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TABLE OF CONTENTS
HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

As filed with the Securities and Exchange Commission on March 25, 2011

Registration No. 333-            

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



FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933



HUNTSMAN INTERNATIONAL LLC*
(Exact Name of Registrant as Specified in its Charter)

Delaware
(State or Other Jurisdiction of Incorporation or Organization)
  2800
(Primary Standard Industrial Classification Code Number)
  87-0630358
(I.R.S. Employer Identification Number)



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

(Address, Including Zip Code and Telephone Number, Including Area Code, of Registrants' Principal Executive Offices)



James R. Moore, Esq.
Executive Vice President, General Counsel and Secretary
Huntsman International LLC
500 Huntsman Way
Salt Lake City, UT 84108
(801) 584-5700

(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service)



Copy to:
Nathan W. Jones, Esq.
Stoel Rives LLP
201 South Main Street, Suite 1100
Salt Lake City, UT 84111
(801) 328-3131



*
The entities listed on the following page in the Table of Additional Registrants are included in this registration statement as additional Registrants.



             Approximate date of commencement of proposed sale to the public: The Exchange will occur as soon as practicable after the effective date of this registration statement.



             If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box: o

             If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: o

             If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: 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):

Large accelerated filer o   Accelerated filer o   Non-accelerated filer ý
(Do not check if a smaller reporting company)
  Smaller reporting company o

             If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

             Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) o

             Exchange Act Rule 14d-1(d) (Cross-Border Third Party Tender Offer) o



CALCULATION OF REGISTRATION FEE

               
 
Title of each Class of Securities
to be Registered

  Amount to be
Registered

  Proposed Maximum
Offering Price Per Note

  Proposed Maximum
Aggregate Offering Price

  Amount of
Registration Fee

 

85/8% Senior Subordinated Notes due 2021

  $530,000,000(1)   100%(2)(3)   $530,000,000(1)(2)   $61,533
 

Guarantees of 85/8% Senior Subordinated Notes due 2021

  (4)   (4)   (4)   (4)

 

(1)
Represents the aggregate principal amount of the 85/8% Senior Subordinated Notes due 2021 issued by Huntsman International LLC prior to the date of this Registration Statement.

(2)
Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(f) under the Securities Act of 1933, as amended.

(3)
Exclusive of accrued interest, if any.

(4)
Pursuant to Rule 457(n) under the Securities Act, no separate fee is payable with respect to the guarantees of the new notes being registered.



             The Registrants hereby amend this registration statement on such date or dates as may be necessary to delay its effective date until the Registrants shall file a further amendment that specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until this registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.


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Table of Additional Registrants

Exact Name of Additional Registrants*
  Jurisdiction of
Incorporation/Organization
  Primary Standard Industrial
Classification Code Number
  I.R.S. Employer
Identification Number
 

Airstar Corporation

  Utah     2800     87-0457111  

Huntsman Advanced Materials Americas LLC

  Delaware     2800     52-2215309  

Huntsman Advanced Materials LLC

  Delaware     2800     92-0194012  

Huntsman Australia Inc. 

  Utah     2800     87-0510821  

Huntsman Chemical Purchasing Corporation

  Utah     2800     87-0568517  

Huntsman Enterprises, Inc. 

  Utah     2800     87-0562447  

Huntsman Ethyleneamines LLC

  Texas     2800     87-0668124  

Huntsman Fuels LLC

  Texas     2800     91-2085706  

Huntsman International Financial LLC

  Delaware     2800     87-0632917  

Huntsman International Fuels LLC

  Texas     2800     91-2073796  

Huntsman International Trading Corporation

  Delaware     2800     87-0522263  

Huntsman MA Investment Corporation

  Utah     2800     87-0564509  

Huntsman MA Services Corporation

  Utah     2800     87-0661851  

Huntsman Petrochemical LLC

  Delaware     2800     58-1594518  

Huntsman Petrochemical Purchasing Corporation

  Utah     2800     87-0568520  

Huntsman Procurement Corporation

  Utah     2800     87-0644129  

Huntsman Propylene Oxide LLC

  Texas     2800     91-2073797  

Huntsman Purchasing, Ltd. 

  Utah     2800     84-1370346  

Polymer Materials Inc. 

  Utah     2800     87-0432897  

Tioxide Americas LLC

  Cayman Islands     2800     98-0015568  

Tioxide Group

  U.K.     2800     98-0207605  

*
Address and telephone number of principal executive office are the same as those of Huntsman International LLC.

Table of Contents

Information contained herein is subject to completion or amendment. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This prospectus shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State.

SUBJECT TO COMPLETION—DATED MARCH 25, 2011

PRELIMINARY PROSPECTUS

LOGO

Huntsman International LLC

Offer to exchange $530,000,000 aggregate principal amount of
85/8% Senior Subordinated Notes due 2021
which have been registered under the Securities Act
for
$530,000,000 aggregate principal amount of
85/8% Senior Subordinated Notes due 2021



This exchange offer will expire at 12:01 a.m., New York City Time,
on                        , 2011 unless extended.



Terms of the exchange offer:

        See the "Description of New Notes" section on page 176 for more information about the new notes to be issued in this exchange offer.



        This investment involves risks. See the section entitled "Risk Factors" that begins on page 13 for a discussion of the risks that you should consider prior to tendering your old notes for exchange.



        Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or the accuracy of this prospectus. Any representation to the contrary is a criminal offense.



The date of this prospectus is                                    , 2011




        Each broker-dealer that receives new notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of the new notes it receives. The letter of transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act of 1933, as amended. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of new notes received in exchange for old notes where such old notes were acquired by the broker-dealer as a result of market-making activities or other trading activities. We have agreed that, for a period of 120 days after the consummation of the exchange offer, we will make this prospectus, as amended and supplemented, available to any broker-dealer for use in connection with any such resale. See "Plan of Distribution."


TABLE OF CONTENTS

Prospectus Summary

    1  

Risk Factors

    13  

Disclosure Regarding Forward-Looking Statements

    26  

The Exchange Offer

    26  

Use of Proceeds

    36  

Ratio of Earnings to Fixed Charges

    37  

Capitalization

    38  

Selected Financial and Operating Data

    39  

Management's Discussion and Analysis of Financial Condition and Results of Operations

    40  

Quantitative and Qualitative Disclosures About Market Risk

    69  

Business

    72  

Management

    114  

Compensation Discussion and Analysis

    121  

Executive Compensation

    139  

Director Compensation

    159  

Security Ownership of Certain Beneficial Owners and Management

    163  

Corporate Governance

    165  

Certain Relationships and Transactions with Related Persons

    174  

Description of New Notes

    176  

Material United States Federal Income Tax Consequences

    225  

Plan of Distribution

    226  

Legal Matters

    226  

Experts

    227  

Where You Can Find More Information

    227  

Index to Consolidated Financial Statements

    F-1  

        We file annual, quarterly and certain other reports with the Securities and Exchange Commission jointly with our parent, Huntsman Corporation. Because Huntsman Corporation is not an obligor or guarantor under the notes and is not a registrant under the registration statement of which this prospectus is a part, certain notes to the financial statements included in this prospectus that relate solely to Huntsman Corporation have been omitted and are marked "[Reserved]."

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PROSPECTUS SUMMARY

        The following summary highlights selected information from this prospectus and may not contain all the information that is important to you. This prospectus contains information regarding our business and detailed financial information. You should carefully read this entire document.

        We are a wholly-owned subsidiary of Huntsman Corporation, which we refer to in this prospectus as our "parent." Unless the context otherwise requires: references in this prospectus to "we," "us," "our" or "our Company" refer to Huntsman International LLC, together with its subsidiaries, and not to Huntsman Corporation and its other subsidiaries; references to "guarantors" or "guarantor subsidiaries" refer to our subsidiaries that have guaranteed our debt obligations, including the notes, consisting of substantially all of our domestic subsidiaries and certain of our foreign 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 Investment BV (our unconsolidated manufacturing joint venture with BASF AG and three Chinese chemical companies).

        In this prospectus, 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. Many of these terms are defined in the Glossary of Chemical Terms that begins on page 112 below.

Overview

        We are a global manufacturer of differentiated organic chemical products and of inorganic chemical products. Jon M. Huntsman founded the predecessor to our Company as a small polystyrene plastics packaging company. Since then, we have grown through a series of significant acquisitions and now own a portfolio of businesses. In 2005, our parent completed an initial public stock offering. Our products comprise a broad range of chemicals and formulations, which we market globally to a diversified group of consumer and industrial customers. Our products are used in a wide range of applications, including those in the adhesives, aerospace, automotive, construction products, durable and non-durable consumer products, electronics, medical, packaging, paints and coatings, power generation, refining, synthetic fiber, textile chemicals and dye industries. We are a leading global producer in many of our key product lines, including MDI, amines, surfactants, epoxy-based polymer formulations, textile chemicals, dyes, maleic anhydride and titanium dioxide. Our administrative, research and development and manufacturing operations are primarily conducted at the facilities listed below under "Business—Properties," which are located in 30 countries. As of December 31, 2010, we employed approximately 12,000 associates worldwide. Our revenues for the years ended December 31, 2010, 2009 and 2008 were $9,250 million, $7,665 million and $10,056 million, respectively.

        Our company was organized in 1999 as a Delaware limited liability company. Our principal executive offices are located at 500 Huntsman Way, Salt Lake City, Utah 84108, and our telephone number at that location is (801) 584-5700.

        We operate in five segments: Polyurethanes, Performance Products, Advanced Materials, Textile Effects and Pigments. In a series of transactions beginning in 2006, we sold or shutdown substantially all of our Australian styrenics, Polymers and Base Chemicals operations. We report the results of our former Australian styrenics, Polymers and Base Chemicals businesses as discontinued operations in our statements of operations. See "Note 27. Discontinued Operations" to our consolidated financial statements.

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        The chart below generally illustrates our organizational structure:

GRAPHIC

Recent Developments

        For a discussion of recent developments, see "Business—Recent Developments" below.

Our Products

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

        Growth in our differentiated products has been driven by the substitution of our products for other materials and by the level of global economic activity. Accordingly, the profitability of our differentiated products has been somewhat less influenced by the cyclicality that typically impacts the petrochemical

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industry. Our Pigments business, while cyclical, is influenced by seasonal demand patterns in the coatings industry.

2010 Segment Revenues(1)
 
2010 Segment EBITDA
from Continuing Operations(1)

 

 

 
GRAPHIC

(1)
Percentage allocations in this chart do not give effect to Corporate and other unallocated items, eliminations and EBITDA from discontinued operations. For a detailed disclosure of our revenues, total assets and EBITDA by segment, see "Note 29. Operating Segment Information" to our consolidated financial statements. For a discussion of EBITDA by segment and a reconciliation of EBITDA to net income attributable to Huntsman International and cash provided by operating activities, see "Part I. Item 12. Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations."

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        The following table identifies the key products, their principal end markets and applications and representative customers of each of our segments:

Segment
  Products   End Markets and
Applications
  Representative
Customers
Polyurethanes   MDI, PO, polyols, PG, TPU, aniline and MTBE   Refrigeration and appliance insulation, construction products, adhesives, automotive, footwear, furniture, cushioning, specialized engineering applications and fuel additives   BMW, Certainteed, Electrolux, Firestone, GE, Haier, Louisiana Pacific, Recticel, Weyerhauser

Performance Products

 

Amines, surfactants, LAB, maleic anhydride, other performance chemicals, EG, olefins and technology licenses

 

Detergents, personal care products, agrochemicals, lubricant and fuel additives, adhesives, paints and coatings, construction, marine and automotive products and PET fibers and resins

 

Chevron, Henkel, The Sun Products Corporation, Monsanto, Procter & Gamble, Unilever, Lubrizol, Reichhold, Dow, L'Oreal, Afton

Advanced Materials

 

Basic liquid and solid epoxy resins; specialty resin compounds; cross-linking, matting and curing agents; epoxy, acrylic and polyurethane-based formulations

 

Adhesives, composites for aerospace, automotive, and wind power generation; construction and civil engineering; industrial coatings; electrical power transmission; consumer electronics

 

ABB, Akzo, BASF, Boeing, Bosch, Cytec, Dow, Hexcel, ISOLA, Omya, PPG, ASTORIT, Sanarrow, Schneider, Sherwin Williams, Siemens, Sika, Speed Fair, Syngenta, Toray

Textile Effects

 

Textile chemicals and dyes

 

Apparel, home and technical textiles

 

Esquel Group, Alok Industries, Nice Dyeing, Fruit of the Loom, Hanesbrands, Zaber & Zubair, Aunde, Y.R.C., Guilford Mills, Tencate

Pigments

 

Titanium dioxide

 

Paints and coatings, plastics, paper, printing inks, fibers and ceramics

 

Akzo, PPG, Clariant, Jotun, PolyOne

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THE EXCHANGE OFFER

Securities Offered                            

  $530,000,000 aggregate principal amount of new notes which have been registered under the Securities Act of 1933, as amended (the "Securities Act"). The terms of the new notes are substantially identical to the old notes, except that certain transfer restrictions, registration rights and liquidated damages provisions relating to the old notes do not apply to the registered new notes.

The Exchange Offer

 

We are offering to issue registered new notes in exchange for like principal amount and like denomination of our old notes. We are offering to issue these registered new notes to satisfy our obligations under exchange and registration rights agreements that we entered into with the initial purchasers of the old notes when we sold them in transactions that were exempt from the registration requirements of the Securities Act. You may tender your old notes for exchange by following the procedures described under the heading "The Exchange Offer."

Tenders; Expiration Date; Withdrawal

 

The exchange offer will expire at 12:01 a.m., New York City time, on                    , 2011, unless we extend it. If you decide to exchange your old notes for new notes, you must acknowledge, among other things, that you are acquiring the new notes in the ordinary course of your business, that you have no arrangement or understanding with any person to participate in a distribution of the new notes and that you are not an affiliate of our Company. You may withdraw any notes that you tender for exchange at any time prior to 12:01 a.m., New York City time, on the expiration date. If we decide for any reason not to accept any old notes you have tendered for exchange, those notes will be returned to you without cost promptly after the expiration or termination of the exchange offer. See "The Exchange Offer—Terms of the Exchange Offer" and "—Withdrawal Rights" for a more complete description of the tender and withdrawal provisions.

Conditions to the Exchange Offer

 

The exchange offer is subject to customary conditions and we may terminate or amend the exchange offer if any of these conditions occur prior to the expiration of the exchange offer. These conditions include any change in applicable law or legal interpretation or governmental or regulatory actions that would impair our ability to proceed with the exchange offer, any general suspension or general limitation relating to trading of securities on any national securities exchange or the over-the-counter market or a declaration of war or other hostilities involving the United States. We may waive any of these conditions in our sole discretion.

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Procedures for Tendering Old Notes

 

A holder who wishes to tender old notes in the exchange offer must transmit to Wells Fargo Bank, N.A. (the "exchange agent") a completed and executed letter of transmittal or an agent's message, transmitted by a book-entry transfer facility, which letter of transmittal or agent's message must be received by the exchange agent prior to 12:01 a.m., New York City time, on the expiration date. In addition, the exchange agent must receive a timely confirmation of book-entry transfer of the old notes into the exchange agent's account at The Depository Trust Company, or DTC, under the procedures for book-entry transfers described in "The Exchange Offer—How to Tender Old Notes for Exchange."

 

Old notes may be tendered by electronic transmission of acceptance through DTC's Automated Tender Offer Program, which we refer to as ATOP. Custodial entities that are participants in DTC must tender old notes through ATOP. A physical letter of transmittal need not accompany tenders effected through ATOP, although the electronic instructions sent to DTC and transmitted to the exchange agent must contain your acknowledgement of receipt of, and your agreement to be bound by, the letter of transmittal. Please carefully follow the instructions contained in this document on how to tender your securities. See "The Exchange Offer—DTC Book Entry Transfers."

 

A holder who holds old notes through Euroclear Bank S.A./N.V. ("Euroclear") or Clearstream Banking,  S.A. ("Clearstream") must comply with the procedures of Euroclear or Clearstream, as applicable, when tendering its old notes.

Exchange Offer; Exchange and Registration Rights

 

The old notes were sold in two tranches: $350 million pursuant to a purchase agreement dated September 14, 2010 and $180 million pursuant to a purchase agreement dated October 28, 2010. Under the exchange and registration rights agreements, we have agreed to use our reasonable best efforts to commence and consummate the exchange offer within 45 days after the date on which the registration statement of which this prospectus is a part is declared effective. In addition, we have agreed to file a "shelf registration statement" that would allow some or all of the old notes to be offered to the public if we are unable to complete the exchange offer or a change in applicable laws or legal interpretation occurs that would limit the intended effects or availability of the exchange offer.

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Penalty Interest

 

If we fail to fulfill certain obligations under the exchange and registration rights agreements, including if the registration statement of which this prospectus is a part is not declared effective by the SEC on or before June 21, 2011 (with respect to $350 million of old notes sold pursuant to the purchase agreement dated September 14, 2010) or on or before August 9, 2011 (with respect to $180 million of old notes sold pursuant to the purchase agreement dated October 28, 2010), or if the exchange offer has not been completed within 45 business days after the effective date of such registration statement (a "registration default"), the annual interest rate on the notes will increase by 0.125% during the first 90-day period during which the registration default continues, and will increase by an additional 0.125% for each subsequent 90-day period during which the registration default continues, up to a maximum increase of 0.50% over the interest rate that would otherwise apply to the old notes. As soon as we cure a registration default, the interest rates on the notes will revert to their original levels.

U.S. Federal Tax Consequences

 

Your exchange of old notes for new notes in the exchange offer will not result in any gain or loss to you for United States federal income tax purposes. See "Material United States Federal Income Tax Consequences."

Use of Proceeds

 

We will not receive any cash proceeds from the exchange offer. In consideration for issuing the new notes in the exchange offer as contemplated in this prospectus, we will receive in exchange old notes in like principal amount, which will be cancelled and as such will not result in any increase in our indebtedness. We will pay all expenses incident to the exchange offer. See "Use of Proceeds" for a discussion of the use of proceeds from the issuance of the old notes.

Exchange Agent

 

Wells Fargo Bank, N.A.

Consequences of Failure to Exchange

 

Old notes that are not tendered or that are tendered but not accepted will continue to be subject to the restrictions on transfer that are described in the legend on those notes. In general, you may offer or sell your old notes only if they are registered under, or offered or sold under an exemption from, the Securities Act and applicable state securities laws. We, however, will have no further obligation to register the old notes. If you do not participate in the exchange offer, the liquidity of your notes could be adversely affected.

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Consequences of Exchanging Your Old Notes

 

Based on interpretations of the Securities and Exchange Commission, or SEC, set forth in certain no-action letters issued to third parties, we believe that you may offer for resale, resell or otherwise transfer the new notes that we issue in the exchange offer without complying with the registration and prospectus delivery requirements of the Securities Act if you:

 

•       acquire the new notes issued in the exchange offer in the ordinary course of your business;

 

•       are not participating, do not intend to participate, and have no arrangement or understanding with anyone to participate, in the distribution of the new notes issued to you in the exchange offer; and

 

•       are not an "affiliate" of our Company as defined in Rule 405 of the Securities Act.

 

If any of these conditions are not satisfied and you transfer any new notes issued to you in the exchange offer without delivering a proper prospectus or without qualifying for a registration exemption, you may incur liability under the Securities Act. We will not be responsible for, or indemnify you against, any liability you may incur.

 

In connection with the exchange offer, you will be required to acknowledge that you are not engaged in, and do not intend to engage in, the distribution of the new notes. In addition, any broker-dealer that acquires new notes in the exchange offer for its own account in exchange for old notes which it acquired through market-making or other trading activities may be an "underwriter" within the meaning of the Securities Act and must acknowledge that it will deliver a prospectus when it resells or transfers any new notes. See "Plan of Distribution" for a description of the prospectus delivery obligations of broker-dealers in the exchange offer.

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THE NEW NOTES

        The terms of the new notes and those of the old notes are identical in all material respects, except:

        A brief description of the material terms of the new notes follows:

Issuer

  Huntsman International LLC.

Notes Offered

 

$530 million in aggregate principal amount of 85/8% senior subordinated notes due 2021.

Maturity

 

March 15, 2021.

Interest

 

The new notes will bear interest at a rate of 85/8% per annum, payable semi-annually.

Interest Payment Dates

 

We will pay interest on the new notes each March 15 and September 15, beginning on September 15, 2011.

Guarantees

 

The new notes will be unconditionally guaranteed by substantially all of our domestic subsidiaries and certain of our foreign subsidiaries. If we cannot make payments on the notes when they are due, then our subsidiary guarantors are required to make payments on our behalf. See "Description of New Notes—Brief Description of the Notes and the Guarantees—The Guarantees."

