132	)		(21	)		(56	)
Interest (expense) income, net			(51	)		9			(16	)		—			(58	)
Loss on accounts receivable securitization program			(1	)		(2	)		(3	)		—			(6	)
Equity (loss) income of investment in affiliates and subsidiaries			(70	)		(100	)		—			171			1
Other expense			(21	)		—			—			21			—

(Loss) income from continuing operations before income taxes			(151	)		12			(151	)		171			(119	)
Income tax benefit (expense)			22			(38	)		8			—			(8	)

Loss from continuing operations			(129	)		(26	)		(143	)		171			(127	)
(Loss) income from discontinued operations, net of tax			—			(3	)		1			—			(2	)

Net loss			(129	)		(29	)		(142	)		171			(129	)
Net loss attributable to noncontrolling interests			—			—			—			—			—

Net loss attributable to Huntsman International LLC		$	(129	)	$	(29	)	$	(142	)	$	171		$	(129	)

Table of Contents

HUNTSMAN CORPORATION AND SUBSIDIARIES

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

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

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

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (UNAUDITED)
SIX MONTHS ENDED JUNE 30, 2010
(Dollars in Millions)

		Parent Company			Guarantors			Non-guarantors			Eliminations			Consolidated Huntsman International LLC

Revenues:
	Trade sales, services and fees, net	$	390		$	1,157		$	2,782		$	—		$	4,329
	Related party sales		125			248			497			(762	)		108

Total revenues			515			1,405			3,279			(762	)		4,437
Cost of goods sold			431			1,237			2,846			(751	)		3,763

Gross profit			84			168			433			(11	)		674
Selling, general and administrative			70			44			309			—			423
Research and development			24			14			34			—			72
Other operating (income) expense			(27	)		33			(17	)		—			(11	)
Restructuring, impairment and plant closing costs			2			—			18			—			20

Operating income			15			77			89			(11	)		170
Interest (expense) income, net			(97	)		18			(34	)		—			(113	)
Equity income of investment in affiliates and subsidiaries			175			49			19			(226	)		17
Loss on early extinguishment of debt			(16	)		—			—			—			(16	)
Other (expense) income			(10	)		—			2			10			2

Income from continuing operations before income taxes			67			144			76			(227	)		60
Income tax benefit (expense)			35			(35	)		(16	)		—			(16	)

Income from continuing operations			102			109			60			(227	)		44
(Loss) income from discontinued operations, net of tax			(11	)		68			(8	)		—			49

Net income			91			177			52			(227	)		93
Net income attributable to noncontrolling interests			—			(1	)		(2	)		1			(2	)

Net income attributable to Huntsman International LLC		$	91		$	176		$	50		$	(226	)	$	91

Table of Contents

HUNTSMAN CORPORATION AND SUBSIDIARIES

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

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

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

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (UNAUDITED)
SIX MONTHS ENDED JUNE 30, 2009
(Dollars in Millions)

		Parent Company			Guarantors			Non-guarantors			Eliminations			Consolidated Huntsman International LLC

Revenues:
	Trade sales, services and fees, net	$	292		$	978		$	2,225		$	—		$	3,495
	Related party sales		80			163			267			(479	)		31

Total revenues			372			1,141			2,492			(479	)		3,526
Cost of goods sold			332			913			2,349			(458	)		3,136

Gross profit			40			228			143			(21	)		390
Selling, general and administrative			56			65			263			—			384
Research and development			25			15			32			—			72
Other operating (income) expense			(27	)		(15	)		33			—			(9	)
Restructuring, impairment and plant closing costs			6			2			68			—			76

Operating (loss) income			(20	)		161			(253	)		(21	)		(133	)
Interest (expense) income, net			(98	)		20			(35	)		—			(113	)
Loss on accounts receivable securitization program			(3	)		(3	)		(4	)		—			(10	)
Equity (loss) income of investment in affiliates and subsidiaries			(314	)		(348	)		3			661			2
Other expense			(21	)		—			—			21			—

Loss from continuing operations before income taxes			(456	)		(170	)		(289	)		661			(254	)
Income tax benefit (expense)			46			(61	)		(139	)		—			(154	)

Loss from continuing operations			(410	)		(231	)		(428	)		661			(408	)
Loss from discontinued operations, net of tax			—			(1	)		(5	)		—			(6	)

Net loss			(410	)		(232	)		(433	)		661			(414	)
Net loss attributable to noncontrolling interests			—			—			4			—			4

Net loss attributable to Huntsman International LLC		$	(410	)	$	(232	)	$	(429	)	$	661		$	(410	)

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HUNTSMAN CORPORATION AND SUBSIDIARIES

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

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

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

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (UNAUDITED)
SIX MONTHS ENDED JUNE 30, 2010
(Dollars in Millions)

	Parent Company			Guarantors			Non-guarantors			Eliminations			Consolidated Huntsman International LLC

Net cash (used in) provided by operating activities	$	(340	)	$	(13	)	$	(60	)	$	—		$	(413	)

Investing activities:
Capital expenditures		(6	)		(26	)		(46	)		—			(78	)
Proceeds from insurance settlement		—			34			—			—			34
Investment in unconsolidated affiliates, net of cash acquired		—			—			(4	)		—			(4	)
Investment in affiliate		(116	)		(4	)		—			120			—
Change in restricted cash		—			—			(1	)		—			(1	)
Increase in receivable from affiliate		(46	)		—			—			—			(46	)

Net cash used in investing activities		(168	)		4			(51	)		120			(95	)
Financing activities:
Net borrowings under revolving loan facilities		—			—			(4	)		—			(4	)
Revolving loan facility from A/R Programs		254			—			—			—			254
Net borrowings on overdraft facilities		—			—			5			—			5
Net borrowings on short-term debt		—			—			21			—			21
Repayments of long-term debt		(629	)		—			(30	)		—			(659	)
Proceeds from long-term debt		350			—			25			—			375
Net repayment of note payable to affiliate		(15	)		—			—			—			(15	)
Intercompany repayments		—			—			(5	)		5			—
Repayments of notes payable		(19	)		—			(3	)		—			(22	)
Borrowings on notes payable		—			—			4			—			4
Debt issuance costs paid		(17	)		—			—			—			(17	)
Call premiums paid related to early extinguishment of debt		(7	)		—			—			—			(7	)
Contribution from parent, net		—			(2	)		127			(125	)		—
Excess tax benefit related to stock-based compensation		4			—			—			—			4
Other, net		—			(1	)		1			—			—

Net cash (used in) provided by financing activities		(79	)		(3	)		141			(120	)		(61	)
Effect of exchange rate changes on cash		—			—			(8	)		—			(8	)

(Decrease) increase in cash and cash equivalents		(587	)		(12	)		22			—			(577	)
Cash and cash equivalents at beginning of period		688			24			207			—			919

Cash and cash equivalents at end of period	$	101		$	12		$	229		$	—		$	342

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HUNTSMAN CORPORATION AND SUBSIDIARIES

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

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

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

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (UNAUDITED)
SIX MONTHS ENDED JUNE 30, 2009
(Dollars in Millions)

	Parent Company			Guarantors			Non-guarantors			Eliminations			Consolidated Huntsman International LLC

Net cash provided by operating activities	$	30		$	73		$	96		$	—		$	199

Investing activities:
Capital expenditures		(4	)		(43	)		(53	)		—			(100	)
Proceeds from sale of assets, net of adjustments		—			(1	)		2			—			1
Acquisition of business		—			—			(24	)		—			(24	)
Increase in receivable from affiliate		(11	)		—			—			—			(11	)
Investment in affiliate		(58	)		(71	)		—			129			—
Other, net		—			5			(2	)		—			3

Net cash used in investing activities		(73	)		(110	)		(77	)		129			(131	)
Financing activities:
Net repayments under revolving loan facilities		—			—			(8	)		—			(8	)
Net borrowings on overdraft facilities		—			—			1			—			1
Repayments of short-term debt		—			—			(78	)		—			(78	)
Proceeds from short-term debt		—			—			57			—			57
Repayments of long-term debt		(16	)		—			(10	)		—			(26	)
Proceeds from long-term debt		864			—			5			—			869
Repayments of note payable to affiliate		(403	)		—			—			—			(403	)
Proceeds from note payable to affiliate		529			—			—			—			529
Intercompany borrowings		—			—			(47	)		47			—
Repayments of notes payable		(20	)		—			(14	)		—			(34	)
Borrowings on notes payable		—			—			15			—			15
Contribution from parent, net		236			40			136			(176	)		236
Dividends paid to parent		(23	)		—			—			—			(23	)
Other, net		—			(4	)		—			—			(4	)

Net cash provided by financing activities		1,167			36			57			(129	)		1,131
Effect of exchange rate changes on cash		—			—			2			—			2

Increase (decrease) in cash and cash equivalents		1,124			(1	)		78			—			1,201
Cash and cash equivalents at beginning of period		—			3			84			—			87

Cash and cash equivalents at end of period	$	1,124		$	2		$	162		$	—		$	1,288

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HUNTSMAN CORPORATION AND SUBSIDIARIES

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

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

24. SUBSEQUENT EVENT

On July 31, 2010, we announced that we have entered into a definitive agreement to acquire the chemicals business of Laffans Petrochemicals Ltd. Located in Ankleshwar, India, the business manufactures amines and surfactants, has annual sales of approximately $45 million and has 130 employees. The acquisition, with a cost of approximately $21 million, including debt, a non-compete agreement and other obligations, is subject to certain terms and conditions and is expected to occur in the first half of 2011. The acquired business will be integrated into our Performance Products division and is expected to be immediately accretive to earnings.

