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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, 2011
OR
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

Commission File Number	Exact Name of Registrant as Specified in its Charter, Principal Office Address and Telephone Number	State of Incorporation or Organization	I.R.S. Employer Identification No.

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 ý	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 the 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 26, 2011, 241,793,529 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, 2011

TABLE OF CONTENTS

		Page

PART I	FINANCIAL INFORMATION	3
ITEM 1.	Financial Statements:	3
	Huntsman Corporation and Subsidiaries:
	Condensed Consolidated Balance Sheets (Unaudited)	3
	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)	4
	Condensed Consolidated Statements of Cash Flows (Unaudited)	5
	Condensed Consolidated Statements of Equity (Unaudited)	7
	Huntsman International LLC and Subsidiaries:
	Condensed Consolidated Balance Sheets (Unaudited)	8
	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)	9
	Condensed Consolidated Statements of Cash Flows (Unaudited)	10
	Condensed Consolidated Statements of Equity (Unaudited)	12
	Huntsman Corporation and Subsidiaries and Huntsman International LLC and Subsidiaries:
	Notes to Condensed Consolidated Financial Statements (Unaudited)	13
ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	67
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	92
ITEM 4.	Controls and Procedures	94
PART II	OTHER INFORMATION	95
ITEM 1.	Legal Proceedings	95
ITEM 1A.	Risk Factors	95
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	95
ITEM 6.	Exhibits	96

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, 2011			December 31, 2010

ASSETS
Current assets:
	Cash and cash equivalents(a)		$	683		$	966
	Restricted cash(a)			7			7
	Accounts and notes receivable (net of allowance for doubtful accounts of $55 and $52, respectively), ($731 and $589 pledged as collateral, respectively)(a)			1,836			1,413
	Accounts receivable from affiliates			1			15
	Inventories(a)			1,746			1,396
	Prepaid expenses			34			46
	Deferred income taxes			2			1
	Other current assets(a)			271			164

		Total current assets		4,580			4,008
Property, plant and equipment, net(a)				3,825			3,605
Investment in unconsolidated affiliates				192			234
Intangible assets, net(a)				109			105
Goodwill				111			94
Deferred income taxes				188			166
Notes receivable from affiliates				6			7
Other noncurrent assets(a)				465			495

		Total assets	$	9,476		$	8,714

LIABILITIES AND EQUITY
Current liabilities:
	Accounts payable(a)		$	1,110		$	842
	Accounts payable to affiliates			22			45
	Accrued liabilities(a)			758			628
	Deferred income taxes			20			19
	Current portion of debt(a)			289			519

		Total current liabilities		2,199			2,053
Long-term debt(a)				3,886			3,627
Notes payable to affiliates				4			4
Deferred income taxes				307			314
Other noncurrent liabilities(a)				844			866

		Total liabilities		7,240			6,864
Commitments and contingencies (Notes 13 and 14)
Equity
Huntsman Corporation stockholders' equity:
	Common stock $0.01 par value, 1,200,000,000 shares authorized, 241,793,529 and 239,549,365 issued and 239,732,121 and 236,799,455 outstanding in 2011 and 2010, respectively			2			2
	Additional paid-in capital			3,225			3,186
	Unearned stock-based compensation			(16	)		(11	)
	Accumulated deficit			(970	)		(1,090	)
	Accumulated other comprehensive loss			(142	)		(297	)

		Total Huntsman Corporation stockholders' equity		2,099			1,790
Noncontrolling interests in subsidiaries				137			60

		Total equity		2,236			1,850

		Total liabilities and equity	$	9,476		$	8,714

(a): At June 30, 2011 and December 31, 2010, respectively, $66 and $7 of cash and cash equivalents, $2 and nil of restricted cash, $37 and $8 of accounts and notes receivable (net), $50 and $45 of inventories, $3 and $2 of other current assets, $429 and $275 of property, plant and equipment (net), $26 and $7 of intangible assets (net), $20 and $18 of other noncurrent assets, $74 and $56 of accounts payable, $19 and $16 of accrued liabilities, $27 and $15 of current portion of debt, $286 and $185 of long-term debt, and $98 and $109 of other noncurrent liabilities from consolidated variable interest entities are included in the respective Balance Sheet captions above. See "Note 5. Variable Interest Entities."

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,

			2011			2010			2011			2010
Revenues:
	Trade sales, services and fees, net		$	2,896		$	2,280		$	5,522		$	4,329
	Related party sales			38			63			91			108

		Total revenues		2,934			2,343			5,613			4,437
Cost of goods sold				2,433			1,958			4,652			3,771

Gross profit				501			385			961			666
Operating expenses:
	Selling, general and administrative			256			208			474			426
	Research and development			42			36			81			72
	Other operating (income) expense			(26	)		(3	)		8			(1	)
	Restructuring, impairment and plant closing costs			9			17			16			20

		Total expenses		281			258			579			517

Operating income				220			127			382			149
Interest expense, net				(65	)		(43	)		(124	)		(104	)
Equity in income of investment in unconsolidated affiliates				2			16			4			17
Loss on early extinguishment of debt				—			(7	)		(3	)		(162	)
Expenses associated with the Terminated Merger and related litigation				—			(1	)		—			(1	)
Other income				1			1			1			1

Income (loss) from continuing operations before income taxes				158			93			260			(100	)
Income tax expense				(34	)		(39	)		(56	)		(5	)

Income (loss) from continuing operations				124			54			204			(105	)
(Loss) income from discontinued operations, net of tax				(1	)		62			(15	)		49

Income (loss) before extraordinary gain				123			116			189			(56	)
Extraordinary gain on the acquisition of a business, net of tax of nil				1			—			2			—

Net income (loss)				124			116			191			(56	)
Net income attributable to noncontrolling interests				(10	)		(2	)		(15	)		(2	)

Net income (loss) attributable to Huntsman Corporation			$	114		$	114		$	176		$	(58	)

Net income (loss)			$	124		$	116		$	191		$	(56	)
Other comprehensive income (loss)				60			(64	)		156			(108	)

Comprehensive income (loss)				184			52			347			(164	)
Comprehensive income attributable to noncontrolling interests				(10	)		(2	)		(16	)		(2	)

Comprehensive income (loss) attributable to Huntsman Corporation			$	174		$	50		$	331		$	(166	)

Basic income (loss) per share:
Income (loss) from continuing operations attributable to Huntsman Corporation common stockholders			$	0.48		$	0.22		$	0.79		$	(0.46	)
Income (loss) from discontinued operations attributable to Huntsman Corporation common stockholders, net of tax				—			0.26			(0.06	)		0.21
Extraordinary gain on the acquisition of a business attributable to Huntsman Corporation common stockholders, net of tax				—			—			0.01			—

Net income (loss) attributable to Huntsman Corporation common stockholders			$	0.48		$	0.48		$	0.74		$	(0.25	)

Weighted average shares				239.4			236.4			238.5			235.6

Diluted income (loss) per share:
Income (loss) from continuing operations attributable to Huntsman Corporation common stockholders			$	0.47		$	0.21		$	0.78		$	(0.46	)
Income (loss) from discontinued operations attributable to Huntsman Corporation common stockholders, net of tax				—			0.26			(0.07	)		0.21
Extraordinary gain on the acquisition of a business attributable to Huntsman Corporation common stockholders, net of tax				—			—			0.01			—

Net income (loss) attributable to Huntsman Corporation common stockholders			$	0.47		$	0.47		$	0.72		$	(0.25	)

Weighted average shares				243.7			240.8			243.2			235.6

Amounts attributable to Huntsman Corporation common stockholders:
Income (loss) from continuing operations			$	114		$	52		$	189		$	(107	)
(Loss) income from discontinued operations, net of tax				(1	)		62			(15	)		49
Extraordinary gain on the acquisition of a business, net of tax				1			—			2			—

Net income (loss)			$	114		$	114		$	176		$	(58	)

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,

		2011			2010
Operating Activities:
Net income (loss)		$	191		$	(56	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Gain on the consolidation of a variable interest entity			(12	)		—
Equity in income of investment in unconsolidated affiliates			(4	)		(17	)
Depreciation and amortization			214			196
(Gain) loss on disposal of businesses/assets, net			(2	)		2
Loss on early extinguishment of debt			3			162
Noncash interest expense			19			2
Deferred income taxes			(18	)		34
Noncash gain on foreign currency transactions			—			(3	)
Stock-based compensation			16			12
Portion of insurance settlement representing cash provided by investing activities			—			(34	)
Other, net			2			8
Changes in operating assets and liabilities:
	Accounts and notes receivable		(325	)		(262	)
	Accounts receivable from A/R Programs		—			(254	)
	Inventories		(270	)		(205	)
	Prepaid expenses		10			12
	Other current assets		(121	)		(24	)
	Other noncurrent assets		37			(80	)
	Accounts payable		200			127
	Accrued liabilities		119			(30	)
	Other noncurrent liabilities		(58	)		(32	)

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

Investing Activities:
Capital expenditures			(124	)		(78	)
Proceeds from settlements treated as reimbursement of capital expenditures			3			34
Cash assumed in connection with the initial consolidation of a variable interest entity			28			—
Cash paid for acquisition of a business			(23	)		—
Proceeds from sale of business/assets			3			—
Investment in unconsolidated affiliates			(10	)		(4	)
Cash received from unconsolidated affiliates			13			—
Change in restricted cash			—			(1	)
Other			(1	)		—

Net cash used in investing activities			(111	)		(49	)

(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,

		2011			2010
Financing Activities:
Net borrowings (repayments) under revolving loan facilities			4		$	(4	)
Revolving loan facility from A/R Programs			—			254
Net borrowings on overdraft facilities			11			5
Repayments of short-term debt			(100	)		(94	)
Borrowings on short-term debt			76			115
Repayments of long-term debt			(170	)		(895	)
Proceeds from issuance of long-term debt			71			375
Repayments of notes payable			(15	)		(22	)
Borrowings on notes payable			1			4
Debt issuance costs paid			(7	)		(17	)
Call premiums related to early extinguishment of debt			(3	)		(153	)
Dividends paid to common stockholders			(48	)		(48	)
Repurchase and cancellation of stock awards			(8	)		(6	)
Proceeds from issuance of common stock			3			2
Excess tax benefit related to stock-based compensation			10			4
Other, net			(3	)		—

Net cash used in financing activities			(178	)		(480	)

Effect of exchange rate changes on cash			5			(8	)

Decrease in cash and cash equivalents			(283	)		(979	)
Cash and cash equivalents at beginning of period			966			1,745

Cash and cash equivalents at end of period			683		$	766

Supplemental cash flow information:
	Cash paid for interest		108		$	97
	Cash paid for income taxes		35			10

During the six months ended June 30, 2011 and 2010, the amount of capital expenditures in accounts payable decreased by $8 million and $10 million, respectively.

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

	Shares
	Shares													Accumulated other comprehensive (loss) income
	Common stock			Common stock		Additional paid-in capital		Unearned stock-based compensation			Accumulated deficit			Accumulated other comprehensive (loss) income			Noncontrolling interests in subsidiaries		Total equity
Balance, January 1, 2011		236,799,455		$	2	$	3,186	$	(11	)	$	(1,090	)	$	(297	)	$	60	$	1,850
Net income		—			—		—		—			176			—			15		191
Other comprehensive income		—			—		—		—			—			155			1		156
Consolidation of a variable interest entity		—			—		—		—			—			—			61		61
Issuance of nonvested stock awards		—			—		11		(11	)		—			—			—		—
Vesting of stock awards		2,211,143			—		13		—			—			—			—		13
Recognition of stock-based compensation		—			—		2		6			—			—			—		8
Repurchase and cancellation of stock awards		(503,913	)		—		—		—			(8	)		—			—		(8	)
Stock options exercised		1,225,436			—		3		—			—			—			—		3
Excess tax benefit related to stock-based compensation		—			—		10		—			—			—			—		10
Dividends paid on common stock		—			—		—		—			(48	)		—			—		(48	)

Balance, June 30, 2011		239,732,121		$	2	$	3,225	$	(16	)	$	(970	)	$	(142	)	$	137	$	2,236

	Huntsman Corporation Stockholders

	Shares
	Shares													Accumulated other comprehensive (loss) income
	Common stock			Common stock		Additional paid-in capital		Unearned stock-based compensation			Accumulated deficit			Accumulated other comprehensive (loss) income			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 paid on common stock		—			—		—		—			(48	)		—			—		(48	)

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

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, 2011			December 31, 2010

ASSETS
Current assets:
	Cash and cash equivalents(a)		$	306		$	561
	Restricted cash(a)			7			7
	Accounts and notes receivable (net of allowance for doubtful accounts of $55 and $52, respectively), ($731 and $589 pledged as collateral, respectively)(a)			1,836			1,413
	Accounts receivable from affiliates			72			100
	Inventories(a)			1,746			1,396
	Prepaid expenses			33			45
	Deferred income taxes			41			40
	Other current assets(a)			266			160

		Total current assets		4,307			3,722
Property, plant and equipment, net(a)				3,701			3,469
Investment in unconsolidated affiliates				192			234
Intangible assets, net(a)				111			107
Goodwill				111			94
Deferred income taxes				201			179
Notes receivable from affiliates				6			7
Other noncurrent assets(a)				465			495

		Total assets	$	9,094		$	8,307

LIABILITIES AND EQUITY
Current liabilities:
	Accounts payable(a)		$	1,110		$	840
	Accounts payable to affiliates			29			59
	Accrued liabilities(a)			757			626
	Deferred income taxes			64			63
	Note payable to affiliate			100			100
	Current portion of debt(a)			289			519

		Total current liabilities		2,349			2,207
	Long-term debt(a)			3,886			3,627
	Notes payable to affiliates			439			439
	Deferred income taxes			87			94
	Other noncurrent liabilities(a)			837			852

		Total liabilities		7,598			7,219
Commitments and contingencies (Notes 13 and 14)
Equity
Huntsman International LLC members' equity:
	Members' equity, 2,728 units issued and outstanding			3,074			3,049
	Accumulated deficit			(1,519	)		(1,667	)
	Accumulated other comprehensive loss			(196	)		(354	)

		Total Huntsman International LLC members' equity		1,359			1,028
Noncontrolling interests in subsidiaries				137			60

		Total equity		1,496			1,088

		Total liabilities and equity	$	9,094		$	8,307

(b): At June 30, 2011 and December 31, 2010, respectively, $66 and $7 of cash and cash equivalents, $2 and nil of restricted cash, $37 and $8 of accounts and notes receivable (net), $50 and $45 of inventories, $3 and $2 of other current assets, $429 and $275 of property, plant and equipment (net), $26 and $7 of intangible assets (net), $20 and $18 of other noncurrent assets, $74 and $56 of accounts payable, $19 and $16 of accrued liabilities, $27 and $15 of current portion of debt, $286 and $185 of long-term debt, and $98 and $109 of other noncurrent liabilities from consolidated variable interest entities are included in the respective Balance Sheet captions above. See "Note 5. Variable Interest Entities."

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,

			2011			2010			2011			2010
Revenues:
Trade sales, services and fees, net			$	2,896		$	2,280		$	5,522		$	4,329
Related party sales				38			63			91			108

		Total revenues		2,934			2,343			5,613			4,437
Cost of goods sold				2,429			1,955			4,643			3,763

Gross profit				505			388			970			674
Operating expenses:
	Selling, general and administrative			255			208			472			423
	Research and development			42			36			81			72
	Other operating (income) expense			(26	)		(4	)		8			(11	)
	Restructuring, impairment and plant closing costs			9			17			16			20

		Total expenses		280			257			577			504

Operating income				225			131			393			170
Interest expense, net				(67	)		(47	)		(131	)		(113	)
Equity in income of investment in unconsolidated affiliates				2			16			4			17
Loss on early extinguishment of debt				—			(7	)		(3	)		(16	)
Other income				1			2			1			2

Income from continuing operations before income taxes				161			95			264			60
Income tax expense				(34	)		(38	)		(56	)		(16	)

Income from continuing operations				127			57			208			44
(Loss) income from discontinued operations, net of tax				(1	)		62			(15	)		49

Income before extraordinary gain				126			119			193			93
Extraordinary gain on the acquisition of a business, net of tax of nil				1			—			2			—

Net income				127			119			195			93
Net income attributable to noncontrolling interests				(10	)		(2	)		(15	)		(2	)

Net income attributable to Huntsman International LLC			$	117		$	117		$	180		$	91

Net income			$	127		$	119		$	195		$	93
Other comprehensive income (loss)				61			(63	)		159			(106	)

Comprehensive income (loss)				188			56			354			(13	)
Comprehensive income attributable to noncontrolling interests				(10	)		(2	)		(16	)		(2	)

Comprehensive income (loss) attributable to Huntsman International LLC			$	178		$	54		$	338		$	(15	)

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,

		2011			2010
Operating Activities:
Net income		$	195		$	93
Adjustments to reconcile net income to net cash used in operating activities:
Gain on the consolidation of a variable interest entity			(12	)		—
Equity in income of investment in unconsolidated affiliates			(4	)		(17	)
Depreciation and amortization			203			184
(Gain) loss on disposal of businesses/assets, net			(2	)		2
Loss on early extinguishment of debt			3			16
Noncash interest expense			25			11
Deferred income taxes			(19	)		37
Noncash gain on foreign currency transactions			—			(3	)
Noncash compensation			15			11
Portion of insurance settlement representing cash provided by investing activities			—			(34	)
Other, net			2			7
Changes in operating assets and liabilities:
	Accounts and notes receivable		(325	)		(262	)
	Accounts receivable from A/R Programs		—			(254	)
	Inventories		(270	)		(205	)
	Prepaid expenses		12			14
	Other current assets		(121	)		(14	)
	Other noncurrent assets		37			(80	)
	Accounts payable		194			132
	Accrued liabilities		119			(21	)
	Other noncurrent liabilities		(55	)		(30	)

Net cash used in operating activities			(3	)		(413	)

Investing Activities:
Capital expenditures			(124	)		(78	)
Proceeds from settlements treated as reimbursement of capital expenditures			3			34
Cash assumed in connection with the initial consolidation of a variable interest entity			28			—
Cash paid for acquisition of a business			(23	)		—
Proceeds from sale of business/assets			3			—
Decrease (increase) in receivable from affiliate			8			(46	)
Investment in unconsolidated affiliates			(10	)		(4	)
Cash received from unconsolidated affiliates			13			—
Change in restricted cash			—			(1	)
Other			(1	)		—

Net cash used in investing activities			(103	)		(95	)

(Continued)

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

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

(Dollars in Millions)

		Six months ended June 30,

		2011			2010
Financing Activities:
Net borrowings (repayments) under revolving loan facilities		$	4		$	(4	)
Revolving loan facility from A/R Programs			—			254
Net borrowings on overdraft facilities			11			5
Repayments of short-term debt			(100	)		(94	)
Borrowings on short-term debt			76			115
Repayments of long-term debt			(170	)		(659	)
Proceeds from issuance of long-term debt			71			375
Repayments of notes payable to affiliate			—			(125	)
Proceeds from notes payable to affiliate			—			110
Repayments of notes payable			(15	)		(22	)
Borrowings on notes payable			1			4
Debt issuance costs paid			(7	)		(17	)
Call premiums related to early extinguishment of debt			(3	)		(7	)
Dividends paid to parent			(32	)		—
Excess tax benefit related to stock-based compensation			10			4

Net cash used in financing activities			(154	)		(61	)

Effect of exchange rate changes on cash			5			(8	)

Decrease in cash and cash equivalents			(255	)		(577	)
Cash and cash equivalents at beginning of period			561			919

Cash and cash equivalents at end of period		$	306		$	342

Supplemental cash flow information:
	Cash paid for interest	$	108		$	88
	Cash paid for income taxes		35			9

During the six months ended June 30, 2011 and 2010, the amount of capital expenditures in accounts payable decreased by $8 million and $10 million, respectively. During the six months ended June 30, 2011 and 2010, Huntsman Corporation contributed $15 million and $11 million, respectively, related to stock-based compensation.