Ranking

 

The new notes will be:

 

•       our general unsecured senior subordinated obligations;

 

•       subordinated in right of payment to all our existing and future senior indebtedness and structurally subordinated to all liabilities (including trade payables) of our subsidiaries which are not guarantors (except with respect to indebtedness owed to us or other guarantors);

 

•       equal in right of payment to all our existing and future senior subordinated indebtedness; and

 

•       unconditionally guaranteed by the guarantors on a senior subordinated basis.

 

Since the new notes are unsecured, in the event of a bankruptcy or insolvency, our secured creditors will have a prior secured claim to any collateral securing the debt owed to them.

 

The guarantees will be:

 

•       the general unsecured senior subordinated obligations of the guarantors;

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•       subordinated in right of payment to all existing and future senior indebtedness of the guarantors; and

 

•       equal in right of payment to all existing and future subordinated indebtedness of the guarantors.

 

Since the guarantees are unsecured obligations of each guarantor, in the event of a bankruptcy or insolvency, such guarantor's secured creditors will have a prior secured claim to any collateral securing the debt owed to them.

 

As of December 31, 2010, we and the guarantors had approximately $2.2 billion of outstanding senior indebtedness (excluding intercompany indebtedness), of which approximately $1.7 billion was secured. We and the guarantors had approximately $1.8 billion of other indebtedness (excluding intercompany indebtedness, except for the $535 million note payable to our parent) outstanding that rank equally in right of payment with the notes. In addition, our subsidiaries which are not guarantors had approximately $712 million of indebtedness (excluding intercompany indebtedness) outstanding on December 31, 2010. See "Note 30. Condensed Consolidating Financial Information" to the consolidated financial statements for certain financial information about our non-guarantor subsidiaries as of December 31, 2010.

Asset Sale Proceeds

 

We may have to use the net proceeds from asset sales to offer to repurchase the notes under certain circumstances at their face amount, plus accrued and unpaid interest, if any, to the date of repurchase. See "Description of New Notes—Certain Covenants—Limitation on Asset Sales."

Certain Covenants

 

The indenture governing the notes contains covenants that, among other things, limit our ability and the ability of certain of our subsidiaries to:

 

•       incur additional indebtedness;

 

•       pay dividends or distributions on or redeem, repurchase or acquire our capital stock;

 

•       make certain investments;

 

•       create liens;

 

•       engage in transactions with affiliates;

 

•       merge or consolidate; and

 

•       transfer or sell assets.

 

These covenants are subject to a number of important exceptions and qualifications, which are described in "Description of New Notes—Certain Covenants."

 

Certain of these covenants will terminate if the notes attain an investment grade rating.

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Risk Factors

 

You should carefully consider all the information set forth in this prospectus and, in particular, should evaluate the specific risk factors set forth under "Risk Factors," beginning on page 13, before participating in this exchange offer.

        For additional information regarding the new notes, see "Description of New Notes."


FAILURE TO EXCHANGE YOUR OLD NOTES

        The old notes which you do not tender or we do not accept will, following the exchange offer, continue to be restricted securities. Therefore, you may only transfer or resell them in a transaction registered under or exempt from the Securities Act and all applicable state securities laws. We will issue the new notes in exchange for the old notes under the exchange offer only following the satisfaction of the procedures and conditions described under the caption "The Exchange Offer."

        Because we anticipate that most holders of the old notes will elect to exchange their old notes, we expect that the liquidity of the markets, if any, for any old notes remaining after the completion of the exchange offer will be substantially limited. Any old notes tendered and exchanged in the exchange offer will reduce the aggregate principal amount outstanding of the old notes.


OTHER DEBT

        As of December 31, 2010, we had $4.2 billion in debt outstanding, excluding the old notes.

        The indenture governing the notes limits our ability to incur additional debt. Consequently, we would be required to obtain an amendment of the indenture before we incurred any additional debt, other than the types of debt specifically identified in the indenture as permitted.

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SUMMARY HISTORICAL FINANCIAL DATA

        The summary historical financial data set forth below presents our historical financial data as of and for the dates and periods indicated. You should review this summary historical financial data in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operation" and our consolidated financial statements and accompanying notes and other financial information.

(in millions)

 
  Year Ended December 31,  
 
  2010   2009   2008   2007   2006  

Statements of Operations Data:

                               

Revenues

  $ 9,250   $ 7,665   $ 10,056   $ 9,496   $ 8,536  

Gross profit

    1,478     1,095     1,297     1,551     1,431  

Restructuring, impairment and plant closing costs

    29     88     31     29     8  

Operating income

    443     41     215     569     672  

Income (loss) income from continuing operations

    144     (399 )   (59 )   232     272  

Income (loss) from discontinued operations, net of tax(a)

    42     (19 )   84     (246 )   (122 )

Extraordinary gain (loss) on the acquisition of a business, net of tax of nil(b)

    (1 )   6     14     (7 )   56  

Net income (loss)

    185     (412 )   39     (21 )   237  

Net income (loss) attributable to Huntsman International LLC

    180     (410 )   38     (12 )   234  

Other Data:

                               

Depreciation and amortization

  $ 382   $ 420   $ 374   $ 391   $ 439  

Capital expenditures

    236     189     418     665     550  

Balance Sheet Data (at period end):

                               

Total assets

  $ 8,307   $ 7,693   $ 7,424   $ 8,095   $ 8,196  

Total debt

    4,685     4,531     4,076     3,574     3,649  

Total liabilities

    7,219     6,846     6,505     6,179     6,633  

(a)
Income (loss) from discontinued operations represents the operating results, fire insurance settlement gains and loss on disposal of our former Australian styrenics business, our former U.S. base chemicals business, our former North American polymers business, our former European base chemicals and polymers business and our former TDI business. The Australian styrenics business was shut down in the first quarter of 2010. The U.S. base chemicals business was sold on November 5, 2007, the North American polymers business was sold on August 1, 2007, the European base chemicals and polymers business was sold on December 29, 2006 and the TDI business was sold on July 6, 2005. See "Note 27. Discontinued Operations" and "Note 25. Casualty Losses and Insurance Recoveries" to our consolidated financial statements.

(b)
The extraordinary gain (loss) on the acquisition of a business relates to the June 30, 2006 acquisition of our textile effects business. See "Note 3. Business Combinations—Textile Effects Acquisition" to our consolidated financial statements.

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RISK FACTORS

        You should carefully consider the risks and uncertainties below and the other information contained in this prospectus before you decide whether to exchange your old notes for new notes. The risks and uncertainties described below are not the only risks we may face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business operations. Any of the following risks could materially and adversely affect our business, results of operations and financial condition. In this section of the prospectus, references to the notes mean the new notes.

Risks Related to Our Business

Our industry is affected by global economic factors including risks associated with volatile economic conditions.

        Our financial results are substantially dependent upon overall economic conditions in the United States, the European Union and Asia. Declining economic conditions in all or any of these locations—or negative perceptions about economic conditions—could result in a substantial decrease in demand for our products and could adversely affect our business. Uncertain economic conditions and market instability make it difficult for us, our customers and our suppliers to forecast demand trends. Renewed declines in demand would place additional pressure on our results of operations. The timing and extent of any changes to currently prevailing market conditions is uncertain and supply and demand may be unbalanced at any time. As a consequence, we are unable to accurately predict future economic conditions or the effect of such conditions on our financial condition or results of operations, and we can give no assurances as to the timing, extent or duration of the current or future economic cycles impacting the chemical industry.

Future acquisitions, partnerships and joint ventures may require significant resources and/or result in unanticipated adverse consequences that could have a material adverse effect on our business, results of operations and/or financial condition.

        In the future we may seek to grow by making acquisitions or entering into partnerships and joint ventures. Any future acquisition, partnership or joint venture may require that we make a significant cash investment, issue stock or incur substantial debt. In addition, acquisitions, partnerships or investments may require significant managerial attention, which may be diverted from our other operations. These capital, equity and managerial commitments may impair the operation of our businesses. Any future acquisitions of businesses or facilities could entail a number of additional risks, including:

        We have incurred indebtedness to finance past acquisitions. We may finance future acquisitions with additional indebtedness. We could face financial risks associated with incurring additional indebtedness, such as reducing our liquidity and access to financial markets and increasing the amount

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of cash flow required to service indebtedness, which could have a material adverse effect on our business, results of operations and financial condition.

Significant price volatility or interruptions in supply of our raw materials may result in increased costs that we may be unable to pass on to our customers, which could reduce our profitability.

        The prices of the raw materials that we purchase from third parties are cyclical and volatile. We purchase a substantial portion of these raw materials from third party suppliers. The cost of these raw materials represents a substantial portion of our operating expenses. The prices for a number of these raw materials generally follow price trends of, and vary with market conditions for, crude oil and natural gas feedstocks, which are highly volatile and cyclical.

        The feedstocks and other raw materials we consume are generally commodity products that are readily available at market prices. We frequently enter into supply agreements with particular suppliers, but disruptions of existing supply arrangements could substantially impact our profitability. If certain of our suppliers are unable to meet their obligations under present supply agreements, we may be forced to pay higher prices to obtain the necessary raw materials from other sources and we may not be able to increase prices for our finished products to recoup the higher raw materials costs. In addition, if any of the raw materials that we use become unavailable within the geographic area from which they are now sourced, then we may not be able to obtain suitable or cost effective substitutes. Any interruption in the supply of raw materials could increase our costs or decrease our revenues, which could reduce our cash flow.

        Our supply agreements typically provide for market-based pricing and provide us only limited protection against price volatility. While we attempt to match cost increases with corresponding product price increases, we are not always able to raise product prices immediately or at all. Timing differences between raw material prices, which may change daily, and contract product prices, which in many cases are negotiated only monthly or less often, have had and may continue to have a negative effect on our cash flow. Any cost increase that we are not able to pass on to our customers could have a material adverse effect on our business, results of operations, financial condition and liquidity.

Financial difficulties and related problems at our customers, vendors, suppliers and other business partners could have a material adverse effect on our business.

        The recent economic downturn has caused financial problems at some customers, vendors, suppliers and business partners. We rely on numerous vendors and suppliers and collaborations with other industry participants to provide us with chemicals, feedstocks and other raw materials, along with energy sources and, in certain cases, facilities, that we need to operate our business. If the economic downturn were to continue or worsen, some of these companies may be forced to reduce their output, shut down their operations or file for bankruptcy protection. If this were to occur, it could materially adversely affect their ability to provide us with the raw materials, energy sources or facilities that we need, which could disrupt our operations, including the production of certain of our products. In addition, it could be difficult to find replacements for certain of our business partners without incurring significant delays or cost increases.

        In addition, if the economic downturn were to continue or worsen, more of our customers may experience financial difficulties, including bankruptcies, restructurings and liquidations, which could affect our business by reducing sales, increasing our risk in extending trade credit to customers and reducing our profitability. A significant adverse change in a customer relationship or in a customer's financial position could cause us to limit or discontinue business with that customer, require us to assume more credit risk relating to that customer's receivables or limit our ability to collect accounts receivable from that customer, all of which could have a material adverse effect on our business, results of operations, financial condition and liquidity.

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Our available cash and access to additional capital may be limited by our significant leverage and the terms of our existing indebtedness, which could restrict our ability to grow our businesses.

        We have a significant amount of indebtedness outstanding. As of December 31, 2010, we had total consolidated outstanding indebtedness of approximately $4,685 million (including the current portion of long-term debt) and a debt to total capitalization ratio of approximately 81%. Our outstanding debt could have important consequences for our businesses, including the following:

        We require substantial capital to finance our operations and continued growth, and we may incur substantial additional debt from time to time for a variety of purposes, including acquiring additional businesses. However, our existing debt instruments contain restrictive covenants. Among other things, these covenants limit or prohibit our ability to incur more debt; make prepayments of other debt; pay dividends, redeem stock or make other distributions; issue capital stock; make investments; create liens; enter into transactions with affiliates; enter into sale and leaseback transactions; merge or consolidate; and transfer or sell assets.

        Our debt instruments also require us to comply with certain financial covenants under certain circumstances. For example, the leverage covenant (the "Leverage Covenant") applicable to our $300 million revolving facility (the "Revolving Facility") under our senior secured credit facilities (the "Senior Credit Facilities") requires us to maintain a maximum senior secured debt to EBITDA ratio of 3.75 to 1 when uncollateralized loans or letters of credit are outstanding under the Revolving Facility. As of December 31, 2010, we were in compliance with the covenant. However, if we violate this covenant, it could lead to an event of default under the Senior Credit Facilities, which could require us to pay off the balance of the Senior Credit Facilities in full and result in a loss of such facilities. It may not be possible for us to replace the Senior Credit Facilities with a substitute facility on terms acceptable to us, or at all.

        We also must comply with certain receivable performance metrics under our $250 million U.S. accounts receivable securitization program ("U.S. A/R Program") and our €225 million (approximately $297 million) European accounts receivable program ("EU A/R Program," and, collectively with the U.S. A/R Program, our "A/R Program" or "A/R Programs"). Failure to meet such metrics could lead to an early termination event and could require us to cease use of such facilities, prohibiting us from additional borrowings against our receivables, or, at the discretion of the lenders, requiring us to repay the A/R Programs in full. An early termination event under our 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 result in a loss of such facilities. In summary, if debt under one or more of our facilities is accelerated, cross-default provisions in our debt instruments would likely be triggered, which would likely have a material adverse impact on our financial condition.

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        As of December 31, 2010, the current portion of our long term debt and note payable to affiliate totaled approximately $619 million. As of December 31, 2010, we had combined outstanding variable rate borrowings of approximately $2.8 billion. Assuming a 1% increase in interest rates, without giving effect to any interest rate hedges or our cash balances, our annual interest rate expense would increase by approximately $28 million. If we are unable to generate sufficient cash flow or are otherwise unable to obtain the funds required to meet payments of principal and interest on our indebtedness, or if we otherwise fail to comply with the various covenants in the instruments governing our indebtedness, we could be in default under the terms of those instruments. In the event of a default, a holder of the indebtedness could elect to declare all the funds borrowed under those instruments to be due and payable together with accrued and unpaid interest, the creditors under our Senior Credit Facilities could elect to terminate their commitments thereunder, and we or one or more of our subsidiaries could be forced into bankruptcy or liquidation. Any of the foregoing consequences could have a material adverse effect on our business, results of operations and financial condition.

The industries in which we compete are highly competitive, and we may not be able to compete effectively with our competitors that have greater financial resources, which could have a material adverse effect on our business, results of operations and financial condition.

        The industries in which we operate are highly competitive. Among our competitors are some of the world's largest chemical companies and major integrated petroleum companies that have their own raw material resources. Changes in the competitive landscape could make it difficult for us to retain our leadership position in various products and markets throughout the world. In addition, some of the companies with whom we compete may be able to produce products more economically than we can. Furthermore, some of our competitors have greater financial resources, which may enable them to invest significant capital into their businesses, including expenditures for research and development. While we are engaged in a range of research and development programs to develop new products and processes, to improve and refine existing products and processes, and to develop new applications for existing products, the failure to develop new products, processes or applications could make us less competitive. Moreover, if any of our current or future competitors develops proprietary technology that enables them to produce products at a significantly lower cost, our technology could be rendered uneconomical or obsolete.

        In addition, certain of our businesses use technology that is widely available. Accordingly, barriers to entry, apart from capital availability, may be low in certain product segments of our business, and the entrance of new competitors into the industry may reduce our ability to capture improving profit margins in circumstances where capacity utilization in the industry is increasing. Further, petroleum-rich countries have become more significant participants in the petrochemical industry and may expand this role significantly in the future. Increased competition in any of our businesses could compel us to reduce the prices of our products, which could result in reduced profit margins and loss of market share and have a material adverse effect on our business, results of operations, financial condition and liquidity.

Our results of operations may be adversely affected by international business risks, including fluctuations in currency exchange rates, legal restrictions and taxes.

        We conduct a majority of our business operations outside the U.S., and these operations are subject to risks normally associated with international operations. These risks include the need to convert currencies that may be received for our products into currencies in which we purchase raw materials or pay for services, which could result in a gain or loss depending on fluctuations in exchange rates. In addition, we translate our local currency financial results into U.S. dollars based on average exchange rates prevailing during the reporting period or the exchange rate at the end of that period. During times of a strengthening U.S. dollar, our reported international sales and earnings may be

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reduced because the local currency may translate into fewer U.S. dollars. Because we currently have significant operations located outside the U.S., we are exposed to fluctuations in global currency rates which may result in gains or losses on our financial statements.

        Other risks of international operations include trade barriers, tariffs, exchange controls, national and regional labor strikes, social and political risks, general economic risks and required compliance with a variety of U.S. and foreign laws, including tax laws and the Foreign Corrupt Practices Act. In addition, although we maintain an anti-corruption compliance program throughout the Company, violations of our compliance program may result in criminal or civil sanctions, including material monetary fines, penalties and other costs against us or our employees, and may have a material adverse effect on our business. Furthermore, in foreign jurisdictions where process of law may vary from country to country, we may experience difficulty in enforcing agreements. In jurisdictions where bankruptcy laws and practices may vary, we may experience difficulty collecting foreign receivables through foreign legal systems. The occurrence of these risks, among others, could disrupt the businesses of our international subsidiaries, which could significantly affect their ability to make distributions to us.

        We operate in a significant number of jurisdictions, which contributes to the volatility of our effective tax rate. Changes in tax laws or the interpretation of tax laws in the jurisdictions in which we operate may affect our effective tax rate. In addition, generally accepted accounting principles in the U.S. ("GAAP" or "U.S. GAAP") has required us to place valuation allowances against our net operating losses and other deferred tax assets in a number of tax jurisdictions. These valuation allowances primarily result from analysis of positive and negative evidence supporting the realization of tax benefits. Negative evidence includes a cumulative history of pre-tax operating losses in those specific tax jurisdictions. Valuation allowances have resulted in material fluctuations in our effective tax rate. Economic conditions may dictate the continued imposition of the current valuation allowances and potentially the establishment of new valuation allowances. While significant valuation allowances remain, our effective tax rate will likely continue to experience significant fluctuations.

Demand for many of our products is cyclical, and we may experience depressed market conditions for such products.

        Historically, the markets for many of our products have experienced alternating periods of tight supply, causing prices and profit margins to increase, followed by periods of capacity additions, resulting in oversupply and declining prices and profit margins. The volatility these markets experience occurs as a result of changes in the supply and demand for products, changes in energy prices and changes in various other economic conditions around the world. This cyclicality and volatility of our industry results in significant fluctuations in profits and cash flow from period to period and over the business cycle.

Natural or other disasters could disrupt our business and result in loss of revenue or in higher expenses.

        Any serious disruption at any of our facilities due to hurricane, fire, earthquake, flood, terrorist attack or any other natural or man-made disaster could impair our ability to use our facilities and have a material adverse impact on our revenues and increase our costs and expenses. If there is a natural disaster or other serious disruption at any of these facilities, it could impair our ability to adequately supply our customers and negatively impact our operating results. In addition, many of our current and potential customers are concentrated in specific geographic areas. A disaster in one of these regions could have a material adverse impact on our operations, operating results and financial condition.

        While we maintain business recovery plans that are intended to allow us to recover from natural disasters or other events that could disrupt our business, we cannot provide assurances that our plans would fully protect us from all such disasters or events that might result due to climate change. In addition, insurance may not adequately compensate us from any losses incurred as a result of natural

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or other disasters. Furthermore, in areas prone to frequent natural or other disasters, insurance may become increasingly expensive or not at all available.

Our operations involve risks that may increase our operating costs, which could reduce our profitability.

        Although we take precautions to enhance the safety of our operations and minimize the risk of disruptions, our operations are subject to hazards inherent in the manufacturing and marketing of chemical products. These hazards include: chemical spills, pipeline leaks and ruptures, storage tank leaks, discharges or releases of toxic or hazardous substances or gases and other hazards incident to the manufacturing, processing, handling, transportation and storage of dangerous chemicals. We are also potentially subject to other hazards, including natural disasters and severe weather; explosions and fires; transportation problems, including interruptions, spills and leaks; mechanical failures; unscheduled downtimes; labor difficulties; remediation complications; and other risks. Many potential hazards can cause bodily injury and loss of life, severe damage to or destruction of property and equipment and environmental damage, and may result in suspension of operations and the imposition of civil or criminal penalties and liabilities. Furthermore, we are subject to present and future claims with respect to workplace exposure, exposure of contractors on our premises as well as other persons located nearby, workers' compensation and other matters.

        We maintain property, business interruption and casualty insurance policies which we believe are in accordance with customary industry practices, but we are not fully insured against all potential hazards and risks incident to our business. We maintain property damage and business interruption insurance policies and products liability insurance policies, as well as insurance policies covering other types of risks, including pollution legal liability insurance. Each of these insurance policies is subject to customary exclusions, deductibles and coverage limits, in accordance with industry standards and practices. As a result of market conditions, premiums and deductibles for certain insurance policies can increase substantially and, in some instances, certain insurance may become unavailable or available only for reduced amounts of coverage. If we were to incur a significant liability for which we were not fully insured, it could have a material adverse effect on our business, results of operations, financial condition and liquidity.