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

FORWARD-LOOKING STATEMENTS

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

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

There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements contained in or contemplated by this report. Any forward-looking statements should be considered in light of the risks referenced in "Part I. Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2009.

OVERVIEW

Business

We operate in five segments: Polyurethanes, Performance Products, Advanced Materials, Textile Effects and Pigments. Our Polyurethanes, Performance Products, Advanced Materials and Textile Effects segments produce differentiated organic chemical products and our Pigments segment produces inorganic chemical products. We ceased operation of our Australian styrenics operations during the first quarter of 2010 and report the results of that business as discontinued operations. See "Note 20. Discontinued Operations" to our condensed consolidated financial statements (unaudited).

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RECENT DEVELOPMENTS

Settlement of Fire Insurance Claims

As a result of this settlement, we recognized a gain of $110 million in discontinued operations during the second quarter of 2010, the proceeds of which were used to repay secured debt in accordance with relevant provisions of the agreements governing our Senior Credit Facilities. Of the $110 million payment, $34 million was reflected within the statement of cash flows as cash flows from investing activities and the remaining $76 million was reflected as cash flows from operating activities.

OUTLOOK

During the second quarter of 2010 we saw strong underlying demand growth as volumes increased across all of our businesses. We expect that growth in demand to continue, albeit at a slower pace than we experienced in the first half of 2010. Our business, similar to many in the chemical industry, tends to be seasonally slower in the third quarter than the second quarter due to decreased European demand in the month of August. North America and Europe, which represent approximately two thirds of our sales, still show relatively modest growth compared to Asia and Latin America. We continue to have idle capacity in many of our products that will be more fully utilized as demand improves.

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RESULTS OF OPERATIONS

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

Huntsman Corporation

	Three months ended June 30,									Six months ended June 30,

	Three months ended June 30,						Percent Change			Six months ended June 30,						Percent Change
	2010			2009			Percent Change			2010			2009			Percent Change
Revenues	$	2,343		$	1,846			27	%	$	4,437		$	3,526			26	%
Cost of goods sold		1,958			1,613			21	%		3,771			3,144			20	%

Gross profit		385			233			65	%		666			382			74	%
Operating expenses		241			233			3	%		497			455			9	%
Restructuring, impairment and plant closing costs		17			62			(73	)%		20			76			(74	)%

Operating income (loss)		127			(62	)		NM			149			(149	)		NM
Interest expense, net		(43	)		(58	)		(26	)%		(104	)		(113	)		(8	)%
Loss on accounts receivable securitization program		—			(6	)		NM			—			(10	)		NM
Equity income of investment in unconsolidated affiliates		16			1			NM			17			2			750	%
Loss on early extinguishment of debt		(7	)		—			NM			(162	)		—			NM
(Expenses) income associated with the Terminated Merger and related litigation		(1	)		844			NM			(1	)		837			NM
Other income		1			—			NM			1			—			NM

Income (loss) from continuing operations before income taxes		93			719			(87	)%		(100	)		567			NM
Income tax expense		(39	)		(311	)		(87	)%		(5	)		(449	)		(99	)%

Income (loss) from continuing operations		54			408			(87	)%		(105	)		118			NM
Income (loss) from discontinued operations		62			(2	)		NM			49			(6	)		NM

Net income (loss)		116			406			(71	)%		(56	)		112			NM
Net (income) loss attributable to noncontrolling interests		(2	)		—			NM			(2	)		4			NM

Net income (loss) attributable to Huntsman Corporation		114			406			(72	)%		(58	)		116			NM
Interest expense, net		43			58			(26	)%		104			113			(8	)%
Income tax expense from continuing operations		39			311			(87	)%		5			449			(99	)%
Income tax expense (benefit) from discontinued operations		37			(1	)		NM			29			—			NM
Depreciation and amortization		98			100			(2	)%		196			226			(13	)%

EBITDA(1)	$	331		$	874			(62	)%	$	276		$	904			(69	)%

Net cash (used in) provided by operating activities										$	(442	)	$	1,009			NM
Net cash used in investing activities											(49	)		(120	)		(59	)%
Net cash (used in) provided by financing activities											(480	)		747			NM

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Huntsman International

	Three months ended June 30,									Six months ended June 30,

	Three months ended June 30,						Percent Change			Six months ended June 30,						Percent Change
	2010			2009			Percent Change			2010			2009			Percent Change
Revenues	$	2,343		$	1,846			27	%	$	4,437		$	3,526			26	%
Cost of goods sold		1,955			1,610			21	%		3,763			3,136			20	%

Gross profit		388			236			64	%		674			390			73	%
Operating expenses		240			230			4	%		484			447			8	%
Restructuring, impairment and plant closing costs		17			62			(73	)%		20			76			(74	)%

Operating income (loss)		131			(56	)		NM			170			(133	)		NM
Interest expense, net		(47	)		(58	)		(19	)%		(113	)		(113	)		—
Loss on accounts receivable securitization program		—			(6	)		NM			—			(10	)		NM
Equity income of investment in unconsolidated affiliates		16			1			NM			17			2			750	%
Loss on early extinguishment of debt		(7	)		—			NM			(16	)		—			NM
Other income		2			—			NM			2			—			NM

Income (loss) from continuing operations before income taxes		95			(119	)		NM			60			(254	)		NM
Income tax expense		(38	)		(8	)		375	%		(16	)		(154	)		(90	)%

Income (loss) from continuing operations		57			(127	)		NM			44			(408	)		NM
Income (loss) from discontinued operations		62			(2	)		NM			49			(6	)		NM

Net income (loss)		119			(129	)		NM			93			(414	)		NM
Net (income) loss attributable to noncontrolling interests		(2	)		—			NM			(2	)		4			NM

Net income (loss) attributable to Huntsman International LLC		117			(129	)		NM			91			(410	)		NM
Interest expense, net		47			58			(19	)%		113			113			—
Income tax expense from continuing operations		38			8			375	%		16			154			(90	)%
Income tax expense (benefit) from discontinued operations		37			(1	)		NM			29			—			NM
Depreciation and amortization		92			94			(2	)%		184			214			(14	)%

EBITDA(1)	$	331		$	30			NM		$	433		$	71			510	%

Net cash (used in) provided by operating activities										$	(413	)	$	199			NM
Net cash used in investing activities											(95	)		(131	)		(27	)%
Net cash (used in) provided by financing activities											(61	)		1,131			NM

NM—Not Meaningful

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

Huntsman Corporation

				Three months ended June 30,						Six months ended June 30,

				2010			2009			2010			2009
Foreign exchange gains—unallocated				$	—		$	7		$	1		$	9
Loss on early extinguishment of debt					(7	)		—			(162	)		—
Loss on accounts receivable securitization program					—			(6	)		—			(10	)
Amounts included in discontinued operations					100			(2	)		79			(5	)
Acquisition expenses					(1	)		—			(1	)		(1	)
(Expenses) income associated with the Terminated Merger and related litigation					(1	)		844			(1	)		837
Restructuring, impairment and plant closing (costs) credits:
	Polyurethanes				—			(1	)		—			(2	)
	Performance Products				—			—			—			—
	Advanced Materials				—			(15	)		2			(15	)
	Textile Effects				(15	)		(10	)		(15	)		(9	)
	Pigments				(2	)		(30	)		(3	)		(43	)
	Corporate and other				—			(6	)		(4	)		(7	)

		Total restructuring, impairment and plant closing costs			(17	)		(62	)		(20	)		(76	)

			Total	$	74		$	781		$	(104	)	$	754

Huntsman International

				Three months ended June 30,						Six months ended June 30,

				2010			2009			2010			2009
Foreign exchange gains—unallocated				$	—		$	7		$	1		$	9
Loss on early extinguishment of debt					(7	)		—			(16	)		—
Loss on accounts receivable securitization program					—			(6	)		—			(10	)
Amounts included in discontinued operations					100			(2	)		79			(5	)
Acquisition expenses					(1	)		—			(1	)		(1	)
Restructuring, impairment and plant closing (costs) credits:
	Polyurethanes				—			(1	)		—			(2	)
	Performance Products				—			—			—			—
	Advanced Materials				—			(15	)		2			(15	)
	Textile Effects				(15	)		(10	)		(15	)		(9	)
	Pigments				(2	)		(30	)		(3	)		(43	)
	Corporate and other				—			(6	)		(4	)		(7	)

		Total restructuring, impairment and plant closing costs			(17	)		(62	)		(20	)		(76	)

			Total	$	75		$	(63	)	$	43		$	(83	)

(1): EBITDA is defined as net (loss) income attributable to Huntsman Corporation or Huntsman International LLC, as appropriate, before interest, income taxes, depreciation and amortization. We believe that EBITDA enhances an investor's understanding of our financial performance and