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

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)

(Dollars in Millions)

	Huntsman International LLC Members

	Members' equity
	Members' equity				Accumulated deficit			Accumulated other comprehensive (loss) income			Noncontrolling interests in subsidiaries		Total equity
	Units		Amount		Accumulated deficit			Accumulated other comprehensive (loss) income			Noncontrolling interests in subsidiaries		Total equity
Balance, January 1, 2011		2,728	$	3,049	$	(1,667	)	$	(354	)	$	60	$	1,088
Net income		—		—		180			—			15		195
Other comprehensive income		—		—		—			158			1		159
Consolidation of a variable interest entity		—		—		—			—			61		61
Contributions from parent		—		15		—			—			—		15
Dividend paid to parent		—		—		(32	)		—			—		(32	)
Excess tax benefit related to stock-based compensation		—		10		—			—			—		10

Balance, June 30, 2011		2,728	$	3,074	$	(1,519	)	$	(196	)	$	137	$	1,496

	Huntsman International LLC Members

	Members' equity
	Members' equity				Accumulated deficit			Accumulated other comprehensive (loss) income			Noncontrolling interests in subsidiaries		Total equity
	Units		Amount		Accumulated deficit			Accumulated other comprehensive (loss) income			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		—		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

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

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HUNTSMAN CORPORATION AND SUBSIDIARIES

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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. 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, 2010 for our Company and Huntsman International.

DESCRIPTION OF BUSINESS

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

We operate in five segments: Polyurethanes, Performance Products, Advanced Materials, Textile Effects and Pigments. Our Polyurethanes, Performance Products, Advanced Materials and Textile Effects segments produce differentiated organic chemical products and our Pigments segment produces inorganic chemical products.

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

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

1. GENERAL (Continued)

company. Since then, we have grown through a series of acquisitions and now own a global portfolio of businesses.

We operate all of our businesses through Huntsman International, our 100% owned subsidiary. Huntsman International is a Delaware limited liability company.

HUNTSMAN CORPORATION AND HUNTSMAN INTERNATIONAL FINANCIAL STATEMENTS

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

•: 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;
•: expenses associated with our terminated merger with a subsidiary of Hexion (the "Terminated Merger"); and
•: a note payable from Huntsman International to us.

PRINCIPLES OF CONSOLIDATION

Our condensed consolidated financial statements (unaudited) include the accounts of our wholly-owned and majority-owned subsidiaries and any variable interest entities for which we are the primary beneficiary. All intercompany accounts and transactions have been eliminated, except for intercompany sales between continuing and discontinued operations.

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 consolidated financial statements for prior periods have been reclassified to conform with the current presentation. Beginning in 2011, we reclassified bank accepted drafts in China with maturities greater than 90 days from receipt from accounts receivable to other current assets.

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

1. GENERAL (Continued)

RECENT DEVELOPMENTS

Redemption of 7.375% Senior Subordinated Notes Due 2015

On July 25, 2011, Huntsman International redeemed the remaining $75 million of its 7.375% senior subordinated notes due 2015. The total redemption payment, excluding accrued interest, was $77 million, which included $2 million of call premiums. We expect to record a loss on early extinguishment of debt for this transaction in the third quarter of 2011 of $2 million.

2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

ACCOUNTING PRONOUNCEMENTS ADOPTED DURING 2011

In October 2009, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("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 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 significantly expand the required disclosures related to multiple-deliverable revenue arrangements. The amendments in this ASU were effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning after June 15, 2010. The initial adoption of this statement did not have a significant impact on our condensed consolidated financial statements (unaudited).

In December 2010, the FASB Emerging Issues Task Force ("EITF") issued ASU No. 2010-29, Business Combinations (Topic 805)—Disclosure of Supplementary Pro Forma Information for Business Combinations, which requires public entities that present comparative financial statements to disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred at the beginning of the comparable prior annual reporting period only. The amendments in this ASU also expand the supplemental pro forma disclosures under Topic 805 to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The amendments in this ASU are effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. We complied with the disclosure requirements of this standard in connection with our April 2, 2011 acquisition of Laffans Petrochemicals Limited and in connection with our April 1, 2011 consolidation of the Sasol-Huntsman GmbH and Co. KG ("Sasol-Huntsman") joint venture. See "Note 3. Business Combinations" and "Note 5. Variable Interest Entities."

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

2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (Continued)

ACCOUNTING PRONOUNCEMENTS PENDING ADOPTION IN FUTURE PERIODS

In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs, providing a consistent definition of fair value between U.S. GAAP and International Financial Reporting Standards ("IFRSs") as well as developing common requirements for measuring fair value and for disclosing information about fair value measurements in accordance with U.S. GAAP and IFRSs. The amendments in this ASU are to be applied prospectively and will be effective during interim and annual periods beginning after December 15, 2011. We do not expect the adoption of the amendments in this ASU to have a significant impact on our condensed consolidated financial statements (unaudited).

In June 2011, the FASB issued ASU No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income, requiring entities to present net income and other comprehensive income in either a single continuous statement of comprehensive income or in two separate, but consecutive, statements of net income and other comprehensive income. The option to present components of other comprehensive income as part of the statement of equity is eliminated. The amendments do not change the option to present components of other comprehensive income either net of related tax effects or before related tax effects, with one amount shown for the aggregate income tax expense or benefit related to the total of other comprehensive income components. The amendments in this ASU should be applied retrospectively and will be effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. We do not expect the adoption of the amendments in this ASU to have a significant impact on our condensed consolidated financial statements (unaudited).

3. BUSINESS COMBINATIONS

LAFFANS ACQUISITION

On April 2, 2011, we completed the acquisition of the chemical business of Laffans Petrochemicals Limited ("Laffans"), an amines and surfactants manufacturer located in Ankleshwar, India (the "Laffans Acquisition"). The acquisition cost of approximately $23 million remains subject to finalization of closing working capital. The acquired business has been integrated into our Performance Products segment. Transaction costs charged to expense related to this acquisition were not significant.

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

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

3. BUSINESS COMBINATIONS (Continued)

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


Acquisition cost		$	23

Fair value of assets acquired and liabilities assumed:
	Accounts receivable	$	10
	Inventories		2
	Other current assets		2
	Property, plant and equipment		14
	Accounts payable		(3	)
	Accrued liabilities		(1	)
	Other noncurrent liabilities		(1	)

Total fair value of net assets acquired		$	23

The acquisition cost allocation is preliminary pending final determination of the fair value of assets acquired and liabilities assumed, including final valuation of property, plant and equipment, intangible assets and the determination of related deferred taxes. For purposes of this preliminary allocation of fair value, we have assigned any excess of the acquisition cost of historical carrying values to property, plant and equipment and no amounts have been allocated to goodwill. It is possible that changes to this allocation could occur.

If this acquisition were to have occurred on January 1, 2010, the following estimated pro forma revenues and net income (loss) attributable to Huntsman Corporation and Huntsman International would have been reported (dollars in millions):

Huntsman Corporation

	Pro Forma

	Three Months Ended June 30,		Six Months Ended June 30,
	2010		2011		2010
Revenues	$	2,355	$	5,627	$	4,461
Net income (loss) attributable to Huntsman Corporation		114		177		(58	)

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

3. BUSINESS COMBINATIONS (Continued)

Huntsman International

	Pro Forma

	Three Months Ended June 30,		Six Months Ended June 30,
	2010		2011		2010
Revenues	$	2,355	$	5,627	$	4,461
Net income attributable to Huntsman International		117		181		91

4. INVENTORIES

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

	June 30, 2011			December 31, 2010

Raw materials and supplies	$	403		$	321
Work in progress		107			99
Finished goods		1,323			1,043

Total		1,833			1,463
LIFO reserves		(87	)		(67	)

Net	$	1,746		$	1,396

As of June 30, 2011 and December 31, 2010, approximately 10% and 12%, respectively, of inventories were recorded using the LIFO cost method.

In the normal course of operations we, at times, exchange raw materials and finished goods with other companies for the purpose of reducing transportation costs. The net nonmonetary open exchange positions are valued at cost. The amounts included in inventory under nonmonetary open exchange agreements receivable by us as of June 30, 2011 and December 31, 2010 were $4 million and $3 million, respectively. Other open exchanges are settled in cash and result in a net deferred profit margin. The amounts payable under these open exchange agreements as of June 30, 2011 and December 31, 2010 were $1 million and nil, respectively.

5. VARIABLE INTEREST ENTITIES

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

•: Rubicon LLC manufactures products for our Polyurethanes segment. The joint venture is structured such that the total equity investment at risk is not sufficient to permit it to finance its

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

5. VARIABLE INTEREST ENTITIES (Continued)

activities without additional financial support. Under the Rubicon LLC operating agreement, 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 ("Pacific Iron Products") manufactures products for our Pigments segment. In this joint venture, we supply all the raw materials through a fixed cost supply agreement, operate the manufacturing facility and market the products. Under the fixed cost supply agreement, we are exposed to the risks related to the fluctuation of raw material prices.
•: Arabian Amines Company manufactures ethyleneamines products for our Performance Products segment. Prior to July 1, 2010, this joint venture was accounted for under the equity method. In July 2010, Arabian Amines Company exited the development stage, which triggered its reconsideration as a VIE. As required in the Arabian Amines Company operating agreement, we purchase all of its production and sell it to our customers. Substantially all of the joint venture's activities are conducted on our behalf.

In April 2011, Arabian Amines Company settled a dispute with its third party contractors and received an amount totaling $11 million. Of this $11 million settlement, $8 million was related to damages incurred due to the delayed initial acceptance of the plant. This amount was recorded as other operating (income) expense in the condensed consolidated statements of operations and comprehensive income (loss) (unaudited) and included in the cash flows from operating activities in the condensed consolidated statements of cash flows (unaudited). The remaining $3 million of the settlement was received for the reimbursement of capital expenditures for work left unfinished by the third party contractors. This amount was included in cash flows from investing activities in the condensed consolidated statements of cash flows (unaudited).

•: Sasol-Huntsman is our 50/50 joint venture with Sasol that owns and operates a maleic anhydride facility in Moers, Germany. This joint venture manufactures products for our Performance Products segment. Prior to April 1, 2011, we accounted for Sasol-Huntsman using the equity method. During the second quarter of 2010, we recorded a nonrecurring $15 million credit to equity income of investment in unconsolidated affiliates to appropriately reflect our investment in the Sasol-Huntsman joint venture.

In April 2011, an expansion at this facility began production, which triggered the reconsideration of this joint venture as a VIE. The joint venture uses our technology and expertise, and we bear a disproportionate amount of risk of loss due to a related-party loan to Sasol-Huntsman for which we bear the default risk. As a result, we concluded that we were the primary beneficiary and began consolidating Sasol-Huntsman beginning April 1, 2011.

Creditors of these VIEs have no recourse to our general credit, except in the event that we offer guarantees of specified indebtedness. As the primary beneficiary, the joint ventures' assets, liabilities and results of operations are included in our condensed consolidated financial statements (unaudited).

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

5. VARIABLE INTEREST ENTITIES (Continued)

The following table summarizes the carrying amount of Rubicon LLC, Pacific Iron Products and Arabian Amines Company's assets and liabilities included in our condensed consolidated balance sheet (unaudited), before intercompany eliminations (dollars in millions):

	June 30, 2011		December 31, 2010

Current assets	$	117	$	90
Property, plant and equipment, net		267		275
Other noncurrent assets		61		56
Deferred income taxes		40		40
Intangible assets		6		7

Total assets	$	491	$	468

Current liabilities		135		111
Long-term debt		188		188
Deferred income taxes		2		—
Other noncurrent liabilities		91		109

Total liabilities	$	416	$	408

The following table summarizes the fair value of Sasol-Huntsman's assets and liabilities as of April 1, 2011 recorded upon initial consolidation in our condensed consolidated balance sheet (unaudited) and the carrying amounts of such assets and liabilities as of June 30, 2011, before intercompany eliminations (dollars in millions):

	June 30, 2011		April 1, 2011

Current assets	$	77	$	61
Property, plant and equipment, net		162		155
Intangible assets		20		16
Goodwill		17		17

Total assets	$	276	$	249

Current liabilities		31		23
Long-term debt		102		93
Deferred income taxes		8		8
Other noncurrent liabilities		8		7

Total liabilities	$	149	$	131

Goodwill of $17 million was recognized upon consolidation of Sasol-Huntsman, of which approximately $12 million is deductible for income tax purposes. The total amount of goodwill did not change from the date of consolidation to June 30, 2011. All other intangible assets are being amortized over an average useful life of 18 years.

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

5. VARIABLE INTEREST ENTITIES (Continued)

Sasol-Huntsman had revenues and earnings of $44 million and $7 million, respectively, for the period from the date of consolidation to June 30, 2011. If this consolidation had occurred on January 1, 2010, the approximate pro forma revenues attributable to both our Company and Huntsman International would have been $2,366 million for the three months ended June 30, 2010 and $5,643 million and $4,479 million for the six months ended June 30, 2011 and 2010, respectively. There would have been no impact to the combined earnings attributable to us or Huntsman International excluding a one-time noncash gain of approximately $12 million recognized upon consolidation included in other operating income in the condensed consolidated statements of operations and comprehensive income (loss) (unaudited). Upon consolidation we also recognized a one-time noncash income tax expense of approximately $2 million. The fair value of the noncontrolling interest was estimated to be $61 million at April 1, 2011. The noncontrolling interest was valued at 50% of the fair value of the net assets as of April 1, 2011, as dictated by the ownership interest percentages, adjusted for certain tax consequences only applicable to one parent.

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

6. RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS

As of June 30, 2011 and December 31, 2010, accrued restructuring costs by type of cost and initiative consisted of the following (dollars in millions):

	Workforce reductions(1)			Demolition and decommissioning			Noncancelable lease costs			Other restructuring costs			Total(2)

Accrued liabilities as of January 1, 2011	$	36		$	1		$	1		$	11		$	49
2011 charges for 2006 and prior initiatives		1			—			1			—			2
2011 charges for 2009 initiatives		1			—			—			2			3
2011 charges for 2010 initiatives		—			2			—			1			3
2011 charges for 2011 initiatives		11			—			—			—			11
Reversal of reserves no longer required		(3	)		—			—			—			(3	)
2011 payments for 2006 and prior initiatives		—			—			(1	)		—			(1	)
2011 payments for 2008 initiatives		(1	)		—			—			—			(1	)
2011 payments for 2009 initiatives		(2	)		—			—			(3	)		(5	)
2011 payments for 2010 initiatives		(9	)		(2	)		—			(1	)		(12	)
2011 payments for 2011 initiatives		(1	)		—			—			—			(1	)
Net activity of discontinued operations		—			—			—			(1	)		(1	)
Foreign currency effect on liability balance		3			(1	)		—			—			2

Accrued liabilities as of June 30, 2011	$	36		$	—		$	1		$	9		$	46

(1): The total workforce reduction reserves of $36 million relate to the termination of 255 positions, of which 218 positions had not been terminated as of June 30, 2011.
(2): Accrued liabilities by initiatives were as follows (dollars in millions):

	June 30, 2011		December 31, 2010

2006 initiatives and prior	$	5	$	4
2008 initiatives		—		1
2009 initiatives		17		20
2010 initiatives		14		24
2011 initiatives		10		—

Total	$	46	$	49

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

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

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

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

Accrued liabilities as of January 1, 2011	$	—	$	1	$	2	$	25		$	8		$	8		$	5		$	49
2011 charges for 2006 and prior initiatives		—		—		—		1			1			—			—			2
2011 charges for 2009 initiatives		—		—		—		—			3			—			—			3
2011 charges for 2010 initiatives		—		—		—		2			—			—			1			3
2011 charges for 2011 initiatives		—		—		3		5			3			—			—			11
Reversal of reserves no longer required		—		—		—		(3	)		—			—			—			(3	)
2011 payments for 2006 and prior initiatives		—		—		—		(1	)		—			—			—			(1	)
2011 payments for 2008 initiatives		—		—		—		—			(1	)		—			—			(1	)
2011 payments for 2009 initiatives		—		—		—		—			(5	)		—			—			(5	)
2011 payments for 2010 initiatives		—		—		—		(8	)		—			—			(4	)		(12	)
2011 payments for 2011 initiatives		—		—		—		(1	)		—			—			—			(1	)
Net activity of discontinued operations		—		—		—		—			—			(1	)		—			(1	)
Foreign currency effect on liability balance		—		—		—		3			(1	)		—			—			2

Accrued liabilities as of June 30, 2011	$	—	$	1	$	5	$	23		$	8		$	7		$	2		$	46

Current portion of restructuring reserves	$	—	$	1	$	4	$	23		$	8		$	7		$	2		$	45
Long-term portion of restructuring reserve		—		—		1		—			—			—			—			1
Estimated additional future charges for current restructuring projects
Estimated additional charges within one year		—		—		—		—			5			—			—			5
Estimated additional charges beyond one year		—		—		—		—			—			—			—			—

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

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

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

		Three Months Ended June 30, 2011			Six Months Ended June 30, 2011

Cash charges:
	2011 charges for 2006 and prior initiatives	$	—		$	2
	2011 charges for 2009 initiatives		2			3
	2011 charges for 2010 initiatives		2			3
	2011 charges for 2011 initiatives		6			11
Reversal of reserves no longer required			(1	)		(3	)

Total 2011 Restructuring, Impairment and Plant Closing Costs		$	9		$	16

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

Cash charges:
	2010 charges for 2005 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

During the six months ended June 30, 2011, our Advanced Materials segment recorded charges of $3 million primarily related to the reorganization of our global structure and relocation of our divisional headquarters from Basel, Switzerland to The Woodlands, Texas.

During the six months ended June 30, 2011, our Textile Effects segment recorded charges of $8 million of which $5 million related to simplification of the commercial organization and optimization of our distribution network, $2 million related to nonworkforce reductions incurred for the consolidation of our Switzerland manufacturing facilities, and $1 million related to the consolidation of our North Carolina sites. We reversed charges of $3 million which were no longer required for workforce reductions at our production facility in Langweid, Germany and the consolidation of manufacturing activities and processes at our site in Basel, Switzerland.

During the six months ended June 30, 2011, our Pigments segment recorded charges of $7 million of which $3 million related to the closure of our Grimsby, U.K. plant and $3 million related to workforce reductions at our Umbogintwini, South Africa plant. We expect to incur additional charges of $5 million through December 31, 2012, primarily related to the closure of our Grimsby, U.K. plant.