        In addition, we are subject to various claims and litigation in the ordinary course of business. We are a party to various pending lawsuits and proceedings. It is possible that judgments could be rendered against us in these cases or others in which we could be uninsured or not covered by indemnity and beyond the amounts that we currently have reserved or anticipate incurring for such matters.

We might not be able to obtain funding if deterioration in the credit and capital markets were to occur. This could hinder or prevent us from meeting our future capital needs and from refinancing our existing indebtedness when it comes due.

        While global financial markets and economic conditions have improved, they continue to be volatile. A deterioration of capital and credit markets could hinder our ability to access these markets. If this were to occur, we cannot be certain that additional funding for our capital needs from credit and capital markets would be available if needed and, to the extent required, on acceptable terms. In addition, we might be unable to refinance our existing indebtedness when it comes due on terms that are acceptable to us or at all. If we were unable to meet our capital needs or refinance our existing indebtedness, it could have a material adverse effect on our financial position and results of operations.

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A downgrade in the ratings of the securities of our company or our subsidiaries could result in increased interest and other financial expenses related to future borrowings of our company or our subsidiaries and could restrict our access to additional capital or trade credit.

        Standard and Poor's Ratings Services and Moody's Investors Service maintain credit ratings for our company. Each of these ratings is currently below investment grade. Any decision by these or other ratings agencies, which may in the future rate our debt, to downgrade such ratings in the future could result in increased interest and other financial expenses relating to our future borrowings and could restrict our ability to obtain additional financing on satisfactory terms. In addition, any downgrade could restrict our access to, and negatively impact the terms of, trade credit extended by our suppliers of raw materials.

We are subject to many EHS regulations that may result in unanticipated costs or liabilities, which could reduce our profitability.

        We are subject to extensive federal, state, local and foreign laws, regulations, rules and ordinances relating to pollution, protection of the environment and human health, and the generation, storage, handling, transportation, treatment, disposal and remediation of hazardous substances and waste materials. Actual or alleged violations of EHS laws or permit requirements could result in restrictions or prohibitions on plant operations, substantial civil or criminal sanctions, as well as, under some EHS laws, the assessment of strict liability and/or joint and several liability.

        Increasing concerns regarding the safety of chemicals in commerce and their potential impact on the environment constitute a growing trend. Governmental, regulatory and societal demands for increasing levels of product safety and environmental protection could result in increased pressure for more stringent regulatory control with respect to the chemical industry. In addition, these concerns could influence public perceptions, the viability of certain products, our reputation, the cost to comply with regulations, and the ability to attract and retain employees. Moreover, changes in EHS 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, which could reduce our profitability.

        We could incur significant expenditures in order to comply with existing or future EHS laws. Capital expenditures and costs relating to EHS matters will be subject to evolving regulatory requirements and will depend on the timing of the promulgation and enforcement of specific standards which impose requirements on our operations. Capital expenditures and costs beyond those currently anticipated may therefore be required under existing or future EHS laws.

        Furthermore, we may be liable for the costs of investigating and cleaning up environmental contamination on or from our properties or at off-site locations where we disposed of or arranged for the disposal or treatment of hazardous materials or from disposal activities that pre-dated our purchase of our businesses. We may therefore incur additional costs and expenditures beyond those currently anticipated to address all such known and unknown situations under existing and future EHS laws.

Existing or future litigation or legislative initiatives restricting the use of MTBE in gasoline may subject us or our products to environmental liability, materially reduce our sales and/or materially increase our costs.

        We produce MTBE, an oxygenate that is blended with gasoline to reduce vehicle air emissions and to enhance the octane rating of gasoline. Litigation or legislative initiatives restricting the use of MTBE in gasoline may subject us or our products to environmental liability or materially adversely affect our sales and costs. Because MTBE has contaminated some water supplies, its use has become controversial in the U.S. and elsewhere, and its use has been effectively eliminated in the U.S. market. We currently market MTBE, either directly or through third parties, to gasoline additive customers located outside the U.S., although there are additional costs associated with such outside-U.S. sales

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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 future MTBE contamination cases. We cannot provide assurances that adverse results against us in future MTBE contamination cases will not have a material adverse effect on our business, results of operations and financial position.

Failure to adequately protect critical data and technology systems could materially affect our operations.

        Information technology system failures, network disruptions and breaches of data security could disrupt our operations by causing delays or cancellation of customer orders, impeding the manufacture or shipment of products, processing transactions and reporting financial results, resulting in the unintentional disclosure of customer or our information, or damage to our reputation. While management has taken steps to address these concerns by implementing network security and internal control measures, there can be no assurance that a system failure or data security breach will not have a material adverse effect on our financial condition and operating results.

Our business is dependent on our intellectual property. If our intellectual property rights cannot be enforced or our trade secrets become known to our competitors, our ability to compete may be adversely affected.

        Proprietary protection of our processes, apparatuses and other technology is important to our business. While a presumption of validity exists with respect to patents issued to us in the U.S., there can be no assurance that any of our patents will not be challenged, invalidated, circumvented or rendered unenforceable. Furthermore, if any pending patent application filed by us does not result in an issued patent, or if patents are issued to us, but such patents do not provide meaningful protection of our intellectual property, then our ability to compete may be adversely affected. Additionally, our competitors or other third parties may obtain patents that restrict or preclude our ability to lawfully produce or sell our products in a competitive manner, which could have a material adverse effect on our business, results of operations, financial condition and liquidity.

        We also rely upon unpatented proprietary know-how and continuing technological innovation and other trade secrets to develop and maintain our competitive position. While it is our policy to enter into confidentiality agreements with our employees and third parties to protect our intellectual property, these confidentiality agreements may be breached, may not provide meaningful protection for our trade secrets or proprietary know-how, or adequate remedies may not be available in the event of an unauthorized access, use or disclosure of our trade secrets and know-how. In addition, others could obtain knowledge of our trade secrets through independent development or other access by legal means.

        Consequently, we may have to rely on judicial enforcement of our patents and other proprietary rights. We may not be able to effectively protect our intellectual property rights from misappropriation or infringement in countries where effective patent, trademark, trade secret and other intellectual property laws and judicial systems may be unavailable, or may not protect our proprietary rights to the same extent as U.S. law.

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        The failure of our patents or confidentiality agreements to protect our processes, apparatuses, technology, trade secrets or proprietary know-how or the failure of adequate legal remedies for related actions could have a material adverse effect on our business, results of operations, financial condition and liquidity.

Loss of key members of our management could disrupt our business.

        We depend on the continued employment and performance of our senior executives and other key members of management. If any of these individuals resigns or becomes unable to continue in his or her present role and is not adequately replaced, our business operations and our ability to implement our growth strategies could be materially disrupted. We generally do not have employment agreements with, and we do not maintain any "key person" life insurance for, any of our executive officers.

Conflicts, military actions, terrorist attacks and general instability throughout the world, and in particular in certain energy-producing nations, along with increased security regulations related to our industry, could adversely affect our business.

        In the past, conflicts, military actions and terrorist attacks have precipitated global economic instability and turmoil in world financial markets. Current regional tensions and conflicts in energy-producing nations, including continuing instability throughout the Middle East and northern Africa, ongoing military action in Afghanistan, Iraq and Libya, and other conflicts have caused, and may cause further, increases in raw material costs, particularly natural gas and crude oil based feedstocks, which are used in our operations. The uncertainty surrounding the threat of further armed hostilities, military action or acts of terrorism may impact any or all of our physical facilities and operations, which are located in North America, Europe, Australia, Asia, Africa, South America and the Middle East, or those of our suppliers or customers. Furthermore, the resulting economic disruption caused by such events may result in reduced demand from our customers for our products.

        A military action or terrorist attack that impacts any of our facilities, or the facilities of our suppliers or customers, could have a material adverse effect on our business. In addition, a number of governments have begun regulatory processes that could lead to new regulations impacting the security of chemical plant locations and the transportation of hazardous chemicals, which could result in higher operating costs. Conflicts and stability will subject our worldwide operations to increased risks and, depending on their magnitude, could have a material adverse effect on our business, results of operations, financial condition and liquidity.

If our subsidiaries do not make sufficient distributions to us, then we will not be able to make payment on our debts.

        Our debt is generally the exclusive obligation of our Company and our guarantor subsidiaries. Because a significant portion of our operations are conducted by non-guarantor subsidiaries, our cash flow and our ability to service indebtedness, including our ability to pay the interest on our debt when due and principal of such debt at maturity, are dependent to a large extent upon cash dividends and distributions or other transfers from such non-guarantor subsidiaries. Any payment of dividends, distributions, loans or advances by our non-guarantor subsidiaries to us could be subject to restrictions on dividends or repatriation of earnings under applicable local law, monetary transfer restrictions and foreign currency exchange regulations in the jurisdictions in which our subsidiaries operate, and any restrictions imposed by the current and future debt instruments of our non-guarantor subsidiaries. In addition, payments to us by our subsidiaries are contingent upon our subsidiaries' earnings.

        Our subsidiaries are separate and distinct legal entities and, except for our guarantor subsidiaries, have no obligation, contingent or otherwise, to pay any amounts due on our debt or to make any funds available for those amounts, whether by dividends, loans, distributions or other payments, and do not

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guarantee the payment of interest on, or principal of, our debt. Any right that we have to receive any assets of any of our subsidiaries that are not guarantors upon the liquidation or reorganization of any such subsidiary, and the consequent right of holders of notes to realize proceeds from the sale of their assets, will be structurally subordinated to the claims of that subsidiary's creditors, including trade creditors and holders of debt issued by that subsidiary.

Regulatory requirements to reduce GHG emissions could have an adverse effect on our results of operations.

        Although the continued existence of binding emissions limitations under international treaties such as the Kyoto Protocol is in doubt after 2012, we expect some of our operations to be subject to regulatory requirements to reduce GHG emissions. 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 and state agency regulations in the near future. While EPA's GHG programs are 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 costs to modify assets as necessary to meet GHG emission limits 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 GHGs in the Earth's atmosphere may produce climate changes that have significant physical effects, such as increased frequency and severity of storms, droughts, floods and other climatic events. If any of those effects were to occur, they could have an adverse effect on our assets and operations.

Risks Related to the Notes

Despite our current levels of indebtedness, we may incur substantially more debt, which could further increase the risks associated with our substantial indebtedness.

        Although the agreements governing our outstanding indebtedness contain and the indenture governing the notes contains restrictions on the incurrence of additional indebtedness by us and our restricted subsidiaries, these restrictions are subject to a number of qualifications and exceptions, and the indebtedness incurred in compliance with these restrictions could be substantial. As of December 31, 2010, we and our subsidiaries had approximately $4.7 billion of indebtedness. We may incur substantial additional indebtedness from time to time for a variety of purposes. Although a covenant in the indenture governing the notes will restrict our ability to incur additional indebtedness, this covenant is subject to certain significant exceptions. See "Description of Notes—Certain Covenants—Limitation on Incurrence of Additional Indebtedness" and "—Certain Definitions." Since the operating results of many of our businesses are cyclical, we could incur significant amounts of

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additional indebtedness at the peak of the operating cycle. To the extent that we incur indebtedness that constitutes senior indebtedness, such indebtedness may be secured. If new debt is added to the current debt levels, the related risks that we now face could intensify.

We and the guarantors of the notes are permitted to provide guarantees of indebtedness of our parent. The indenture does not contain restrictions on our parent company and in certain circumstances the guarantees that we and the guarantors are permitted to issue in respect of our parent company's debt may be senior in right of payment to the notes or the guarantees of the notes, as the case may be.

        The indenture governing the notes provides that we and the guarantors of the notes may provide guarantees of indebtedness of our parent if, among other things, the proceeds of our parent's indebtedness are used to refinance our indebtedness. The amount of such guarantees by us and the guarantors shall be limited to the amount of our indebtedness that is so refinanced plus the amount of premiums and expenses to be paid, in each case in connection with such refinancing of our debt. Our parent company will not be governed by the covenants in the indenture governing the notes relating to, among other things, restricted payments and incurrence of indebtedness. There is a significant risk that our parent company's indebtedness, including our and our subsidiaries' guarantees of such indebtedness, may be satisfied from the assets of our Company and the guarantors. If our or our subsidiaries' guarantees of parent indebtedness rank senior in right of payment to the notes and the guarantees and our parent becomes insolvent, our parent's creditors may assert claims against us or our subsidiaries that are senior in right of payment to claims of holders of the notes. See "Description of New Notes—Certain Covenants—Limitation on Incurrence of Additional Indebtedness," "—Limitation on Restricted Payments," "—Limitation on Liens" and "—Limitations on Transactions with Affiliates."

The instruments governing our debt contain cross default provisions that may cause all of the debt issued under such instruments to become immediately due and payable as a result of a default under an unrelated debt instrument.

        The indentures governing our outstanding senior notes and senior subordinated notes and the notes offered hereby contain numerous covenants, and the agreements governing our Senior Credit Facilities and our A/R Programs contain numerous covenants and triggers that require us to meet certain financial ratios and tests. Our failure to comply with the obligations contained in the indentures governing our outstanding senior notes and senior subordinated notes and the notes offered hereby, our Senior Credit Facilities and our A/R Programs or other instruments governing our indebtedness could result in an event of default under the applicable instrument, which could result in the related debt and the debt issued under other instruments becoming immediately due and payable. In such event, we would need to raise funds from alternative sources, which funds may not be available to us on favorable terms, on a timely basis or at all. Alternatively, such a default could require us to sell our assets and otherwise curtail operations in order to pay our creditors.

The notes and the subsidiary guarantees are subordinated to our and the subsidiary guarantors' senior debt.

        The notes will be our senior subordinated obligations. Accordingly, the notes will be subordinated to all of our existing and future senior debt. We expect to incur additional senior debt from time to time in the future. The indenture governing the notes limits, but does not prohibit, the incurrence of other debt by us, including senior debt. As a result of such subordination, upon any distribution to our creditors in a liquidation, dissolution, bankruptcy, reorganization or any similar proceeding by or relating to us or our property, the holders of our senior debt would be entitled to receive payment in full before the holders of the notes would be entitled to receive any payment. In addition, all payments on the notes could be blocked in the event of a default on our senior debt. See "Description of New Notes—Subordination."

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        The notes will not be secured. The borrowings under our Senior Credit Facilities are secured by liens on our assets. If we or any of our guarantors liquidates, dissolves or declares bankruptcy, or if payment under the credit agreement or any of our other secured debt is accelerated, our secured creditors would be entitled to exercise the remedies available to a secured creditor under applicable law and will have a claim on those assets before the holders of the notes. The guarantees are unsecured senior subordinated obligations of the guarantors, subordinated to all senior indebtedness of the guarantors, and in the event of the bankruptcy or insolvency of a guarantor, such guarantor's secured creditors will have a prior secured claim to any collateral securing the debt owed to them. Such guarantor's unsecured senior creditors will also have a prior claim to that of the holders of the notes. As of December 31, 2010, we and the guarantors had approximately $2.2 billion of senior debt outstanding to which the notes and the guarantees are subordinated. In addition, under the indenture governing the notes, any additional senior debt we are permitted to incur may be secured.

The notes will be structurally subordinated to all indebtedness of our subsidiaries that are not guarantors of the notes.

        We derive substantially all of our revenue from our consolidated subsidiaries. While certain of our subsidiaries guarantee the notes, other subsidiaries are not guaranteeing the notes. You will not have any claim as a creditor against our other subsidiaries that are not guarantors of the notes. Accordingly, all obligations of our non-guarantor subsidiaries will have to be satisfied before any of the assets of such subsidiaries would be available for distribution, upon a liquidation or otherwise, to us or a guarantor of the notes. As of December 31, 2010, our non-guarantor subsidiaries had approximately $712 million of total indebtedness, excluding intercompany indebtedness owed to us or the guarantors. Under the indenture, if we meet a specified fixed charge coverage ratio, our non-guarantor subsidiaries may incur additional indebtedness, which would be structurally senior to the notes. See "Note 30. Condensed Consolidating Financial Information" to the consolidated financial statements for certain financial information about our non-guarantor subsidiaries.

We may not have the ability to repurchase notes upon a change of control as required by the indenture.

        Upon the occurrence of certain change of control events (which, as defined in our indentures, generally exclude transactions approved by our board of managers), each holder of notes may require us to repurchase all or a portion of its notes at a purchase price equal to 101% of their principal amount plus accrued interest to the date of purchase. Our ability to repurchase the notes upon a change of control is restricted by the terms of our Senior Credit Facilities. As such, prior to repurchasing the notes upon a change of control, we would have to either repay outstanding indebtedness under our Senior Credit Facilities or obtain the consent of lenders thereunder. If we do not obtain the required consents or repay our outstanding indebtedness under our Senior Credit Facilities, we would remain effectively prohibited from offering to purchase the notes. In any event, we cannot assure you that we will have sufficient funds to repurchase the notes upon a change of control. Our failure to repurchase the notes upon a change of control would result in a default under the indenture governing the notes, which would, in turn, result in a default under our Senior Credit Facilities and our outstanding senior notes and senior subordinated notes.

The notes and guarantees may be void, avoided or subordinated under laws governing fraudulent transfers and insolvency.

        We have incurred substantial debt, including our outstanding senior notes and senior subordinated notes and our Senior Credit Facilities. Various fraudulent conveyance laws enacted for the protection of

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creditors may apply to our issuance of the notes and the guarantors' issuance of the guarantees. To the extent that a court were to find that:

then the court could void the notes and the guarantees or subordinate the notes or the guarantees in favor of our or the guarantor's other creditors. Furthermore, to the extent that the notes or a guarantee were voided as a fraudulent conveyance or held unenforceable for any other reason:

There is no public market for the notes.

        The notes are a new issue of securities and there is no existing trading market for the notes. We cannot assure you that a liquid market will develop for the notes, that you will be able to sell your notes at a particular time or that the prices that you receive when you sell the notes will be favorable.

        We do not intend to apply for listing or quotation of the notes on any securities exchange or stock market. The liquidity of any market for the notes will depend on a number of factors, including

        Historically, the market for non-investment grade debt has been subject to disruptions that have caused substantial volatility in the prices of these securities. We cannot assure you that the market for the notes will be free from similar disruptions. Any disruptions could have an adverse effect on noteholders, regardless of our prospects or performance.

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DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

        All statements other than statements of historical facts included in this prospectus, including, without limitation, statements regarding our plans, objectives, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions or dispositions and other information that is not historical information, are forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as "believes," "expects," "may," "will," "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 occur or be achieved. Accordingly, investors should not place undue reliance on our forward-looking statements. All forward-looking statements apply only as of the date made. We do not assume any obligation to update any forward-looking statements as a result of new information or future events or developments, except as required by law.

        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 prospectus. Any forward-looking statements should be considered in light of the risks set forth under the heading "Risk Factors" and elsewhere in this prospectus.

        This prospectus includes information with respect to market share, market position, industry conditions and forecasts that we obtained from internal industry research, publicly available information (including industry publications and surveys), and surveys and market research provided by consultants. The publicly available information and the reports, forecasts and other research provided by consultants generally state that the information contained therein has been obtained from sources believed to be reliable. We have not independently verified any of the data from third party sources, nor have we ascertained the underlying economic assumptions relied upon therein. Similarly, our internal research and forecasts are based upon our management's understanding of industry conditions, and such information has not been verified by any independent sources.


THE EXCHANGE OFFER

Purpose of the Exchange Offer

        When we sold the old notes in September and October of 2010, we conveyed the rights contained in exchange and registration rights agreements with the initial purchasers of those notes. Under the exchange and registration rights agreements, we agreed to file the registration statement of which this prospectus forms a part regarding the exchange of the old notes for new notes which are registered under the Securities Act. We also agreed to use our reasonable best efforts to cause the registration statement to become effective with the SEC no later than June 21, 2011 with respect to $350 million of old notes sold pursuant to a purchase agreement dated September 14, 2010 and no later than August 9, 2011 with respect to $180 million of old notes sold pursuant to a purchase agreement dated October 28, 2010, and to commence and complete this exchange offer within 45 days after the date the registration statement was declared effective. We will use our best efforts to keep the registration statement effective until the exchange offer is completed. The exchange and registration rights agreement provides that we will be required to pay liquidated damages to the holders of the old notes if the exchange offer has not been completed within 45 business days after the effective date of the

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registration statement. Copies of the exchange and registration rights agreements are filed as exhibits to the registration statement of which this prospectus is a part.

Terms of the Exchange Offer

        This prospectus and the accompanying letter of transmittal together constitute the exchange offer. Upon the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal, we will accept for exchange old notes that are properly tendered on or before the expiration date and are not withdrawn as permitted below. The expiration date for this exchange offer is 12:01 a.m., New York City time, on                                    , 2011, or such later date and time to which we, in our sole discretion, extend the exchange offer. The exchange offer, however, will be in effect no longer than 45 days from the effective date of the registration statement of which this prospectus is a part.