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our ability to satisfy principal and interest obligations with respect to our indebtedness. However, EBITDA should not be considered in isolation or viewed as a substitute for net income, cash flow from operations or other measures of performance as defined by GAAP. Moreover, EBITDA as used herein is not necessarily comparable to other similarly titled measures of other companies due to potential inconsistencies in the method of calculation. Our management uses EBITDA to assess financial performance and debt service capabilities. In assessing financial performance, our management reviews EBITDA as a general indicator of economic performance compared with prior periods. Because EBITDA excludes interest, income taxes, depreciation and amortization, EBITDA provides an indicator of general economic performance that is not affected by debt restructurings, fluctuations in interest rates or effective tax rates, or levels of depreciation and amortization. Accordingly, our management believes this type of measurement is useful for comparing general operating performance from period to period and making certain related management decisions. EBITDA is also used by securities analysts, lenders and others in their evaluation of different companies because it excludes certain items that can vary widely across different industries or among companies within the same industry. For example, interest expense can be highly dependent on a company's capital structure, debt levels and credit ratings. Therefore, the impact of interest expense on earnings can vary significantly among companies. In addition, the tax positions of companies can vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the various jurisdictions in which they operate. As a result, effective tax rates and tax expense can vary considerably among companies. Finally, companies employ productive assets of different ages and utilize different methods of acquiring and depreciating such assets. This can result in considerable variability in the relative costs of productive assets and the depreciation and amortization expense among companies. Our management also believes that our investors use EBITDA as a measure of our ability to service indebtedness as well as to fund capital expenditures and working capital requirements. Nevertheless, our management recognizes that there are material limitations associated with the use of EBITDA in the evaluation of our Company as compared to net income, which reflects overall financial performance, including the effects of interest, income taxes, depreciation and amortization. EBITDA excludes interest expense. Because we have borrowed money in order to finance our operations, interest expense is a necessary element of our costs and ability to generate revenue. Therefore, any measure that excludes interest expense has material limitations. EBITDA also excludes taxes. Because the payment of taxes is a necessary element of our operations, any measure that excludes tax expense has material limitations. Finally, EBITDA excludes depreciation and amortization expense. Because we use capital assets, depreciation and amortization expense is a necessary element of our costs and ability to generate revenue. Therefore, any measure that excludes depreciation and amortization expense has material limitations. Our management compensates for the limitations of using EBITDA by using it to supplement GAAP results to provide a more complete understanding of the factors and trends affecting the business rather than GAAP results alone. Our management also uses other metrics to evaluate capital structure, tax planning and capital investment decisions. For example, our management uses credit ratings and net debt ratios to evaluate capital structure, effective tax rate by jurisdiction to evaluate tax planning, and payback period and internal rate of return to evaluate capital investments. Our management also uses trade working capital to evaluate its investment in accounts receivable and inventory, net of accounts payable.

: We believe that net (loss) income attributable to Huntsman Corporation or Huntsman International, as appropriate, is the performance measure calculated and presented in accordance with GAAP that is most directly comparable to EBITDA and that cash provided by operating activities is the liquidity measure calculated and presented in accordance with GAAP that is most directly comparable to EBITDA. For each of our Company and Huntsman International, the following tables reconcile EBITDA to net (loss) income attributable to Huntsman Corporation or

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Huntsman International LLC, as appropriate, and to net cash used in operations (dollars in millions):

Huntsman Corporation

	Six Months Ended June 30,

	Six Months Ended June 30,						Percent Change
	2010			2009			Percent Change
EBITDA	$	276		$	904			(69	)%
Depreciation and amortization		(196	)		(226	)		(13	)%
Interest expense, net		(104	)		(113	)		(8	)%
Income tax expense from continuing operations		(5	)		(449	)		(99	)%
Income tax expense from discontinued operations		(29	)		—			NM

Net (loss) income attributable to Huntsman Corporation		(58	)		116			NM
Net income (loss) attributable to noncontrolling interests		2			(4	)		NM

Net (loss) income		(56	)		112			NM
Equity income of investment in unconsolidated affiliates		(17	)		(2	)		750	%
Depreciation and amortization		196			226			(13	)%
Loss (gain) on disposal of businesses/assets, net		2			(1	)		NM
Noncash restructuring, impairment and plant closing costs		—			5			NM
Loss on early extinguishment of debt		162			—			NM
Noncash interest expense		2			5			(60	)%
Deferred income taxes		34			255			(87	)%
Net unrealized gain on foreign currency transactions		(3	)		—			NM
Portion of insurance settlement representing cash provided by investing activities		(34	)		—			NM
Other, net		20			13			54	%
Changes in operating assets and liabilities		(748	)		396			NM

Net cash (used in) provided by operating activities	$	(442	)	$	1,009			NM

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Huntsman International

	Six Months Ended June 30,

	Six Months Ended June 30,						Percent Change
	2010			2009			Percent Change
EBITDA	$	433		$	71			510	%
Depreciation and amortization		(184	)		(214	)		(14	)%
Interest expense, net		(113	)		(113	)		—
Income tax expense from continuing operations		(16	)		(154	)		(90	)%
Income tax expense from discontinued operations		(29	)		—			NM

Net income (loss) attributable to Huntsman International LLC		91			(410	)		NM
Net income (loss) attributable to noncontrolling interests		2			(4	)		NM

Net income (loss)		93			(414	)		NM
Equity income of investment in unconsolidated affiliates		(17	)		(2	)		750	%
Depreciation and amortization		184			214			(14	)%
Loss (gain) on disposal of businesses/assets, net		2			(1	)		NM
Noncash restructuring, impairment and plant closing costs		—			5			NM
Loss on early extinguishment of debt		16			—			NM
Noncash interest expense		11			12			(8	)%
Deferred income taxes		37			143			(74	)%
Net unrealized gain on foreign currency transactions		(3	)		—			NM
Portion of insurance settlement representing cash provided by investing activities		(34	)		—			NM
Other, net		18			9			100	%
Changes in operating assets and liabilities		(720	)		233			NM

Net cash (used in) provided by operating activities	$	(413	)	$	199			NM

NM—Not Meaningful

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Three Months Ended June 30, 2010 Compared with Three Months Ended June 30, 2009

For the three months ended June 30, 2010, net income attributable to Huntsman Corporation was $114 million on revenues of $2,343 million, compared with net income attributable to Huntsman Corporation of $406 million on revenues of $1,846 million for the same period of 2009. For the three months ended June 30, 2010, net income attributable to Huntsman International LLC was $117 million on revenues of $2,343 million, compared with net loss attributable to Huntsman International LLC of $129 million on revenues of $1,846 million for the same period of 2009. The decrease of $292 million in net income attributable to Huntsman Corporation and the increase of $246 million in net income attributable to Huntsman International LLC was the result of the following items:

•: Revenues for the three months ended June 30, 2010 increased by $497 million, or 27%, as compared with the 2009 period due principally to higher average selling prices and higher sales volumes in all our segments. See "—Segment Analysis" below.
•: Our gross profit and the gross profit of Huntsman International for the three months ended June 30, 2010 increased by $152 million each, or 65% and 64%, respectively, as compared with the 2009 period resulting from higher gross margins in all of our segments except Polyurethanes. See "—Segment Analysis" below.
•: Our operating expenses and the operating expenses of Huntsman International for the three months ended June 30, 2010 increased by $8 million and $10 million, or 3% and 4%, respectively, as compared with the 2009 period due primarily to higher selling, general and administrative expenses.
•: Restructuring, impairment and plant closing costs for the three months ended June 30, 2010 decreased to $17 million from $62 million in the 2009 period. For more information concerning restructuring activities, see "Note 7. Restructuring, Impairment and Plant Closing Costs" to our condensed consolidated financial statements (unaudited).
•: Our net interest expense and the net interest expense of Huntsman International for the three months ended June 30, 2010 decreased by $15 million and $11 million, or 26% and 19%, respectively, as compared with the 2009 period resulting primarily from a $15 million reduction in interest expense recognized in the three months ended June 30, 2010 related to the ineffective portion of the cross currency swap entered into in connection with our 2020 Senior Subordinated Notes issuance, offset in part by higher interest expense associated with our A/R Programs. Upon the adoption of new accounting guidance in 2010, transfers of our accounts receivable under our A/R Programs no longer met the criteria for derecognition. Accordingly, the amounts outstanding under our A/R Programs are accounted for as secured borrowings beginning January 1, 2010. For more information, see "Note 8. Debt—Accounts Receivable Securitization" and "Note 9. Derivative Instruments and Hedging Activities" to our condensed consolidated financial statements (unaudited).
•: Equity income of investment in unconsolidated affiliates for the three months ended June 30, 2010 increased to $16 million from $1 million in the 2009 period. During the second quarter of 2010, we recorded a non-recurring $15 million credit to equity income of investment in unconsolidated affiliates to appropriately reflect our investment in the Sasol-Huntsman GmbH and Co. KG joint venture. For more information, see "Note 5. Investment in Unconsolidated Affiliates" to our condensed consolidated financial statements (unaudited).
•: The loss on early extinguishment of debt for the three months ended June 30, 2010 resulted from the April 26, 2010 prepayment of $124 million of Term Loan B and $40 million of Term Loan C and from the June 22, 2010 prepayment of $110 million of our Senior Credit Facilities. For more information, see "Note 8. Debt" to our condensed consolidated financial statements (unaudited).