During the six months ended June 30, 2011, we recorded charges of $1 million in Corporate and other primarily related to workforce reductions in connection with a reorganization and regional consolidation of our transactional accounting activities.

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

7. DEBT

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

Huntsman Corporation

		June 30, 2011		December 31, 2010

Senior Credit Facilities:
	Term loans	$	1,692	$	1,688
Amounts outstanding under A/R programs			254		238
Senior notes			462		452
Senior Subordinated notes			1,198		1,279
Australian credit facilities			34		33
HPS (China) debt			147		188
Variable interest entities			313		200
Other			75		68

Total debt—excluding debt to affiliates		$	4,175	$	4,146

Total current portion of debt		$	289	$	519
Long-term portion			3,886		3,627

Total debt—excluding debt to affiliates		$	4,175	$	4,146

Total debt—excluding debt to affiliates		$	4,175	$	4,146
Notes payable to affiliates—noncurrent			4		4

Total debt		$	4,179	$	4,150

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

7. DEBT (Continued)

Huntsman International

		June 30, 2011		December 31, 2010

Senior Credit Facilities:
	Term loans	$	1,692	$	1,688
Amounts outstanding under A/R programs			254		238
Senior notes			462		452
Subordinated notes			1,198		1,279
Australian credit facilities			34		33
HPS (China) debt			147		188
Variable interest entities			313		200
Other			75		68

Total debt—excluding debt to affiliates		$	4,175	$	4,146

Total current portion of debt		$	289	$	519
Long-term portion			3,886		3,627

Total debt—excluding debt to affiliates		$	4,175	$	4,146

Total debt—excluding debt to affiliates		$	4,175	$	4,146
Notes payable to affiliates—current			100		100
Notes payable to affiliates—noncurrent			439		439

Total debt		$	4,714	$	4,685

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 Arabian Amines Company (our consolidated ethyleneamines manufacturing joint venture in Jubail, Saudi Arabia); a guarantee of certain debt and other obligations of certain of our Australian subsidiaries; and certain indebtedness incurred from time to time to finance certain insurance premiums.

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.

Senior Credit Facilities

As of June 30, 2011, our senior secured credit facilities ("Senior Credit Facilities") consisted of our revolving facility ("Revolving Facility"), our term loan B facility ("Term Loan B"), our term C loan

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7. DEBT (Continued)

facility ("Term Loan C") and our extended term loan B facility ("Extended Term Loan B") as follows (dollars in millions):

Facility	Committed Amount		Principal Outstanding		Carrying Value			Interest Rate

Revolving Facility	$	300		—	$	—	(1)	USD LIBOR plus 3.00%	2014	(2)
Term Loan B		NA	$	652	$	652		USD LIBOR plus 1.50%	2014	(2)
Term Loan C		NA	$	427	$	390		USD LIBOR plus 2.25%	2016	(2)
Extended Term Loan B		NA	$	650	$	650		USD LIBOR plus 2.50%	2017	(2)

(1): We had no borrowings outstanding under our Revolving Facility; we had approximately $26 million (U.S. dollar equivalents) of letters of credit and bank guarantees issued and outstanding under our Revolving Facility.
(2): The Revolving Facility matures in March 2014, but is subject to optional extensions from time to time with the consent of the lenders and subject to certain specified conditions and exceptions. Notwithstanding the stated maturity dates, the maturities of the Revolving Facility and Term Loan B 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. The maturity of the Extended Term Loan B will also accelerate if we do not repay, refinance or have a minimum level of liquidity available to enable us to refinance or repay our outstanding 5.50% senior notes due 2016 at least three months prior to the maturity date of such notes.

Our obligations under the Senior Credit Facilities are guaranteed by our guarantor subsidiaries, which consist of substantially all of our domestic subsidiaries and certain of our foreign subsidiaries, and are secured by a first priority lien on substantially all of our domestic property, plant and equipment, the stock of all of our material domestic subsidiaries and certain foreign subsidiaries and pledges of intercompany notes between certain of our subsidiaries.

Amendments to Senior Credit Facilities

On March 7, 2011, Huntsman International entered into a sixth amendment to its credit agreement. The amendment, among other things, extended $650 million of aggregate principal of Term Loan B to a stated maturity of April 2017. As noted in the table above, after the amendment, as of June 30, 2011, we have $652 million outstanding on Term Loan B with maturity of April 2014 and $650 million outstanding on Extended Term Loan B with a maturity of April 2017. The amendment increased the interest rate margin with respect to Extended Term Loan B by 1.0%.

Extended Term Loan B will amortize in an amount equal to 1.0% of the principal amount, payable annually commencing on March 31, 2012. The amendment also grants Huntsman International the right to request an extension of the remaining principal balance of Term Loan B to the stated maturity date of Extended Term Loan B.

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

7. DEBT (Continued)

A/R Programs

Our U.S. and European accounts receivable programs ("U.S. A/R Program," "EU A/R Program" and collectively "A/R Programs") are structured so that we grant a participating undivided interest in certain of our trade receivables to a U.S. special purpose entity ("U.S. SPE") and a European special purpose entity ("EU SPE"). We retain the servicing rights and a retained interest in the securitized receivables. Information regarding the A/R Programs as of June 30, 2011 is as follows (monetary amounts in millions):

Facility	Maturity	Maximum Funding Availability(1)	Amount Outstanding	Interest Rate(2)(3)

U.S. A/R Program	April 2014	$250	$90	Applicable Rate plus 1.50%-1.65%
EU A/R Program	April 2014	€225 (approximately $323)	€114 (approximately $164)	Applicable Rate plus 2.0%

(1): The amount of actual availability under the A/R Programs may be lower based on the level of eligible receivables sold, changes in the credit ratings of our customers, customer concentration levels, and certain characteristics of the accounts receivable being transferred, as defined in the applicable agreements.
(2): Each interest rate is defined in the applicable agreements. In addition, the U.S. SPE and the EU SPE are obligated to pay unused commitment fees to the lenders based on the amount of each lender's commitment.
(3): Applicable rate for the U.S. A/R Program is defined by the lender as either USD LIBOR or CP rate. Applicable rate for the EU A/R Program is either GBP LIBOR, USD LIBOR or EURIBOR.

As of June 30, 2011, $698 million of accounts receivable were pledged as collateral under the A/R Programs.

Amendments to A/R Programs

On April 15, 2011, Huntsman International entered into an amendment to the EU A/R Program. This amendment, among other things, extended the scheduled commitment termination date of the program to April 2014, added an additional lender to the program and reduced the applicable margin on borrowings to 2.0%.

On April 18, 2011, Huntsman International entered into an amendment to the U.S. A/R Program. This amendment, among other things, extended the scheduled commitment termination date of the program to April 2014, added an additional lender to the program and reduced the applicable margin on borrowings to a range of 1.50% to 1.65%.

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7. DEBT (Continued)

Redemption of Notes and Loss on Early Extinguishment of Debt

During the six months ended June 30, 2011 and 2010, we redeemed or repurchased the following notes (monetary amounts in millions):

Date of Redemption	Notes	Principal Amount of Notes Redeemed	Amount Paid (Excluding Accrued Interest)	Loss on Early Extinguishment of Debt

January 18, 2011	7.375% Senior Subordinated Notes due 2015	$100	$102	$	3
March 17, 2010	6.875% Senior Subordinated Notes due 2013	€184 (approximately $253)	€189 (approximately $259)	$	7
March 17, 2010	7.50% Senior Subordinated Notes due 2015	€59 (approximately $81)	€59 (approximately $81)	$	2
January 11, 2010(1)	7.00% Convertible Notes due 2018	$250	$382	$	146

(1): The convertible notes due 2018 were issued to Apollo in December 2008 as part of a settlement agreement with Apollo. These convertible notes, which would have matured on December 23, 2018, bore interest at the rate of 7% per year and were convertible into approximately 31.8 million shares of our common stock at any time by the holders.

For the six months ended June 30, 2011, we and Huntsman International recorded a loss on early extinguishment of debt of $3 million. For the six months ended June 30, 2010, we had a loss on early extinguishment of $162 million, which included $7 million of loss on early extinguishment of debt on the prepayment of our term loans, and Huntsman International recorded a loss on early extinguishment of debt of $16 million, which included the $7 million of loss on early extinguishment of debt on the prepayment of our term loans.

On July 25, 2011, Huntsman International redeemed the remaining $75 million of its 7.375% senior subordinated notes due 2015. This amount was classified as current on the accompanying condensed consolidated balance sheets (unaudited) as of June 30, 2011. The total redemption payment, excluding accrued interest, was $77 million, which included $2 million of call premiums. We expect to record a loss on early extinguishment of debt for this transaction in the third quarter of 2011 of $2 million.

Variable Interest Entity Debt

On April 1, 2011 we began consolidating Sasol-Huntsman which was previously accounted for under the equity method. See "Note 5. Variable Interest Entities." Sasol-Huntsman has a facility agreement for a €77 million term loan facility (approximately $111 million) and a €5 million revolving facility (approximately $7 million). As of June 30, 2011, Sasol-Huntsman had no borrowings under the revolving facility and had €76 million (approximately $109 million) outstanding under the term loan facility.

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7. DEBT (Continued)

The facility will be repaid over 15 semiannual installments, beginning December 2011, with final repayment scheduled for December 2018. Obligations under the facility agreement are secured by, among other things, first priority right on the property, plant and equipment of Sasol-Huntsman.

As of June 30, 2011, Arabian Amines Company had $204 million outstanding under its loan commitments and debt financing arrangements.

Other Debt

During the six months ended June 30, 2011, HPS repaid $2 million and RMB 118 million (approximately $18 million) of term loans and working capital loans under its secured facilities. In addition, during the six months ended June 30, 2011, HPS refinanced RMB 38 million (approximately $6 million) in working capital loans due beginning in 2011 to 2014. The interest rate on these facilities is LIBOR plus 0.48% for U.S. dollar borrowings and 90% of the Peoples Bank of China rate for RMB borrowings. As of June 30, 2011, HPS had $14 million in U.S. dollar borrowings and 362 million in RMB term loan and working capital borrowings (approximately $56 million) under these secured facilities.

As of June 30, 2011, HPS also had RMB 499 million (approximately $77 million) outstanding under a loan facility for issuing working capital loans and for discounting commercial drafts with recourse.

As of June 30, 2011, our Australian subsidiary has AUD32 million (approximately $34 million) outstanding under our Australian credit facility. The credit facility is comprised of a revolving facility with AUD17 million outstanding (approximately $19 million) and a term facility with AUD14 million outstanding (approximately $15 million). Our Australian subsidiary is currently not in compliance with a financial covenant contained in the credit facility. Our lender has agreed to modify certain terms of the credit facility, and we expect to complete this amendment in the third quarter of 2011. The amounts outstanding under our Australian credit facility were classified as current on the accompanying condensed consolidated balance sheets (unaudited) as of June 30, 2011.

Note Payable from Huntsman International to Huntsman Corporation

As of June 30, 2011, we have a loan of $535 million to our subsidiary, Huntsman International (the "Intercompany Note"). The Intercompany Note is unsecured and $100 million of the outstanding amount is classified as current as of June 30, 2011 and December 31, 2010, respectively, on the accompanying consolidated balance sheets. As of June 30, 2011, 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 Programs, less ten 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).

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7. DEBT (Continued)

COMPLIANCE WITH COVENANTS

We believe 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. However, our Australian subsidiary is currently not in compliance with a financial covenant contained in its credit facility. See "—Other Debt" above.

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 not more than 3.75 to 1.

If in the future Huntsman International failed to comply with the Leverage Covenant, then we may 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 uncollateralized 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 may not have further access to such facilities.

The agreements governing our A/R Programs also contain certain receivable performance metrics. Any material failure to meet the applicable A/R Programs' metrics in the future could lead to an early termination event under the A/R Programs, which could require us to cease our use of such facilities, prohibiting us from additional borrowings against our receivables or, at the discretion of the lenders, requiring that we repay the A/R Programs in full. An early termination event 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.

8. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

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

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

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8. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Continued)

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

Our cash flows and earnings are subject to fluctuations due to exchange rate variation. Our revenues and expenses are denominated in various currencies. From time to time, we may enter into foreign currency derivative instruments to minimize the short-term impact of movements in foreign currency rates. Where practicable, we generally net multicurrency cash balances among our subsidiaries to help reduce exposure to foreign currency exchange rates. Certain other exposures may be managed from time to time through financial market transactions, principally through the purchase of spot or forward foreign exchange contracts (generally with maturities of one year or less). We do not hedge our currency exposures in a manner that would eliminate the effect of changes in exchange rates on our cash flows and earnings. As of June 30, 2011, we had approximately $250 million in 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, 2011, the fair value of the hedge was less than $2 million and is recorded in other noncurrent liabilities.

On January 19, 2010, we entered into a five-year interest rate contract to hedge the variability caused by monthly changes in cash flow due to associated changes in LIBOR under our Senior Credit Facilities. The notional value of the contract is $50 million and was designated as a cash flow hedge. The effective portion of the changes in the fair value of the swap was recorded in other comprehensive loss. We will pay a fixed 2.8% on the hedge and receive the one-month LIBOR rate. As of June 30, 2011, the fair value of the hedge was less than $3 million and is recorded in other noncurrent liabilities.

Beginning in 2009, Arabian Amines Company entered into a 12 year floating to fixed interest rate contract providing to us LIBOR interest payments for a fixed payment of 5.02%. In connection with the consolidation of Arabian Amines Company as of July 1, 2010, the interest rate contract is now consolidated by Huntsman International. See "Note 5. Variable Interest Entities." The notional amount of the hedge as of June 30, 2011 is $40 million and the interest rate contract is not designated as a cash flow hedge. As of June 30, 2011, the fair value of the hedge was $5 million and was recorded in other noncurrent liabilities on the accompanying consolidated balance sheets (unaudited). For the three and six months ended June 30, 2011, we recorded interest income of $1 million and nil, respectively.

In 2009, Sasol-Huntsman entered into derivative transactions to hedge the variable interest rate associated with its local credit facility. These derivative rate hedges include a floating to fixed interest rate contract providing Sasol-Huntsman with EURIBOR interest payments for a fixed payment of 3.62% and a cap for future periods with a strike price of 3.62%. In connection with the consolidation of Sasol-Huntsman as of April 1, 2011, the interest rate contract is now included in our consolidated results. See "Note 5. Variable Interest Entities." The notional amount of the hedge as of June 30, 2011 is €54 million (approximately $77 million) and the derivative transactions do not qualify for hedge

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8. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Continued)

accounting. As of June 30, 2011, the fair value of this hedge was €1 million (approximately $2 million) and was recorded in other noncurrent liabilities on the accompanying condensed consolidated balance sheets (unaudited).

In conjunction with the issuance of $350 million of 8.625% senior subordinated notes due 2020, we entered into cross-currency interest rate contracts with three counterparties. On March 17, 2010, we paid $350 million to these counterparties and received €255 million from these counterparties and at maturity on March 15, 2015 we are required to pay €255 million and will receive $350 million. 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, 2011, the fair value of this swap was $5 million and was recorded as noncurrent liabilities in our condensed consolidated balance sheet (unaudited). For the three months and six months ended June 30, 2011, the effective portion of the changes in the fair value of $9 million and $24 million, respectively was recorded at a loss in other comprehensive income.

As of and for the three months and six months ended June 30, 2011, the changes in fair value of the realized gains (losses) recorded in the accompanying condensed consolidated statements of operations (unaudited) of our other outstanding foreign currency rate hedging contracts and derivatives were not considered significant.

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

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

From time to time, we review our non-U.S. dollar denominated debt and swaps to determine the appropriate amounts designated as hedges. As of June 30, 2011, we have designated €363 million (approximately $521 million) of euro-denominated debt and cross-currency interest rate swap as a hedge of our net investments. For the three and six months ended June 30, 2011, the amount of loss recognized on the hedge of our net investments was $12 million and $35 million and was recorded as a loss in other comprehensive loss. As of June 30, 2011, we had €1,050 million (approximately $1,507 million) in net euro assets.

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9. FAIR VALUE

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

	June 30, 2011						December 31, 2010

	Carrying Amount			Estimated Fair Value			Carrying Amount			Estimated Fair Value
Non-qualified employee benefit plan investments	$	12		$	12		$	11		$	11
Cross-currency interest rate contracts		(5	)		(5	)		19			19
Interest rate contracts		(12	)		(12	)		(9	)		(9	)
Long-term debt (including current portion)		(4,175	)		(4,372	)		(4,146	)		(4,371	)

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 nonqualified employee benefit plan investments is estimated using prevailing market prices. The estimated fair values of our long-term debt are based on quoted market prices for the identical liability when traded as an asset in an active market.

The fair value estimates presented herein are based on pertinent information available to management as of June 30, 2011 and December 31, 2010. 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, 2011, and current estimates of fair value may differ significantly from the amounts presented herein.

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

						Fair Value Amounts Using

Description			June 30, 2011			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	$	12		$	12	$	—		$	—

Liabilities:
	Derivatives:
		Cross-currency interest rate contracts(1)	$	(5	)	$	—	$	—		$	(5	)
		Interest rate contracts(2)		(12	)		—		(12	)		—

Total liabilities			$	(17	)	$	—	$	(12	)	$	(5	)

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

9. FAIR VALUE (Continued)

						Fair Value Amounts Using

Description			December 31, 2010			Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)			Significant unobservable inputs (Level 3)
Assets:
	Available-for-sale equity securities:
		Equity mutual funds	$	11		$	11	$	—		$	—
	Derivatives:
		Cross-currency interest rate contracts(1)		19			—		—			19

Total assets			$	30		$	11	$	—		$	19

Liabilities:
	Derivatives:
		Interest rate contracts(2)	$	(9	)	$	—	$	(9	)	$	—

(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 instruments measured at fair value on a recurring basis using significant unobservable inputs (Level 3) (dollars in millions):

		Three months ended June 30, 2011			Six months ended June 30, 2011

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)		Cross-Currency Interest Rate Contracts			Cross-Currency Interest Rate Contracts
Beginning balance		$	4		$	19
Total gains or losses
	Included in earnings		—			—
	Included in other comprehensive income (loss)		(9	)		(24	)
Purchases, issuances, sales and settlements			—			—

Ending balance June 30, 2011		$	(5	)	$	(5	)

The amount of total gains (losses) for the period included in earnings earnings attributable to the change in unrealized gains (losses) relating to assets still held at June 30, 2011		$	—		$	—

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9. FAIR VALUE (Continued)

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

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

Ending balance June 30, 2010		$	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	$	—		$	14	$	14

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

Gains and losses (realized and unrealized) included in earnings for the three and six months ended June 30, 2011 and 2010, respectively, are reported in interest expense and other comprehensive loss as follows (dollars in millions):

	Three months ended June 30, 2011					Six months ended June 30, 2011

	Interest expense		Other comprehensive loss			Interest expense		Other comprehensive loss
Total net gains included in earnings	$	—	$	—		$	—	$	—
Changes in unrealized losses relating to assets still held at June 30, 2011		—		(9	)		—		(24	)

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

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

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10. EMPLOYEE BENEFIT PLANS

Components of the net periodic benefit costs for the three and six months ended June 30, 2011 and 2010 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,
	2011			2010			2011		2010
Service cost	$	17		$	16		$	1	$	1
Interest cost		39			35			2		2
Expected return on assets		(48	)		(40	)		—		—
Amortization of prior service cost		(2	)		(2	)		—		—
Amortization of actuarial loss		7			6			—		—

Net periodic benefit cost	$	13		$	15		$	3	$	3

	Defined Benefit Plans						Other Postretirement Benefit Plans

	Six Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
Service cost	$	33		$	33		$	2		$	2
Interest cost		77			71			4			4
Expected return on assets		(94	)		(82	)		—			—
Amortization of prior service cost		(3	)		(3	)		(1	)		(1	)
Amortization of actuarial loss		14			12			—			—

Net periodic benefit cost	$	27		$	31		$	5		$	5

Huntsman International

	Defined Benefit Plans						Other Postretirement Benefit Plans

	Three Months Ended June 30,						Three Months Ended June 30,
	2011			2010			2011		2010
Service cost	$	17		$	16		$	1	$	1
Interest cost		39			35			2		2
Expected return on assets		(48	)		(40	)		—		—
Amortization of prior service cost		(2	)		(2	)		—		—
Amortization of actuarial loss		9			7			—		—

Net periodic benefit cost	$	15		$	16		$	3	$	3

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

10. EMPLOYEE BENEFIT PLANS (Continued)

	Defined Benefit Plans						Other Postretirement Benefit Plans

	Six Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
Service cost	$	33		$	33		$	2		$	2
Interest cost		77			71			4			4
Expected return on assets		(94	)		(82	)		—			—
Amortization of prior service cost		(3	)		(3	)		(1	)		(1	)
Amortization of actuarial loss		17			15			—			—

Net periodic benefit cost	$	30		$	34		$	5		$	5

During the six months ended June 30, 2011 and 2010, we made contributions to our pension and other postretirement benefit plans of $96 million and $72 million, respectively. During the remainder of 2011, we expect to contribute an additional amount of $68 million to these plans.