        The form and terms of the new notes being issued in the exchange offer are the same as the form and terms of the old notes, except that:

        Old notes tendered in the exchange offer must be in denominations of the principal amount of $1,000 or any integral multiple thereof.

        We expressly reserve the right, in our sole discretion:

        We will give notice of any extension, delay, non-acceptance, termination or amendment as promptly as practicable in writing or by a public announcement, and in the case of an extension, no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date. Any notice relating to the extension of the exchange offer will disclose the number of securities tendered as of the date of the notice, as required by Rule 14e-1(d) under the Exchange Act.

        During an extension, all old notes previously tendered will remain subject to the exchange offer and may be accepted for exchange by us. Any old notes not accepted for exchange for any reason will be returned without cost to the holder that tendered them promptly after the expiration or termination of the exchange offer.

        If we delay accepting any old notes or terminate the exchange offer, we will promptly pay the consideration offered, or return any old notes deposited, pursuant to the exchange offer as required by Rule 14e-1(c).

How to Tender Old Notes for Exchange

        We have forwarded to you, along with this prospectus, a letter of transmittal relating to this exchange offer. Because all of the old notes are held in book-entry accounts maintained by the relevant

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exchange agent at DTC, a holder need not submit a letter of transmittal if the holder tenders old notes in accordance with the procedures mandated by DTC's Automated Tender Offer Program, or ATOP. To tender old notes without submitting a letter of transmittal, the electronic instructions sent to DTC and transmitted to the exchange agent must contain your acknowledgment of receipt of, and your agreement to be bound by and to make all of the representations contained in, the letter of transmittal. In all other cases, a letter of transmittal must be manually executed and delivered as described in this prospectus. Wells Fargo Bank, N.A has been appointed as the exchange agent with responsibility for the tender and exchange of all old notes for new notes.

        Only a holder of record of old notes may tender old notes in the exchange offer. To tender in the exchange offer, a holder must comply with the procedures of DTC, and either:

        In addition, the exchange agent must receive, before expiration of the exchange offer, certificates for old notes to which such letter of transmittal relates or timely confirmation of book-entry transfer of old notes into the exchange agent's account at DTC, according to the procedure for book-entry transfer described below.

        With respect to any old notes, letters of transmittal or other documents that must be physically delivered to the exchange agent, such documents must be received by the exchange agent at the exchange agent's address set forth below under the caption "—The Exchange Agent" before expiration of the exchange offer. To receive confirmation of valid tender of old notes, a holder should contact the exchange agent at the telephone number listed under the caption "—The Exchange Agent." If old notes, the letter of transmittal or any other required documents are physically delivered to the exchange agent, the method of delivery is at the holder's election and risk. Rather than mail these items, we recommend that holders use an overnight or hand delivery service. In all cases, holders should allow sufficient time to assure delivery to the exchange agent before expiration of the exchange offer. Holders should not send the letter of transmittal or old notes to us. Holders may request their respective brokers, dealers, commercial banks, trust companies or other nominees to effect the above transactions for them.

        The tender by a holder that is not withdrawn before expiration of the exchange offer will constitute an agreement between that holder and us in accordance with the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal. Only a registered holder of old notes may tender the old notes in the exchange offer. If a holder completing a letter of transmittal tenders less than all of the old notes held by such holder, such tendering holder should fill in the applicable box of the letter of transmittal. The amount of old notes delivered to the exchange agent will be deemed to have been tendered, unless otherwise indicated.

        Any beneficial owner whose old notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender should contact the registered holder promptly and instruct it to tender on the owner's behalf. If the beneficial owner wishes to tender on its

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own behalf, it must, prior to completing and executing the letter of transmittal and delivering its old notes, either:

        The transfer of registered ownership may take considerable time and may not be completed prior to the expiration date.

        If the letter of transmittal is signed by the record holder(s) of the old notes tendered, the signature must correspond with the name(s) written on the face of the old note without alteration, enlargement or any change whatsoever. If the letter of transmittal is signed by a participant in DTC, the signature must correspond with the name as it appears on the security position listing as the holder of the old notes.

        Signatures on a letter of transmittal or a notice of withdrawal, as the case may be, must be guaranteed unless the old notes surrendered for exchange are tendered:

        An "eligible institution" is a financial institution, including most banks, savings and loan associations and brokerage houses, that is a participant in the Securities Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Program or the Stock Exchanges Medallion Program.

        If signatures on a letter of transmittal or notice of withdrawal are required to be guaranteed, the guarantor must be an eligible institution. If old notes are registered in the name of a person other than the signer of the letter of transmittal, the old notes surrendered for exchange must be endorsed by the registered holder, or accompanied by a written instrument or instruments of transfer or exchange, in satisfactory form as determined by us in our sole discretion, duly executed by the registered holder, in either case, with the holder's signature guaranteed by an eligible institution.

        If trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity sign the letter of transmittal or any old notes or any power of attorney, such persons should so indicate when signing, and you must submit proper evidence satisfactory to us of such person's authority to so act unless we waive this requirement.

        We will determine all questions as to the validity, form, eligibility (including time of receipt) and acceptance of old notes tendered for exchange in our sole discretion. Our determination will be final and binding. We reserve the absolute right to:

        Our interpretation of the terms and conditions of tender as to any particular old note either before or after the expiration date, including the letter of transmittal and the instructions to it, will be final

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and binding on all parties. Holders must cure any defects and irregularities in connection with tenders of old notes for exchange within such reasonable period of time as we will determine, unless we waive such defects or irregularities. Neither we, the exchange agent nor any other person shall be under any duty to give notification of any defect or irregularity with respect to any tender of old notes for exchange, nor shall any of us incur any liability for failure to give such notification.

        By tendering, each holder will represent to us, among other things, that (i) any new notes to be received by such holder will be acquired in the ordinary course of its business, (ii) at the time of the commencement of the exchange offer, such holder has no arrangement or understanding with any person to participate in the distribution of the new notes issued in this exchange offer and (iii) such holder is not an "affiliate," as defined under Rule 405 of the Securities Act, of our Company. A holder that uses the exchange offer to participate in a distribution of the new notes:

        Each holder will be required to represent to us in a letter of transmittal that it is not engaged in, and does not intend to engage in, the distribution of the new notes. In addition, each broker-dealer who acquired its old notes as a result of market-making activities or other trading activities and thereafter receives new notes issued for its own account in this exchange offer may be an "underwriter" within the meaning of the Securities Act and must represent to us in a letter of transmittal that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such new notes issued in this exchange offer, and a broker-dealer that is not able to make this representation will not be permitted to participate in the exchange offer. The letter of transmittals states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. See "Plan of Distribution" for a discussion of the exchange and resale obligations of broker-dealers in connection with this exchange offer.

Acceptance of Old Notes for Exchange; Delivery of New Notes

        Upon satisfaction or waiver of all of the conditions to this exchange offer, we will accept, promptly after the expiration date, all old notes properly tendered and will issue the new notes registered under the Securities Act. For purposes of this exchange offer, we shall be deemed to have accepted properly tendered old notes for exchange when, as and if we have given oral or written notice to the exchange agent, with written confirmation of any oral notice to be given promptly thereafter. See "—Conditions to the Exchange Offer" for a discussion of the conditions that must be satisfied before we accept any old notes for exchange.

        For each old note accepted for exchange, the holder will receive a new note registered under the Securities Act having a principal amount equal to, and in the denomination of, that of the surrendered old note. Accordingly, registered holders of new notes on the relevant record date for the first interest payment date following the consummation of this exchange offer will receive interest accruing from the most recent date to which interest has been paid or, if no interest has been paid on the old notes, from the respective dates such old notes were originally issued. Old notes that we accept for exchange will cease to accrue interest from and after the date of consummation of this exchange offer. Under the exchange and registration rights agreement, we may be required to make additional payments in the form of liquidated damages to the holders of the old notes under circumstances relating to the timing of this exchange offer.

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        In all cases, we will issue new notes in this exchange offer for old notes that are accepted for exchange only after the exchange agent timely receives:

        If for any reason set forth in the terms and conditions of this exchange offer we do not accept any tendered old notes, or if a holder submits old notes for a greater principal amount than the holder desires to exchange, we will return such unaccepted or non-exchanged notes without cost to the tendering holder. In the case of old notes tendered by book-entry transfer into the exchange agent's account at DTC, such non-exchanged old notes will be credited to an account maintained with DTC promptly after the expiration or termination of this exchange offer.

DTC Book Entry Transfers

        The exchange agent will make a request to establish an account at DTC with respect to old notes for purposes of this exchange offer promptly upon receipt of this prospectus. Any financial institution that is a participant in DTC's systems must make book-entry delivery of old notes by causing DTC to transfer those old notes into the exchange agent's account at DTC in accordance with DTC's electronic ATOP procedures for such transfer. Such participant should transmit its acceptance to DTC on or prior to the expiration date or comply with the guaranteed delivery procedures described below. DTC will verify such acceptance, execute a book-entry transfer of the tendered old notes into the exchange agent's account at DTC and then send to the exchange agent confirmation of such book-entry transfer. The confirmation of such book-entry transfer will include an agent's message confirming that DTC has received an express acknowledgment from such participant that such participant has received and agrees to be bound by the letter of transmittal and that we may enforce the letter of transmittal against such participant. Delivery of new notes may be effected through book-entry transfer at DTC. However, the letter of transmittal or facsimile thereof, with any required signature guarantees, or an agent's message, and any other required documents, must be transmitted to and received by the exchange agent at the address set forth below under "—The Exchange Agent" on or prior to the expiration date or comply with the guaranteed delivery procedures described below.

        A holder who holds old notes through Euroclear or Clearstream must comply with the procedures of Euroclear or Clearstream, as applicable, when tendering its old notes.

Guaranteed Delivery Procedures

        If a registered holder of old notes desires to tender the old notes, and the old notes are not immediately available, or time will not permit the holder's old notes or other required documents to reach the exchange agent before the expiration date, or the procedure for book-entry transfer described above cannot be completed on a timely basis, a tender may nonetheless be made if:

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Withdrawal Rights

        You may withdraw tenders of your old notes at any time prior to 12:01 a.m., New York City time, on the expiration date.

        For a withdrawal to be effective, you must send a written notice of withdrawal to the exchange agent at the exchange agent's address set forth below under "—The Exchange Agent." Any such notice of withdrawal must:

        If certificates for old notes have been delivered or otherwise identified to the exchange agent, then, prior to the release of such certificates the withdrawing holder must also submit the serial numbers of the particular certificates to be withdrawn and signed notice of withdrawal with signatures guaranteed by an eligible institution unless such holder is an eligible institution. If old notes have been tendered pursuant to the procedure for book-entry transfer described above, any notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawn old notes and otherwise comply with the procedures of such facility. We will determine all questions as to the validity, form and eligibility (including time of receipt) of such notices and our determination will be final and binding on all parties. Any tendered old notes so withdrawn will be deemed not to have been validly tendered for exchange for purposes of this exchange offer. Any old notes tendered for exchange that are not exchanged for any reason will be returned to the holder without cost to such holder. In the case of old notes tendered by book-entry transfer into the exchange agent's account at DTC, such old notes will be credited to an account maintained with DTC for the old notes as soon as practicable after withdrawal, rejection of tender or termination of this exchange offer. Properly withdrawn old notes may be re-tendered by following one of the procedures described under "—How to Tender Old Notes for Exchange" above at any time on or prior to 12:01 a.m., New York City time, on the expiration date.

Conditions to the Exchange Offer

        Notwithstanding any other provision of this exchange offer, we will not be required to accept for exchange, or to issue new notes in this exchange offer for any old notes, and we may terminate or amend this exchange offer, if at any time before the expiration of this exchange offer:

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        The non-occurrence of each of the preceding events is a condition to this exchange offer. We expressly reserve the right to amend or terminate this exchange offer upon the occurrence of any of these events. The conditions are for our sole benefit and we may assert them regardless of the circumstances giving rise to them. We may waive the preceding conditions in whole or in part at any time and from time to time in our sole discretion prior to the expiration of this exchange offer. If we do so, this exchange offer will remain open for at least three (3) business days following any waiver of the preceding conditions and, if we determine that any waiver constitutes a material change to the terms of this exchange offer, this exchange offer will remain open for at least five (5) business days following any such waiver. If we waive any condition as to any particular old note, such waiver will apply to all old notes tendered in the exchange offer. Our failure at any time to exercise the foregoing rights shall not be deemed a waiver of any such right and each such right shall be deemed an ongoing right which we may assert at any time and from time to time, except that all conditions to this exchange offer must be satisfied or waived by us prior to the expiration of this exchange offer. We will give notice in writing or by public announcement of any waiver by us of any condition and any related amendment, termination or extension of this exchange offer. In the case of any extension, such notice in writing or by public announcement will disclose the number of securities tendered as of the date of the notice, as required by Rule 14e-1(d) of the Exchange Act, and will be issued no later than 9:00 a.m., New York City time, on the business day after the previously scheduled expiration date.

The Exchange Agent

        As explained above, Wells Fargo Bank, N.A. has been appointed as our exchange agent. All executed letters of transmittal should be directed to our exchange agent at the address set forth below. You should direct questions and requests for assistance, requests for additional copies of this

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prospectus or of the letter of transmittal and requests for notices of guaranteed delivery to the exchange agent addressed as follows:

By registered mail or certified mail:

Wells Fargo Bank, N.A.
Corporate Trust Operations
MAC N9303-121
P.O. Box 1517
Minneapolis, MN 55480-1517

By regular mail or overnight courier:

Wells Fargo Bank, N.A.
Corporate Trust Operations
MAC N9303-121
Sixth Street & Marquette Avenue
Minneapolis, MN 55479

By hand delivery before 4:30 p.m.:

Wells Fargo Bank, N.A.
Northstar East Building
608 Second Avenue South
12th Floor—Corporate Trust Services
Minneapolis, MN 55402

For information, call:
(800) 344-5128

By facsimile transmission:
(for eligible institutions only)
(612) 667-6282

Confirm by telephone:
(612) 667-9764

        Delivery of the letter of transmittal to an address other than as set forth above, or transmission of such letter of transmittal via facsimile other than as set forth above, does not constitute a valid delivery of such letter of transmittal.

Fees and Expenses

        We will bear the expenses of soliciting tenders. We have not retained any dealer or manager in connection with the exchange offer and will not make any payment to brokers, dealers or others soliciting acceptances of the exchange offer. We will however, pay the exchange agent reasonable and customary fees for its services and will reimburse it for its reasonable out-of-pocket expenses.

        We will pay the cash expenses incurred in connection with the exchange offer. These expenses include registration fees, fees and expenses of the exchange agent and the trustee, accounting and legal fees and printing costs, among others.

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Accounting Treatment

        We will not recognize any gain or loss for accounting purposes upon the consummation of this exchange offer. We will amortize the expense of this exchange offer over the term of the new notes in accordance with accounting principles generally accepted in the United States of America ("GAAP").

Transfer Taxes

        You will not be obligated to pay any transfer taxes in connection with the tender of your old notes in this exchange offer. If, however, new notes are to be delivered to, or are to be issued in the name of, any person other than the holder of the old notes tendered, or if a transfer tax is imposed for any reason other than the exchange of old notes in connection with this exchange offer, then you must pay any such transfer taxes, whether imposed on the registered holder or on any other person. If satisfactory evidence of payment of, or exemption from, such taxes is not submitted with the letter of transmittal, the amount of such transfer taxes will be billed directly to you.

Consequences of Failing to Exchange Old Notes

        Holders who desire to tender their old notes in exchange for new notes registered under the Securities Act should allow sufficient time to ensure timely delivery. Neither the exchange agent nor our Company is under any duty to give notification of defects or irregularities with respect to the tenders of old notes for exchange.

        Old notes that are not tendered or are tendered but not accepted will, following the consummation of this exchange offer, continue to be subject to the provisions in the indenture regarding the transfer and exchange of the old notes and the existing restrictions on transfer set forth in the legend on the old notes and in the offering circular dated September 14, 2010 with respect to the $350 million of the old notes and the offering circular dated October 28, 2010 with respect to the $180 million of the old notes. Except in limited circumstances with respect to specific types of holders of old notes, we will have no further obligation to provide for the registration under the Securities Act of such old notes. In general, old notes, unless registered under the Securities Act, may not be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. We do not currently anticipate that we will take any action to register the untendered old notes under the Securities Act or under any state securities laws.

        Upon completion of this exchange offer, holders of the old notes will not be entitled to any further registration rights under the exchange and registration rights agreement, except under limited circumstances.

        Holders of the new notes and any old notes which remain outstanding after consummation of this exchange offer will vote together as a single class for purposes of determining whether holders of the requisite percentage of the class have taken certain actions or exercised certain rights under the indenture.

Consequences of Exchanging Old Notes

        Based on interpretations of the staff of the SEC, as set forth in no-action letters to third parties, we believe that the new notes may be offered for resale, resold or otherwise transferred by holders of such notes, other than by any holder which is an "affiliate" of our Company within the meaning of Rule 405 under the Securities Act. The new notes may be offered for resale, resold or otherwise transferred without compliance with the registration and prospectus delivery provisions of the Securities Act, if:

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        However, the SEC has not considered this exchange offer in the context of a no-action letter and we cannot guarantee that the staff of the SEC would make a similar determination with respect to this exchange offer as in such other circumstances.

        As a condition to participation in the exchange offer, each holder must furnish a written representation that:

        Each holder will be required to represent to us in a letter of transmittal that it is not engaged in, and does not intend to engage in, the distribution of the new notes. In addition, each broker-dealer that receives new notes in this exchange offer for its own account in exchange for old notes that it acquired as a result of market-making or other trading activities may be an "underwriter" within the meaning of the Securities Act and must represent to us in a letter of transmittal that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of the new notes. The letter of transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. See "Plan of Distribution" for a discussion of the exchange and resale obligations of broker-dealers in connection with this exchange offer.

        In addition, to comply with state securities laws of certain jurisdictions, the new notes may not be offered or sold in any state unless they have been registered or qualified for sale in such state or an exemption from registration or qualification is available and complied with by the holders selling the new notes.

        Any holder using the exchange offer to participate in a distribution of the new notes (i) may not rely on applicable interpretations of the staff of the SEC and (ii) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction.


USE OF PROCEEDS

        We will not receive any proceeds from the issuance of the new notes. The new notes will be exchanged for old notes in like principal amount, and the exchanged old notes will be canceled. As a result, the issuance of new notes in exchange for old notes as contemplated in this prospectus will not result in any change in our indebtedness.

        We used the proceeds from the offering of the old notes to redeem a portion of our euro-denominated 67/8% senior subordinated notes due 2013 (€132 million (approximately $177 million)) and our 77/8% senior subordinated notes due 2014 ($347 million).

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RATIO OF EARNINGS TO FIXED CHARGES

        The following table shows our consolidated ratio of earnings to fixed charges for the periods indicated (dollars in millions):

 
  Year Ended December 31,  
 
  2010   2009   2008   2007   2006  

Fixed Charges:

                               
 

Interest expensed and capitalized (includes amortization of deferred financing costs)

  $ 249   $ 243   $ 279   $ 303   $ 370  
 

Interest portion of rent expense

    28     27     30     32     28  
                       

Total fixed charges

  $ 277   $ 270   $ 309   $ 335   $ 398  
                       

Earnings:

                               
 

Pretax income (loss) from continuing operations less equity income

    160     (243 )   (75 )   259     268  
 

Fixed charges

    277     270     309     335     398  
 

Amortization of capitalized interest

    3     3     2     1     1  

Less:

                               
 

Interest capitalized

    (1 )   (3 )   (17 )   (17 )   (16 )
                       

Total earnings plus fixed charges

  $ 439   $ 27   $ 219   $ 578   $ 651  
                       
 

Ratio of earnings to fixed charges

    1.6             1.7     1.6  
                       
 

Deficiency of earnings to fixed charges

  $   $ 243   $ 90   $   $  
                       

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CAPITALIZATION

        The following table sets forth our capitalization as of December 31, 2010.

        The information presented below should be read in conjunction with our consolidated financial statements, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Selected Historical Financial Data" included in this prospectus and, in each case, any related notes thereto. We will not receive any cash proceeds from the issuance of the new notes. In consideration for issuing the new notes as contemplated in this prospectus, we will receive in exchange old notes in like principal amount, which will be cancelled and as such will not result in any increase in our capitalization.

 
  As of
December 31,
2010
 
 
  (in millions)
 

Long-term debt (including current portion):

       
 

Senior credit facilities:

       
   

Term loans(a)

  $ 1,688  
 

Amounts outstanding under A/R Programs

    238  
 

Senior notes(b)

    452  
 

Subordinated notes

    1,279  
 

Other

    489  
       
 

Total debt—excluding debt to affiliates

  $ 4,146  
 

Notes payable to affiliates(c)

    539  
       
 

Total debt

  $ 4,685  
       

Members' equity

    1,088  
       

Total capitalization

  $ 5,773  
       

(a)
Term loans include a $1,302 million term loan B ("Term Loan B") and a $427 million term loan C ("Term Loan C") presented at its carrying value of $386 million.