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•: Income associated with the Terminated Merger and related litigation for the three months ended June 30, 2009 consisted primarily of an $868 million gain related to the Texas Bank Litigation Settlement Agreement, offset in part by litigation-related fees and employee retention bonuses. For more information, see "Note 18. (Expenses) Income Associated with the Terminated Merger and Related Litigation" to our condensed consolidated financial statements (unaudited).
•: For the three months ended June 30, 2010, our income tax expense decreased by $272 million and Huntsman International's tax expense increased by $30 million, as compared with the same period in 2009. During the three months ended June 30, 2009, we recorded discrete tax expense of $310 million related to the Terminated Merger and related litigation. Our and Huntsman International's tax obligations are affected by the mix of income and losses in the tax jurisdictions in which we operate. For the three months ended June 30, 2010 we have computed our provision for income taxes based on the actual effective tax rate for the year-to-date by applying the discrete method. The discrete method was used to calculate the income tax provision as the annual effective tax rate was not considered a reliable estimate of year-to-date income tax expense. For further information concerning taxes, see "Note 19. Income Taxes" to our condensed consolidated financial statements (unaudited).
•: Income from discontinued operations for the three months ended June 30, 2010 was $62 million as compared to a loss from discontinued operations of $2 million in the 2009 period. The increase in income from discontinued operations resulted principally from a $110 million pretax gain recognized in the second quarter of 2010 in connection with the final settlement of our insurance claims related to the 2006 fire at our former Port Arthur, Texas plant, offset in part by related income taxes, legal and other costs. See "Note 17. Casualty Losses and Insurance Recoveries" to our condensed consolidated financial statements (unaudited). In connection with the closure and abandonment of our Australian styrenics operations in the first quarter of 2010, we have treated this business as discontinued operations beginning in the first quarter of 2010. All relevant information for prior periods has been restated to reflect this change. For more information, see "Note 20. Discontinued Operations" to our condensed consolidated financial statements (unaudited).

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Segment Analysis

		Three Months Ended June 30,

		Three Months Ended June 30,						Percent Change
		2010			2009			Percent Change
Revenues
Polyurethanes		$	932		$	695			34	%
Performance Products			669			482			39	%
Advanced Materials			320			255			25	%
Textile Effects			213			179			19	%
Pigments			287			254			13	%
Eliminations			(78	)		(19	)		311	%

Total		$	2,343		$	1,846			27	%

Huntsman Corporation
Segment EBITDA
Polyurethanes		$	70		$	86			(19	)%
Performance Products			116			31			274	%
Advanced Materials			52			(1	)		NM
Textile Effects			(7	)		(20	)		(65	)%
Pigments			47			(26	)		NM
Corporate and other			(47	)		806			NM

	Subtotal		231			876			(74	)%
Discontinued Operations			100			(2	)		NM

Total		$	331		$	874			(62	)%

Huntsman International
Segment EBITDA
Polyurethanes		$	70		$	86			(19	)%
Performance Products			116			31			274	%
Advanced Materials			52			(1	)		NM
Textile Effects			(7	)		(20	)		(65	)%
Pigments			47			(26	)		NM
Corporate and other			(47	)		(38	)		24	%

	Subtotal		231			32			622	%
Discontinued Operations			100			(2	)		NM

Total		$	331		$	30			NM

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		Three months ended June 30, 2010 vs. 2009

		Average Selling Price(1)
		Local Currency			Foreign Currency Translation Impact			Sales Volumes(1)
Period-Over-Period Increase (Decrease)
Polyurethanes			11	%		0	%		17	%
Performance Products			12	%		0	%		27	%
Advanced Materials			11	%		0	%		13	%
Textile Effects			6	%		2	%		10	%
Pigments			7	%		(1	)%		7	%

	Total Company		6	%		0	%		18	%

		Three months ended June 30, 2010 vs. March 31, 2010

		Average Selling Price(1)
		Local Currency			Foreign Currency Translation Impact			Sales Volumes(1)
Period-Over-Period (Decrease) Increase
Polyurethanes			(10	)%		(2	)%		38	%
Performance Products			4	%		(3	)%		7	%
Advanced Materials			8	%		(3	)%		3	%
Textile Effects			5	%		(2	)%		6	%
Pigments			5	%		(6	)%		7	%

	Total Company		(4	)%		(3	)%		19	%

(1): Excludes revenues and sales volumes from tolling arrangements and byproducts.

NM—Not meaningful

Polyurethanes

The increase in revenues in our Polyurethanes segment for the three months ended June 30, 2010 compared to the same period in 2009 was primarily due to higher average selling prices and higher sales volumes. Average selling prices for MDI and PO/MTBE increased in response to higher raw material costs. MDI sales volumes increased as a result of improved demand in all regions and across all major markets with the exception of appliances, while PO/MTBE sales volumes increased generally due to improved demand. The decrease in EBITDA was primarily due to lower PO/MTBE margins which more than offset favorable MDI margins where growth and higher selling prices more than offset increased raw materials costs.

Performance Products

The increase in revenues in our Performance Products segment for the three months ended June 30, 2010 compared to the same period in 2009 was due to higher average selling prices and higher sales volumes. Average selling prices increased across almost all product groups principally in response to higher raw material costs. Sales volumes increased primarily due to higher demand across all product groups and as a result of additional sales related to a portion of our ethylene glycol production that was previously manufactured under tolling arrangements. The increase in segment EBITDA was primarily due to higher sales volumes and higher contribution margins. In addition, equity income from investment in unconsolidated affiliates for the three months ended June 30, 2010 increased to $16 million as compared to $1 million in the 2009 period. During the second quarter of 2010, we recorded a non-recurring $15 million credit to equity income of investment in unconsolidated affiliates to appropriately reflect our investment in the Sasol-Huntsman GmbH and Co. KG joint venture.

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Advanced Materials

The increase in revenues in our Advanced Materials segment for the three months ended June 30, 2010 compared to the same period in 2009 was due to higher sales volumes and higher average selling prices. Sales volumes increased in all regions of the world and across almost all products groups primarily due to the worldwide economic recovery. Average selling prices increased in our base resins business primarily in response to higher raw material costs and reduced product availability in the epoxy resin market, offset in part by lower average selling prices in our specialty components and formulations markets primarily as a result of changes in our product mix and competitive market pressures. The increase in segment EBITDA was primarily due to higher sales volumes; higher contribution margins and lower restructuring, impairment and plant closing costs, partially offset by higher manufacturing costs. During the three months ended June 30, 2010 and 2009, our Advanced Materials segment recorded restructuring, impairment and plant closing charges of nil and $15 million, respectively. For more information concerning restructuring activities, see "Note 7. Restructuring, Impairment and Plant Closing Costs" to our condensed consolidated financial statements (unaudited).

Textile Effects

The increase in revenues in our Textile Effects segment for the three months ended June 30, 2010 compared to the same period in 2009 was due to higher sales volumes and higher average selling prices. Sales volumes increased across all business lines and in all regions primarily due to the worldwide economic recovery. Average selling prices increased primarily due to favorable changes in product mix and the strength of the Indian rupee and Brazilian real against the U.S. dollar. The increase in segment EBITDA was primarily due to higher sales volumes and higher contribution margins, partially offset by higher fixed costs in part due to our second quarter 2009 acquisition of Baroda and to higher restructuring, impairment and plant closing costs. During the three months ended June 30, 2010 and 2009, our Textile Effects segment recorded restructuring, impairment and plant closing charges of $15 million and $10 million, respectively. For more information concerning restructuring activities, see "Note 7. Restructuring, Impairment and Plant Closing Costs" to our condensed consolidated financial statements (unaudited).

Pigments

The increase in revenues in our Pigments segment for three months ended June 30, 2010 compared to the same period in 2009 was due to higher average selling prices and higher sales volumes. Average selling prices increased primarily as a result of price increase initiatives in all regions of the world, offset in part by the strength of the U.S. dollar against relevant international currencies. Sales volumes increased primarily due to demand recovery in Europe and North America. The increase in segment EBITDA was primarily due to higher sales volumes, higher contribution margins and lower restructuring, impairment and plant closing costs. During the three months ended June 30, 2010 and 2009, our Pigments segment recorded restructuring, impairment and plant closing charges of $2 million and $30 million, respectively. For more information concerning restructuring activities, see "Note 7. Restructuring, Impairment and Plant Closing Costs" to our condensed consolidated financial statements (unaudited).

Corporate and other—Huntsman Corporation

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gain of $806 million for the same period in 2009. The decrease in EBITDA from Corporate and other for the three months ended June 30, 2010 resulted primarily from a gain of $844 million in 2009 related to the Texas Bank Litigation Settlement Agreement. For more information, see "Note 18. (Expenses) Income Associated with the Terminated Merger and Related Litigation" to our condensed consolidated financial statements (unaudited). Additionally, the decrease in EBITDA was attributable to an increase of LIFO inventory valuation expense of $3 million and a $7 million loss on early extinguishment of debt recorded in the three months ended June 30, 2010. For more information regarding the loss on early extinguishment of debt, see "Note 8. Debt" to our condensed consolidated financial statements (unaudited).