11. HUNTSMAN CORPORATION STOCKHOLDERS' EQUITY

COMMON STOCK DIVIDENDS

On each of June 30, 2011 and March 31, 2011, we paid cash dividends of $24 million, or $0.10 per share, to common stockholders of record as of June 15, 2011 and March 15, 2011, respectively. 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.

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12. 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)						Other comprehensive income (loss)
		Accumulated other comprehensive income (loss)						Three Months Ended					Six Months Ended
		June 30, 2011			December 31, 2010			June 30, 2011		June 30, 2010			June 30, 2011			June 30, 2010
Foreign currency translation adjustments, net of tax of $16 and $25 as of June 30, 2011 and December 31, 2010, respectively		$	445		$	298		$	56	$	(63	)	$	147		$	(113	)
Pension and other postretirement benefit adjustments, net of tax of $90 and $92 as of June 30, 2011 and December 31, 2010, respectively			(605	)		(613	)		4		4			8			10
Other comprehensive income of unconsolidated affiliates			7			7			—		—			—			—
Other, net			5			4			—		(5	)		1			(5	)

	Total		(148	)		(304	)		60		(64	)		156			(108	)
Amounts attributable to noncontrolling interests			6			7			—		—			(1	)		—

Amounts attributable to Huntsman Corporation		$	(142	)	$	(297	)	$	60	$	(64	)	$	155		$	(108	)

Huntsman International

								Other comprehensive income (loss)

		Accumulated other comprehensive income (loss)						Other comprehensive income (loss)
		Accumulated other comprehensive income (loss)						Three Months Ended					Six Months Ended
		June 30, 2011			December 31, 2010			June 30, 2011		June 30, 2010			June 30, 2011			June 30, 2010
Foreign currency translation adjustments, net of tax of $3 and $12 as of June 30, 2011 and December 31, 2010, respectively		$	444		$	296		$	55	$	(63	)	$	148		$	(114	)
Pension and other postretirement benefit adjustments, net of tax of $122 and $124 as of June 30, 2011 and December 31, 2010, respectively			(652	)		(663	)		6		5			11			13
Other comprehensive income of unconsolidated affiliates			7			7			—		—			—			—
Other, net			(1	)		(1	)		—		(5	)		—			(5	)

	Total		(202	)		(361	)		61		(63	)		159			(106	)
Amounts attributable to noncontrolling interests			6			7			—		—			(1	)		—

Amounts attributable to Huntsman International LLC		$	(196	)	$	(354	)	$	61	$	(63	)	$	158		$	(106	)

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.

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13. COMMITMENTS AND CONTINGENCIES

LEGAL MATTERS

Asbestos Litigation

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

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

	2011		2010
Unresolved at beginning of period		1,116		1,138
Tendered during period		9		21
Resolved during period(1)		39		14
Unresolved at end of period		1,086		1,145

(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, 2011, we had an accrued liability of $13 million relating to these cases and a corresponding receivable of $13 million relating to our indemnity protection with respect to these cases. We cannot assure you that our liability

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13. COMMITMENTS AND CONTINGENCIES (Continued)

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; accordingly, 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, 2011.

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 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,

	2011		2010
Unresolved at beginning of period		37		39
Filed during the period		8		1
Resolved during period		5		2
Unresolved at end of period		40		38

We paid gross settlement costs for asbestos exposure cases that are not subject to indemnification of $342,000 and $200,000 during the six months ended June 30, 2011 and 2010, respectively. As of June 30, 2011, we had an accrual of $337,500 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; accordingly, 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, 2011.

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 pending in the U.S. District Court for the District of Kansas.

In addition, we and the other Polyether Polyol defendants have 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 the Kansas multidistrict litigation. The relevant time frame for these cases is 1994 to 2004 and they are referred to as the "direct action cases."

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13. COMMITMENTS AND CONTINGENCIES (Continued)

The class action and the direct action cases have been consolidated in the Kansas court for the purposes of discovery and other pretrial matters. Discovery in the direct action cases is ongoing and we do not anticipate a trial of the direct action cases until 2013.

On May 26, 2011, we entered into a settlement agreement with the class plaintiffs. Although we vigorously deny any wrongdoing alleged in the litigation, we determined to enter into the settlement to avoid the substantial burdens and uncertainties inherent in complex business litigation.

Under the settlement agreement, we paid $11 million into an escrow fund for the benefit of the class on June 27, 2011 after the court preliminarily approved the settlement. We will pay an additional $11 million within one year thereafter and a third $11 million payment within two years of the initial payment. In exchange for these payments, we will receive from the class a release and discharge of all claims against us, as described in the settlement agreement. The settlement is subject to final approval by the court after notice is given to the class members. The hearing on final approval is scheduled for September 27, 2011.

We fully accrued for this matter in prior quarters. The settlement does not resolve the direct action cases nor the other pending antitrust litigation described below.

Two purported class action cases were filed May 5 and 17, 2006 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. The class certification hearing is scheduled for April 2, 2012. A purported class action case filed February 15, 2002 by purchasers of products containing rubber and urethanes products and pending in Superior Court of California, County of San Francisco is stayed pending resolution of the Kansas multidistrict litigation. The plaintiffs in each of these matters make similar claims against the defendants as the class plaintiffs in the Kansas multidistrict litigation.

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. du Pont de Nemours and Company, Kronos Worldwide Inc., Millennium Inorganic Chemicals, Inc. and the National Titanium Dioxide Company Limited (d/b/a Cristal). A class certification hearing is scheduled for August 16, 2012 and trial is set to begin September 9, 2013. Discovery is ongoing.

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. We are not aware of any illegal conduct by us or any of our employees. Nevertheless, we have incurred costs relating to these claims and could incur additional costs in amounts material to us.

Port Arthur Plant Fire Insurance Litigation Settlement

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 International Risk Insurance Company ("IRIC"),

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13. COMMITMENTS AND CONTINGENCIES (Continued)

our captive insurer, and certain reinsurers (the "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.

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. 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.

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.

14. ENVIRONMENTAL, HEALTH AND SAFETY MATTERS

GENERAL

We are subject to extensive federal, state, local and international laws, regulations, rules and ordinances relating to safety, pollution, protection of the environment and the generation, storage, handling, transportation, treatment, disposal and remediation of hazardous substances and waste materials. In the ordinary course of business, we are subject to frequent environmental inspections and monitoring and occasional investigations by governmental enforcement authorities. In addition, our production facilities require operating permits that are subject to renewal, modification and, in certain circumstances, revocation. Actual or alleged violations of safety laws, environmental laws or permit requirements could result in restrictions or prohibitions on plant operations, substantial civil or criminal sanctions, as well as, under some environmental laws, the assessment of strict liability and/or joint and several liability. Moreover, changes in environmental regulations could inhibit or interrupt our operations, or require us to modify our facilities or operations. Accordingly, environmental or regulatory matters may cause us to incur significant unanticipated losses, costs or liabilities.

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14. ENVIRONMENTAL, HEALTH AND SAFETY MATTERS (Continued)

ENVIRONMENTAL, HEALTH AND SAFETY SYSTEMS

We are committed to achieving and maintaining compliance with all applicable environmental, health and safety ("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, 2011 and 2010 our capital expenditures for EHS matters totaled $34 million and $24 million, respectively. Because capital expenditures for these matters are subject to evolving regulatory requirements and depend, in part, on the timing, promulgation and enforcement of specific requirements, our capital expenditures for EHS matters have varied significantly from year to year and 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 waste that was disposed of prior to the purchase of our businesses. Under some circumstances, the scope of our liability may extend to damages to natural resources.

Under the Comprehensive Environmental Response, Compensation and Liability Act ("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. 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. 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.

One of these sites, the North Maybe Canyon Mine CERCLA site, includes an abandoned phosphorous mine near Soda Springs, Idaho believed to 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

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surface water. Under a 2004 administrative order, the current mine lessee, Nu-West Industries, Inc., began undertaking the investigation required for a CERCLA 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. On June 15, 2010, we received the UAO which had been executed by the Forest Service and we are presently carrying out the requirements of the order. We continue to coordinate with our insurers regarding policy coverage in this matter. At this time, we do not believe the costs to remediate this site will be material to our financial condition, results of operations, or cash flows.

In addition, under the Resource Conservation and Recovery Act ("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, or previously operated, 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. In October 2010, the local authorities approved our proposed two-phase remedial approach. The first phase was installed in 2011 and involves groundwater extraction and treatment in one limited area of the site. The second phase, not yet defined, would proceed during site redevelopment. As the second phase remediation has not yet been defined, we are unable to assess the amount of any potential liability.

By letter dated March 7, 2006, our Base Chemicals and Polymers facility in West Footscray, Australia, was issued a clean-up notice by the Environment Protection Authority, Victoria, Australia (the "EPA Victoria") 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. In the third quarter of 2009, we recorded a $30 million liability related to estimated environmental remediation costs at this site. On August 23, 2010, EPA Victoria revoked the second clean-up notice and issued a revised notice that included a requirement for financial assurance for the remediation. We have now reached agreement with the agency that a mortgage on the land will be held by the agency as financial surety during the period covered by the current clean-up notice, which ends on July 30, 2014. We can provide no assurance that the agency 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 demolished.

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14. ENVIRONMENTAL, HEALTH AND SAFETY MATTERS (Continued)

By letter dated March 15, 2010, the U.S. Department of Justice (the "DOJ") notified us that the U.S. Environmental Protection Agency (the "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. We 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. The tolling agreement has since been extended through September 30, 2011.

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 the liabilities for all such matters subject to indemnity, will be honored by the prior owner or that our existing indemnities will be sufficient to cover our liabilities for such matters.

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 not honored or do not fully cover the costs of investigation and remediation or we are required to contribute to such costs, 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 total cost, exclusive of indemnification benefits, to remediate any of the known contamination sites.

ENVIRONMENTAL RESERVES

We have accrued liabilities relating to anticipated environmental cleanup obligations, site reclamation and closure costs and known penalties. Liabilities are recorded when potential liabilities are either known or considered probable and can be reasonably estimated. Our liability estimates are calculated using present value techniques and are based upon requirements placed upon us by regulators, available facts, existing technology and past experience. The environmental liabilities do not include amounts recorded as asset retirement obligations. We had accrued $41 million and $48 million for environmental liabilities as of June 30, 2011 and December 31, 2010, respectively. Of these amounts, $4 million and $13 million were classified as accrued liabilities in our consolidated balance sheets as of June 30, 2011 and December 31, 2010, respectively, and $37 million and $35 million were classified as other noncurrent liabilities in our consolidated balance sheets as of June 30, 2011 and December 31, 2010, respectively. In certain cases, our remediation liabilities may be payable over

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periods of up to 30 years. We may incur losses for environmental remediation in excess of the amounts accrued; however, we are not able to estimate the amount or range of such potential excess.

REGULATORY DEVELOPMENTS

In December 2006, the EU parliament and EU council approved a new EU regulatory framework for chemicals called Registration, Evaluation and Authorization of Chemicals ("REACH"). 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 European Economic Area ("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 alternative 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 intended to register. These two substances, along with the other high-volume and high-priority chemicals, were successfully registered under the program by the November 30, 2010 regulatory deadline. Although the total long-term cost for REACH compliance is not estimable at this time, we spent approximately $9 million, $3 million and $2 million in 2010, 2009 and 2008, respectively, on REACH compliance. However, we cannot provide assurance that these recent expenditures will be indicative of future amounts required for REACH compliance.

GREENHOUSE GAS REGULATION

Although the existence of binding emissions limitations under international treaties such as the Kyoto Protocol is in doubt after 2012, we expect some or all of our operations to be subject to regulatory requirements to reduce emissions of greenhouse gases ("GHG"). Even in the absence of a new global agreement to limit GHGs, we may be subject to additional regulation under the European Union Emissions Trading System as well as new national and regional GHG trading programs. For example, our operations in Australia and selected U.S. states may be subject to future GHG regulations under emissions trading systems in those jurisdictions.

Because the United States has not adopted federal climate change legislation, domestic GHG efforts are likely to be guided by EPA regulations in the near future. While EPA's GHG programs are

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currently subject to judicial challenge, our domestic operations may become subject to EPA's regulatory requirements when implemented. In particular, expansions of our existing facilities or construction of new facilities may be subject to the Clean Air Act's Prevention of Significant Deterioration Requirements under EPA's GHG "Tailoring Rule." In addition, certain aspects of our operations may be subject to GHG emissions monitoring and reporting requirements. If we are subject to EPA GHG regulations, we may face increased monitoring, reporting, and compliance costs.

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 of these programs, although it is possible that GHG emission restrictions may increase over time. Potential consequences of such restrictions include capital requirements to modify assets to meet GHG emission restrictions 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 GHG 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

In 2007, the U.S. Department of Homeland Security ("DHS") issued the final "Chemical Facility Anti-Terrorism Standard." To comply, chemical manufacturing facilities using specified chemicals in threshold quantities were required to submit a "Top Screen" questionnaire to the DHS in 2008. Consequently, we submitted Top Screens for all of our covered facilities and later the DHS designated four of our facilities as "High Risk" sites. In late 2008, these four sites performed and submitted DHS-required security vulnerability assessments. DHS subsequently deemed one of these sites to be on a high security risk tier, and the other three to be on a lower security risk tier. The three lower-tiered sites submitted Site Security Plans ("SSPs") to the DHS, but security improvements recommended from the SSPs are not anticipated to be material. The higher-tiered site also submitted an SSP to the DHS, and DHS-required security upgrades were estimated to cost $8 million to $10 million to be spent during 2011 and 2012. During the six months ended June 30, 2011, we spent approximately $2 million on these security upgrades. However, in June 2011, the DHS unexpectedly lowered the high-tiered site's risk ranking one level. Consequently, security upgrades are not expected to be as costly as originally projected for the higher-level ranking. Additional security upgrades will be required, but the extent and cost of these upgrades cannot be determined until the facility meets with the DHS to review the ranking change.

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

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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 TBA 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 numerous cases in U.S. courts that allege MTBE contamination in groundwater. The plaintiffs in the MTBE groundwater contamination cases generally seek compensatory damages, punitive damages, injunctive relief, such as monitoring and abatement, and attorney fees. Between 2007 and 2009, we were named as a defendant in 18 of these lawsuits in New York state and federal courts, which we settled in an amount immaterial to us.

It is possible that we could be named as a defendant in 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

During the third quarter of 2010, we completed an internal investigation of the operations of Petro Araldite Pvt. Ltd. ("PAPL"), our majority owned joint venture in India. PAPL manufactures base liquid resins, base solid resins and formulated products in India. The investigation initially focused on allegations of illegal disposal of hazardous waste and waste water discharge and related reporting irregularities. Based upon preliminary findings, the investigation was expanded to include a review of the production and off-book sales of certain products and waste products. The investigation included the legality under Indian law and U.S. law, including the U.S. Foreign Corrupt Practices Act, of certain payments made by employees of the joint venture to government officials in India. Records at the facility covering nine months in 2009 and early 2010 show that less than $11,000 in payments were made to officials for that period; in addition, payments in unknown amounts may have been made by individuals from the facility in previous years.

In May and July 2010, PAPL fully disclosed the environmental noncompliance issues to the local Indian environmental agency, the Tamil Nadu Pollution Control Board ("TNPCB"). All environmental compliance and reporting issues have been addressed to the agency's satisfaction other than the use of freshwater for the dilution of wastewater effluent discharges and the remediation of several off-site solid waste disposal areas. Also in May 2010, we voluntarily contacted the U.S. Securities and Exchange Commission (the "SEC") and the DOJ to advise them of our investigation and that we intend to cooperate fully with each of them. We met with the SEC and the DOJ in October 2010 to discuss this matter and we continue to cooperate with these agencies. Steps have been taken to halt all known illegal or improper activity. These steps included the termination of employment of management

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employees as appropriate. TNPCB directed us to submit a plan for the remediation of the off-site waste disposal areas and the plan was approved. The impacted off-site soil has been excavated and relocated to the site. Final disposal methods for the removed waste await approval from TNPCB.

No conclusions 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 affect the operations of PAPL. We cannot, however, determine at this time the magnitude of the penalties and fines that could be assessed, the total costs to remediate the prior noncompliance or the effects of implementing any necessary corrective measures on PAPL's operations.

15. STOCK-BASED COMPENSATION PLANS

Under the Huntsman Corporation Stock Incentive Plan, as amended and restated (the "Stock Incentive Plan"), a plan approved by stockholders, we may grant nonqualified 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. As of June 30, 2011, we were authorized to grant up to 32.6 million shares under the Stock Incentive Plan. As of June 30, 2011, we had 10.3 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 from continuing operations under the Stock Incentive Plan for our Company and Huntsman International were as follows (dollars in millions):

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

	2011		2010		2011		2010
Huntsman Corporation	$	8	$	5	$	16	$	12
Huntsman International	$	8	$	5	$	15	$	11

The total income tax benefit recognized in the statements of operations for us and Huntsman International for stock-based compensation arrangements was $4 million and $3 million, for each of the six months ended June 30, 2011 and 2010, respectively.

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15. STOCK-BASED COMPENSATION PLANS (Continued)

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 periods.

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

	2011		2010		2011			2010
Dividend yield		NA		NA		3.3	%		3.0	%
Expected volatility		NA		NA		65.6	%		69.0	%
Risk-free interest rate		NA		NA		2.8	%		3.1	%
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, 2011 and 2010, no stock options were granted.