(b)
The $600 million aggregate principal amount of senior notes presented are presented at their carrying value of $452 million.

(c)
Includes a note payable to our parent in the amount of $535 million as of December 31, 2010. The intercompany note is unsecured, and $100 million is classified as current as of December 31, 2010.

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SELECTED FINANCIAL AND OPERATING DATA

        The selected historical financial data set forth below presents our historical financial data as of and for the dates and periods indicated. The selected financial data as of December 31, 2010 and 2009 and for the years ended December 31, 2010, 2009 and 2008 has been derived from the consolidated financial statements included in this prospectus. The selected financial data as of December 31, 2008, 2007 and 2006 and for the years ended December 31, 2007 and 2006 has been derived from our consolidated financial statements not included in this prospectus. You should read the selected financial data in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations," and our consolidated financial statements and accompanying notes.

(in millions)

 
  Year ended December 31,  
 
  2010   2009   2008   2007   2006  

Statements of Operations Data:

                               

Revenues

  $ 9,250   $ 7,665   $ 10,056   $ 9,496   $ 8,536  

Gross profit

    1,478     1,095     1,297     1,551     1,431  

Restructuring, impairment and plant closing costs

    29     88     31     29     8  

Operating income

    443     41     215     569     672  

Income (loss) from continuing operations

    144     (399 )   (59 )   232     272  

Income (loss) from discontinued operations, net of tax(a)

    42     (19 )   84     (246 )   (122 )

Extraordinary (loss) gain on the acquisition of a business, net of tax of nil(b)

    (1 )   6     14     (7 )   56  

Net income (loss)

    185     (412 )   39     (21 )   237  

Net income (loss) attributable to Huntsman International LLC

    180     (410 )   38     (12 )   234  

Other Data:

                               

Depreciation and amortization

  $ 382   $ 420   $ 374   $ 391   $ 439  

Capital expenditures

    236     189     418     665     550  

Balance Sheet Data (at period end):

                               

Total assets

  $ 8,307   $ 7,693   $ 7,424   $ 8,095   $ 8,196  

Total debt

    4,685     4,531     4,076     3,574     3,649  

Total liabilities

    7,219     6,846     6,505     6,179     6,633  

(a)
Income (loss) from discontinued operations represents the operating results, fire insurance settlement gains and loss on disposal of our former Australian styrenics business, our former U.S. base chemicals business, our former North American polymers business, our former European base chemicals and polymers business and our former TDI business. The Australian styrenics business was shut down in the first quarter of 2010. The U.S. base chemicals business was sold on November 5, 2007, the North American polymers business was sold on August 1, 2007, the European base chemicals and polymers business was sold on December 29, 2006 and the TDI business was sold on July 6, 2005. See "Note 27. Discontinued Operations" and "Note 25. Casualty Losses and Insurance Recoveries" to our consolidated financial statements.

(b)
The extraordinary gain (loss) on the acquisition of a business relates to the June 30, 2006 acquisition of our textile effects business. See "Note 3. Business Combinations—Textile Effects Acquisition" to our consolidated financial statements.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

        The following discussion should be read in conjunction with the historical financial statements and other financial information appearing elsewhere in this prospectus, including "Prospectus Summary—Summary Historical Financial Data," "Capitalization" and "Selected Financial and Operating Data." The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this prospectus, particularly in "Risk Factors." All references to years relate to the calendar year ended December 31 of the particular year.

OVERVIEW

        We are a global manufacturer of differentiated organic chemical products and of inorganic chemical products. Our products comprise a broad range of chemicals and formulations, which we market globally to a diversified group of consumer and industrial customers. Our products are used in a wide range of applications, including those in the adhesives, aerospace, automotive, construction products, durable and non-durable consumer products, electronics, medical, packaging, paints and coatings, power generation, refining, synthetic fiber, textile chemicals and dye industries. We are a leading global producer in many of our key product lines, including MDI, amines, surfactants, epoxy-based polymer formulations, textile chemicals, dyes, maleic anhydride and titanium dioxide. Our administrative, research and development and manufacturing operations are primarily conducted at the facilities listed in "—Business—Properties" below, which are located in 30 countries. We employed approximately 12,000 associates worldwide at December 31, 2010.

        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. In a series of transactions beginning in 2006, we have sold or shutdown substantially all of our former Australian styrenics, Polymers and Base Chemicals operations. We report the results from our former Australian styrenics, Polymers and Base Chemicals businesses as discontinued operations. See "Note 27. Discontinued Operations" to our consolidated financial statements.

        Growth in our Polyurethanes, Advanced Materials and Textile Effects segments has been driven by the continued substitution of our products for other materials across a broad range of applications, as well as by the level of global economic activity. Historically, demand for many of these products has grown at rates in excess of GDP growth. In Polyurethanes, this growth, driven largely by Asia, has in recent years resulted in improved demand and higher industry capacity utilization rates for many of our key products, including MDI.

        In our Performance Products segment, demand for our performance specialties has generally continued to grow at rates in excess of GDP as overall demand is significantly influenced by new product and application development. Demand for most of our performance intermediates has grown in line with GDP growth. Over time, demand for maleic anhydride has generally grown at rates that slightly exceed GDP growth. However, given its dependence on the UPR market, which is influenced by construction end markets, maleic anhydride demand can be cyclical.

        Historically, demand for titanium dioxide pigments has grown at rates approximately equal to global GDP growth. Pigment prices have historically reflected industry-wide operating rates but have typically lagged behind movements in these rates by up to twelve months due to the effects of product stocking and destocking by customers and producers, contract arrangements and seasonality. The industry experiences some seasonality in its sales because sales of paints, the largest end use for

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titanium dioxide, generally peak during the spring and summer months in the northern hemisphere. This results in greater sales volumes in the second and third quarters of the year.

        In January 2010, we idled our PO/MTBE production facility at Port Neches, Texas for turnaround and inspection. This planned shutdown concluded on March 17, 2010. The financial impact on our first quarter results was estimated to be approximately $40 million, including unabsorbed fixed costs.

        For further information regarding sales price and demand trends, see the tables captioned "Period-Over-Period Increase (Decrease)" 2010 vs. 2009 and the fourth quarter 2010 vs. third quarter 2010 in "Results of Operations—Segment Analysis—Year Ended December 31, 2010 Compared to Year Ended December 31, 2009" below.

OUTLOOK

        We believe that global demand for most of our products is recovering and underlying trends within our businesses are also encouraging. Average selling prices increased sequentially on an annual and quarterly basis within our largest businesses and our capacity utilization rates are improving on a seasonally adjusted basis. Early indicators for 2011 give us a high degree of optimism that we will continue to see improving markets globally. Nevertheless, we recognize that there are significant continuing economic risks that could materially impact our earnings performance. While we anticipate that our raw material and energy costs will remain at elevated levels in response to increased demand, we expect our margins will continue to strengthen over the next few years.

        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. Given current improving global economic trends, it appears reasonable that we could achieve Adjusted EBITDA of $1,325 million within the next two to three years.

RECENT DEVELOPMENTS

        For a discussion of recent developments, see "Business—Recent Developments" below.

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RESULTS OF OPERATIONS

 
   
   
   
  Percent Change  
 
  Year ended December 31,  
 
  2010 vs 2009   2009 vs 2008  
 
  2010   2009   2008  

Revenues

  $ 9,250   $ 7,665   $ 10,056     21 %   (24 )%

Cost of goods sold

    7,772     6,570     8,759     18 %   (25 )%
                           

Gross profit

    1,478     1,095     1,297     35 %   (16 )%

Operating expenses

    1,006     966     1,051     4 %   (8 )%

Restructuring, impairment and plant closing costs

    29     88     31     (67 )%   184 %
                           

Operating income

    443     41     215     980 %   (81 )%

Interest expense, net

    (248 )   (240 )   (263 )   3 %   (9 )%

Loss on accounts receivable securitization program

        (23 )   (27 )   NM     (15 )%

Equity in income of investment in unconsolidated affiliates

    24     3     14     700 %   (79 )%

Loss on early extinguishment of debt

    (37 )   (21 )   (1 )   76 %   NM  

Other income

    2         1     NM     NM  
                           

Income (loss) from continuing operations before income taxes

    184     (240 )   (61 )   NM     293 %

Income tax expense (benefit)

    40     159     (2 )   (75 )%   NM  
                           

Income (loss) from continuing operations

    144     (399 )   (59 )   NM     576 %

Income (loss) from discontinued operations (including gain on disposal of $1 in 2009, $11 in 2008), net of tax

    42     (19 )   84     NM     NM  

Extraordinary (loss) gain on the acquisition of a business, net of tax of nil

    (1 )   6     14     NM     (57 )%
                           

Net income (loss)

    185     (412 )   39     NM     NM  

Net (income) loss attributable to noncontrolling interests

    (5 )   2     (1 )   NM     NM  
                           

Net income (loss) attributable to Huntsman International LLC

    180     (410 )   38     NM     NM  

Interest expense, net

    248     240     263     3 %   (9 )%

Interest expense of discontinued operations, net

            1     NM     NM  

Income tax expense (benefit) from continuing operations

    40     159     (2 )   (75 )%   NM  

Income tax expense (benefit) from discontinued operations

    10     (80 )   69     NM     NM  

Depreciation and amortization

    382     420     374     (9 )%   12 %
                           

EBITDA(1)

  $ 860   $ 329   $ 743     161 %   (56 )%
                           

Net cash (used in) provided by operating activities

    (46 )   420     39     NM     977 %

Net cash used in investing activities

    (238 )   (212 )   (314 )   12 %   (32 )%

Net cash (used in) provided by financing activities

    (78 )   619     213     NM     191 %

Other non-GAAP measures:

                               

Adjusted EBITDA(1)

  $ 882   $ 535   $ 662     65 %   (19 )%

Adjusted net income(2)

    212     (301 )   (25 )   NM     NM  

Capital expenditures, net of reimbursements(3)

    202     189     418     7 %   55 %

NM—Not meaningful

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(1)
EBITDA is defined as net income (loss) attributable to Huntsman International LLC 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 International LLC 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 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 International LLC, 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 or losses; loss or gain on early extinguishment of debt; legal settlements; loss on accounts receivable securitization programs (for periods prior to January 1, 2010); EBITDA from discontinued operations; acquisition costs; gain on sale of a business; extraordinary loss (gain) on the acquisition of a business; and restructuring, impairment and plant closing costs. 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

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  Year ended December 31,  
 
  2010   2009   2008  

Net income (loss) attributable to Huntsman International LLC

  $ 180   $ (410 ) $ 38  

Interest expense, net

    248     240     263  

Interest expense of discontinued operations, net

            1  

Income tax expense (benefit) from continuing operations

    40     159     (2 )

Income tax (benefit) expense from discontinued operations

    10     (80 )   69  

Depreciation and amortization

    382     420     374  
               

EBITDA

    860     329     743  

Foreign exchange (gains) losses—unallocated

    (3 )   (16 )   31  

Loss on early extinguishment of debt

    37     21     1  

Legal settlements

    8          

Loss on accounts receivable securitization program

        23     27  

Amounts included in discontinued operations

    (53 )   97     (156 )

Acquisition expenses

    3          

Gain on sale of business/assets

        (1 )   (1 )

Extraordinary loss (gain) on the acquisition of a business

    1     (6 )   (14 )

Restructuring, impairment and plant closing costs (credits):

                   
 

Polyurethanes

        2      
 

Performance Products

    3         1  
 

Advanced Materials

    (2 )   13     1  
 

Textile Effects

    15     6     24  
 

Pigments

    8     53     4  
 

Corporate and other

    5     14     1  
               
   

Total restructuring, impairment and plant closing costs

    29     88     31  
               

Adjusted EBITDA

  $ 882   $ 535   $ 662  
               
(2)
Adjusted net income (loss) is computed by eliminating the after-tax amounts related to the following from net income attributable to Huntsman International LLC: unallocated foreign exchange gains or losses; loss or gain on early extinguishment of debt; legal settlements; loss on

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  Year ended December 31,  
 
  2010   2009   2008  

Net income (loss) attributable to Huntsman International LLC

  $ 180   $ (410 ) $ 38  

Foreign exchange (gains) losses—unallocated, net of tax of $3, $11 and $(22) in 2010, 2009 and 2008, respectively

        (5 )   9  

Loss on early extinguishment of debt, net of tax of $(14), $(8) and $(1) in 2010, 2009 and 2008, respectively

    23     13      

Legal settlements, net of tax of $(3), nil and nil in 2010, 2009 and 2008, respectively

    5          

Discount amortization on settlement financing, net of tax of $(10), $(5) and nil in 2010, 2009 and 2008, respectively

    16     9      

Discontinued operations, net of tax of $10, $(80) and $69 in 2010, 2009 and 2008, respectively

    (42 )   19     (84 )

Acquisition expenses, net of tax of $(1), nil and nil in 2010, 2009 and 2008, respectively

    2     1      

Gain on sale of business/assets, net of tax of nil in 2010, 2009 and 2008, respectively

        (1 )   (1 )

Extraordinary loss (gain) on the acquisition of a business, net of tax of nil for 2010, 2009 and 2008, each

    1     (6 )   (14 )

Restructuring, impairment and plant closing costs (credits), net of tax of $(2), $(9) and $(4) in 2010, 2009 and 2008, respectively

    27     79     27  
               

Adjusted net income (loss)

  $ 212   $ (301 ) $ (25 )
               

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(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 2010, 2009 and 2008, capital expenditures of $236 million, $189 million and $418 million, respectively, were reimbursed in part by $34 million, nil and nil, respectively, from insurance settlement proceeds. During 2010, 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.

Year Ended December 31, 2010 Compared with Year Ended December 31, 2009

        For 2010, net income attributable to Huntsman International LLC was $180 million on revenues of $9,250 million, compared with net loss attributable to Huntsman International LLC of $410 million on revenues of $7,665 million for 2009. The increase of $590 million in net income attributable to Huntsman International LLC was the result of the following items:

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Segment Analysis

        During the first quarter of 2010, we began reporting our LIFO inventory valuation reserves as part of Corporate and other; these reserves were previously reported in our Performance Products segment. During the fourth quarter of 2010, we began reporting the (income) loss attributable to noncontrolling interests in the reporting segment to which the subsidiary relates. Previously, (income) loss attributable to noncontrolling interests was reported in our Corporate and other segment. All relevant information for prior periods has been reclassified to reflect these changes.

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Year Ended December 31, 2010 Compared to Year Ended December 31, 2009

        The following table sets forth the revenues and EBITDA for each of our operating segments (dollars in millions):

 
  Year ended December 31,    
 
 
  Percent
Change
 
 
  2010   2009  

Revenues

                   

Polyurethanes

  $ 3,605   $ 3,005     20 %

Performance Products

    2,659     2,090     27 %

Advanced Materials

    1,244     1,059     17 %

Textile Effects

    787     691     14 %

Pigments

    1,213     960     26 %

Eliminations

    (258 )   (140 )   84 %
                 

Total

  $ 9,250   $ 7,665     21 %
                 

Segment EBITDA

                   

Polyurethanes

  $ 319   $ 388     (18 )%

Performance Products

    363     246     48 %

Advanced Materials

    143     59     142 %

Textile Effects

    1     (64 )   NM  

Pigments

    205     (25 )   NM  

Corporate and other

    (224 )   (178 )   26 %
                 
 

Subtotal

    807     426     89 %

Discontinued Operations

    53     (97 )   NM  
                 

Total

  $ 860   $ 329     161 %
                 

 

 
  Year ended December 31, 2010 vs. 2009  
 
  Average Selling Price(1)    
 
 
  Local
Currency
  Foreign Currency
Translation Impact
  Sales
Volumes(1)
 

Period-Over-Period Increase (Decrease)

                   

Polyurethanes

    13 %   (1 )%   4 %

Performance Products

    8 %       21 %

Advanced Materials

    8 %   (1 )%   11 %

Textile Effects

    6 %   1 %   6 %

Pigments

    11 %   (2 )%   17 %

Total Company

    9 %   (1 )%   12 %

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  Fourth Quarter 2010 vs. Third Quarter 2010  
 
  Average Selling Price(1)    
 
 
  Local
Currency
  Foreign Currency
Translation Impact
  Sales
Volumes(1)
 

Period-Over-Period Increase (Decrease)

                   

Polyurethanes

    9 %   2 %   (11 )%

Performance Products

        2 %    

Advanced Materials

        3 %   (5 )%

Textile Effects

    (2 )%   2 %   (1 )%

Pigments

    5 %   3 %   (7 )%

Total Company

    5 %   2 %   (6 )%

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

NM—Not Meaningful

Polyurethanes

        The increase in revenues in our Polyurethanes segment for 2010 as compared to 2009 was primarily due to higher average selling prices for MDI products and MTBE and higher MDI product sales volumes. Average selling prices for MDI products and MTBE increased primarily in response to higher raw material costs. MDI products sales volumes were higher as demand in all major markets continued to recover from the worldwide economic downturn. PO/MTBE sales volumes decreased due to the planned 60 day maintenance outage at our Port Neches, Texas PO/MTBE facility in the first quarter of 2010. The decrease in segment EBITDA was primarily due to the estimated $40 million impact of the planned maintenance outage at our Port Neches, Texas facility and lower MTBE margins, offset in part by improvement in MDI sales volumes and margins.

Performance Products

        For 2010, our Performance Products segment revenues increased due to higher sales volumes and higher average selling prices when compared to 2009. Sales volumes increased primarily due to higher demand across almost all product groups and as a result of additional sales of a portion of our ethylene glycol production previously produced under tolling arrangements. Average selling prices increased across almost all product groups principally in response to continued strong market demand and higher raw material costs, partially offset by the strength of the U.S. dollar against major European currencies. The increase in segment EBITDA was primarily due to higher sales volumes and higher margins, partially offset by higher plant expenses and the impact of shut downs during the first quarter of 2010 at our Port Neches, Texas ethylene and ethylene oxide units which resulted in higher costs of approximately $11 million. In addition, during 2010, we recorded a non-recurring $18 million credit to equity income of investment in unconsolidated affiliates to appropriately reflect our investment in the Sasol-Huntsman joint venture.

Advanced Materials

        The increase in revenues in our Advanced Materials segment for 2010 compared to 2009 was due to higher sales volumes and higher average selling prices. Sales volumes increased in all markets primarily due to the worldwide economic recovery. Average selling prices increased in our base resins business primarily in response to higher raw material costs, offset in part by lower average selling prices in our specialty components and formulations markets, primarily as a result of changes in our product mix and competitive market pressures. The increase in segment EBITDA was primarily due to higher sales volumes and margins and lower restructuring, impairment and plant closing costs, partially offset by higher manufacturing costs. During 2010 and 2009, our Advanced Materials segment recorded

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restructuring, impairment and plant closing (credits) charges of $(2) million and $13 million, respectively. For more information concerning restructuring activities, see "Note 11. Restructuring, Impairment and Plant Closing Costs" to our consolidated financial statements.

Textile Effects

        The increase in revenues in our Textile Effects segment for 2010 compared to 2009 was due to higher average selling prices and higher sales volumes. Average selling prices increased primarily due to favorable changes in product mix. Sales volumes increased across all business lines due to the economic recovery in all regions of the world. The increase in segment EBITDA was primarily due to higher sales volumes and higher contribution margins, partially offset by higher restructuring, impairment and plant closing costs. During 2010 and 2009, our Textile Effects segment recorded restructuring, impairment and plant closing charges of $15 million and $6 million, respectively. For more information concerning restructuring activities, see "Note 11. Restructuring, Impairment and Plant Closing Costs" to our consolidated financial statements.

Pigments

        The increase in revenues in our Pigments segment for 2010 compared to 2009 was due to higher average selling prices and higher sales volumes. Average selling prices increased primarily as a result of higher selling prices in all regions of the world. Sales volumes increased primarily due to demand recovery in all regions of the world as a result of the worldwide economic recovery. The increase in segment EBITDA was primarily due to higher sales volumes, higher contribution margins and lower restructuring, impairment and plant closing costs. During 2010 and 2009, our Pigments segment recorded restructuring, impairment and plant closing charges of $8 million and $53 million, respectively. For more information concerning restructuring activities, see "Note 11. Restructuring, Impairment and Plant Closing Costs" to our consolidated financial statements.