Corporate and other—Huntsman International

Corporate and other includes unallocated corporate overhead, unallocated foreign exchange gains and losses, LIFO inventory valuation reserve adjustments, loss on early extinguishment of debt, net income (loss) attributable to noncontrolling interests, unallocated restructuring impairment and plant closing costs and non-operating income and expense. For the three months ended June 30, 2010, EBITDA from Corporate and other items decreased by $9 million to a loss of $47 million from a loss of $38 million for the same period in 2009. The decrease in EBITDA from Corporate and other for the three months ended June 30, 2010 resulted primarily from an increase of LIFO inventory valuation expense of $3 million and a $7 million loss on early extinguishment of debt recorded in the three months ended June 30, 2010. For more information regarding the loss on early extinguishment of debt, see "Note 8. Debt" to our condensed consolidated financial statements (unaudited).

Discontinued Operations

The operating results of our former polymers, base chemicals and Australian styrenics businesses are classified as discontinued operations, and, accordingly, the revenues of these businesses are excluded from revenues for all periods presented. The EBITDA of these former businesses are included in discontinued operations for all periods presented. The income (loss) from discontinued operations represents the operating results, fire insurance settlement gains and related litigation costs, and restructuring, impairment and plant closing costs and gain (loss) on disposal with respect to our former businesses. See "Note 17. Casualty Losses and Insurance Recoveries" and "Note 20. Discontinued Operations" to our condensed consolidated financial statements (unaudited).

Six Months Ended June 30, 2010 Compared with Six Months Ended June 30, 2009

For the six months ended June 30, 2010, net loss attributable to Huntsman Corporation was $58 million on revenues of $4,437 million, compared with net income attributable to Huntsman Corporation of $116 million on revenues of $3,526 million for the same period of 2009. For the six months ended June 30, 2010, net income attributable to Huntsman International LLC was $91 million on revenues of $4,437 million, compared with net loss attributable to Huntsman International LLC of $410 million on revenues of $3,526 million for the same period of 2009. The increase of $174 million in net loss attributable to Huntsman Corporation and the increase of $501 million in net income attributable to Huntsman International LLC was the result of the following items:

•: Revenues for the six months ended June 30, 2010 increased by $911 million, or 26%, as compared with the 2009 period due principally to higher average selling prices and higher sales volumes in all our segments. See "—Segment Analysis" below.
•: Our gross profit and the gross profit of Huntsman International for the six months ended June 30, 2010 increased by $284 million each, or 74% and 73%, respectively, as compared with the 2009 period, resulting from higher gross margins in all of our segments. See "—Segment Analysis" below.

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•: Our operating expenses and the operating expenses of Huntsman International for the six months ended June 30, 2010 increased by $42 million and $37 million, or 9% and 8%, respectively, as compared with the 2009 period due primarily to a $13 million negative impact of translating foreign currency amounts to the U.S. dollar, as the U.S. dollar weakened versus other relevant currencies, and higher selling, general and administrative expenses.
•: Restructuring, impairment and plant closing costs for the six months ended June 30, 2010 decreased to $20 million from $76 million in the 2009 period. For more information concerning restructuring activities, see "Note 7. Restructuring, Impairment and Plant Closing Costs" to our condensed consolidated financial statements (unaudited).
•: Our net interest expense and the net interest expense of Huntsman International for the six months ended June 30, 2010 decreased by $9 million and nil, respectively, as compared with the 2009 period, resulting primarily from a $14 million reduction in interest expense recognized in the three months ended June 30, 2010 related to the ineffective portion of the cross currency swap entered into in connection with our 2020 Subordinated Notes issuance, offset in part by higher interest expense associate with our A/R Programs. Upon the adoption of new accounting guidance in 2010, transfers of our accounts receivable under our A/R Programs no longer met the criteria for derecognition. Accordingly, the amounts outstanding under our A/R Programs are accounted for as secured borrowings beginning January 1, 2010. For more information, see "Note 9. Derivative Instruments and Hedging Activities" and "Note 8. Debt—Accounts Receivable Securitization" to our condensed consolidated financial statements (unaudited).
•: Equity income of investment in unconsolidated affiliates for the six months ended June 30, 2010 increased to $17 million from $2 million in the 2009 period. During the second quarter of 2010, we recorded a non-recurring $15 million credit to equity income of investment in unconsolidated affiliates to appropriately reflect our investment in the Sasol-Huntsman GmbH and Co. KG joint venture. For more information, see "Note 5. Investment in Unconsolidated Affiliates" to our condensed consolidated financial statements (unaudited).
•: Loss on early extinguishment of debt for the six months ended June 30, 2010 resulted from the January 11, 2010 repurchase of the Convertible Notes, the March 17, 2010 partial redemption of the senior subordinated notes due 2013 and the senior subordinated notes due 2015, the April 26, 2010 prepayment of $124 million of Term Loan B and $40 million of Term Loan C and from the June 22, 2010 prepayment of $110 million of our Senior Credit Facilities. For more information see "Note 8. Debt" to our condensed consolidated financial statements (unaudited).
•: Income associated with the Terminated Merger and related litigation for the six months ended June 30, 2009 consisted primarily of an $868 million gain related to the Texas Bank Litigation Settlement Agreement, offset in part by litigation-related fees and employee retention bonuses. For more information, see "Note 18. (Expenses) Income Associated with the Terminated Merger and Related Litigation" to our condensed consolidated financial statements (unaudited).
•: For the six months ended June 30, 2010, our income tax expense decreased by $444 million and Huntsman International's tax expense decreased by $138 million, as compared with the same period in 2009. During the six months ended June 30, 2009, we recorded discrete tax expense of $310 million related to the net $837 million of income of the Terminated Merger and related litigation. Our and Huntsman International's tax obligations are affected by the mix of income and losses in the tax jurisdictions in which we operate. For the six months ended June 30, 2010 we have computed our provision for income taxes based on the actual effective tax rate for the year-to-date by applying the discrete method. The discrete method was used to calculate the income tax provision as the annual effective tax rate was not considered a reliable estimate of year-to-date income tax expense. For further information concerning taxes, see "Note 19. Income Taxes" to our condensed consolidated financial statements (unaudited).

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•: Income from discontinued operations for the six months ended June 30, 2010 was $49 million as compared to a loss from discontinued operations of $6 million in the 2009 period. The increase in income from discontinued operations resulted principally from a $110 million pretax gain recognized in the second quarter of 2010 in connection with the final settlement of our insurance claims related to the 2006 fire at our former Port Arthur, Texas plant, offset in part by related income taxes, legal and other costs. See "Note 17. Casualty Losses and Insurance Recoveries" to our condensed consolidated financial statements (unaudited). In connection with the closure and abandonment of our Australian styrenics operations in the first quarter of 2010, we have treated this business as discontinued operations beginning in the first quarter of 2010. All relevant information for prior periods has been restated to reflect this change. For more information, see "Note 20. Discontinued Operations" to our condensed consolidated financial statements (unaudited).

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Segment Analysis

		Six Months Ended June 30,

		Six Months Ended June 30,						Percent Change
		2010			2009			Percent Change
Revenues
Polyurethanes		$	1,699		$	1,295			31	%
Performance Products			1,285			982			31	%
Advanced Materials			611			512			19	%
Textile Effects			408			331			23	%
Pigments			556			450			24	%
Eliminations			(122	)		(44	)		177	%

Total		$	4,437		$	3,526			26	%

Huntsman Corporation
Segment EBITDA
Polyurethanes		$	122		$	112			9	%
Performance Products			176			94			87	%
Advanced Materials			85			9			844	%
Textile Effects			(7	)		(31	)		(77	)%
Pigments			75			(55	)		NM
Corporate and other			(254	)		780			NM

	Subtotal		197			909			(78	)%
Discontinued Operations			79			(5	)		NM

Total		$	276		$	904			(69	)%

Huntsman International
Segment EBITDA
Polyurethanes		$	122		$	112			9	%
Performance Products			176			94			87	%
Advanced Materials			85			9			844	%
Textile Effects			(7	)		(31	)		(77	)%
Pigments			75			(55	)		NM
Corporate and other			(97	)		(53	)		83	%

	Subtotal		354			76			366	%
Discontinued Operations			79			(5	)		NM

Total		$	433		$	71			510	%

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		Six months ended June 30, 2010 vs. 2009

		Average Selling Price(1)
		Local Currency			Foreign Currency Translation Impact			Sales Volumes(1)
Period-Over-Period Increase (Decrease)
Polyurethanes			21	%		1	%		3	%
Performance Products			6	%		2	%		24	%
Advanced Materials			3	%		2	%		14	%
Textile Effects			5	%		3	%		14	%
Pigments			4	%		1	%		18	%

	Total Company		9	%		2	%		13	%

(1): Excludes revenues and sales volumes from tolling arrangements and byproducts.