A summary of stock option activity under the Stock Incentive Plan as of June 30, 2011 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, 2011		10,997		$	12.28
Granted		941			17.59
Exercised		(1,226	)		2.82
Forfeited		(99	)		5.80

Outstanding at June 30, 2011		10,613			13.90		6.4	$	66

Exercisable at June 30, 2011		7,322			16.42		5.5		31

The weighted-average grant-date fair value of stock options granted during the six months ended June 30, 2011 was $9.22 per option. As of June 30, 2011, there was $10 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 1.1 years.

The total intrinsic value of stock options exercised during the six months ended June 30, 2011 and 2010 was $19 million and $9 million, respectively.

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15. STOCK-BASED COMPENSATION PLANS (Continued)

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, 2011 and changes during the three 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, 2011		3,126		$	6.95		1,642		$	6.05
Granted		669			17.61		311			17.59
Vested		(1,485	)(1)		7.17		(726	)		5.54
Forfeited		(8	)		4.57		(71	)		8.85

Nonvested at June 30, 2011		2,302			9.92		1,156			9.30

(1): As of June 30, 2011, a total of 422,305 restricted stock units were vested, of which 93,173 vested during the six months ended June 30, 2011. Only 176,327 of these shares have 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, 2011, there was $32 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 1.4 years. The value of share awards that vested during the six months ended June 30, 2011 and 2010 was $23 million and $18 million, respectively.

16. INCOME TAXES

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 jurisdiction 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, 2011, we released valuation allowances of $6 million on certain net deferred tax assets in Luxembourg. During the six months ended June 30, 2010, we released a valuation allowance of $14 million on certain net deferred tax assets in Australia.

During the six months ended June 30, 2011, we recorded a net increase in unrecognized tax benefits with a corresponding income tax expense of approximately $1 million and during the six months ended June 30, 2010 we recorded a net decrease in unrecognized tax benefits with a

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16. INCOME TAXES (Continued)

corresponding income tax benefit of $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

In addition to the tax benefits resulting from the valuation allowance release and the tax effects resulting from the unrecognized tax benefit items discussed above, during the six months ended June 30, 2011 and 2010 we recognized $1 million and $13 million of tax benefit, respectively, on $3 million and $162 million of loss on early extinguishment of debt (the majority of the 2010 loss is not deductible for tax purposes). Excluding these items, we recorded income tax expense of $62 million and $39 million for the six months ended June 30, 2011 and 2010, 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 tax effects resulting from the unrecognized tax benefit items discussed above, during the six months ended June 30, 2011 and 2010 Huntsman International recognized $1 million and $5 million of tax benefit, respectively, on $3 million and $16 million of loss on early extinguishment of debt. Excluding these items, Huntsman International recorded income tax expense of $62 million and $42 million for the six months ended June 30, 2011 and 2010, respectively. Our tax obligations are affected by the mix of income and losses in the tax jurisdictions in which we operate.

17. DISCONTINUED OPERATIONS

AUSTRALIAN STYRENICS BUSINESS SHUTDOWN

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

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

	2011			2010			2011			2010
Revenues	$	9		$	10		$	18		$	35
Costs and expenses		(11	)		(17	)		(41	)		(62	)

Operating loss		(2	)		(7	)		(23	)		(27	)
Income tax benefit		1			1			8			9

Loss from discontinued operations, net of tax	$	(1	)	$	(6	)	$	(15	)	$	(18	)

In 2006, product defect actions were filed against our subsidiary Huntsman Chemical Company Australia Pty Ltd ("HCCA") in Australian courts relating to the sale and supply of vinyl ester resins

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17. DISCONTINUED OPERATIONS (Continued)

that were used in the manufacture of fiberglass swimming pools. HCCA ceased manufacturing these resins by 2004 and sold the business that manufactured and sold these resins in 2007.

In 2010 and 2011, the courts found HCCA liable for damage to certain swimming pools and one court issued a ruling awarding $87,000 per pool for each of 423 known damaged pools, plus an additional 143 pools that could potentially fail plus economic damages, costs and interest in amounts still to be determined.

These and other related claims were tendered to HCCA's insurers, who continue to defend these matters. During the first quarter of 2011, HCCA increased its estimate of potential loss related to these claims and recorded a liability for the full estimated value of the claims and a corresponding receivable relating to our indemnity protection with a net charge to discontinued operations for any potential shortfall in insurance coverage.

U.S. BASE CHEMICALS AND NORTH AMERICAN POLYMERS DISPOSITIONS

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

During the three 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 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.

18. NET INCOME (LOSS) PER SHARE

Basic income (loss) 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 loss 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.

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

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

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

		2011		2010		2011		2010
Numerator:
Income (loss) from continuing operations:
Income (loss) from continuing operations attributable to Huntsman Corporation		$	114	$	52	$	189	$	(107	)

Net income (loss):
Net income (loss) attributable to Huntsman Corporation		$	114	$	114	$	176	$	(58	)

Denominator:
Shares:
Weighted average shares outstanding			239.4		236.4		238.5		235.6
Dilutive securities:
	Stock-based awards		4.3		4.4		4.7		—

Total dilutive shares outstanding assuming conversion			243.7		240.8		243.2		235.6

Additional stock-based awards of 6.2 million and 6.9 million weighted average equivalent shares of stock were outstanding during the three months ended June 30, 2011 and 2010, respectively, and additional stock-based awards of 6.1 million and 6.6 million weighted average equivalent shares of stock were outstanding during the six months ended June 30, 2011 and 2010, respectively. These stock-based awards were not included in the computation of diluted earnings per share for the three and six months ended June 30, 2011 and 2010 periods because the effect would be anti-dilutive. In addition, our 7% convertible notes due 2018 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, the potential effect of assumed conversion of the convertible notes due 2018 were not included in the computation of diluted earnings per share for the six months ended June 30, 2010 because the effect would be anti-dilutive.

19. OPERATING SEGMENT INFORMATION

We derive our revenues, earnings and cash flows from the manufacture and sale of a wide variety of differentiated 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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19. OPERATING SEGMENT INFORMATION (Continued)

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 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,

			2011			2010			2011			2010
Net Sales:
	Polyurethanes		$	1,135		$	932		$	2,182		$	1,699
	Performance Products			896			669			1,700			1,285
	Advanced Materials			360			320			710			611
	Textile Effects			200			213			390			408
	Pigments			424			287			788			556
	Eliminations			(81	)		(78	)		(157	)		(122	)

		Total	$	2,934		$	2,343		$	5,613		$	4,437

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19. OPERATING SEGMENT INFORMATION (Continued)

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

				2011			2010			2011			2010
Huntsman Corporation:
Segment EBITDA(1):
	Polyurethanes			$	142		$	69		$	256		$	121
	Performance Products				113			116			228			176
	Advanced Materials				28			51			67			84
	Textile Effects				(7	)		(7	)		(18	)		(7	)
	Pigments				112			47			196			75
	Corporate and other(2)				(63	)		(45	)		(144	)		(252	)

		Subtotal			325			231			585			197
			Discontinued Operations(3)		(2	)		100			(23	)		79

			Total		323			331			562			276
Interest expense, net					(65	)		(43	)		(124	)		(104	)
Income tax expense—continuing operations					(34	)		(39	)		(56	)		(5	)
Income tax benefit (expense)—discontinued operations					1			(37	)		8			(29	)
Depreciation and amortization					(111	)		(98	)		(214	)		(196	)

		Net income (loss) attributable to Huntsman Corporation		$	114		$	114		$	176		$	(58	)

Huntsman International:
Segment EBITDA(1):
	Polyurethanes			$	142		$	69		$	256		$	121
	Performance Products				113			116			228			176
	Advanced Materials				28			51			67			84
	Textile Effects				(7	)		(7	)		(18	)		(7	)
	Pigments				112			47			196			75
	Corporate and other(2)				(64	)		(45	)		(144	)		(95	)

		Subtotal			324			231			585			354
			Discontinued Operations(3)		(2	)		100			(23	)		79

			Total		322			331			562			433
Interest expense, net					(67	)		(47	)		(131	)		(113	)
Income tax expense—continuing operations					(34	)		(38	)		(56	)		(16	)
Income tax benefit (expense)—discontinued operations					1			(37	)		8			(29	)
Depreciation and amortization					(105	)		(92	)		(203	)		(184	)

	Net income attributable to Huntsman International LLC			$	117		$	117		$	180		$	91

(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.
(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,

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HUNTSMAN CORPORATION AND SUBSIDIARIES

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

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

19. OPERATING SEGMENT INFORMATION (Continued)

unallocated restructuring, impairment and plant closing costs and nonoperating 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 17. Discontinued Operations."

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

The following condensed consolidating financial statements (unaudited) present, in separate columns, financial information for the following: Huntsman International LLC (on a parent only basis), with its investment in subsidiaries recorded under the equity method; the Guarantors on a combined, and where appropriate, consolidated basis; and the nonguarantors on a combined, and where appropriate, consolidated basis. Additional columns present eliminating adjustments and consolidated totals as of June 30, 2011 and December 31, 2010 and for the three and six months ended June 30, 2011 and 2010. There are no contractual restrictions limiting transfers of cash from the Guarantors to Huntsman International. Each of the Guarantors is 100% owned by Huntsman International and has fully and unconditionally guaranteed Huntsman International's outstanding notes on a joint and several basis.

Table of Contents

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEET (UNAUDITED)

AS OF JUNE 30, 2011

(Dollars in Millions)

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

			Parent Company			Guarantors			Nonguarantors			Eliminations			Consolidated Huntsman International LLC

ASSETS
Current assets:
	Cash and cash equivalents		$	55		$	3		$	248		$	—		$	306
	Restricted cash			—			—			7			—			7
	Accounts and notes receivable, net			26			185			1,625			—			1,836
	Accounts receivable from affiliates			1,224			2,812			82			(4,046	)		72
	Inventories			107			280			1,369			(10	)		1,746
	Prepaid expenses			7			—			50			(24	)		33
	Deferred income taxes			5			—			45			(9	)		41
	Other current assets			40			7			258			(39	)		266

		Total current assets		1,464			3,287			3,684			(4,128	)		4,307
Property, plant and equipment, net				402			866			2,431			2			3,701
Investment in unconsolidated affiliates				5,587			1,730			133			(7,258	)		192
Intangible assets, net				52			2			60			(3	)		111
Goodwill				(19	)		84			46			—			111
Deferred income taxes				62			—			175			(36	)		201
Notes receivable from affiliates				54			985			6			(1,039	)		6
Other noncurrent assets				57			151			257			—			465

		Total assets	$	7,659		$	7,105		$	6,792		$	(12,462	)	$	9,094

LIABILITIES AND EQUITY
Current liabilities:
	Accounts payable		$	74		$	268		$	768		$	—		$	1,110
	Accounts payable to affiliates			2,065			839			1,171			(4,046	)		29
	Accrued liabilities			111			138			570			(62	)		757
	Deferred income taxes			—			55			20			(11	)		64
	Note payable to affiliate			100			—			—			—			100
	Current portion of debt			93			—			196			—			289

		Total current liabilities		2,443			1,300			2,725			(4,119	)		2,349
Long-term debt				3,259			—			627			—			3,886
Notes payable to affiliates				435			—			1,043			(1,039	)		439
Deferred income taxes				—			37			84			(34	)		87
Other noncurrent liabilities				163			133			544			(3	)		837

		Total liabilities		6,300			1,470			5,023			(5,195	)		7,598
Equity
Huntsman International LLC members' equity:
	Members' equity			3,074			4,741			2,313			(7,054	)		3,074
	Subsidiary preferred stock			—			—			1			(1	)		—
	Accumulated deficit			(1,519	)		(1,015	)		(422	)		1,437			(1,519	)
	Accumulated other comprehensive (loss) income			(196	)		1,909			(211	)		(1,698	)		(196	)

		Total Huntsman International LLC members' equity		1,359			5,635			1,681			(7,316	)		1,359
Noncontrolling interests in subsidiaries				—			—			88			49			137

		Total equity		1,359			5,635			1,769			(7,267	)		1,496

	Total liabilities and equity		$	7,659		$	7,105		$	6,792		$	(12,462	)	$	9,094

Table of Contents

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEET (UNAUDITED)

AS OF DECEMBER 31, 2010

(Dollars in Millions)

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

			Parent Company			Guarantors			Nonguarantors			Eliminations			Consolidated Huntsman International LLC

ASSETS
Current assets:
	Cash and cash equivalents		$	220		$	9		$	332		$	—		$	561
	Restricted cash			—			—			7			—			7
	Accounts and notes receivable, net			17			112			1,284			—			1,413
	Accounts receivable from affiliates			1,275			2,530			79			(3,784	)		100
	Inventories			78			240			1,089			(11	)		1,396
	Prepaid expenses			11			6			42			(14	)		45
	Deferred income taxes			5			—			44			(9	)		40
	Other current assets			—			3			160			(3	)		160

		Total current assets		1,606			2,900			3,037			(3,821	)		3,722
Property, plant and equipment, net				417			881			2,169			2			3,469
Investment in unconsolidated affiliates				5,018			1,403			172			(6,359	)		234
Intangible assets, net				62			3			42			—			107
Goodwill				(17	)		84			27			—			94
Deferred income taxes				(9	)		—			161			27			179
Notes receivable from affiliates				51			930			7			(981	)		7
Other noncurrent assets				73			169			253			—			495

		Total assets	$	7,201		$	6,370		$	5,868		$	(11,132	)	$	8,307

LIABILITIES AND EQUITY
Current liabilities:
	Accounts payable		$	42		$	212		$	586		$	—		$	840
	Accounts payable to affiliates			1,892			860			1,091			(3,784	)		59
	Accrued liabilities			102			77			464			(17	)		626
	Deferred income taxes			—			55			19			(11	)		63
	Note payable to affiliate			100			—			—			—			100
	Current portion of debt			114			—			405			—			519

		Total current liabilities		2,250			1,204			2,565			(3,812	)		2,207
Long-term debt				3,320			—			307			—			3,627
Notes payable to affiliates				435			—			985			(981	)		439
Deferred income taxes				8			(28	)		86			28			94
Other noncurrent liabilities				160			138			555			(1	)		852

		Total liabilities		6,173			1,314			4,498			(4,766	)		7,219
Equity Huntsman International LLC members' equity:
	Members' equity			3,049			4,764			2,217			(6,981	)		3,049
	Subsidiary preferred stock			—			—			1			(1	)		—
	Accumulated deficit			(1,667	)		(1,308	)		(549	)		1,857			(1,667	)
	Accumulated other comprehensive (loss) income			(354	)		1,600			(318	)		(1,282	)		(354	)

		Total Huntsman International LLC members' equity		1,028			5,056			1,351			(6,407	)		1,028
Noncontrolling interests in subsidiaries				—			—			19			41			60

		Total equity		1,028			5,056			1,370			(6,366	)		1,088

	Total liabilities and equity		$	7,201		$	6,370		$	5,868		$	(11,132	)	$	8,307

Table of Contents

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (UNAUDITED)

THREE MONTHS ENDED JUNE 30, 2011

(Dollars in Millions)

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

		Parent Company			Guarantors			Nonguarantors			Eliminations			Consolidated Huntsman International LLC

Revenues:
	Trade sales, services and fees, net	$	231		$	861		$	1,807		$	(3	)	$	2,896
	Related party sales		110			149			283			(504	)		38

Total revenues			341			1,010			2,090			(507	)		2,934
Cost of goods sold			298			816			1,802			(487	)		2,429

Gross profit			43			194			288			(20	)		505
Selling, general and administrative			45			31			179			—			255
Research and development			13			8			21			—			42
Other operating income			(4	)		(11	)		(11	)		—			(26	)
Restructuring, impairment and plant closing costs			—			—			9			—			9

Operating (loss) income			(11	)		166			90			(20	)		225
Interest (expense) income, net			(54	)		11			(24	)		—			(67	)
Equity in income of investment in affiliates and subsidiaries			162			53			3			(216	)		2
Other (expense) income			(16	)		—			—			17			1

Income from continuing operations before income taxes			81			230			69			(219	)		161
Income tax benefit (expense)			36			(60	)		(10	)		—			(34	)

Income from continuing operations			117			170			59			(219	)		127
Loss from discontinued operations, net of tax			—			—			(1	)		—			(1	)

Income before extraordinary gain			117			170			58			(219	)		126
Extraordinary gain on the acquisition of a business, net of tax of nil			—			—			1			—			1

Net income			117			170			59			(219	)		127
Net income attributable to noncontrolling interests			—			(1	)		(4	)		(5	)		(10	)

Net income attributable to Huntsman International LLC		$	117		$	169		$	55		$	(224	)	$	117

Table of Contents

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (UNAUDITED)

THREE MONTHS ENDED JUNE 30, 2010

(Dollars in Millions)

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

		Parent Company			Guarantors			Nonguarantors			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

Table of Contents

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (UNAUDITED)

SIX MONTHS ENDED JUNE 30, 2011

(Dollars in Millions)

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

		Parent Company			Guarantors			Nonguarantors			Eliminations			Consolidated Huntsman International LLC

Revenues:
	Trade sales, services and fees, net	$	435		$	1,664		$	3,426		$	(3	)	$	5,522
	Related party sales		192			283			569			(953	)		91

Total revenues			627			1,947			3,995			(956	)		5,613
Cost of goods sold			541			1,582			3,456			(936	)		4,643

Gross profit			86			365			539			(20	)		970
Selling, general and administrative			84			57			331			—			472
Research and development			24			16			41			—			81
Other operating expense (income)			33			(38	)		13			—			8
Restructuring, impairment and plant closing costs			—			—			16			—			16

Operating (loss) income			(55	)		330			138			(20	)		393
Interest (expense) income, net			(110	)		21			(42	)		—			(131	)
Equity in income of investment in affiliates and subsidiaries			281			61			5			(343	)		4
Loss on early extinguishment of debt			(3	)		—			—			—			(3	)
Other (expense) income			(16	)		—			—			17			1

Income from continuing operations before income taxes			97			412			101			(346	)		264
Income tax benefit (expense)			76			(120	)		(12	)		—			(56	)

Income from continuing operations			173			292			89			(346	)		208
Income (loss) from discontinued operations, net of tax			7			—			(22	)		—			(15	)

Income before extraordinary gain			180			292			67			(346	)		193
Extraordinary gain on the acquisition of a business, net of tax of nil			—			—			2			—			2

Net income			180			292			69			(346	)		195
Net income attributable to noncontrolling interests			—			(1	)		(8	)		(6	)		(15	)

Net income attributable to Huntsman International LLC		$	180		$	291		$	61		$	(352	)	$	180

Table of Contents

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (UNAUDITED)

SIX MONTHS ENDED JUNE 30, 2010

(Dollars in Millions)

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

		Parent Company			Guarantors			Nonguarantors			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 INTERNATIONAL LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (UNAUDITED)

SIX MONTHS ENDED JUNE 30, 2011

(Dollars in Millions)

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

	Parent Company			Guarantors			Nonguarantors			Eliminations			Consolidated Huntsman International LLC

Net cash provided by (used in) operating activities	$	86		$	45		$	(128	)	$	(6	)	$	(3	)