Corporate and other

        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, extraordinary gain (loss) on the acquisition of a business, loss on accounts receivable securitization program (for periods prior to 2010) and non-operating income and expense. For 2010, EBITDA from Corporate and other items decreased by $46 million to a loss of $224 million from a loss of $178 million for 2009. The decrease in EBITDA from Corporate and other for 2010 resulted primarily from an increase of LIFO inventory valuation expense of $32 million ($18 million of expense in 2010 compared to $14 million of income in 2009), a $13 million decrease in unallocated foreign exchange gains ($3 million in gains in 2010 compared to $16 million in gains in 2009), an increase in loss on early extinguishment of debt of $16 million ($37 million of losses in 2010 compared to $21 million of losses in 2009), and an increase in legal settlements of $8 million. For more information regarding the loss on early extinguishment of debt, see "Note 14. Debt—Redemption of Notes and Loss on Early Extinguishment of Debt" to our consolidated financial statements. The decrease to EBITDA was partially offset by a $23 million reduction in loss on accounts receivable securitization program. Upon the adoption of new accounting guidance in 2010, transfers of accounts receivable under our A/R Programs no longer met the criteria for derecognition. Accordingly, the amounts outstanding under our A/R Programs are accounted for as secured borrowings beginning January 1, 2010. For more information, see "Note 16. Off-Balance Sheet Securitization of Accounts Receivable" to our consolidated financial statements.

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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 results of these former businesses are included in discontinued operations for all periods presented.

        Income from discontinued operations, net of tax, for 2010 was $42 million as compared to a loss of $19 million in 2009. The increase in income from discontinued operations resulted principally from a $110 million pretax gain recognized in the second quarter of 2010 in connection with the final settlement of our insurance claims related to the 2006 fire at our former Port Arthur, Texas plant and a pretax gain of $7 million from the settlement of insurance claims related to the 2005 gulf coast storms, offset in part by related income taxes, legal and other costs and by a $19 million loss from the recognition of cumulative currency translation losses upon the substantial liquidation of our former Australian styrenics business. See "Note 25. Casualty Losses and Insurance Recoveries" to our consolidated financial statements.

Year Ended December 31, 2009 Compared to Year Ended December 31, 2008

        For the year ended December 31, 2009, the net loss attributable to Huntsman International LLC was $410 million on revenues of $7,665 million compared with net income attributable to Huntsman International LLC of $38 million on revenues of $10,056 million for 2008. The increase of $448 million in net loss attributable to Huntsman International LLC was the result of the following:

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Segment Analysis

Year Ended December 31, 2009 Compared to Year Ended December 31, 2008

        The following table sets forth the revenues and EBITDA for each of our operating segments (dollars in millions):

 
  Year ended
December 31,
   
 
 
  Percent
Change
 
 
  2009   2008  

Revenues

                   

Polyurethanes

  $ 3,005   $ 4,055     (26 )%

Performance Products

    2,090     2,703     (23 )%

Advanced Materials

    1,059     1,492     (29 )%

Textile Effects

    691     903     (23 )%

Pigments

    960     1,072     (10 )%

Eliminations

    (140 )   (169 )   (17 )%
                 

Total

  $ 7,665   $ 10,056     (24 )%
                 

Segment EBITDA

                   

Polyurethanes

  $ 388   $ 381     2 %

Performance Products

    246     274     (10 )%

Advanced Materials

    59     149     (60 )%

Textile Effects

    (64 )   (33 )   94 %

Pigments

    (25 )   17     NM  

Corporate and other

    (178 )   (201 )   (11 )%
                 
 

Subtotal

    426     587     (27 )%

Discontinued Operations

    (97 )   156     NM  
                 

Total

  $ 329   $ 743     (56 )%
                 

 

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  Year ended December 31, 2009 vs. 2008  
 
  Average Selling Price(1)    
 
 
  Local
Currency
  Foreign Currency
Translation Impact
  Sales
Volumes(1)
 

Period-Over-Period Increase (Decrease)

                   

Polyurethanes

    (20 )%   (2 )%   (5 )%

Performance Products

    (19 )%   (2 )%   (3 )%

Advanced Materials

    (3 )%   (3 )%   (25 )%

Textile Effects

        (5 )%   (20 )%

Pigments

        (5 )%   (6 )%

Total Company

    (16 )%   (3 )%   (5 )%

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

NM—Not Meaningful

Polyurethanes

        The decrease in revenues in our Polyurethanes segment for 2009 as compared to 2008 was primarily due to overall lower average selling prices and lower MDI sales volumes. Average MDI selling prices decreased primarily due to competitive pressures, lower raw material costs and the effects of the movement of the U.S. dollar against the Euro. MDI sales volumes decreased due to lower demand in major European and Americas markets as a result of the worldwide economic slowdown. MTBE sales volumes increased relative to 2008, which was impacted by the 2008 U.S. Gulf Coast storms, while average selling prices decreased in response to lower raw material costs. The slight increase in EBITDA in the Polyurethanes segment was primarily the result of higher MTBE sales volumes and margins as well as the negative effects in 2008 from the U.S. Gulf Coast storms which were offset somewhat by lower MDI sales volumes and margins.

Performance Products

        For 2009, Performance Products segment revenues decreased due to lower sales volumes and lower selling prices when compared to 2008. Sales volumes decreased primarily from lower demand for almost all product lines as a result of the worldwide economic slowdown. The decrease in average selling prices was driven principally by lower raw material costs and the strengthening of the U.S. dollar against major European currencies and the Australian dollar. Performance Products segment EBITDA decreased mainly due to the fall in sales volumes and lower equity income partially offset by higher contribution margins as average selling prices fell more slowly than raw material and energy costs.

Advanced Materials

        The decrease in revenues in our Advanced Materials segment for 2009 compared to 2008 was due to lower sales volumes and lower average selling prices. Sales volumes decreased across all regions as a result of the worldwide economic slowdown. In addition, customers in our formulations and specialty components businesses depleted inventory over several quarters. Average selling prices in our base resins business decreased in response to lower raw material costs while average selling prices in our formulations and specialty components markets decreased as a result of changes in product mix, competitive pressures in our structural components for the ski, automotive and wind generation businesses, and the strength of the U.S. dollar against major European currencies. The decrease in EBITDA was primarily due to lower sales volumes and higher restructuring costs, partially offset by lower raw material and operating costs. During the years ended December 31, 2009 and 2008, our Advanced Materials segment recorded restructuring and plant closing charges of $13 million and $1 million, respectively.

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Textile Effects

        The decrease in revenues in our Textile Effects segment for 2009 compared to 2008 was due to lower sales volumes and lower average selling prices. Sales volumes decreased primarily due to lower demand for apparel and home textile products in all regions, as well as specialty textiles products in the Americas and Europe as a result of the worldwide economic slowdown. Average selling prices decreased primarily as a result of a shift in sales mix from Europe to Asia and the Middle East. The decrease in EBITDA was primarily due to lower sales volumes and lower contribution margins as selling prices decreased more than the reduction in raw material and energy costs, offset in part by lower selling, general and administrative costs and lower restructuring costs. During the years ended December 31, 2009 and 2008, our Textile Effects segment recorded restructuring and plant closing charges of $6 million and $24 million, respectively.

Pigments

        The decrease in revenues in our Pigments segment for 2009 compared to 2008 was due to lower sales volumes and lower average selling prices. Sales volumes decreased primarily due to lower demand in Europe, North America and Asia as a result of the worldwide economic slowdown. Average selling prices decreased primarily as a result of the strength of the U.S. dollar against major European currencies, and due to lower average selling prices in Europe, Africa, Latin America and the Middle East in response to weaker demand, partially offset by higher average selling prices in Asia and North America. The decrease in EBITDA in our Pigments segment was primarily due to higher restructuring, impairment and plant closing costs as the impact of lower sales volumes and average selling prices was offset by lower raw materials and operating costs. During the years ended December 31, 2009 and 2008, our Pigments segment recorded restructuring, impairment and plant closing charges of $53 million and $4 million, respectively.

Corporate and other

        Corporate and other includes unallocated corporate expense, unallocated foreign exchange gains and losses, LIFO inventory valuation reserve adjustments, loss on accounts receivable securitization program, loss on the early extinguishment of debt, unallocated restructuring, impairment and plant closing costs, extraordinary gain on the acquisition of a business and non-operating income and expense. For 2009, EBITDA loss from Corporate and other items decreased by $23 million to a loss of $178 million from a loss of $201 million for 2008. The decrease in EBITDA loss primarily resulted from a $47 million increase in unallocated foreign exchange gains ($16 million of gains in 2009 versus $31 million of losses in 2008), a $10 million increase in LIFO inventory valuation gains ($14 million of gains in 2009 versus $4 million of gains in 2008), and a $4 million reduction in costs associated with our A/R Program ($23 million of costs in 2009 versus $27 million of costs in 2008). These increases in EBITDA were partially offset by higher restructuring charges of $13 million ($14 million in 2009 versus $1 million in 2008). Additionally, EBITDA decreased due to a $20 million increase in costs associated with the early extinguishment of debt ($21 million loss in 2009 compared to $1 million loss in 2008) and an $8 million decrease in the extraordinary gain on the Textile Effects Acquisition ($6 million gain in 2009 compared to $14 million gain in 2008).

Discontinued Operations

        The operating results of our former Australian styrenics business, and our polymers and base chemicals businesses are classified as discontinued operations, and, accordingly, the revenues of these businesses are excluded from revenues for all periods presented. The results of our Australian styrenics business and our polymers and base chemicals businesses are included in discontinued operations for all periods presented.

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        During the year ended December 31, 2009, we recorded an after tax loss from discontinued operations of $19 million related primarily to the operations of our former Australian styrenics business, legal costs in connection with the fire insurance claim on our former base chemicals business and the revaluation of product exchange liabilities. During the year ended December 31, 2008, we recorded after tax income from discontinued operations of $84 million related principally to a $175 million gain on partial fire insurance settlement, offset in part by the operations of our former Australian styrenics business and sales and use tax settlements and post-closing adjustments associated with our former base chemicals and polymers businesses.

LIQUIDITY AND CAPITAL RESOURCES

        The following is a discussion of our liquidity and capital resources.

Cash Flows for Year Ended December 31, 2010 Compared to the Year Ended December 31, 2009

        Net cash (used in) provided by operating activities for 2010 and 2009 was $(46) million and $420 million, respectively. The decrease in cash provided by operating activities was primarily attributable to a $758 million unfavorable variance in operating assets and liabilities changes for the year ended December 31, 2010 as compared with 2009. These decreases to cash provided by operating activities were offset in part by an increase in operating income as described in "—Results of Operations" above. Upon the adoption of new accounting guidance on January 1, 2010, transfers of accounts receivable under our A/R Programs no longer met the criteria for derecognition and off-balance sheet treatment. Accordingly, the amounts outstanding under our A/R Programs are accounted for as secured borrowings and are now on balance sheet. As a result of the adoption of this new guidance, accounts receivable increased by $254 million and a corresponding increase in cash used in operating activities was reflected in the statement of cash flows for 2010.

        Net cash used in investing activities for 2010 and 2009 was $238 million and $212 million, respectively. During 2010 and 2009, we paid $202 million and $189 million, respectively, for capital expenditures, net of reimbursements. This increase in net capital expenditures was largely attributable to higher 2010 spending on maintenance and environmental projects, offset in part by $34 million of reimbursed capital expenditures in 2010. During 2010, we received proceeds of $110 million from the settlement of our insurance claims related to the 2006 fire at our former Port Arthur, Texas plant, $34 million of which was reflected in the investing activities section of the statement of cash flows as a reimbursement of capital expenditures. In connection with the consolidation of Arabian Amines Company in the third quarter of 2010, we assumed $14 million of cash. For more information, see "Note 6. Investment in Unconsolidated Affiliates" and "Note 7. Variable Interest Entities" to our consolidated financial statements. During 2009, we paid $31 million for the acquisition of the Baroda Division ("Baroda") of Metrochem Industries Limited ("MCIL"). For more information, see "Note 3. Business Combinations—Baroda Acquisition" to our consolidated financial statements. During 2010 and 2009, the receivable from Huntsman Corporation increased by $57 and $7 million, respectively.

        Net cash (used in) provided by financing activities for 2010 was $(78) million as compared with $619 million in 2009. This increase in net cash used in financing activities was primarily due to higher net prepayment of debt in 2010 as compared to 2009 and the resulting call premiums paid in association with these prepayments, partially offset by the issuance of new senior subordinated notes and the on balance sheet treatment of our A/R Programs. In addition, in 2009 we issued $600 million aggregate principal amount of 5.5% senior notes due 2016 (the "2016 Senior Notes") and obtained a $500 million Term Loan C in connection with our parent's settlement agreement (the "Texas Bank Litigation Settlement Agreement") in connection with its litigation (the "Texas Bank Litigation") against affiliates of Credit Suisse Securities (USA) LLC and Deutsche Bank Inc. (collectively, the "Banks"). For more information, see "Note 14. Debt" to our consolidated financial statements. During 2010 and 2009, net borrowings from Huntsman Corporation (decreased) increased by $(15) million and

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$126 million, respectively. During 2009, contributions received from Huntsman Corporation were $236 million and dividends paid to Huntsman Corporation were $23 million.

Cash Flows for Year Ended December 31, 2009 Compared to the Year Ended December 31, 2008

        Net cash provided by operating activities for 2009 and 2008 was $420 million and $39 million, respectively. The increase in cash provided by operating activities was primarily attributable to a $569 million favorable variance in operating assets and liabilities changes for 2009 as compared with 2008. These increases to cash provided by operating activities were offset in part by a decrease in operating income as described in "—Results of Operations" above.

        Net cash used in investing activities for 2009 and 2008 was $212 million and $314 million, respectively. During 2009 and 2008, we paid $189 million and $418 million, respectively, for capital expenditures. This reduction in capital expenditures was largely attributable to higher 2008 spending on various projects, including $84 million spent on our maleic anhydride expansion at the Geismar, Louisiana site in 2008 as compared to $26 million in 2009; and $32 million spent on our MDI facility at the Geismar, Louisiana site in 2008. In addition, during 2008, we spent $29 million at our Greatham, U.K. titanium dioxide facility. During 2009, we paid $31 million for the Baroda acquisition. During 2009 and 2008, we received $5 million and $3 million, respectively, from the sale of assets. During 2008, we made payments of $29 million related to certain expenditures for the rebuild of our former Port Arthur, Texas facility, resulting in an adjustment to the sales proceeds received in connection with the 2007 U.S. Base Chemicals Disposition. During 2009 and 2008, the receivable from Huntsman Corporation (increased) decreased by $(7) million and $179 million, respectively. During 2008, we contributed $44 million to our ethyleneamines joint venture in Saudi Arabia.

        Net cash provided by financing activities for 2009 was $619 million as compared with $213 million of net cash provided by financing activities in 2008. During 2009 we issued the 2016 Senior Notes and obtained Term Loan C in connection with the Texas Bank Litigation Settlement Agreement. During this period, we also redeemed in full the $296 million outstanding principal amount 11.625% senior secured notes due October 2010 and the $198 million outstanding principal amount 11.5% senior notes due July 2012. During 2009 and 2008, net borrowings from Huntsman Corporation increased by $126 million and $423 million, respectively, and dividends to Huntsman Corporation were $23 million and $306 million, respectively. During 2009, we received $236 million of contributions from Huntsman Corporation.

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Changes in Financial Condition

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

 
  December 31,
2010
  December 31,
2009
  Increase
(Decrease)
  Percent
Change
 

Cash and cash equivalents

  $ 561   $ 919   $ (358 )   (39 )%

Restricted cash

    7     5     2     40 %

Accounts receivable, net

    1,564     1,050     514     49 %

Inventories

    1,396     1,184     212     18 %

Prepaid expenses

    45     42     3     7 %

Deferred income taxes

    40     33     7     21 %

Other current assets

    109     109     0     0 %
                     
 

Total current assets

    3,722     3,342     380     11 %
                     

Accounts payable

    899     756     143     19 %

Accrued liabilities

    626     613     13     2 %

Deferred income taxes

    63     2     61     NM  

Current portion of debt

    619     220     399     181 %
                     
 

Total current liabilities

    2,207     1,591     616     39 %
                     
   

Working capital

  $ 1,515   $ 1,751   $ (236 )   (13 )%
                     

        Our working capital decreased by $236 million as a result of the net impact of the following significant changes:

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Debt and Liquidity

Senior Credit Facilities

        As of December 31, 2010, our Senior Credit Facilities consisted of the following (dollars in millions):

Facility
  Committed
Amount
  Principal
Outstanding
  Carrying
Value
  Interest
Rate(2)
  Maturity  

Revolving Facility

  $ 300   $   $ (1) USD LIBOR plus 3.0%     2014 (3)

Term Loan B

    NA   $ 1,302   $ 1,302   USD LIBOR plus 1.50%     2014 (3)

Term Loan C

    NA   $ 427   $ 386   USD LIBOR plus 2.25%     2016 (3)

(1)
We had no borrowings outstanding under our Revolving Facility; we had approximately $29 million (U.S. dollar equivalents) of letters of credit and bank guarantees issued and outstanding under our Revolving Facility.

(2)
The applicable interest rate of the Revolving Facility and Term Loan B are subject to certain secured leverage ratio thresholds. As of December 31, 2010, the weighted average interest rate on our outstanding balances under the Senior Credit Facilities was approximately 2%.

(3)
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, Term Loan B and Term Loan C will accelerate if we do not repay, or refinance, all but $100 million of our outstanding debt securities on or before three months prior to the maturity dates of such debt securities.

NA—Not applicable

        During 2010, we took the following actions with respect to our Senior Credit Facilities:

        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.

Accounts Receivable Securitization

        Our A/R Programs are structured so that we grant a participating undivided interest in certain of our trade receivables to bankruptcy remote special purpose entities (the "U.S. SPE" and the "EU

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SPE"). We retain the servicing rights and a retained interest in the securitized receivables. Information regarding the A/R Programs as of December 31, 2010 is as follows (monetary amounts in millions):

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

U.S. A/R Program

  October 2012   $125     $27.5     USD LIBOR rate plus 3.75%

U.S. A/R Program

  October 2011   $125     $27.5     CP rate plus 3.50%

EU A/R Program

  October 2011   €225
(approximately
$297)
  € 139
(approximately
$ 183)
  GBP LIBOR rate, USD LIBOR rate or EURIBOR rate plus 3.75%

(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.

        As of December 31, 2010, $552 million of accounts receivable were pledged as collateral under the A/R Programs.

Notes

        As of December 31, 2010, we had outstanding the following notes (monetary amounts in millions):

Notes
  Maturity   Interest Rate   Amount Outstanding

Senior Notes

  June 2016     5.500 %(1) $600 ($452 carrying value)

Senior Subordinated Notes

  March 2021     8.625 % $530 ($544 carrying value)

Senior Subordinated Notes

  March 2020     8.625 % $350

Senior Subordinated Notes

  January 2015     7.375 % $175

Senior Subordinated Notes

  January 2015     7.500 % €  76 (approximately $100)

Senior Subordinated Notes

  March 2013     6.875 % €  84 (approximately $110)

(1)
The effective interest rate at issuance was 11.73%.

        During 2010, we completed the following note offerings:

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        Our notes are governed by indentures which impose certain limitations on us, including among other things limitations on the incurrence of debt, distributions, certain restricted payments, asset sales, and affiliate transactions. The notes are unsecured obligations and are guaranteed by certain subsidiaries named as guarantors.

Redemption of Notes and Loss on Early Extinguishment of Debt

        During 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
 

November 29, 2010

  7.875% Senior Subordinated Notes due 2014     $  88     $  92   $ 3  

November 26, 2010

 

7.875% Senior Subordinated Notes due 2014

   
$100
   
$104
 
$

4
 

October 12, 2010

 

7.875% Senior Subordinated Notes due 2014

   
$159
   
$165
 
$

7
 

September 27, 2010

 

6.875% Senior Subordinated Notes due 2013

   
€132 (approximately $177

)
 
€137 (approximately $183

)

$

7
 

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
 

        For 2010, in connection with redemptions described in the table above, we recorded a loss on early extinguishment of debt of $30 million. As noted in "—Senior Credit Facilities" above, we also recognized a $7 million loss on early extinguishment of debt in 2010 on the prepayment of $274 million of Term Loans. For 2009, we recorded a loss on early extinguishment of debt of $21 million.

        On January 18, 2011, we redeemed $100 million of our $175 million 73/8% senior subordinated notes due 2015. The total redemption payment, excluding accrued interest was $102 million, which included $2 million of call premiums. We recorded a loss on early extinguishment of debt for this transaction in the first quarter of 2011 of $3 million.

Variable Interest Entity Debt

        Arabian Amines Company has the following loan commitments and debt financing:

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Other Debt

        In September 2010, we replaced our $25 million European overdraft facility (which terminated on April 1, 2010) with a new $25 million European overdraft facility. This facility is a demand facility that we use for the working capital needs of our European subsidiaries. In addition, we continue to maintain certain other foreign overdraft facilities used for working capital needs. As of December 31, 2010 we had no borrowings on our European overdraft facility.