NM—Not meaningful

Polyurethanes

The increase in revenues in our Polyurethanes segment for the six months ended June 30, 2010 compared to the same period in 2009 was primarily due to higher MDI sales volumes and higher average selling prices for MDI and PO/MTBE. MDI sales volumes were higher with demand recovery across all major markets as a result of the worldwide economic recovery, while average selling prices for MDI and PO/MTBE increased in response to higher raw material costs. PO/MTBE sales volumes decreased due to a planned 60 day maintenance outage at our Port Neches, Texas PO/MTBE facility in the first quarter of 2010. The increase in segment EBITDA was primarily due to higher MDI sales volumes which were partially offset by the estimated $40 million impact of the planned maintenance outage at our Port Neches, Texas PO/MTBE facility and overall lower MTBE margins.

Performance Products

The increase in revenues in our Performance Products segment for the six months ended June 30, 2010 compared to the same period in 2009 was due to higher sales volumes and higher average selling prices. Sales volumes increased primarily due to higher demand across nearly all product groups and as a result of additional sales related to a portion of our ethylene glycol production that was previously manufactured under tolling arrangements. Average selling prices increased across most product groups in response to higher raw material costs and the strength of major European currencies and the Australian dollar against the U.S. dollar. The increase in segment EBITDA was primarily due to higher sales volumes and higher margins, offset in part by the impact of shut downs during the first quarter of 2010 at our Port Neches, Texas ethylene and ethylene oxide units which resulted in higher costs of approximately $11 million. In addition, during the second quarter of 2010, we recorded a non-recurring $15 million credit to equity income of investment in unconsolidated affiliates to appropriately reflect our investment in the Sasol-Huntsman GmbH and Co. KG joint venture.

Advanced Materials

The increase in revenues in our Advanced Materials segment for the six months ended June 30, 2010 compared to the same period in 2009 was due to higher sales volumes and higher average selling prices. Sales volumes increased in all markets primarily due to the worldwide economic recovery. Average selling prices increased in our base resins business primarily in response to higher raw material costs and reduced product availability in the epoxy resin market, offset in part by lower average selling prices in our specialty components and formulations markets, primarily as a result of changes in our

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product mix and competitive market pressures. The increase in segment EBITDA was primarily due to higher sales volumes and margins and lower restructuring, impairment and plant closing costs, partially offset by higher manufacturing costs. During the six months ended June 30, 2010 and 2009, our Advanced Materials segment recorded restructuring, impairment and plant closing (credits) charges of $(2) million and $15 million, respectively. For more information concerning restructuring activities, see "Note 7. Restructuring, Impairment and Plant Closing Costs" to our condensed consolidated financial statements (unaudited).

Textile Effects

The increase in revenues in our Textile Effects segment for the six months ended June 30, 2010 compared to the same period in 2009 was due to higher average selling prices and higher sales volumes. Average selling prices increased primarily due to favorable changes in product mix. Sales volumes increased across all business lines, primarily in Asia and the Americas, due to the economic recovery. The increase in segment EBITDA was primarily due to higher sales volumes and higher contribution margins, partially offset by higher fixed costs and higher restructuring, impairment and plant closing costs. During the six months ended June 30, 2010 and 2009, our Textile Effects segment recorded restructuring, impairment and plant closing charges of $15 million and $9 million, respectively. For more information concerning restructuring activities, see "Note 7. Restructuring, Impairment and Plant Closing Costs" to our condensed consolidated financial statements (unaudited).

Pigments

The increase in revenues in our Pigments segment for six months ended June 30, 2010 compared to the same period in 2009 was due to higher sales volumes and higher average selling prices. Sales volumes increased primarily due to demand recovery in the Europe, North America, and Asia Pacific regions as a result of the worldwide economic recovery. Average selling prices increased primarily as a result of higher selling prices in all regions of the world. The increase in segment EBITDA was primarily due to higher sales volumes, higher contribution margins and lower restructuring, impairment and plant closing costs. During the six months ended June 30, 2010 and 2009, our Pigments segment recorded restructuring, impairment and plant closing charges of $3 million and $43 million, respectively. For more information concerning restructuring activities, see "Note 7. Restructuring, Impairment and Plant Closing Costs" to our condensed consolidated financial statements (unaudited).

Corporate and other—Huntsman Corporation

Corporate and other includes unallocated corporate overhead, unallocated foreign exchange gains and losses, LIFO inventory valuation reserve adjustments, loss on early extinguishment of debt, income (expenses) associated with the Terminated Merger and related litigation, net income (loss) attributable to noncontrolling interests, unallocated restructuring impairment and plant closing costs, step accounting impacts and non-operating income and expense. For the six months ended June 30, 2010, EBITDA from Corporate and other items decreased by $1,034 million to a loss of $254 million from earnings of $780 million for the same period in 2009. The decrease in EBITDA from Corporate and other for the six months ended June 30, 2010 resulted primarily from a gain of $837 million in the 2009 period related to the Texas Bank Litigation Settlement Agreement. For more information, see "Note 18. (Expenses) Income Associated with the Terminated Merger and Related Litigation" to our condensed consolidated financial statements (unaudited). Additionally, the decrease in EBITDA from Corporate and other was attributable to a $162 million loss on early extinguishment of debt recorded in the six months ended June 30, 2010, and to an increase of LIFO inventory valuation expense of $33 million. For more information regarding the loss on early extinguishment of debt, see "Note 8. Debt" to our condensed consolidated financial statements (unaudited).

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Corporate and other—Huntsman International

Corporate and other includes unallocated corporate overhead, unallocated foreign exchange gains and losses, LIFO inventory valuation reserve adjustments, loss on early extinguishment of debt, net income (loss) attributable to noncontrolling interests, unallocated restructuring impairment and plant closing costs and non-operating income and expense. For the six months ended June 30, 2010, EBITDA from Corporate and other items decreased by $44 million to a loss of $97 million from a loss of $53 million for the same period in 2009. The decrease in EBITDA from Corporate and other for the six months ended June 30, 2010 resulted primarily from an increase of LIFO inventory valuation expense of $33 million and a $16 million loss on early extinguishment of debt recorded in the six months ended June 30, 2010. For more information regarding the loss on early extinguishment of debt, see "Note 8. Debt" to our condensed consolidated financial statements (unaudited).

Discontinued Operations

LIQUIDITY AND CAPITAL RESOURCES

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

Cash

Net cash (used in) provided by operating activities for the six months ended June 30, 2010 and 2009 was $(442) million and $1,009 million, respectively. The increase in cash used in operating activities was primarily attributable to the 2009 settlement proceeds received in connection with the Texas Bank Litigation Settlement Agreement and by a $1,144 million unfavorable variance in operating assets and liabilities for the six months ended June 30, 2010 as compared with the same period in 2009, offset in part by an increase in operating income as described in "—Results of Operations" above. Upon the adoption of new accounting guidance on January 1, 2010, transfers of accounts receivable under our A/R Programs no longer met the criteria for derecognition and off-balance sheet treatment. Accordingly, the amounts outstanding under our A/R Programs are accounted for as secured borrowings and are now on balance sheet. As a result of the adoption of this new guidance, accounts receivable increased by $254 million and a corresponding increase in cash used in operating activities was reflected in the statement of cash flows for the six months ended June 30, 2010.

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Net cash used in investing activities for the six months ended June 30, 2010 and 2009 was $49 million and $120 million, respectively. During the six months ended June 30, 2010 and 2009, we paid $78 million and $100 million, respectively, for capital expenditures. This reduction in capital expenditures was largely attributable to higher 2009 spending on various projects, including the maleic anhydride and MDI expansion projects at our Geismar, Louisiana site. During the six months ended June 30, 2010, we received proceeds of $110 million from the settlement of our insurance claims related to the 2006 fire at our former Port Arthur, Texas plant, $34 million of which was reflected in the statement of cash flows as investing activities.

Net cash (used in) provided by financing activities for the six months ended June 30, 2010 was $(480) million as compared with $747 million in the 2009 period. This increase in net cash used in financing activities was primarily due to higher net prepayments of debt in the 2010 period as compared to the 2009 period and the resulting call premiums paid in association with that debt, partially offset by the revolving loan facility from the A/R Programs that no longer met the criteria for derecognition upon adoption of new accounting guidance. In addition, in 2009 we issued the 2016 Senior Notes and Term Loan C in connection with the Texas Bank Litigation Settlement Agreement.