Investing activities:
Capital expenditures		(7	)		(29	)		(88	)		—			(124	)
Proceeds from settlements treated as reimbursement of capital expenditures		—			—			3			—			3
Cash assumed in connection with the initial consolidation of a variable interest entity		—			—			28			—			28
Cash paid for acquisition of a business		—			—			(23	)		—			(23	)
Proceeds from sale of business/assets		—			—			3			—			3
Decrease in receivable from affiliate		8			—			—			—			8
Investment in affiliate		(106	)		(1	)		—			107			—
Investment in unconsolidated affiliate		—			(10	)		—			—			(10	)
Cash received from unconsolidated affiliates		—			13			—			—			13
Other, net		—			—			(6	)		5			(1	)

Net cash used in investing activities		(105	)		(27	)		(83	)		112			(103	)
Financing activities:
Net borrowings under revolving loan facilities		—			—			4			—			4
Net borrowings on overdraft facilities		—			—			11			—			11
Repayments of short-term debt		—			—			(100	)		—			(100	)
Borrowings on short-term debt		—			—			76			—			76
Repayments of long-term debt		(100	)		—			(70	)		—			(170	)
Proceeds from issuance of long-term debt		—			—			71			—			71
Repayments of notes payable		(14	)		—			(1	)		—			(15	)
Borrowings on notes payable		—			—			1			—			1
Debt issuance costs paid		(7	)		—			—			—			(7	)
Call premiums related to early extinguishment of debt		(3	)		—			—			—			(3	)
Contribution from parent, net		—			(23	)		130			(107	)		—
Dividends paid		(32	)		(1	)		—			1			(32	)
Excess tax benefit related to stock-based compensation		10			—			—			—			10

Net cash (used in) provided by financing activities		(146	)		(24	)		122			(106	)		(154	)
Effect of exchange rate changes on cash		—			—			5			—			5

Decrease in cash and cash equivalents		(165	)		(6	)		(84	)		—			(255	)
Cash and cash equivalents at beginning of period		220			9			332			—			561

Cash and cash equivalents at end of period	$	55		$	3		$	248		$	—		$	306

Table of Contents

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (UNAUDITED)

SIX MONTHS ENDED JUNE 30, 2010

(Dollars in Millions)

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

	Parent Company			Guarantors			Nonguarantors			Eliminations			Consolidated Huntsman International LLC

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

Investing activities:
Capital expenditures		(6	)		(26	)		(46	)		—			(78	)
Proceeds from settlements treated as reimbursement of capital expenditures		—			34			—			—			34
Investment in unconsolidated affiliates		—			—			(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) provided by 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
Repayments of short-term debt		—			—			(94	)		—			(94	)
Borrowings on short-term debt		—			—			115			—			115
Repayments of long-term debt		(629	)		—			(30	)		—			(659	)
Proceeds from issuance of long-term debt		350			—			25			—			375
Repayments of note payable to affiliate		(125	)		—			—			—			(125	)
Proceeds from note payable to affiliate		110			—			—			—			110
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 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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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

With respect to Huntsman Corporation, certain information set forth in this report contains "forward-looking statements" within the meaning of the federal securities laws. Huntsman International is a limited liability company, and, pursuant to Section 21E(b)(2)(E) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the safe harbor for certain forward-looking statements is inapplicable to it. Forward-looking statements include statements concerning our plans, objectives, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions and other information that is not historical information. In some cases, forward-looking statements can be identified by terminology such as "believes," "expects," "may," "should," "anticipates," or "intends" or the negative of such terms or other comparable terminology, or by discussions of strategy. We may also make additional forward-looking statements from time to time. All such subsequent forward-looking statements, whether written or oral, by us or on our behalf, are also expressly qualified by these cautionary statements.

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

There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements contained in or contemplated by this report. Any forward-looking statements should be considered in light of the risks referenced in "Part I. Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2010.

OVERVIEW

Business

We are a global manufacturer of differentiated organic chemical products and of inorganic chemical products. Our products comprise a broad range of chemicals and formulations, which we market globally to a diversified group of consumer and industrial customers. Our products are used in a wide range of applications, including those in the adhesives, aerospace, automotive, construction products, durable and nondurable 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, epoxy-based polymer formulations, textile chemicals, dyes, maleic anhydride and titanium dioxide. We had revenues for the six months ended June 30, 2011 and 2010 of $5,613 million and $4,437 million, respectively.

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RECENT DEVELOPMENTS

Redemption of 7.375% Senior Subordinated Notes Due 2015

OUTLOOK

Global demand for most of our products is strong and we continue to be encouraged by underlying trends within our largest businesses. Average selling prices increased on a quarterly basis both from the prior year and sequentially within all our businesses, a trend we expect to continue in the near term for most of our businesses, most notably in our Pigments business.

We continue to be optimistic that we will see stable to improving markets globally for the remainder of 2011. Nevertheless, we recognize that there are significant continuing economic risks that could materially impact our earnings performance. Continued government budgetary issues, both in the U.S. and in Europe, and inflation containment efforts in China are headwinds to accelerating demand in this stage of the economic cycle. While we anticipate that our raw material and energy costs will remain at elevated levels in response to increased demand, subject to global economic growth we expect our margins will continue to improve.

Our management believes that our strategic and financial approach to the operation of our business—focusing on growth in Asia and other emerging markets and debt reduction—will provide us a foundation for long-term earnings growth.

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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
		2011			2010			Percent Change			2011			2010			Percent Change
Revenues		$	2,934		$	2,343			25	%	$	5,613		$	4,437			27	%
Cost of goods sold			2,433			1,958			24	%		4,652			3,771			23	%

Gross profit			501			385			30	%		961			666			44	%
Operating expenses, net			272			241			13	%		563			497			13	%
Restructuring, impairment and plant closing costs			9			17			(47	)%		16			20			(20	)%

Operating income			220			127			73	%		382			149			156	%
Interest expense, net			(65	)		(43	)		51	%		(124	)		(104	)		19	%
Equity in income of investment in unconsolidated affiliates			2			16			(88	)%		4			17			(76	)%
Loss on early extinguishment of debt			—			(7	)		NM			(3	)		(162	)		(98	)%
Expenses associated with the Terminated Merger and related litigation			—			(1	)		NM			—			(1	)		NM
Other income			1			1			—			1			1			—

Income (loss) from continuing operations before income taxes			158			93			70	%		260			(100	)		NM
Income tax expense			(34	)		(39	)		(13	)%		(56	)		(5	)		NM

Income (loss) from continuing operations			124			54			130	%		204			(105	)		NM
(Loss) income from discontinued operations, net of tax			(1	)		62			NM			(15	)		49			NM
Extraordinary gain on the acquisition of a business, net of tax of nil			1			—			NM			2			—			NM

Net income (loss)			124			116			7	%		191			(56	)		NM
Net income attributable to noncontrolling interests			(10	)		(2	)		400	%		(15	)		(2	)		650	%

Net income (loss) attributable to Huntsman Corporation			114			114			—			176			(58	)		NM
Interest expense, net			65			43			51	%		124			104			19	%
Income tax expense from continuing operations			34			39			(13	)%		56			5			NM
Income tax (benefit) expense from discontinued operations			(1	)		37			NM			(8	)		29			NM
Depreciation and amortization			111			98			13	%		214			196			9	%

EBITDA(1)		$	323		$	331			(2	)%	$	562		$	276			104	%

Net income (loss) per share:
	Basic	$	0.48		$	0.48			—		$	0.74		$	(0.25	)		NM
	Diluted		0.47			0.47			—			0.72			(0.25	)		NM
Net cash provided by (used in) operating activities												1			(442	)		NM
Net cash used in investing activities												(111	)		(49	)		127	%
Net cash used in financing activities												(178	)		(480	)		(63	)%
Other non-GAAP measures:
Adjusted EBITDA(1)		$	318		$	257			24	%	$	620		$	380			63	%
Adjusted net income(2)			117			75			56	%		231			59			292	%
Adjusted income (loss) per share(2):
	Basic		0.49			0.32			53	%		0.97			0.25			288	%
	Diluted		0.48			0.31			55	%		0.95			0.25			280	%
Capital expenditures, net of reimbursements(3)												121			44			175	%

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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
	2011			2010			Percent Change			2011			2010			Percent Change
Revenues	$	2,934		$	2,343			25	%	$	5,613		$	4,437			27	%
Cost of goods sold		2,429			1,955			24	%		4,643			3,763			23	%

Gross profit		505			388			30	%		970			674			44	%
Operating expenses, net		271			240			13	%		561			484			16	%
Restructuring, impairment and plant closing costs		9			17			(47	)%		16			20			(20	)%

Operating income		225			131			72	%		393			170			131	%
Interest expense, net		(67	)		(47	)		43	%		(131	)		(113	)		16	%
Equity in income of investment in unconsolidated affiliates		2			16			(88	)%		4			17			(76	)%
Loss on early extinguishment of debt		—			(7	)		NM			(3	)		(16	)		(81	)%
Other income		1			2			(50	)%		1			2			(50	)%

Income from continuing operations before income taxes		161			95			69	%		264			60			340	%
Income tax expense		(34	)		(38	)		(11	)%		(56	)		(16	)		250	%

Income from continuing operations		127			57			123	%		208			44			373	%
(Loss) income from discontinued operations, net of tax		(1	)		62			NM			(15	)		49			NM
Extraordinary gain on the acquisition of a business, net of tax of nil		1			—			NM			2			—			NM

Net income		127			119			7	%		195			93			110	%
Net income attributable to noncontrolling interests		(10	)		(2	)		400	%		(15	)		(2	)		650	%

Net income attributable to Huntsman International LLC		117			117			—			180			91			98	%
Interest expense, net		67			47			43	%		131			113			16	%
Income tax expense from continuing operations		34			38			(11	)%		56			16			250	%
Income tax (benefit) expense from discontinued operations		(1	)		37			NM			(8	)		29			NM
Depreciation and amortization		105			92			14	%		203			184			10	%

EBITDA(1)	$	322		$	331			(3	)%	$	562		$	433			30	%

Net cash used in operating activities											(3	)		(413	)		(99	)%
Net cash used in investing activities											(103	)		(95	)		8	%
Net cash used in financing activities											(154	)		(61	)		152	%
Other non-GAAP measures:
Adjusted EBITDA(1)	$	317		$	256			24	%	$	620		$	390			59	%
Adjusted net income(2)		120			77			56	%		235			71			231	%
Capital expenditures, net of reimbursements(3)											121			44			175	%

NM—Not Meaningful

(1): EBITDA is defined as net income (loss) 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. However, EBITDA should not be considered in isolation or viewed as a substitute for net income attributable to Huntsman Corporation or Huntsman International LLC, as appropriate, 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 by reviewing 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

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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. 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 attributable to Huntsman Corporation or Huntsman International LLC, as appropriate, 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.

: Adjusted EBITDA is computed by eliminating the following from EBITDA: unallocated foreign exchange gains; loss on early extinguishment of debt; legal settlements; EBITDA from discontinued operations; acquisition expenses; gain on the sale of assets related to plant closures; expenses associated with the Terminated Merger and related litigation (Huntsman Corporation only); extraordinary gain on the acquisition of a business; gain on consolidation of a variable interest entity and restructuring, impairment and plant closing costs (credits). Adjusted EBITDA is presented solely as a supplemental disclosure to EBITDA and reported GAAP measures because we believe that it is indicative of our operating performance and is frequently used as a valuation measure of chemical companies. Our management also uses Adjusted EBITDA to evaluate the core operating performance of our segments and business.
: In addition to the limitations of EBITDA noted above, Adjusted EBITDA excludes items that may be recurring in nature and should not be disregarded in the evaluation of performance. However, we believe it is useful to exclude such items to provide a supplemental analysis of current results and trends compared to other periods for the following reasons: certain excluded items can vary significantly depending on specific underlying transactions or events, and the variability of such items may not relate specifically to current operating results or trends; and certain excluded items, while potentially recurring in future periods, may not be indicative of future results.
: Adjusted EBITDA should not be construed as an alternative to net income applicable to Huntsman Corporation or Huntsman International, as appropriate, as an indicator of performance, or as any other measure determined in accordance with GAAP.
: We believe that net income (loss) 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 Adjusted EBITDA. For each of our Company and Huntsman

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International, the following tables reconcile net income (loss) attributable to Huntsman Corporation or Huntsman International LLC, as appropriate, to EBITDA and Adjusted EBITDA (dollars in millions):

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

Huntsman Corporation

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

			2011			2010			2011			2010
Net income (loss) attributable to Huntsman Corporation			$	114		$	114		$	176		$	(58	)
Interest expense, net				65			43			124			104
Income tax expense from continuing operations				34			39			56			5
Income tax (benefit) expense from discontinued operations				(1	)		37			(8	)		29
Depreciation and amortization				111			98			214			196

EBITDA				323			331			562			276
Foreign exchange gains—unallocated				(3	)		—			(5	)		(1	)
Loss on early extinguishment of debt				—			7			3			162
Gain on consolidation of a variable interest entity				(12	)		—			(12	)		—
Legal settlements				—			—			34			—
EBITDA from discontinued operations				2			(100	)		23			(79	)
Acquisition expenses				3			1			4			1
Gain on sale of assets related to plant closures				(3	)		—			(3	)		—
Expenses associated with the Terminated Merger and related litigation				—			1			—			1
Extraordinary gain on the acquisition of a business				(1	)		—			(2	)		—
Restructuring, impairment and plant closing costs (credits):
	Advanced Materials			3			—			3			(2	)
	Textile Effects			—			15			5			15
	Pigments			5			2			7			3
	Corporate and other			1			—			1			4

		Total restructuring, impairment and plant closing costs		9			17			16			20

Adjusted EBITDA			$	318		$	257		$	620		$	380

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Huntsman International

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

			2011			2010			2011			2010
Net income attributable to Huntsman International			$	117		$	117		$	180		$	91
Interest expense, net				67			47			131			113
Income tax expense from continuing operations				34			38			56			16
Income tax (benefit) expense from discontinued operations				(1	)		37			(8	)		29
Depreciation and amortization				105			92			203			184

EBITDA				322			331			562			433
Foreign exchange gains—unallocated				(3	)		—			(5	)		(1	)
Loss on early extinguishment of debt				—			7			3			16
Gain on consolidation of a variable interest entity				(12	)		—			(12	)		—
Legal settlements				—			—			34			—
EBITDA from discontinued operations				2			(100	)		23			(79	)
Acquisition expenses				3			1			4			1
Gain on sale of assets related to plant closures				(3	)		—			(3	)		—
Extraordinary gain on the acquisition of a business				(1	)		—			(2	)		—
Restructuring, impairment and plant closing costs (credits):
	Advanced Materials			3			—			3			(2	)
	Textile Effects			—			15			5			15
	Pigments			5			2			7			3
	Corporate and other			1			—			1			4

		Total restructuring, impairment and plant closing costs		9			17			16			20

Adjusted EBITDA			$	317		$	256		$	620		$	390

(2): Adjusted net income (loss) is computed by eliminating the after-tax amounts related to the following from net income applicable to Huntsman Corporation or Huntsman International, as appropriate: unallocated foreign exchange gains or losses; loss on early extinguishment of debt; legal settlements; discount amortization of settlement financing; income (loss) from discontinued operations; acquisition expenses; gain on sale of assets related to plant closures; expenses associated with the Terminated Merger and related litigation (Huntsman Corporation only); extraordinary gain on the acquisition of a business; gain on consolidation of a variable interest entity; and restructuring, impairment and plant closing costs. The income tax impacts of each aforementioned item was calculated using the statutory rates in the applicable taxing jurisdiction and considering valuation allowances on deferred tax assets in each jurisdiction. Basic adjusted income (loss) per share excludes dilution and is computed by dividing adjusted net income (loss) by the weighted average number of shares outstanding during the period. Diluted income (loss) per share reflects all potential dilutive common shares outstanding during the period and is computed by dividing adjusted net income (loss) by the weighted average number of shares outstanding during the period increased by the number of additional shares that would have been outstanding as dilutive securities.
: Adjusted net income (loss) and adjusted income (loss) per share amounts are presented solely as supplemental disclosures to net income applicable to Huntsman Corporation or Huntsman International, as appropriate, and income (loss) per share because we believe that these measures are indicative of our operating performance. Adjusted net income (loss) and adjusted income (loss) per share exclude items that may be recurring in nature and should not be disregarded in the evaluation of performance. However, we believe it is useful to exclude such items to provide a supplemental analysis of current results and trends compared to other periods for the following reasons: certain excluded items can vary significantly depending on specific underlying transactions or events, and the variability of such items may not relate specifically to current operating results or trends; and certain excluded items, while potentially recurring in future periods, may not be indicative of future results.

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Huntsman Corporation

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

	2011			2010			2011			2010
Net income (loss) attributable to Huntsman Corporation	$	114		$	114		$	176		$	(58	)
Foreign exchange losses (gains)—unallocated, net of tax of $4 and $(4) for the three months ended, respectively, and $10 and $(9) for the six months ended, respectively		1			(4	)		5			(10	)
Loss on early extinguishment of debt, net of tax of nil and $(3) for the three months ended, respectively, and $(1) and $(15) for the six months ended, respectively		—			4			2			147
Gain on consolidation of a variable interest entity, net of tax of $2		(10	)		—			(10	)		—
Legal settlements, net of tax of $(13)		—			—			21			—
Discount amortization of settlement financing, net of tax of $(2) and $(3) for the three months ended, respectively, and $(5) each for the six months ended		5			4			9			8
Loss (income) from discontinued operations, net of tax of $(1) and $37 for the three months ended, respectively, and $(8) and $29 for the six months ended, respectively		1			(62	)		15			(49	)
Acquisition expenses, net of tax of $(1) and nil for the three months ended, respectively, and $(1) and nil for the six months ended, respectively		2			1			3			1
Gain on sale of assets related to plant closures, net of tax of nil		(3	)		—			(3	)		—
Expenses associated with the Terminated Merger and related litigation, net of tax of nil		—			1			—			1
Extraordinary gain on acquisition of a business, net of tax of nil		(1	)		—			(2	)		—
Restructuring, impairment and plant closing costs, net of tax of $(1) and nil for the three months ended, respectively, and $(1) each for the six months ended		8			17			15			19

Adjusted net income	$	117		$	75		$	231		$	59

Weighted average shares—diluted		243.7			240.8			243.2			240.8

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Huntsman International

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

	2011			2010			2011			2010
Net income attributable to Huntsman International	$	117		$	117		$	180		$	91
Foreign exchange losses (gains)—unallocated, net of tax of $4 and $(4) for the three months ended, respectively, and $10 and $(9) for the six months ended, respectively		1			(4	)		5			(10	)
Loss on early extinguishment of debt, net of tax of nil and $(3) for the three months ended, respectively, and (1) and $(5) for the six months ended, respectively		—			4			2			11
Gain on consolidation of a variable interest entity, net of tax of $2		(10	)		—			(10	)		—
Legal settlements, net of tax of $(13)		—			—			21			—
Discount amortization of settlement financing, net of tax of $(2) and $(3) for the three months ended, respectively, and $(5) each for the six months ended		5			4			9			8
Loss (income) from discontinued operations, net of tax of $(1) and $37 for the three months ended, respectively, and $(8) and $29 for the six months ended, respectively		1			(62	)		15			(49	)
Acquisition expenses, net of tax of $(1) and nil for the three months ended, respectively, and $(1) and nil for the six months ended, respectively		2			1			3			1
Gain on sale of assets related to plant closures, net of tax of nil		(3	)		—			(3	)		—
Extraordinary gain on acquisition of a business, net of tax of nil		(1	)		—			(2	)		—
Restructuring, impairment and plant closing costs, net of tax of $(1) and nil for the three months ended, respectively, and $(1) each for the six months ended		8			17			15			19

Adjusted net income	$	120		$	77		$	235		$	71

(3): Capital expenditures, net of reimbursements represent cash paid for capital expenditures less reimbursements of capital expenditures from insurance settlements, other legal settlements and contributions from noncontrolling shareholders in consolidated entities. During the six months ended June 30, 2011, capital expenditures of $124 million were reimbursed in part by $3 million of proceeds from a settlement by Arabian Amines Company of a dispute with its third party contractors. During the six months ended June 30, 2010 capital expenditures of $78 million were reimbursed in part by $34 million from insurance settlement proceeds. We received $110 million from the settlement of our insurance claims related to the 2006 fire at our Port Arthur Texas plant, $34 million of which was considered as a reimbursement of capital expenditures.