        As of December 31, 2010, HPS had $16 million outstanding in U.S. dollar borrowings and 480 million in RMB term loan and working capital loan borrowings (approximately $73 million) under secured facilities for the construction of its plant. During 2010, HPS refinanced RMB 130 million (approximately $20 million) in working capital loans. 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 December 31, 2010, the interest rate was approximately 1% for U.S. dollar borrowings, 5.5% for RMB term loan borrowings and 4.9% for RMB working capital loans.

        HPS also has a loan facility with the stated capacity for discounting up to CNY700 million (approximately $106 million); drafts are discounted using a discount rate of the three month SHIBOR plus the applicable margin. As of December 31, 2010, the all in discount rate was approximately 5%. As of December 31, 2010, HPS has discounted with recourse CNY659 million (approximately $99 million) of commercial drafts, all of which is classified as Current portion of debt on the accompanying consolidated balance sheets.

Note Payable to Huntsman Corporation

        As of December 31, 2010, Huntsman Corporation has loaned $535 million to us under an existing promissory note (the "Intercompany Note"). The Intercompany Note is unsecured and $100 million of the outstanding amount is classified as current as of December 31, 2010 on the accompanying consolidated balance sheets. As of December 31, 2010, under the terms of the Intercompany Note, we promise to pay Huntsman Corporation interest on the unpaid principal amount at a rate per annum based on the previous monthly average borrowing rate obtained under our A/R Program, 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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Compliance with Covenants

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

        Our Senior Credit Facilities are subject to a single financial covenant, the Leverage Covenant, which applies only to the Revolving Facility. 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 our 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 we failed to comply with the Leverage Covenant, then we would not have access to liquidity under our Revolving Facility. If we failed to comply with the Leverage Covenant at a time when we had uncollateralized loans or letters of credit outstanding under the Revolving Facility, we would be in default under the Senior Credit Facilities, and, unless we obtained a waiver or forbearance with respect to such default (as to which we can provide no assurance), we 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 performance metrics with respect to receivables. Any material failure to meet the applicable A/R Program's 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 us to 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.

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 December 31, 2010, we had $1,029 million of combined cash and unused borrowing capacity, consisting of $568 million in cash and restricted cash, $271 million in availability under our Revolving Facility, and $190 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:

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        As of December 31, 2010, we had $619 million classified as current portion of debt which consisted of certain scheduled term payments and various short-term facilities, including €139 million (approximately $183 million) and $28 million outstanding under our A/R Program with maturity of October 2011, $100 million of senior subordinated notes that were redeemed on January 18, 2011, the HPS draft discounting facility in China with $99 million outstanding, the HPS facility with $33 million of loans due in 2011, our Australian credit facilities with $20 million classified as current, $100 million of our note payable to Huntsman Corporation classified as current and certain other short term facilities and scheduled amortization payments totaling $56 million. Although we cannot provide

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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 for capital expenditures. We expect to fund capital expenditures through a combination of available cash and cash flows from operations.

CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

        Our obligations under long-term debt (including the current portion), notes payable to affiliates, lease agreements and other contractual commitments as of December 31, 2010 are summarized below (dollars in millions):

 
  2011   2012 - 2013   2014 - 2015   After 2015   Total  

Long-term debt, including current portion

  $ 619   $ 270   $ 1,526   $ 2,270   $ 4,685  

Interest(1)

    216     386     305     418     1,325  

Operating leases

    53     93     69     63     278  

Purchase commitments(2)

    810     434     152     57     1,453  
                       
 

Total(3)(4)

  $ 1,698   $ 1,183   $ 2,052   $ 2,808   $ 7,741  
                       

(1)
Interest calculated using interest rates as of December 31, 2010 and contractual maturity dates assuming no refinancing or extension of debt instruments. Where there is no contractual maturity date, interest and indebtedness maturity are calculated through 2016.

(2)
We have various purchase commitments extending through 2023 for materials, supplies and services entered into in the ordinary course of business. Included in the purchase commitments table above are contracts which require minimum volume purchases that extend beyond one year or are renewable annually and have been renewed for 2011. Certain contracts allow for changes in minimum required purchase volumes in the event of a temporary or permanent shutdown of a facility. To the extent the contract requires a minimum notice period, such notice period has been included in the above table. The contractual purchase price for substantially all of these contracts is variable based upon market prices, subject to annual negotiations. We have estimated our contractual obligations by using the terms of our 2010 pricing for each contract. We also have a limited number of contracts which require a minimum payment even if no volume is purchased. We believe that all of our purchase obligations will be utilized in our normal operations.

(3)
Totals do not include commitments pertaining to our pension and other postretirement obligations. Our estimated future contributions to our pension and postretirement plans are as follows (dollars in millions):

 
  2011   2012 - 2013   2014 - 2015   5-Year
Average
Annual
 

Pension plans

  $ 146   $ 252   $ 256   $ 100  

Other postretirement obligations

    13     24     24     12  
(4)
The above table does not reflect expected tax payments and unrecognized tax benefits due to the inability to make reasonably reliable estimates of the timing and amount of payments. For additional discussion on unrecognized tax benefits, see "Note 19. Income Taxes" to our consolidated financial statement.

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Off-Balance Sheet Arrangements

Receivables Securitization

        For a discussion of our former off-balance sheet A/R Programs, see "Note 16. Off-Balance Sheet Securitization of Accounts Receivable" to our consolidated financial statements. Beginning in 2010, receivables transferred into the A/R Program no longer meet the criteria for derecognition and amounts outstanding are accounted for as secured borrowings.

RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS

        For a discussion of restructuring, impairment and plant closing costs, see "Note 11. Restructuring, Impairment and Plant Closing Costs" to our consolidated financial statements.

LEGAL PROCEEDINGS

        For a discussion of legal proceedings, see "Note 20. Commitments and Contingencies—Legal Matters" to our consolidated financial statements.

ENVIRONMENTAL, HEALTH AND SAFETY MATTERS

        For a discussion of environmental, health and safety matters, see "Note 21. Environmental, Health and Safety Matters" to our consolidated financial statements.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

        For a discussion of recently issued accounting pronouncements, see "Note 2. Summary of Significant Accounting Policies—Recently Issued Accounting Pronouncements" to our consolidated financial statements.

CRITICAL ACCOUNTING POLICIES

        The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the U.S. requires management to make judgments, estimates and assumptions that affect the reported amounts in the consolidated financial statements. Our significant accounting policies are summarized in "Note 2. Summary of Significant Accounting Policies" to our consolidated financial statements. Summarized below are our critical accounting policies:

Fair Value

        Pursuant to the Texas Bank Litigation Settlement Agreement, on June 22, 2009, we entered into an amendment of our Senior Credit Facilities that provided for Term Loan C with a $500 million principal amount, and we also issued $600 million aggregate principal amount of 2016 Senior Notes. In accordance with accounting guidance regarding fair value measurements, we recorded the Term Loan C and the 2016 Senior Notes in our accounting records at fair values of $439 million and $425 million, respectively, upon initial recognition in June 2009.

        We primarily used the income approach to determine the fair value of these instruments. Fair value represents the present value of estimated future cash flows calculated using interest rates that were available to us for issuance of debt with similar terms, adjusted for differences in remaining maturity using relevant debt yield curves.

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        Management used judgment with respect to assumptions used in estimating the fair values of the Term Loan C and the 2016 Senior Notes. The effect of the following changes in certain key assumptions is summarized as follows (dollars in millions):

Assumptions
  Balance Sheet
Impact(1)
 

Effective market yield

       

—1% increase

  $ (45 )

—1% decrease

    47  

(1)
Estimated increase (decrease) to June 2009 fair values of Term Loan C and 2016 Senior Notes

Revenue Recognition

        We generate substantially all of our revenues through sales in the open market and long-term supply agreements. We recognize revenue when it is realized or realizable and earned. Revenue for product sales is recognized when a sales arrangement exists, risk and title to the product transfer to the customer, collectibility is reasonably assured and pricing is fixed or determinable. The transfer of risk and title to the product to the customer usually occurs at the time shipment is made.

        Revenue arrangements that contain multiple deliverables, which relate primarily to the licensing of technology, are evaluated in accordance with ASC 605-25, Revenue RecognitionMultiple-Element Arrangements, to determine whether the arrangements should be divided into separate units of accounting and how the arrangement consideration should be measured and allocated among the separate units of accounting.

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 cost methods for different components of inventory. Market is determined based on net realizable value for finished goods inventories and replacement cost for raw materials and work-in-process inventories. In periods of declines in the selling prices of our finished products, inventory carrying values may exceed the net realizable value upon sale, resulting in a lower of cost or market charge. We evaluate the need for a lower of cost or market adjustment to inventories based on the period-end selling prices of our finished products.

Long-Lived Assets

        The useful lives of our property, plant and equipment are estimated based upon our historical experience, engineering estimates and industry information and are reviewed when economic events indicate that we may not be able to recover the carrying value of the assets. The estimated lives of our property range from 3 to 33 years and depreciation is recorded on the straight-line method. Inherent in our estimates of useful lives is the assumption that periodic maintenance and an appropriate level of annual capital expenditures will be performed. Without on-going capital improvements and maintenance, the productivity and cost efficiency declines and the useful lives of our assets would be shorter.

        Management uses judgment to estimate the useful lives of our long-lived assets. At December 31, 2010, if the estimated useful lives of our property, plant and equipment had either been one year greater or one year less than their recorded lives, then depreciation expense for 2010 would have been approximately $28 million less or $32 million greater, respectively.

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        We are required to evaluate the carrying value of our plant assets whenever events indicate that such carrying value may not be recoverable in the future or when management's plans change regarding those assets, such as idling or closing a plant. We evaluate impairment by comparing undiscounted cash flows of the related asset groups that are largely independent of the cash flows of other asset groups to their carrying values. Key assumptions in determining the future cash flows include the useful life, technology, competitive pressures, raw material pricing and regulations. In connection with our asset evaluation policy, we reviewed all of our long-lived assets for indicators that the carrying value may not be recoverable and determined that such indicators did not exist during the year ended December 31, 2010.

Goodwill

        We test our goodwill for impairment at least annually (at the beginning of the third quarter) and when events and circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Goodwill has been assigned to reporting units for purposes of impairment testing. Currently, substantially all of our goodwill balance relates to our Advanced Materials reporting unit.

        Fair value is estimated using the market approach, as well as the income approach based on discounted cash flow projections. The estimated fair values of our reporting units are dependent on several significant assumptions including, among others, market information, operating results, earnings projections and anticipated future cash flows.

        We tested goodwill for impairment at the beginning of the third quarter of 2010 as part of the annual impairment testing procedures and determined that no goodwill impairment existed. The results of our annual impairment testing indicated the excess of fair value of our Advanced Materials reporting unit over its carrying value was approximately $1,200 million.

Restructuring and Plant Closing Costs

        We have recorded restructuring charges in recent periods in connection with closing certain plant locations, workforce reductions and other cost savings programs. These charges are recorded when management has committed to a plan and incurred a liability related to the plan. Also in connection with the Textile Effects Acquisition, we recorded liabilities for workforce reduction, non-cancelable lease termination costs and demolition, decommissioning and other restructuring costs. Estimates for plant closing costs include the write-off of the carrying value of the plant, any necessary environmental and/or regulatory costs, contract termination and demolition costs. Estimates for workforce reductions and other costs savings are recorded based upon estimates of the number of positions to be terminated, termination benefits to be provided and other information, as necessary. While management evaluates the estimates on a quarterly basis and will adjust the reserve when information indicates that the estimate is above or below the currently recorded estimate, historically management's estimates on a project-by-project basis have not varied to a material degree. For further discussion of our restructuring activities, see "Note 11. Restructuring, Impairment and Plant Closing Costs" to our consolidated financial statements.

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 each period on a tax jurisdiction by 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

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assets. Uncertainties regarding expected future income in certain jurisdictions could affect the realization of deferred tax assets in those jurisdictions.

        We do not provide for income taxes or benefits on the undistributed earnings of our non-U.S. subsidiaries as earnings are reinvested and, in the opinion of management, will continue to be reinvested indefinitely.

        Accounting for uncertainty in income taxes prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The application of income tax law is inherently complex. We are required to determine if an income tax position meets the criteria of more-likely-than-not to be realized based on the merits of the position under tax law, in order to recognize an income tax benefit. This requires us to make many assumptions and judgments regarding the merits of income tax positions and the application of income tax law. Additionally, if a tax position meets the recognition criteria of more-likely-than-not we are required to make judgments and assumptions to measure the amount of the tax benefits to recognize based on the probability of the amount of tax benefits that would be realized if the tax position was challenged by the taxing authorities. Interpretations and guidance surrounding income tax laws and regulations change over time. As a consequence, changes in assumptions and judgments can materially affect amounts recognized in the consolidated financial statements.

Employee Benefit Programs

        We sponsor several contributory and non-contributory defined benefit plans, covering employees primarily in the U.S., the U.K., the Netherlands, Belgium and Switzerland, but also covering employees in a number of other countries. We fund the material plans through trust arrangements (or local equivalents) where the assets are held separately from us. We also sponsor unfunded postretirement plans which provide medical and life insurance benefits covering certain employees in the U.S. and Canada. Amounts recorded in the consolidated financial statements are recorded based upon actuarial valuations performed by various independent actuaries. Inherent in these valuations are numerous assumptions regarding expected return on assets, discount rates, compensation increases, mortality rates and health care costs trends. These assumptions are disclosed in "Note 18. Employee Benefit Plans" to our consolidated financial statements.

        Management, with the advice of its actuaries, uses judgment to make assumptions on which our employee pension and postretirement benefit plan obligations and expenses are based. The effect of a 1% change in three key assumptions is summarized as follows (dollars in millions):

Assumptions
  Statement of
Operations(1)
  Balance Sheet
Impact(2)
 

Discount rate

             

—1% increase

  $ (25 ) $ (415 )

—1% decrease

    37     482  

Expected return on assets

             

—1% increase

    (26 )    

—1% decrease

    26      

Rate of compensation increase

             

—1% increase

    21     110  

—1% decrease

    (16 )   (104 )

(1)
Estimated increase (decrease) on 2010 net periodic benefit cost

(2)
Estimated increase (decrease) on December 31, 2010 pension and postretirement liabilities and accumulated other comprehensive (loss) income

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Environmental Reserves

        Environmental remediation costs for our facilities are accrued when it is probable that a liability has been incurred and the amount can be reasonably estimated. Estimates of environmental reserves require evaluating government regulation, available technology, site-specific information and remediation alternatives. We accrue an amount equal to our best estimate of the costs to remediate based upon the available information. The extent of environmental damage may not be fully known and the processes and costs of remediation may change as new information is obtained or technology for remediation is improved. Our process for estimating the expected cost for remediation considers the information available, technology that can be utilized and estimates of the extent of environmental damage. Adjustments to our estimates are made periodically based upon additional information received as remediation progresses. For further information, see "Note 21. Environmental, Health and Safety Matters" to our consolidated financial statements.

Variable Interest Entities—Primary Beneficiary

        We evaluate each of our variable interest entities on an on-going basis to determine whether we are the primary beneficiary. Management assesses, on an on-going basis, the nature of our relationship to the variable interest entity, including the amount of control that we exercise over the entity as well as the amount of risk that we bear and rewards we receive in regards to the entity, to determine if we are the primary beneficiary of that variable interest entity. Management judgment is required to assess whether these attributes are significant. We consolidate all variable interest entities for which we have concluded that we are the primary beneficiary.


QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

        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. 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 income (loss).

INTEREST RATE RISKS

        Through our borrowing activities, we are exposed to interest rate risk. Such risk arises due to the structure of our debt portfolio, including the duration of the portfolio and the mix of fixed and floating interest rates. Actions taken to reduce interest rate risk include managing the mix and rate characteristics of various interest bearing liabilities, as well as entering into interest rate derivative instruments.

        From time to time, we may purchase interest rate swaps and/or interest rate collars to reduce the impact of changes in interest rates on our floating-rate long-term debt. Under interest rate swaps, we agree with other parties to exchange, at specified intervals, the difference between fixed-rate and floating-rate interest amounts calculated by reference to an agreed notional principal amount. The collars entitle us to receive from the counterparties (major banks) the amounts, if any, by which our interest payments on certain of our floating-rate borrowings exceed a certain rate, and require us to pay to the counterparties (major banks) the amount, if any, by which our interest payments on certain of our floating-rate borrowings are less than a certain rate.

        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 it has been 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

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of December 31, 2010 and 2009, the fair value of the hedge was $(2) million and $1 million, and was recorded in other noncurrent liabilities and assets, respectively.

        On January 19, 2010, we entered into an additional five-year interest rate contract to hedge the variability caused by monthly changes in cash flow due to associated changes in LIBOR under our Senior Credit Facilities. The notional value of the contract is $50 million, and it has been designated as a cash flow hedge. The effective portion of the changes in the fair value of the swap was recorded as other comprehensive loss. We will pay a fixed 2.8% on the hedge and receive the one-month LIBOR rate. As of December 31, 2010, the fair value of the hedge was $(2) million and was recorded in other noncurrent liabilities.

        Beginning in 2009, Arabian Amines Company entered into a 12 year floating to fixed interest rate contract providing for a receipt of 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 us. See "Note 7. Variable Interest Entities" to our consolidated financial statements. The notional amount of the swap as of December 31, 2010 was $63 million, and the interest rate contract is not designated as a cash flow hedge. As of December 31, 2010, the fair value of the swap was $(5) million and was recorded as other noncurrent liabilities on the accompanying consolidated balance sheets. For 2010, we recorded a reduction in interest expense of $1 million.

        For the years ended December 31, 2010 and 2009, the changes in accumulated other comprehensive (loss) income associated with these cash flow hedging activities was approximately $5 million and $(1) million, respectively.

        During 2011, accumulated other comprehensive income (loss) of nil is expected to be reclassified to earnings. The actual amount that will be reclassified to earnings over the next twelve months may vary from this amount due to changing market conditions. We would be exposed to credit losses in the event of nonperformance by a counterparty to our derivative financial instruments. We anticipate, however, that the counterparties will be able to fully satisfy their obligations under the contracts. Market risk arises from changes in interest rates.

FOREIGN EXCHANGE RATE RISK

        Our cash flows and earnings are subject to fluctuations due to exchange rate variation. Our revenues and expenses are denominated in various currencies. We 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 December 31, 2010 and 2009, we had approximately $183 million and $100 million notional amount (in U.S. dollar equivalents) outstanding, respectively, in foreign currency contracts with a term of approximately one month.

        In conjunction with the issuance of our 8.625% senior subordinated notes due 2020, we entered into cross-currency interest rate contracts with three counterparties. On March 17, 2010, we made payments of $350 million to these counterparties and received €255 million from these counterparties, and on maturity (March 15, 2015) we are required to pay €255 million to these counterparties and will receive $350 million from these counterparties. On March 15 and September 15 of each year, we will receive U.S. dollar interest payments of approximately $15 million (equivalent to an annual rate of 8.625%) and make interest payments of approximately €11 million (equivalent to an annual rate of approximately 8.41%). This swap is designated as a hedge of net investment for financial reporting

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purposes. As of December 31, 2010, the fair value of this swap was $19 million and was recorded as noncurrent assets in our consolidated balance sheet. For 2010, the effective portion of the changes in the fair value of $7 million was recorded in other comprehensive income; with the ineffective portion of $12 million, recorded as an (addition) reduction to interest expense. On July 15, 2010, we changed the method of assessing the effectiveness of this hedge from the spot method to the forward method, which we believe will reduce the ineffective portion and lower volatility in interest expense in future periods.

        In 2008, we unwound a cross currency interest rate swap pursuant to which we had swapped $153 million of LIBOR floating rate debt payments for €116 million of EURIBOR floating rate debt payments. This swap was not designated as a hedge for financial reporting purposes. For 2008, we recorded a foreign currency gain on this swap of $21 million in the consolidated statements of operations.

        Also in 2008, we unwound a cross currency interest rate swap pursuant to which we had swapped $96 million of LIBOR floating rate debt payments for €71 million of EURIBOR floating rate debt payments. This swap was designated as a hedge of a net investment for financial reporting purposes. We received a cash benefit from the unwind of $3 million in the fourth quarter of 2008. For 2008, the effective portion of the changes in the fair value of $14 million was recorded as income in other comprehensive (loss) income, with ineffectiveness of $2 million recorded in interest expense in our consolidated statements of operations.

        A significant portion of our 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 income. From time to time, we review such designation of intercompany loans.

        We review our non-U.S. dollar denominated debt to determine the appropriate amounts designated as hedges. As of December 31, 2010, we have designated approximately €338 million (approximately $446 million) of euro-denominated debt as a hedge of our net investment. For the years ended December 31, 2010, 2009 and 2008, the amount of (loss) gain recognized on the hedge of our net investment was $34 million, $(5) million and $31 million, respectively, and was recorded in other comprehensive income (loss). As of December 31, 2010, we had approximately €926 million (approximately $1,222 million) in net euro assets.