Changes in Financial Condition

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

			June 30, 2010		December 31, 2009		(Decrease) Increase

Cash and cash equivalents			$	766	$	1,745	$	(979	)	(56	)%
Restricted cash				7		5		2		40	%
Accounts receivable, net				1,483		1,019		464		46	%
Inventories				1,324		1,184		140		12	%
Prepaid expenses				29		42		(13	)	(31	)%
Deferred income taxes				35		36		(1	)	(3	)%
Other current assets				129		109		20		18	%

	Total current assets			3,773		4,140		(367	)	(9	)%

Accounts payable				847		755		92		12	%
Accrued liabilities				568		623		(55	)	(9	)%
Deferred income taxes				2		2		—		—
Current portion of debt				168		431		(263	)	(61	)%

	Total current liabilities			1,585		1,811		(226	)	(12	)%

		Working capital	$	2,188	$	2,329	$	(141	)	(6	)%

Our working capital decreased by $141 million as a result of the net impact of the following significant changes:

•: The decrease in cash and cash equivalents of $979 million resulted from the matters identified in the condensed consolidated statements of cash flows (unaudited).
•: Accounts receivable increased by $464 million mainly due to the inclusion in the June 30, 2010 balance sheet of accounts receivable of $254 million that were previously treated as sold into the A/R programs and as a result of higher sales, partially offset by foreign currency translation as the U.S. dollar strengthened against other relevant currencies during the second quarter of 2010. Upon the adoption of new accounting guidance in 2010, transfers of our accounts receivable under the A/R Programs no longer met the criteria for derecognition and off-balance sheet treatment. Accordingly, the amounts outstanding under the A/R Programs are accounted for as secured borrowings beginning January 1, 2010 and are now on balance sheet. For more

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information, see "Note 8. Debt—Accounts Receivable Securitization" to our condensed consolidated financial statements (unaudited).

•: Inventories increased by $140 million mainly due to higher raw material costs, partially offset by foreign currency translation as the U.S. dollar strengthened against other relevant currencies and an increase in raw materials inventory volumes to support the increase in customer demand.
•: The increase in accounts payable of $92 million was primarily due to higher raw material inventory costs and volumes, partially offset by foreign currency translation as the U.S. dollar strengthened against other relevant currencies.
•: Accrued liabilities decreased by $55 million principally due to payments of accrued restructuring and plant closing costs, accrued rebates and accrued compensation during the six months ended June 30, 2010.
•: Current portion of debt decreased by $263 million. At December 31, 2009, the Convertible Notes were classified as current portion of debt. The Convertible Notes were repaid on January 11, 2010. For more information, see "Note 8. Debt—Senior Credit Facilities" and "—Redemption of Notes" to our condensed consolidated financial statements (unaudited).

Direct and Subsidiary Debt

Transactions Affecting our Debt

Senior Credit Facilities

As of June 30, 2010, our Senior Credit Facilities consisted of (i) our $225 million Revolving Facility; (ii) our $1,302 million Term Loan B; and (iii) our $427 million ($383 million carrying value) Term Loan C. As of June 30, 2010, we had no borrowings outstanding under our Revolving Facility, and we had approximately $29 million (U.S. dollar equivalents) of letters of credit and bank guarantees issued and outstanding under our Revolving Facility. All of our Senior Credit Facilities are obligations of Huntsman International and are not direct obligations of Huntsman Corporation.

On March 9, 2010, Huntsman International entered into the Amendment with JPMorgan Chase Bank, N.A., as successor administrative agent and collateral agent, and the other financial institutions party thereto, which amended certain terms of our Senior Credit Facilities. Among other things, the Amendment

•: replaced Deutsche Bank AG New York Branch as administrative agent, collateral agent and U.K. security trustee with JPMorgan Chase Bank, N.A. as administrative agent and collateral agent and JPMorgan Chase Bank, N.A. or an affiliate thereof as U.K. security trustee;
•: extended the stated maturity of the Revolving Facility to March 9, 2014 and provides for optional extensions of such stated maturity date from time to time with the consent of the lenders and subject to certain specified conditions and exceptions;

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•: limits the aggregate amount of the revolving commitments allowable under the Revolving Facility to an amount up to $300 million, including $225 million currently obtained from the lenders;
•: terminated a waiver that was entered into on April 16, 2009 with respect to the Leverage Covenant;
•: reduces the maximum letter of credit sublimit to $75 million (not including existing letters of credit issued by Deutsche Bank AG New York Branch) and the maximum swing line sublimit to $25 million;
•: increases the applicable LIBOR margin range on revolving loans by 1.75% to 3.50% per annum;
•: increases the unused commitment fee percentage to a range of 0.50% to 0.75%; and
•: amends the mandatory prepayment provisions to permit the reinvestment of certain insurance and condemnation proceeds.

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

•: On April 26, 2010, we prepaid $124 million on Term Loan B and $40 million on Term Loan C with cash flow from operations. In connection with this prepayment, we incurred a loss on early extinguishment of debt of $5 million.
•: On June 22, 2010, we prepaid $83 million on Term Loan B and $27 million on Term Loan C with proceeds from the final settlement of insurance claims. See "Note 17. Casualty Losses and Insurance Recoveries—Port Arthur, Texas Plant Fire." In connection with this prepayment, we incurred a loss on early extinguishment of debt of $2 million.

Accounts Receivable Securitization

Under our A/R Programs, we grant an undivided interest in certain of our trade receivables to the U.S. SPE and the EU SPE. This undivided interest serves as security for the issuance of debt. The A/R Programs provide for financing through a conduit program (in both U.S. dollars and euros). Receivables transferred under the A/R Programs qualified as sales through December 31, 2009. Upon adoption of new accounting guidance in 2010, transfers of accounts receivable under our A/R Programs

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no longer met the criteria for derecognition. Accordingly, the amounts outstanding under our A/R Programs are accounted for as secured borrowings as of January 1, 2010. See "Note 2. Recently Issued Accounting Pronouncements."

2020 Subordinated Notes

Redemption of Notes

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In connection with these redemptions, we recorded a loss on early extinguishment of debt of $155 million.

Other Debt

On June 30, 2010 we amended certain facilities belonging to the Australian Credit Facilities. The amendment among other things, extended the maturity of the facility to June 2015 and amended the interest rate to the Australian index rate plus a margin of 3.75% for borrowings under the revolving facility and 3.5% under the term facility so long as a guarantee remains in place from Huntsman Corporation. In addition, the facility amended the revolver collateral to include the secured interest in eligible receivables of the borrower. The aggregate outstanding balances as of June 30, 2010 under the Australian Credit Facilities was A$34 million (approximately $30 million, of which $17 million is classified as current portion of long term debt).

COMPLIANCE WITH COVENANTS

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

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Short-Term and Long-Term Liquidity

We depend upon our cash, credit facilities, A/R Programs and other debt instruments to provide liquidity for our operations and working capital needs. As of June 30, 2010, we had $1,185 million of combined cash and unused borrowing capacity, consisting of $773 million in cash and restricted cash, $196 million in availability under our Revolving Facility, and $216 million in availability under our A/R Programs.

On March 9, 2010, Huntsman International entered into the Amendment to its existing Senior Credit Facilities. See "—Transactions Affecting our Debt" above. Among other things the Amendment limits the aggregate amount of revolving commitments allowable under the Revolving Facility to an amount up to $300 million, including $225 million currently committed by lenders. As of June 30, 2010 we had no borrowings outstanding under our Revolving Facility, and we had approximately $29 million (U.S. dollar equivalents) of letters of credit and bank guarantees issued and outstanding under our Revolving Facility

Our liquidity can be significantly impacted by various factors. Concerning changes in working capital components for the six months ended June 30, 2010, our accounts receivable (excluding the $254 million effect of the on-balance sheet treatment of the A/R Programs) and inventory, net of accounts payable, increased by approximately $340 million, as reflected in our condensed consolidated statement of cash flows (unaudited). We expect volatility in our working capital components to continue.

On September 8, 2009, we announced the closure of our styrenics facility located at West Footscray, Australia. We ceased operation of the Australian styrenics operations during the first quarter of 2010. During 2009, we recorded closure costs of approximately $63 million ($25 million primarily in severance, $8 million of contract termination costs and a $30 million preliminary estimate of environmental remediation costs) and incurred other closure related costs of approximately $5 million in the first quarter of 2010. We can provide no assurance that the eventual environmental remediation costs will not be materially different from our current estimate. The closure costs are expected to be funded as they are incurred over the next several years, with severance costs to be paid primarily in 2010. During the six months ended June 30, 2010, we paid approximately $20 million of related restructuring costs and have remaining accruals of approximately $44 million for restructuring and environmental remediation costs as of June 30, 2010 to be paid out at a later date. For a discussion of restructuring, impairment and plant closing costs, see "Note 7. Restructuring, Impairment and Plant Closing Costs" to our condensed consolidated financial statements (unaudited).

On April 29, 2006, our former Port Arthur, Texas olefins manufacturing plant (which we sold to Flint Hills Resources in November 2007) experienced a major fire. The plant was covered by property damage and business interruption insurance, subject to a combined deductible of $60 million. We asserted claims related to losses occurring as a result of this fire. Our claims were the subject of litigation and an arbitration proceeding. Prior to December 31, 2009, we received payments on insurance claims with respect to the fire totaling $365 million. On May 14, 2010, we entered into a settlement agreement, pursuant to which we received a final payment totaling $110 million. As a result of this settlement, we recognized a gain of $110 million in discontinued operations during the second

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quarter of 2010. Of the $110 million payment, $34 million was reflected within the statement of cash flows as cash flows from investing activities and the remaining $76 million was reflected as cash flows from operating activities. See "Note 14. Commitments and Contingencies—Legal Matters—Port Arthur Plant Fire Insurance Litigation" and "Note 17. Casualty Losses and Insurance Recoveries—Port Arthur, Texas Plant Fire" to our condensed consolidated financial statements (unaudited). This settlement results in after tax proceeds to us of $92 million. In accordance with relevant provisions of the agreements governing our Senior Credit Facilities, on June 22, 2010, we used these proceeds to prepay $83 million on Term Loan B and $27 million on Term Loan C.