Three Months Ended June 30, 2011 Compared with Three Months Ended June 30, 2010

For the three months ended June 30, 2011, the net income attributable to Huntsman Corporation was $114 million on revenues of $2,934 million, compared with net income attributable to Huntsman Corporation of $114 million on revenues of $2,343 million for the same period of 2010. For the three months ended June 30, 2011, the net income attributable to Huntsman International LLC was $117 million on revenues of $2,934 million, compared with net income attributable to Huntsman International LLC of $117 million on revenues of $2,343 million for the same period of 2010. The change in operating results was the result of the following:

•: Revenues for the three months ended June 30, 2011 increased by $591 million, or 25%, as compared with the 2010 period. The increase was due principally to higher average selling prices in all of our segments, and higher sales volumes in all of our segments except Advanced Materials and Textile Effects. See "—Segment Analysis" below.

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•: Our gross profit and the gross profit of Huntsman International for the three months ended June 30, 2011 increased by $116 million and $117 million, respectively, or 30% each, as compared with the 2010 period. The increase resulted from higher gross margins in all of our segments except Advanced Materials and Textile Effects. See "—Segment Analysis" below.
•: Operating expenses for the three months ended June 30, 2011 increased by $31 million, or 13%, as compared with the 2010 period. Operating expenses increased by $18 million in the 2011 period due to the impact of translating foreign currency amounts to the U.S. dollar. Selling, general and administrative expenses were also higher, partially offset by a $12 million gain on the consolidation of Sasol-Huntsman and an $8 million settlement gain recorded by the Arabian Amines Company. For further information see "Note 5. Variable Interest Entities" to our condensed consolidated financial statements (unaudited).
•: Restructuring, impairment and plant closing costs for the three months ended June 30, 2011 decreased to $9 million from $17 million in the 2010 period. For more information, see "Note 6. 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, 2011 increased by $22 million and $20 million, respectively, or 51% and 43%, respectively, as compared with the 2010 period. In the three months ended June 30, 2010, we benefited from a $15 million reduction in interest expense related to the ineffective portion of a cross currency swap, and interest expense in the 2011 period is also higher due to the consolidation of our Sasol-Huntsman and Arabian Amines Company joint ventures. For more information, see "Note 5. Variable Interest Entities" to our condensed consolidated financial statements (unaudited).
•: Equity in income of investment in unconsolidated affiliates for the three months ended June 30, 2011 decreased to $2 million from $16 million in the 2010 period. During the second quarter of 2010, we recorded a nonrecurring $15 million credit to equity income of investment in unconsolidated affiliates to appropriately reflect our investment in the Sasol-Huntsman joint venture. For more information, see "Note 5. Variable Interest Entities" 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 on Term Loan B and $40 million on Term Loan C and the June 22, 2010 prepayment of $110 million on our Senior Credit Facilities.
•: For the three months ended June 30, 2011, our income tax expense decreased by $5 million and Huntsman International's tax expense decreased by $4 million as compared with the same period in 2010. 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 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 the three months ended June 30, 2011, we used the annual effective tax rate method. For more information, see "Note 16. Income Taxes" to our condensed consolidated financial statements (unaudited).
•: Loss from discontinued operations, net of tax, for the three months ended June 30, 2011 was $1 million compared to income from discontinued operations of $62 million in the 2010 period. The decrease 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

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part by related income taxes, legal and other costs. See "Note 17. Discontinued Operations" to our condensed consolidated financial statements (unaudited).

Segment Analysis

		Three months ended June 30,

		Three months ended June 30,						Percent Change
		2011			2010			Percent Change
Revenues
Polyurethanes		$	1,135		$	932			22	%
Performance Products			896			669			34	%
Advanced Materials			360			320			13	%
Textile Effects			200			213			(6	)%
Pigments			424			287			48	%
Eliminations			(81	)		(78	)		4	%

Total		$	2,934		$	2,343			25	%

Huntsman Corporation
Segment EBITDA
Polyurethanes		$	142		$	69			106	%
Performance Products			113			116			(3	)%
Advanced Materials			28			51			(45	)%
Textile Effects			(7	)		(7	)		—
Pigments			112			47			138	%
Corporate and other			(63	)		(45	)		40	%

	Subtotal		325			231			41	%
Discontinued Operations			(2	)		100			NM

Total		$	323		$	331			(2	)%

Huntsman International
Segment EBITDA
Polyurethanes		$	142		$	69			106	%
Performance Products			113			116			(3	)%
Advanced Materials			28			51			(45	)%
Textile Effects			(7	)		(7	)		—
Pigments			112			47			138	%
Corporate and other			(64	)		(45	)		42	%

	Subtotal		324			231			40	%
Discontinued Operations			(2	)		100			NM

Total		$	322		$	331			(3	)%

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	Three months ended June 30, 2011 vs. 2010

	Average Selling Price(1)
	Local Currency			Foreign Currency Translation Impact			Sales Mix			Sales Volumes(1)
Period-Over-Period Increase (Decrease)
Polyurethanes		20	%		4	%		—			2	%
Performance Products		23	%		4	%		—			6	%
Advanced Materials		8	%		6	%		2	%		(4	)%
Textile Effects		—			5	%		—			(11	)%
Pigments		35	%		7	%		—			8	%
Total Company		19	%		5	%		(2	)%		4	%

	Three months ended June 30, 2011 vs. March 31, 2011

	Average Selling Price(1)
	Local Currency			Foreign Currency Translation Impact			Sales Mix			Sales Volumes(1)
Period-Over-Period Increase (Decrease)
Polyurethanes		9	%		2	%		2	%		(4	)%
Performance Products		10	%		2	%		(2	)%		1	%
Advanced Materials		3	%		3	%		1	%		(7	)%
Textile Effects		1	%		2	%		1	%		3	%
Pigments		9	%		3	%		—			5	%
Total Company		8	%		2	%		—			(1	)%

(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, 2011 compared to the same period in 2010 was primarily due to higher average selling prices and higher sales volumes. Average MDI and PO/MTBE selling prices increased primarily in response to higher raw material costs and the strength of major European currencies against the U.S. dollar. MDI sales volumes increased primarily due to improved demand in the insulation and automotive sectors and stronger regional demand in the Americas and Asia. The increase in segment EBITDA was primarily due to higher contribution margins and higher sales volumes.

Performance Products

The increase in revenues in our Performance Products segment for the three months ended June 30, 2011 compared to the same period in 2010 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 and the strength of major European currencies and the Australian dollar against the U.S. dollar. Sales volumes increased primarily as a result of the consolidation of the Sasol-Huntsman joint venture during the second quarter of 2011 and more production from our Arabian Amines Company joint venture which was starting up in the second quarter of 2010. The decrease in segment EBITDA was primarily due to a nonrecurring $15 million credit recorded in the second quarter of 2010 to appropriately reflect our investment in the Sasol-Huntsman joint venture, offset in part by a gain of $12 million recorded in the second quarter of 2011 in connection with the consolidation of the Sasol-Huntsman joint venture.

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Advanced Materials

The increase in revenues in our Advanced Materials segment for the three months ended June 30, 2011 compared to the same period in 2010 was primarily due to higher average selling prices, partially offset by lower sales volumes. Average selling prices increased primarily in response to higher raw material costs and the strength of major European currencies against the U.S. dollar. Sales volumes decreased in our base resins business partially offset by an increase in combined sales volumes in our core formulation systems and specialty components businesses. The decrease in segment EBITDA was primarily due to lower margins, the impact of stronger major European currencies against the U.S. dollar resulting in higher manufacturing and selling, general and administrative costs, and higher restructuring, impairment and plant closing costs. During the three months ended June 30, 2011 and 2010, our Advanced Materials segment recorded restructuring, impairment and plant closing charges of $3 million and nil, respectively. For more information concerning restructuring activities, see "Note 6. Restructuring, Impairment and Plant Closing Costs" to our condensed consolidated financial statements (unaudited).

Textile Effects

The decrease in revenues in our Textile Effects segment for the three months ended June 30, 2011 compared to the same period in 2010 was due to lower sales volumes, partially offset by higher average selling prices. Sales volumes decreased due to lower demand and customer manufacturing constraints. Average selling prices increased primarily from the strength of major European currencies against the U.S. dollar. EBITDA remained unchanged primarily due to lower sales volumes, the foreign currency impact of a stronger Swiss franc against the U.S. dollar on our manufacturing and selling, general and administrative costs, offset by lower restructuring, impairment and plant closing costs. During the three months ended June 30, 2011 and 2010, our Textile Effects segment recorded restructuring, impairment and plant closing charges of nil and $15 million, respectively. For more information concerning restructuring activities, see "Note 6. 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, 2011 compared to the same period in 2010 was due to higher average selling prices and higher sales volumes. Average selling prices increased in all regions of the world driven principally by higher raw materials costs and stronger overall market demand. Sales volumes increased primarily due to increased global demand, particularly in the Asia-Pacific, Africa, Latin America and Middle East regions. The increase in segment EBITDA in our Pigments segment was primarily due to higher margins and higher sales volumes, partially offset by higher manufacturing and selling, general and administrative costs.

Corporate and other—Huntsman Corporation

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Corporate and other—Huntsman International

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, legal costs, partial fire insurance settlement gains and related litigation costs, and restructuring, impairment and plant closing costs and gain (loss) on disposal with respect to our former businesses. During the second quarter of 2010, we recognized a $110 million pretax gain 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. For more information, see "Note 17. Discontinued Operations" to our condensed consolidated financial statements (unaudited).

Six Months Ended June 30, 2011 Compared with Six Months Ended June 30, 2010

For the six months ended June 30, 2011, the net income attributable to Huntsman Corporation was $176 million on revenues of $5,613 million, compared with net loss attributable to Huntsman Corporation of $58 million on revenues of $4,437 million for the same period of 2010. For the six months ended June 30, 2011, the net income attributable to Huntsman International LLC was $180 million on revenues of $5,613 million, compared with net income attributable to Huntsman International LLC of $91 million on revenues of $4,437 million for the same period of 2010. The increase of $234 million in net income attributable to Huntsman Corporation and the increase of $89 million in net income attributable to Huntsman International LLC was the result of the following items:

•: Revenues for the six months ended June 30, 2011 increased by $1,176 million, or 27%, as compared with the 2010 period. The increase was due principally to higher average selling prices in all of our segments and higher sales volumes in all of our segments except Textile Effects. See "—Segment Analysis" below.
•: Our gross profit and the gross profit of Huntsman International for the six months ended June 30, 2011 increased by $295 million and $296 million, respectively, or 44% each, as compared with the 2010 period. The increase resulted from higher gross margins in all of our segments except Textile Effects. See "—Segment Analysis" below.
•: Our operating expenses and the operating expenses of Huntsman International for the six months ended June 30, 2011 increased by $66 million and $77 million, or 13% and 16%, respectively, as compared with the 2010 period. Operating expenses increased by $20 million in 2011 due to the impact of translating foreign currency amounts to the U.S. dollar and an expense of $34 million related to legal settlements. Selling, general and administrative expenses were also higher, partially offset by a $12 million gain on the consolidation of Sasol-Huntsman and an $8 million settlement gain recorded by the Arabian Amines Company. For further

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information, see "Note 5. Variable Interest Entities" to our condensed consolidated financial statements (unaudited).

•: Restructuring, impairment and plant closing costs for the six months ended June 30, 2011 decreased to $16 million from $20 million in the 2010 period. For more information, see "Note 6. 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, 2011 increased by $20 million and $18 million, respectively, or 19% and 16%, respectively, as compared with the 2010 period. In the six months ended June 30, 2010, we benefited from a $14 million reduction in interest expense related to the ineffective portion of a cross currency swap, and interest expense in the 2011 period is also higher due to the consolidation of our Sasol-Huntsman and Arabian Amines Company joint ventures. For more information, see "Note 5. Variable Interest Entities" to our condensed consolidated financial statements (unaudited).
•: Equity in income of investment in unconsolidated affiliates for the six months ended June 30, 2011 decreased to $4 million from $17 million in the 2010 period. During the second quarter of 2010, we recorded a nonrecurring $15 million credit to equity income of investment in unconsolidated affiliates to appropriately reflect our investment in Sasol-Huntsman.
•: Our loss on early extinguishment of debt for the six months ended June 30, 2011 resulted from the January 18, 2011 repurchase of $100 million of 7.375% senior subordinated notes due 2015. The loss on early extinguishment of debt for the six months ended June 30, 2010 resulted from the January 11, 2010 repurchase of our 7% convertible notes due 2018 (Huntsman Corporation only), the March 17, 2010 partial redemption of our 6.875% senior subordinated notes due 2013 and our 7.50% senior subordinated notes due 2015, the April 26, 2010 prepayment of $124 million on Term Loan B and $40 million on Term Loan C, and the June 22, 2010 prepayment of $110 million on our Senior Credit Facilities. For more information see "Note 7. Debt" to our condensed consolidated financial statements (unaudited).
•: For the six months ended June 30, 2011, our income tax expense increased by $51 million and Huntsman International's tax expense increased by $40 million, as compared with the same period in 2010, primarily due to increased pre-tax income. 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 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 the six months ended June 30, 2011, we used the annual effective tax rate method. For more information, see "Note 16. Income Taxes" to our condensed consolidated financial statements (unaudited) included elsewhere in this report.
•: Loss from discontinued operations, net of tax, for the six months ended June 30, 2011 was $15 compared to income from discontinued operations of $49 million in the 2010 period. The decrease 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. For more information, see "Note 17. 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
		2011			2010			Percent Change
Revenues
Polyurethanes		$	2,182		$	1,699			28	%
Performance Products			1,700			1,285			32	%
Advanced Materials			710			611			16	%
Textile Effects			390			408			(4	)%
Pigments			788			556			42	%
Eliminations			(157	)		(122	)		29	%

Total		$	5,613		$	4,437			27	%

Huntsman Corporation
Segment EBITDA
Polyurethanes		$	256		$	121			112	%
Performance Products			228			176			30	%
Advanced Materials			67			84			(20	)%
Textile Effects			(18	)		(7	)		157	%
Pigments			196			75			161	%
Corporate and other			(144	)		(252	)		(43	)%

	Subtotal		585			197			197	%
Discontinued Operations			(23	)		79			NM

Total		$	562		$	276			104	%

Huntsman International
Segment EBITDA
Polyurethanes		$	256		$	121			112	%
Performance Products			228			176			30	%
Advanced Materials			67			84			(20	)%
Textile Effects			(18	)		(7	)		157	%
Pigments			196			75			161	%
Corporate and other			(144	)		(95	)		52	%

	Subtotal		585			354			65	%
Discontinued Operations			(23	)		79			NM

Total		$	562		$	433			30	%

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	Six months ended June 2011 vs. 2010

	Average Selling Price(1)
	Local Currency			Foreign Currency Translation Impact			Sales Mix			Sales Volumes(1)
Period-Over-Period Increase (Decrease)
Polyurethanes		18	%		2	%		(7	)%		19	%
Performance Products		20	%		2	%		1	%		9	%
Advanced Materials		8	%		3	%		4	%		1	%
Textile Effects		2	%		3	%		—			(9	)%
Pigments		30	%		4	%		—			9	%
Total Company		15	%		3	%		(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, 2011 compared to the same period in 2010 was primarily due to higher sales volumes and higher average selling prices. PO/MTBE sales volumes increased compared to the 2010 period primarily due to the 2010 planned maintenance outage at our Port Neches, Texas facility. MDI sales volumes increased primarily due to improved demand in the insulation and automotive sectors and stronger overall global demand. Average PO/MTBE selling prices increased primarily in response to higher raw material costs and industry supply constraints. Average MDI selling prices increased in response to higher raw material costs and the impact of stronger major European currencies against the U.S. dollar. The increase in EBITDA was primarily due to higher sales volumes and contribution margins, and the 2010 planned maintenance at our Port Neches, Texas facility, the estimated impact of which was $40 million.

Performance Products

The increase in revenues in our Performance Products segment for the six months ended June 30, 2011 compared to the same period in 2010 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 and the strength of major European currencies and the Australian dollar against the U.S. dollar. Sales volumes increased due to higher demand for ethyleneamines and EG, offset by lower sales of amines and European surfactants. In addition, sales volumes increased as a result of the consolidation of the Sasol-Huntsman joint venture during the second quarter of 2011 and more production from our Arabian Amines Company joint venture which was starting up in the second quarter of 2010. The increase in segment EBITDA was primarily due to higher sales volumes and higher margins as selling prices increased faster than raw material prices, partially offset by increased fixed costs. In addition, in the six months ended June 30, 2011, we recorded a gain of $12 million in connection with the consolidation of the Sasol-Huntsman joint venture and, in the six months ended June 30, 2010, we recorded a nonrecurring $15 million credit to appropriately reflect our investment in the Sasol-Huntsman joint venture.

Advanced Materials

The increase in revenues in our Advanced Materials segment for the six months ended June 30, 2011 compared to the same period in 2010 was due to higher average selling prices and higher sales volumes. Average selling prices increased in all regions and across the entire product portfolio in response to higher raw material costs. Sales volumes increased in Europe and the Asia-Pacific region while sales volumes decreased in the Americas, primarily as a result of raw material constraints for

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base resins. The decrease in EBITDA was primarily due to the impact of stronger major European currencies against the U.S. dollar, higher manufacturing and selling, general and administrative costs and higher restructuring, impairment and plant closing costs, offset in part by higher contribution margins. During the six months ended June 30, 2011 and 2010, our Advanced Materials segment recorded restructuring, impairment and plant closing charges (credits) of $3 million and $(2) million, respectively. For more information concerning restructuring activities, see "Note 6. Restructuring, Impairment and Plant Closing Costs" to our condensed consolidated financial statements (unaudited).

Textile Effects

The decrease in revenues in our Textile Effects segment for the six months ended June 30, 2011 compared to the same period in 2010 was due to lower sales volumes, partially offset by higher average selling prices. Sales volumes decreased due to lower demand and customer manufacturing constraints. Average selling prices increased primarily in response to higher raw material costs and from the impact of stronger major international currencies against the U.S. dollar. The decrease in EBITDA was primarily due to lower sales volumes, the foreign currency impact of a stronger Swiss franc against the U.S. dollar on our manufacturing and selling, general and administrative costs, offset in part by lower restructuring, impairment and plant closing costs. During the six months ended June 30, 2011 and 2010, our Textile Effects segment recorded restructuring, impairment and plant closing charges of $5 million and $15 million, respectively. For more information concerning restructuring activities, see "Note 6. 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, 2011 compared to the same period in 2010 was due to higher average selling prices and higher sales volumes. Average selling prices increased in all regions of the world driven principally by higher raw materials costs and stronger overall market demand. Sales volumes increased primarily due to increased demand in all regions of the world. The increase in EBITDA in our Pigments segment was primarily due to higher contribution margins and higher sales volumes, partially offset by higher manufacturing and selling, general and administrative costs and higher restructuring, impairment and plant closing costs. During the six months ended June 30, 2011 and 2010, our Pigments segment recorded restructuring, impairment and plant closing charges of $7 million and $3 million, respectively. For more information concerning restructuring activities, see "Note 6. 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, unallocated restructuring impairment and plant closing costs and nonoperating income and expense. For the six months ended June 30, 2011, EBITDA from Corporate and other items increased by $108 million to a loss of $144 million from a loss of $252 million for the same period in 2010. The increase in EBITDA from Corporate and other for the six months ended June 30, 2011 resulted primarily from a decrease in loss on early extinguishment of debt of $159 million ($3 million of loss in 2011 compared to $162 million in 2010). For more information regarding the loss on early extinguishment of debt, see "Note 7. Debt—Redemption of Notes and Loss on Early Extinguishment of Debt" to our condensed consolidated financial statements (unaudited). The increase to EBITDA was partially offset by $34 million of higher expenses related to legal claims in connection with certain antitrust matters and an $11 million increase in LIFO inventory valuation expense ($19 million of loss in 2011 compared to $8 million loss in 2010). For more information, see "Note 13. Commitments and Contingencies—Antitrust Matters" 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, unallocated restructuring impairment and plant closing costs, gain and loss on the disposition of assets and nonoperating income and expense. For the six months ended June 30, 2011, EBITDA from Corporate and other items decreased by $49 million to a loss of $144 million from a loss of $95 million for the same period in 2010. The decrease in EBITDA from Corporate and other for the six months ended June 30, 2011 resulted primarily from $34 million of higher expenses related to legal claims in connection with certain antitrust matters and an $11 million increase in LIFO inventory valuation expense ($19 million of loss in 2011 compared to $8 million loss in 2010). For more information, see "Note 13. Commitments and Contingencies—Antitrust Matters" 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, legal costs, partial fire insurance settlement gains and related litigation costs, and restructuring, impairment and plant closing costs and gain (loss) on disposal with respect to our former businesses. During the second quarter of 2010 we recognized a $110 million pretax gain 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. Discontinued Operations" to our condensed consolidated financial statements (unaudited).

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 provided by (used in) operating activities for the six months ended June 30, 2011 and 2010 was $1 million and $(442) million, respectively. The increase in cash provided by operating activities during the six months ended June 30, 2011 compared to the same period in 2010 was primarily attributable to an increase in operating income as described in "—Results of Operations" above and to a $340 million favorable variance in operating assets and liabilities for the six months ended June 30, 2011 as compared with the same period in 2010. Upon the adoption of new accounting guidance on January 1, 2010, sales of accounts receivable under our A/R Programs no longer meet the criteria for derecognition and off-balance sheet treatment. Accordingly, the amounts outstanding under our A/R Programs are accounted for as secured borrowings and were included on our 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.

Net cash used in investing activities for the six months ended June 30, 2011 and 2010 was $111 million and $49 million, respectively. During the six months ended June 30, 2011 and 2010, we paid $124 million and $78 million, respectively, for capital expenditures. During the six months ended June 30, 2011, we paid $23 million for the Laffans Acquisition. On April 1, 2011, we began consolidating the Sasol-Huntsman joint venture and assumed its cash balance of $28 million. During

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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, $34 million of which was reflected in the statement of cash flows as investing activities.

Net cash used in financing activities for the six months ended June 30, 2011 was $178 million as compared with $480 million in the 2010 period. This decrease in net cash used in financing activities was primarily due to higher net repayments of debt in the 2010 period as compared to the 2011 period and a $150 million reduction in call premiums paid related to early extinguishment of debt, offset by the on-balance sheet treatment of our A/R Programs in 2010. For more information regarding the call premiums paid, see "Note 7. Debt—Redemption of Notes and Loss on Early Extinguishment of Debt" to our condensed consolidated financial statements (unaudited).

Changes in Financial Condition

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

			June 30, 2011		Less: Laffans Acquisition and Consolidation of Sasol-Huntsman(1)			Subtotal		December 31, 2010		Increase (Decrease)

Cash and cash equivalents			$	683	$	(28	)	$	655	$	966	$	(311	)	(32	)%
Restricted cash				7		—			7		7		—		—
Accounts receivable, net				1,837		(37	)		1,800		1,428		372		26	%
Inventories				1,746		(8	)		1,738		1,396		342		24	%
Prepaid expenses				34		—			34		46		(12	)	(26	)%
Deferred income taxes				2		—			2		1		1		100	%
Other current assets				271		(2	)		269		164		105		64	%

	Total current assets			4,580		(75	)		4,505		4,008		497		12	%

Accounts payable				1,132		(22	)		1,110		887		223		25	%
Accrued liabilities				758		(2	)		756		628		128		20	%
Deferred income taxes				20		—			20		19		1		5	%
Current portion of debt				289		(3	)		286		519		(233	)	(45	)%

	Total current liabilities			2,199		(27	)		2,172		2,053		119		6	%

		Working capital	$	2,381	$	(48	)	$	2,333	$	1,955	$	378		19	%

(1): Represents opening balance sheet amounts related to the Laffans Acquisition and the consolidation of the Sasol-Huntsman joint venture.

Excluding the effects of the Laffans Acquisition and the consolidation of the Sasol-Huntsman joint venture, our working capital increased by $378 million as a result of the net impact of the following significant changes:

•: The decrease in cash and cash equivalents of $311 million resulted from the matters identified in the condensed consolidated statements of cash flows (unaudited).
•: Accounts receivable increased by $372 million mainly due higher sales.
•: Inventories increased by $342 million mainly due to higher raw material costs and higher finished goods inventory levels to support increased production.
•: Other current assets increased by $105 million mainly due to higher receivables relating to indemnity protection under our insurance programs and higher taxes receivable.

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•: The increase in accounts payable of $223 million was primarily due to higher raw materials costs.
•: The increase in accrued liabilities of $128 million resulted primarily from higher legal accruals and higher income taxes payable.
•: Current portion of debt decreased by $233 million due to the April 2011 refinancing our A/R Programs resulting in the reclassification of $223 million from current portion of debt to long-term debt as of June 30, 2011.

DIRECT AND SUBSIDIARY DEBT

Transactions Affecting our Debt

Senior Credit Facilities

As of June 30, 2011, our Senior Credit Facilities consisted of our Revolving Facility, our Term Loan B, our Term Loan C and our Extended Term Loan B as follows (dollars in millions):

Facility	Committed Amount		Principal Outstanding		Carrying Value			Interest Rate

Revolving Facility	$	300		—	$	—	(1)	USD LIBOR plus 3.00%	2014	(2)
Term Loan B		NA	$	652	$	652		USD LIBOR plus 1.50%	2014	(2)
Term Loan C		NA	$	427	$	390		USD LIBOR plus 2.25%	2016	(2)
Extended Term Loan B		NA	$	650	$	650		USD LIBOR plus 2.50%	2017	(2)

(1): We had no borrowings outstanding under our Revolving Facility; we had approximately $26 million (U.S. dollar equivalents) of letters of credit and bank guarantees issued and outstanding under our Revolving Facility.
(2): The Revolving Facility matures in March 2014, but is subject to optional extensions from time to time with the consent of the lenders and subject to certain specified conditions and exceptions. Notwithstanding the stated maturity dates, the maturities of the Revolving Facility and Term Loan B 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. The maturity of the Extended Term Loan B will also accelerate if we do not repay, refinance or have a minimum level of liquidity available to enable us to refinance or repay our outstanding 5.50% senior notes due 2016 at least three months prior to the maturity date of such notes.

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Amendments to Senior Credit Facilities

A/R Programs

Our A/R Programs are structured so that we grant a participating undivided interest in certain of our trade receivables to a U.S. SPE and a EU SPE. We retain the servicing rights and a retained interest in the securitized receivables. Information regarding the A/R Programs as of June 30, 2011 is as follows (monetary amounts in millions):

Facility	Maturity	Maximum Funding Availability(1)	Amount Outstanding	Interest Rate(2)(3)

U.S. A/R Program	April 2014	$250	$90	Applicable Rate plus 1.50%-1.65%
EU A/R Program	April 2014	€225 (approximately $323)	€114 (approximately $164)	Applicable Rate plus 2.0%

(1): The amount of actual availability under the A/R Programs may be lower based on the level of eligible receivables sold, changes in the credit ratings of our customers, customer concentration levels, and certain characteristics of the accounts receivable being transferred, as defined in the applicable agreements.
(2): Each interest rate is defined in the applicable agreements. In addition, the U.S. SPE and the EU SPE are obligated to pay unused commitment fees to the lenders based on the amount of each lender's commitment.
(3): Applicable rate for the US A/R Program is defined by the lender as either USD LIBOR or CP rate. Applicable rate for the EU A/R Program is either GBP LIBOR, USD LIBOR or EURIBOR.

As of June 30, 2011, $698 million of accounts receivable were pledged as collateral under the A/R Programs.

Amendments to A/R Programs

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Redemption of Notes and Loss on Early Extinguishment of Debt

During the six months ended June 30, 2011 and 2010, we redeemed or repurchased the following notes (monetary amounts in millions):

Date of Redemption	Notes	Principal Amount of Notes Redeemed	Amount Paid (Excluding Accrued Interest)	Loss on Early Extinguishment of Debt

January 18, 2011	7.375% Senior Subordinated Notes due 2015	$100	$102	$	3
March 17, 2010	6.875% Senior Subordinated Notes due 2013	€184 (approximately $253)	€189 (approximately $259)	$	7
March 17, 2010	7.50% Senior Subordinated Notes due 2015	€59 (approximately $81)	€59 (approximately $81)	$	2
January 11, 2010(1)	7.00% Convertible Notes due 2018	$250	$382	$	146

(1): The convertible notes due 2018 were issued to Apollo in December 2008 as part of a settlement agreement with Apollo. These convertible notes, which would have matured on December 23, 2018, bore interest at the rate of 7% per year and were convertible into approximately 31.8 million shares of our common stock at any time by the holders.

Variable Interest Entity Debt

On April 1, 2011 we began consolidating Sasol-Huntsman which was previously accounted for under the equity method. Sasol-Huntsman has a facility agreement for a €77 million term loan facility (approximately $111 million) and a €5 million revolving facility (approximately $7 million). As of June 30, 2011, Sasol-Huntsman had no borrowings under the revolving facility and had €76 million (approximately $109 million) outstanding under the term loan facility.

As of June 30, 2011, Arabian Amines Company had $204 million outstanding under its loan commitments and debt financing arrangements.

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Other Debt

As of June 30, 2011, HPS also had RMB 499 million (approximately $77 million) outstanding under a loan facility for issuing working capital loans and for discounting commercial drafts with recourse.

Note Payable from Huntsman International to Huntsman Corporation

As of June 30, 2011, we have a loan of $535 million to our subsidiary, Huntsman International. The Intercompany Note is unsecured and $100 million of the outstanding amount is classified as current as of June 30, 2011 and December 31, 2010, respectively, on the accompanying consolidated balance sheets. As of June 30, 2011, 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 Programs, less ten 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).

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. However, our Australian subsidiary is currently not in compliance with a financial covenant contained in its credit facility. See "—Other Debt" above.

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). 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 not more than 3.75 to 1.

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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 may not have further access to such facilities.

SHORT-TERM AND LONG-TERM LIQUIDITY

We depend upon our cash, credit facilities, A/R Programs and other debt instruments to provide liquidity for our operations and working capital needs. As of June 30, 2011, we had $1,231 million of combined cash and unused borrowing capacity, consisting of $690 million in cash and restricted cash, $274 million in availability under our Revolving Facility, and $267 million in availability under our A/R Programs.

Our liquidity can be significantly impacted by various factors. The following matters had, or are expected to have, a significant impact on our liquidity:

•: Our accounts receivable and inventory, net of accounts payable, increased by approximately $395 million during the six months ended June 30, 2011, as reflected in our consolidated statement of cash flows. 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 the Australian styrenics operations during the first quarter of 2010. As of June 30, 2011, we had restructuring accruals of $7 million and environmental remediation accruals of $37 million. We can provide no assurance that the eventual environmental remediation costs will not be materially different from our current estimate. The plant closure and environmental remediation costs are expected to be funded as they are incurred over the next several years.
•: We are involved in certain legal disputes relating to our current and past operations. We have incurred significant expenses related to these actions and have established reserves related to these matters. Cash expenditures of approximately $50 million associated with these reserves are expected to be made over the next several years. The amount of these expenditures may change pending final resolution of the disputes.
•: During the six months ended June 30, 2011, we made contributions to our pension and postretirement benefit plans of $96 million. During the remainder of 2011, we expect to contribute an additional amount of approximately $68 million to these plans.
•: On July 25, 2011, Huntsman International redeemed the remaining $75 million of its 7.375% senior subordinated notes due 2015. The total redemption payment, excluding accrued interest, was $77 million, which included $2 million of call premiums. We expect to record a loss on early extinguishment of debt for this transaction in the third quarter of 2011 of $2 million.

As of June 30, 2011, we had $289 million classified as current portion of debt which consists of certain scheduled term payments and various short-term facilities, including the prepayment of $75 million of our 7.375% senior subordinated notes due 2015 paid on July 25, 2011, an HPS

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borrowing facility in China with $77 million outstanding, our Australian credit facilities with $34 million classified as current, our scheduled Senior Credit Facilities amortization payments in 2012 totaling $18 million, and certain other short term facilities and scheduled amortization payments totaling $85 million. Although we cannot provide assurances, we intend to renew or extend the majority of these short-term facilities in the current period.

Capital Expenditures

During 2011, we expect to spend approximately $350 million on capital expenditures. We expect to fund capital expenditures through a combination of available cash and cash flows from operations.

RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS

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

LEGAL PROCEEDINGS

For a discussion of legal proceedings, see "Note 13. Commitments and Contingencies—Legal Matters," "Note 14. Environmental, Health and Safety Matters—Remediation Liabilities" and "Note 17. Discontinued Operations—Australian Styrenics Business Shutdown" to our condensed consolidated financial statements (unaudited).

ENVIRONMENTAL, HEALTH AND SAFETY MATTERS

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

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 included in our Annual Report on Form 10-K for the year ended December 31, 2010.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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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, 2011, the fair value of this swap was $5 million and was recorded as noncurrent liabilities in our condensed consolidated balance sheet (unaudited). For the three months and six months ended June 30, 2011, the effective portion of the changes in the fair value of $9 million and $24 million, respectively was recorded at a loss in other comprehensive income.

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) as of June 30, 2011. Based on this evaluation, our chief executive officer and chief financial officer have concluded that, as of June 30, 2011, 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 quarter ended June 30, 2011 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

ANTITRUST SETTLEMENT

As disclosed in our Form 10-K for the fiscal year ended December 31, 2010, 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 ("urethanes") sold in the U.S. in violation of the federal Sherman Act. These cases are consolidated as the "Polyether Polyols" cases pending in the U.S. District Court for the District of Kansas.

On May 26, 2011, we entered into a settlement agreement with the class plaintiffs in the urethanes antitrust litigation that requires us to pay $33 million in three equal installments in exchange for a full release and discharge of all claims by the class plaintiffs against us.

Under the settlement agreement, we paid $11 million into an escrow fund for the benefit of the class on June 27, 2011 after the Court preliminarily approved the settlement. We will pay an additional $11 million within one year thereafter and a third $11 million within two years of the initial payment. In exchange for these payments, we will receive from the class a release and discharge of all claims against us, as described in the settlement agreement. The settlement is subject to final approval by the Court after notice is given to the class members. The hearing on final approval is scheduled for September 27, 2011.

We fully accrued for this matter in prior quarters. The settlement does not resolve the direct action cases nor the other pending antitrust litigation.

ENVIRONMENTAL ENFORCEMENT PROCEEDINGS

During the period from 2007 through 2009, our Performance Products business' surfactants manufacturing facility located in New South Wales, Australia experienced five reported releases of ethylene oxide and propylene oxide, both raw materials used in the surfactants manufacturing process. As a consequence of these releases, the site received and responded to information requests and physical inspections from WorkCover NSW and/or the Department of Environment, Climate Change and Water NSW, both regulatory agencies with oversight authority for the facility. Subsequent to these inquiries, by letter dated September 10, 2010, the Department of Environment, Climate Change and Water NSW notified us that it had commenced a court proceeding regarding the fifth ethylene oxide release which occurred on October 28, 2009. On December 3, 2010, we pled guilty to a breach of our operating license and on March 18, 2011, the court ordered us to pay AUD68,000.

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, 2010.

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

None.

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ITEM 6. EXHIBITS


	10.1		Master Amendment No. 2 to the U.S. Receivables Loan Agreement, U.S. Servicing Agreement and Transaction Documents dated as of April 18, 2011 (incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed on April 20, 2011)
	10.2		Master Amendment No. 2 to the European Receivables Loan Agreement, European Servicing Agreement and Transaction Documents dated as of April 15, 2011 (incorporated by reference to Exhibit 10.2 to our current report on Form 8-K filed on April 20, 2011)
	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.INS*		XBRL Instance Document
	101.SCH*		XBRL Taxonomy Extension Schema
	101.CAL*		XBRL Taxonomy Extension Calculation Linkbase
	101.LAB*		XBRL Taxonomy Extension Label Linkbase
	101.PRE*		XBRL Taxonomy Extension Presentation Linkbase
	101.DEF*		XBRL Taxonomy Extension Definition Linkbase

*: 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 4, 2011	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		Master Amendment No. 2 to the U.S. Receivables Loan Agreement, U.S. Servicing Agreement and Transaction Documents dated as of April 18, 2011 (incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed on April 20, 2011)
	10.2		Master Amendment No. 2 to the European Receivables Loan Agreement, European Servicing Agreement and Transaction Documents dated as of April 15, 2011 (incorporated by reference to Exhibit 10.2 to our current report on Form 8-K filed on April 20, 2011)
	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.INS*		XBRL Instance Document
	101.SCH*		XBRL Taxonomy Extension Schema
	101.CAL*		XBRL Taxonomy Extension Calculation Linkbase
	101.LAB*		XBRL Taxonomy Extension Label Linkbase
	101.PRE*		XBRL Taxonomy Extension Presentation Linkbase
	101.DEF*		XBRL Taxonomy Extension Definition Linkbase

*: 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.