During the six months ended June 30, 2010, we made contributions to our pension and postretirement benefit plans of $72 million. During the remainder of 2010, we expect to contribute an additional amount of approximately $47 million to these plans.

As of June 30, 2010, we have $168 million classified as current portion of debt which consists of certain scheduled term payments and various short-term facilities, including but not limited to, the HPS draft discounting facility in China with $75 million outstanding, the HPS loan facility with $38 million of term loans coming due in the next year, our Australian credit facilities with $17 million classified as current and certain other short term facilities and scheduled amortization payments totaling $38 million. Although we cannot provide assurances, we intend to renew, repay or extend the majority of these short-term facilities in the current period. In addition, on April 26, 2010 we prepaid $124 million of Term Loan B and $40 million of Term loan C with cash flow from operations, and on June 22, 2010, we prepaid $83 million on Term Loan B and $27 million on Term Loan C with proceeds from a fire insurance settlement. See "Note 8. Debt—Senior Credit Facilities" to our condensed consolidated financial statements (unaudited).

Because we currently have sufficient liquidity, we believe that the potentially negative effects of the current credit environment have had only limited impacts on us. Huntsman International successfully accessed the credit markets during the six months ended June 30, 2010 to raise $350 million of subordinated debt which we used to redeem existing subordinated debt and completed an amendment to our Senior Credit Facilities which, among other things, extended the maturity of our Revolving Facility by four years to March 2014. See "Note 8. Debt" to our condensed consolidated financial statements (unaudited).

Capital Expenditures

During 2010, we expect to spend between $225 million and $250 million for capital expenditures. We expect to fund capital expenditures through a combination of available cash and cash flows from operations.

Receivables Securitization

Receivables transferred under the A/R Programs qualified as sales through December 31, 2009. Upon adoption of new accounting guidance in 2010, transfers of accounts receivable under our A/R Programs no longer met the criteria for derecognition. Accordingly, the amounts outstanding under our new A/R Programs are accounted for as secured borrowings as of January 1, 2010. For a discussion of our A/R Programs, see "Note 8. Debt—Accounts Receivable Securitization" to our condensed consolidated financial statements (unaudited).

Off-Balance Sheet Arrangements

Guarantees

Our unconsolidated joint venture, the Arabian Amines Company, obtained various loan commitments in the aggregate amount of approximately $195 million in U.S. dollar equivalents, of

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which $192 million was drawn as of June 30, 2010. Initial production commenced in the second quarter of 2010 with final plant testing and certification expected to be complete in the third quarter of 2010. The plant will have approximate annual capacity of 60 million pounds. We will purchase and sell all of the production from this joint venture. We have provided certain guarantees of approximately $14 million for these commitments, which will terminate upon completion of the project and satisfaction of certain conditions. We have estimated that the fair value of these guarantees was nil as of the closing date of this transaction and, accordingly, no amounts have been recorded.

Restructuring, Impairment and Plant Closing Costs

For a discussion of restructuring, impairment and plant closing costs, see "Note 7. Restructuring, Impairment and Plant Closing Costs" to our condensed consolidated financial statements (unaudited).

Legal Proceedings

For a discussion of legal proceedings, see "Note 14. Commitments and Contingencies—Legal Matters" to our condensed consolidated financial statements (unaudited).

Environmental, Health and Safety Matters

For a discussion of environmental, health and safety matters, see "Note 15. Environmental, Health and Safety Matters" to our condensed consolidated financial statements (unaudited).

Recently Issued Accounting Pronouncements

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

Critical Accounting Policies

Our critical accounting policies are presented in Management's Discussion and Analysis of Financial Condition and Results of Operations statements included in the Annual Report on Form 10-K for the year ended December 31, 2009 for our Company and Huntsman International filed on February 19, 2010 and updated by our Form 8-K filed on June 8, 2010.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

On January 19, 2010, we entered into a five-year interest rate contract to hedge the variability caused by monthly changes in cash flow due to associated changes in LIBOR under our Senior Credit Facilities. The notional value of the contract is $50 million and was designated as a cash flow hedge. The effective portion of the changes in the fair value of the swap was recorded in other comprehensive loss. We will pay a fixed 2.8% on the hedge and receive the one-month LIBOR rate. As of June 30, 2010, the fair value of the hedge was $2 million and is recorded in other noncurrent liabilities.

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$350 million from these counterparties. On March 15 and September 15 of each year, we will receive U.S. dollar interest payments of approximately $15 million (equivalent to an annual rate of 8.625%) and make interest payments of approximately €11 million (equivalent to an annual rate of approximately 8.41%). This swap is designated as a hedge of net investment for financial reporting purposes. As of June 30, 2010, the fair value of this swap was $51 million and was recorded as noncurrent assets in our condensed consolidated balance sheet (unaudited). For the three and six months ended June 30, 2010, the effective portion of the changes in the fair value of $32 million and $37 million, respectively, was recorded in other comprehensive income, with the ineffectiveness of $15 million and $14 million, respectively, recorded as a reduction to interest expense. On July 15, 2010, we changed the method of assessing effectiveness of this hedge from the spot method to the forward method.

Otherwise, we do not believe there are any material changes to our market risks from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2009 for our Company and Huntsman International filed on February 19, 2010.

ITEM 4. CONTROLS AND PROCEDURES

Our management, with the participation of our chief executive officer and chief financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act")) as of June 30, 2010. Based on this evaluation, our chief executive officer and chief financial officer have concluded that, as of June 30, 2010, our disclosure controls and procedures were effective, in that they ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms, and (2) accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

No changes to our internal control over financial reporting occurred during the three months ended June 30, 2010 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). However, we can only give reasonable assurance that our internal controls over financial reporting will prevent or detect material misstatements on a timely basis. Ineffective internal controls over financial reporting could cause investors to lose confidence in our reported financial information and could result in a lower trading price for our securities.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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

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

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

OTHER LEGAL PROCEEDINGS

For a discussion of other legal proceedings, see "Note 14. Commitments and Contingencies—Legal Matters" and "Note 15. Environmental, Health and Safety Matters—Remediation Liabilities" to our condensed consolidated financial statements (unaudited).

ITEM 1A. RISK FACTORS

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

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

ISSUER PURCHASES OF EQUITY SECURITIES

The following table presents shares of restricted stock granted under our stock incentive plan that we withheld upon vesting to satisfy our tax withholding obligations during the three months ended June 30, 2010. We have no publicly announced plans or programs to repurchase our common stock.

Period		Average Price Paid per Share

April	—	$	—	—	—
May	588		11.57	—	—
June	—		—	—	—

Total	588		11.57	—	—

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ITEM 6. EXHIBITS


	10.1		Sworn Statement in Proof of Loss and Full and Final Settlement, Release, and Indemnity Agreement, dated May 14, 2010, by and among Huntsman Corporation, International Risk Insurance Company and the reinsurance carriers specified therein (incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed on May 19, 2010).
	31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	32.1		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	32.2		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	101		The following financial information from the Quarterly Report on Form 10-Q of Huntsman Corporation and Huntsman International LLC for the quarter ended June 30, 2010, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets at June 30, 2010 and December 31, 2009 for each of Huntsman Corporation and Huntsman International LLC; (ii) Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and six months ended June 30, 2010 and 2009 for each of Huntsman Corporation and Huntsman International LLC; (iii) Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2010 and 2009 for each of Huntsman Corporation and Huntsman International LLC; (iv) Condensed Consolidated Statements of Equity for each of Huntsman Corporation and Huntsman International LLC; and (v) the Notes to Condensed Consolidated Financial Statements, tagged as blocks of text.*

*: Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

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SIGNATURES

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

Dated: August 5, 2010


		HUNTSMAN CORPORATION HUNTSMAN INTERNATIONAL LLC
		By:		/s/ J. KIMO ESPLIN J. Kimo Esplin Executive Vice President and Chief Financial Officer (Authorized Signatory and Principal Financial Officer)
		By:		/s/ L. RUSSELL HEALY L. Russell Healy Vice President and Controller (Authorized Signatory and Principal Accounting Officer)

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EXHIBIT INDEX


	10.1		Sworn Statement in Proof of Loss and Full and Final Settlement, Release, and Indemnity Agreement, dated May 14, 2010, by and among Huntsman Corporation, International Risk Insurance Company and the reinsurance carriers specified therein (incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed on May 19, 2010).
	31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	32.1		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	32.2		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	101		The following financial information from the Quarterly Report on Form 10-Q of Huntsman Corporation and Huntsman International LLC for the quarter ended June 30, 2010, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets at June 30, 2010 and December 31, 2009 for each of Huntsman Corporation and Huntsman International LLC; (ii) Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and six months ended June 30, 2010 and 2009 for each of Huntsman Corporation and Huntsman International LLC; (iii) Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2010 and 2009 for each of Huntsman Corporation and Huntsman International LLC; (iv) Condensed Consolidated Statements of Equity for each of Huntsman Corporation and Huntsman International LLC; and (v) the Notes to Condensed Consolidated Financial Statements, tagged as blocks of text.*

*: Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

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