COMMODITY PRICES RISK

        Our exposure to changing commodity prices is somewhat limited since the majority of our raw materials are acquired at posted or market related prices, and sales prices for many of our finished products are at market related prices which are largely set on a monthly or quarterly basis in line with industry practice. Consequently, we do not generally hedge our commodity exposures.

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BUSINESS

OVERVIEW

        Our products comprise a broad range of chemicals and formulations which we market globally to a diversified group of consumer and industrial customers. Our products are used in a wide range of applications, including those in the adhesives, aerospace, automotive, construction products, durable and non-durable consumer products, electronics, medical, packaging, paints and coatings, power generation, refining, synthetic fiber, textile chemicals and dye industries. We are a leading global producer in many of our key product lines, including MDI, amines, surfactants, epoxy-based polymer formulations, textile chemicals, dyes, maleic anhydride and titanium dioxide. Our administrative, research and development and manufacturing operations are primarily conducted at the facilities listed in "—Item 2. Properties" below, which are located in 30 countries. As of December 31, 2010, we employed approximately 12,000 associates worldwide. Our revenues for the years ended December 31, 2010, 2009 and 2008 were $9,250 million, $7,665 million and $10,056 million, respectively.

        We operate in five segments: Polyurethanes, Performance Products, Advanced Materials, Textile Effects and Pigments. In a series of transactions beginning in 2006, we sold or shutdown substantially all of our Australian styrenics, Polymers and Base Chemicals operations. We report the results of our former Australian styrenics, Polymers and Base Chemicals businesses as discontinued operations in our statements of operations. See "Note 27. Discontinued Operations" to our consolidated financial statements.

Recent Developments

        On March 8, 2011, our parent announced that we had successfully completed an amendment to our Senior Credit Facilities. Among other things, the amendment extends the maturity date of our $650 million of Term Loan B by three years from April 2014 to April 2017. The drawn pricing on the extended Term Loan B will currently be LIBOR + 2.50%.

        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 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 the swimming pools and one court issued a ruling awarding $87,000 for 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.

        Both of these cases were tendered to HCCA's insurers, who defended these matters. Prior to the court's ruling in 2011, we believed that any judgment or settlement would be fully covered by insurance. In light of the court's rulings, however, it is possible that our policy limits could be exhausted and we could be required to pay amounts in excess of these policy limits. Accordingly, during the first quarter of 2011, we will record a liability for the full value of the court ruling and a corresponding receivable relating to our indemnity protection with a net charge to discontinued operations for the amount that may not be covered by insurance.

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Our Products

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

        Growth in our differentiated products has been driven by the substitution of our products for other materials and by the level of global economic activity. Accordingly, the profitability of our differentiated products has been somewhat less influenced by the cyclicality that typically impacts the petrochemical industry. Our Pigments business, while cyclical, is influenced by seasonal demand patterns in the coatings industry.

2010 Segment Revenues(1)
 
2010 Segment EBITDA
from Continuing Operations(1)

 

 

 
GRAPHIC

(1)
Percentage allocations in this chart do not give effect to Corporate and other unallocated items, eliminations and EBITDA from discontinued operations. For a detailed disclosure of our revenues, total assets and EBITDA by segment, see "Note 29. Operating Segment Information" to our consolidated financial statements. For a discussion of EBITDA by segment and a reconciliation of EBITDA to net income attributable to Huntsman International and cash provided by operating activities, see "Part I. Item 12. Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations."

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        The following table identifies the key products, their principal end markets and applications and representative customers of each of our segments:

Segment
  Products   End Markets and
Applications
  Representative
Customers
Polyurethanes   MDI, PO, polyols, PG, TPU, aniline and MTBE   Refrigeration and appliance insulation, construction products, adhesives, automotive, footwear, furniture, cushioning, specialized engineering applications and fuel additives   BMW, Certainteed, Electrolux, Firestone, GE, Haier, Louisiana Pacific, Recticel, Weyerhauser

Performance Products

 

Amines, surfactants, LAB, maleic anhydride, other performance chemicals, EG, olefins and technology licenses

 

Detergents, personal care products, agrochemicals, lubricant and fuel additives, adhesives, paints and coatings, construction, marine and automotive products and PET fibers and resins

 

Chevron, Henkel, The Sun Products Corporation, Monsanto, Procter & Gamble, Unilever, Lubrizol, Reichhold, Dow, L'Oreal, Afton

Advanced Materials

 

Basic liquid and solid epoxy resins; specialty resin compounds; cross-linking, matting and curing agents; epoxy, acrylic and polyurethane-based formulations

 

Adhesives, composites for aerospace, automotive, and wind power generation; construction and civil engineering; industrial coatings; electrical power transmission; consumer electronics

 

ABB, Akzo, BASF, Boeing, Bosch, Cytec, Dow, Hexcel, ISOLA, Omya, PPG, ASTORIT, Sanarrow, Schneider, Sherwin Williams, Siemens, Sika, Speed Fair, Syngenta, Toray

Textile Effects

 

Textile chemicals and dyes

 

Apparel, home and technical textiles

 

Esquel Group, Alok Industries, Nice Dyeing, Fruit of the Loom, Hanesbrands, Zaber & Zubair, Aunde, Y.R.C., Guilford Mills, Tencate

Pigments

 

Titanium dioxide

 

Paints and coatings, plastics, paper, printing inks, fibers and ceramics

 

Akzo, PPG, Clariant, Jotun, PolyOne

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Polyurethanes

General

        We are a leading global manufacturer and marketer of a broad range of polyurethane chemicals, including MDI products, PO, polyols, PG and TPU. Polyurethane chemicals are used to produce rigid and flexible foams, as well as coatings, adhesives, sealants and elastomers. We focus on the higher-margin, higher-growth markets for MDI and MDI-based polyurethane systems. Growth in our Polyurethanes segment has been driven primarily by the continued substitution of MDI-based products for other materials across a broad range of applications. We operate five primary Polyurethanes manufacturing facilities in the U.S., Europe and China. We also operate 14 Polyurethanes formulation facilities, which are located in close proximity to our customers worldwide.

        Our customers produce polyurethane products through the combination of an isocyanate, such as MDI or TDI, with polyols, which are derived largely from PO and EO. While the range of TDI-based products is relatively limited, we are able to produce over 2,000 distinct MDI-based polyurethane products by modifying the MDI molecule through varying the proportion and type of polyol used and by introducing other chemical additives to our MDI formulations. As a result, polyurethane products, especially those derived from MDI, are continuing to replace traditional products in a wide range of end use markets, including insulation in construction and appliances, cushioning for automotive and furniture, adhesives, wood binders, footwear and other specialized engineering applications.

        We are a leading North American producer of PO. We and some of our customers process PO into derivative products, such as polyols for polyurethane products, PG and various other chemical products. End uses for these derivative products include applications in the home furnishings, construction, appliance, packaging, automotive and transportation, food, paints and coatings and cleaning products industries. We also produce MTBE as a co-product of our PO manufacturing process. MTBE is an oxygenate that is blended with gasoline to reduce harmful vehicle emissions and to enhance the octane rating of gasoline. See "—Environmental, Health and Safety Matters—MTBE Developments" below and "Part I. Item 1A. Risk Factors" for a discussion of legal and regulatory developments that have resulted in the curtailment and potential elimination of MTBE in gasoline in the U.S. and elsewhere. Also, see "—Manufacturing and Operations" below and "Part I. Item 12. Management's Discussion and Analysis of Financial Condition and Results of Operations" for a discussion of material changes concerning sales of MTBE.

        In 1992, we were the first global supplier of polyurethane chemicals to open a technical service center in China. We have since expanded this facility to include an integrated polyurethanes formulation facility. In January 2003, we entered into two related joint ventures to build MDI production and finishing facilities near Shanghai, China. Production at our MDI finishing plant near Shanghai, China operated by HPS, a consolidated joint venture, was commissioned on June 30, 2006. Production at the MNB, aniline and crude MDI plants operated by SLIC, an unconsolidated joint venture, commenced on September 30, 2006. These world-scale facilities strengthen our ability to service our customers in the critical Chinese market and will support the significant demand growth that we believe this region will continue to experience.

Products and Markets

        MDI is used primarily in rigid foam applications and in a wide variety of customized, higher-value flexible foam and coatings, adhesives, sealants and elastomers. Polyols, including polyether and polyester polyols, are used in conjunction with MDI and TDI in rigid foam, flexible foam and other non-foam applications. PO is one of the principal raw materials for producing polyether polyols. The following chart illustrates the range of product types and end uses for polyurethane chemicals.

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GRAPHIC

        Polyurethane chemicals are sold to customers who combine the chemicals to produce polyurethane products. Depending on their needs, customers will use either commodity polyurethane chemicals produced for mass sales or polyurethane systems tailored for their specific requirements. By varying the blend, additives and specifications of the polyurethane chemicals, manufacturers are able to develop and produce a breadth and variety of polyurethane products.

        MDI.    MDI has a substantially larger market size and a higher growth rate than TDI. This is primarily because MDI can be used to make polyurethanes with a broader range of properties and can therefore be used in a wider range of applications than TDI. We believe that future growth of MDI is expected to be driven by the continued substitution of MDI-based polyurethane for fiberglass and other materials currently used in rigid insulation foam for construction. We expect that other markets, such as binders for reconstituted wood board products, specialty cushioning applications and coatings will further contribute to the continued growth of MDI.

        With the recent rapid growth of the developing Asian economies, the Asian markets have now become the largest market for MDI.

        In addition to the Company, there are three other major global producers of MDI: Bayer, BASF and Dow. While there are also some regional producers in Asia and Europe, we believe it is unlikely that any new global producers of MDI will emerge in the foreseeable future due to the substantial requirements for entry, such as the limited availability of licenses for MDI technology and the significant capital commitment and integration that is required to develop both the necessary technology and the infrastructure to manufacture and market MDI.

        TPU.    TPU is a high-quality, fully formulated thermal plastic derived from the reaction of MDI or an aliphatic isocyanate with polyols to produce unique qualities such as durability, flexibility, strength, abrasion resistance, shock absorbency and chemical resistance. We can tailor the performance characteristics of TPU to meet the specific requirements of our customers. TPU is used in injection molding and small components for the automotive and footwear industries. It is also extruded into films, wires and cables for use in a wide variety of applications in the coatings, adhesives, sealants and elastomers markets.

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        Polyols.    Polyols are combined with MDI, TDI and other isocyanates to create a broad spectrum of polyurethane products. Demand for specialty polyols has been growing at approximately the same rate at which MDI consumption has grown.

        Aniline.    Aniline is an intermediate chemical used primarily to manufacture MDI. Generally, aniline is either consumed internally by the producers of the aniline or is sold to third parties under long-term supply contracts. We believe that the lack of a significant spot market for aniline means that in order to remain competitive, MDI manufacturers must either be integrated with an aniline manufacturing facility or have a long-term, cost-competitive aniline supply contract.

        PO.    PO is an intermediate chemical used mainly to produce a wide range of polyols and PG. Demand for PO depends largely on overall economic demand, especially that of consumer durables. The following chart illustrates the primary end markets and applications for PO.

GRAPHIC

        MTBE.    MTBE is an oxygenate that is blended with gasoline to reduce harmful vehicle emissions and to enhance the octane rating of gasoline. The use of MTBE can be controversial, and it has been effectively eliminated in the U.S. market. See "—Environmental, Health and Safety Matters—MTBE Developments" below and "Part I. Item 1A. Risk Factors." We continue to sell MTBE for use as a gasoline additive, substantially all of which is sold for use outside the U.S. See "—Manufacturing and Operations" below and "Part II. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations."

Sales and Marketing

        We manage a global work force which sells our polyurethane chemicals to over 3,500 customers in more than 90 countries. Our sales and technical resources are organized to support major regional markets, as well as key end use markets which require a more global approach. These key end use markets include the appliance, automotive, footwear, furniture and coatings, construction products, adhesives, sealants and elastomers industries.

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        We provide a wide variety of polyurethane solutions as components (i.e., the isocyanate or the polyol) or in the form of "systems" in which we provide the total isocyanate and polyol formulation to our customers in ready-to-use form. Our ability to deliver a range of polyurethane solutions and technical support tailored to meet our customer's needs is critical to our long term success. We have strategically located our polyurethane formulation facilities, commonly referred to in the chemicals industry as "systems houses," close to our customers, enabling us to focus on customer support and technical service. We believe this customer support and technical service system contributes to customer retention and also provides opportunities for identifying further product and service needs of customers. We manufacture polyols primarily to support our MDI customers' requirements.

        We believe that the extensive market knowledge and industry experience of our sales teams and technical experts, in combination with our strong emphasis on customer relationships, have facilitated our ability to establish and maintain long-term customer supply positions. Due to the specialized nature of our markets, our sales force must possess technical knowledge of our products and their applications. Our strategy is to continue to increase sales to existing customers and to attract new customers by providing innovative solutions, quality products, reliable supply, competitive prices and superior customer service.

Manufacturing and Operations

        Our MDI production facilities are located in Geismar, Louisiana; Rozenburg, Netherlands; and through our joint ventures in Caojing, China. These facilities receive aniline, which is a primary material used in the production of MDI, from our facilities located in Geismar, Louisiana; Wilton, U.K.; and Caojing, China. We believe that this relative scale and product integration of our large facilities provide a significant competitive advantage over other producers. In addition to reducing transportation costs for our raw materials, integration helps reduce our exposure to cyclical prices.

        The following table sets forth the annual production capacity of polyurethane chemicals at each of our polyurethanes facilities:

 
  MDI   Polyols   TPU   Aniline   Nitrobenzene   PO   PG   MTBE  
 
  (millions of pounds)

  (millions of
gallons)

 

Geismar, Louisiana

    970     160           715 (2)   953 (2)                  

Osnabrück, Germany

          26     57                                

Port Neches, Texas

                                  525     145     260  

Ringwood, Illinois

                18                                

Caojing, China

    265 (1)                                          

Rozenburg, Netherlands

    880     130                                      

Wilton, U.K. 

                      715     953                    
                                   

Total

    2,115     316     75     1,430     1,906     525     145     260  
                                   

(1)
Represents our 50% share of capacity from SLIC, an unconsolidated Chinese joint venture.

(2)
Represents our approximately 78% share of capacity under our consolidated Rubicon LLC manufacturing joint venture with Chemtura Corporation.

        At both our Geismar and Rozenburg facilities we utilize sophisticated proprietary technology to produce our MDI. This technology, which is also used in our Chinese joint venture, contributes to our position as a low cost MDI producer. In addition to MDI, we use a proprietary manufacturing process to manufacture PO. We own or license all technology and know-how developed and utilized at our PO facility. Our process combines isobutane and oxygen in proprietary oxidation (peroxidation) reactors, thereby forming TBHP and TBA, which are further processed into PO and MTBE, respectively.

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Because our PO production process is less expensive relative to other technologies and allows all of our PO co-products to be processed into saleable or useable materials, we believe that our PO production technology possesses several distinct advantages over its alternatives.

        We operate polyurethane systems houses in Buenos Aires, Argentina; Deerpark, Australia; Shanghai, China; Cartagena, Colombia; Deggendorf, Germany; Thane (Maharashtra), India; Ternate, Italy; Tlalnepantla, Mexico; Mississauga, Ontario; Kuan Yin, Taiwan; Samuprakam, Thailand; Osnabrück, Germany; Dammam, Saudi Arabia and Obninsk, Russia.

Joint Ventures

        Rubicon Joint Venture.    Chemtura Corporation is our joint venture partner in Rubicon LLC, which owns aniline, nitrobenzene and DPA manufacturing facilities in Geismar, Louisiana. We are entitled to approximately 78% of the nitrobenzene and aniline production capacity of Rubicon LLC, and Chemtura Corporation is entitled to 100% of the DPA production. In addition to operating the joint venture's aniline, nitrobenzene and DPA facilities, Rubicon LLC also operates our wholly owned MDI and polyol facilities at Geismar and is responsible for providing other auxiliary services to the entire Geismar complex. As a result of this joint venture, we are able to achieve greater scale and lower costs for our products than we would otherwise have been able to obtain. Rubicon LLC is consolidated in our financial statements.

        Chinese MDI Joint Ventures.    In January 2003, we entered into two related joint venture agreements to build MDI production facilities near Shanghai, China. SLIC, our manufacturing joint venture with BASF AG and three Chinese chemical companies, built three plants that manufacture MNB, aniline and crude MDI. We effectively own 35% of SLIC and account for our investment under the equity method. HPS, our splitting joint venture with Shanghai Chlor-Alkali Chemical Company, Ltd, has constructed a plant to manufacture pure MDI, polymeric MDI and MDI variants. We own 70% of HPS and it is a consolidated affiliate. These projects have been funded by a combination of equity invested by the joint venture partners and borrowed funds. SLIC and HPS commenced operations during 2006. The total production capacity of the SLIC facilities is 530 million pounds per year of MDI and the production capacity of the HPS facility is 300 million pounds per year of MDI finished products.

        Russian MDI, Coatings and Systems Joint Venture.    In 2006, we purchased a 45% interest in International Polyurethane Investments B.V. This company's wholly owned subsidiary, NMG is a leading polyurethanes producer headquartered in Obninsk, Russia. We account for this investment under the equity method. This joint venture, now Huntsman NMG ZAO, manufactures and markets a range of polyurethane systems in adhesives, coatings, elastomers and insulation using our MDI products.

Raw Materials

        The primary raw materials for MDI-based polyurethane chemicals are benzene and PO. Benzene is a widely available commodity that is the primary feedstock for the production of MDI and aniline. Historically, benzene has been the largest component of our raw material costs. We purchase benzene from third parties to manufacture nitrobenzene and aniline, almost all of which we then use to produce MDI.

        A major cost in the production of polyols is attributable to the costs of PO. The integration of our PO business with our polyurethane chemicals business gives us access to a competitively priced, strategic source of PO and the opportunity to develop polyols that enhance our range of MDI products. The primary raw materials used in our PO production process are butane/isobutane, propylene, methanol and oxygen, which accounted for 53%, 35%, 11% and 1%, respectively, of total raw material costs in 2010. We purchase our raw materials primarily under long-term contracts. While

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most of these feedstocks are commodity materials generally available to us from a wide variety of suppliers at competitive prices in the spot market, all the propylene used in the production of our PO is produced internally and delivered through a pipeline connected to our PO facility.

Competition

        Our major competitors in the polyurethane chemicals market include BASF, Bayer, Dow, Yantai Wanhua and LyondellBasell. While these competitors and others produce various types and quantities of polyurethane chemicals, we focus on MDI and MDI-based polyurethane systems. Our polyurethane chemicals business competes in two basic ways: (1) where price is the dominant element of competition, our polyurethane chemicals business differentiates itself by its high level of customer support, including cooperation on technical and safety matters; and (2) elsewhere, we compete on the basis of product performance and our ability to react quickly to changing customer needs and by providing customers with innovative solutions to their needs.

        Some of our competitors in the Polyurethanes segment are among the world's largest chemical companies and major integrated petroleum companies. These competitors may have their own raw material resources. Some of these companies may be able to produce products more economically than we can. In addition, some of our competitors in this market have greater financial resources, which may enable them to invest significant capital into their businesses, including expenditures for research and development. If any of our current or future competitors in this market develop proprietary technology that enables them to produce products at a significantly lower cost, our technology could be rendered uneconomical or obsolete.

Performance Products

General

        Our Performance Products segment is organized around three market areas: performance specialties, performance intermediates and maleic anhydride and licensing, and serves a wide variety of consumer and industrial end markets. In performance specialties, we are a leading global producer of amines, carbonates and certain specialty surfactants. Growth in demand in our performance specialties market tends to be driven by the end-performance characteristics that our products deliver to our customers. These products are manufactured for use in a growing number of niche industrial end uses and have been characterized by growing demand, technology substitution and stable profitability. For example, we are one of two significant global producers of polyetheramines, for which our sales volumes have grown at a compound annual rate of over 9% in the last 10 years due to strong demand in a number of industrial applications, such as epoxy curing agents, oil drilling, agrochemicals, fuel additives and civil construction materials. In performance intermediates, we consume internally produced and third-party-sourced base petrochemicals in the manufacture of our surfactants, LAB and ethanolamines products, which are primarily used in detergency, consumer products and industrial applications. We also produce EG, which is primarily used in the production of polyester fibers and PET packaging. We believe we are North America's largest and lowest-cost producer of maleic anhydride. Maleic anhydride is the building block for UPRs, which are mainly used in the production of fiberglass reinforced resins for marine, automotive and construction products. We are the leading global licensor of maleic anhydride manufacturing technology and are also the largest supplier of butane fixed bed catalyst used in the manufacture of maleic anhydride. Our licensing group also licenses technology on behalf of our other Huntsman businesses. We operate 16 Performance Products manufacturing facilities in North America, Europe, Middle East, Asia and Australia.

        We have the annual capacity to produce approximately 1.4 billion pounds of more than 250 amines and other performance chemicals. We believe we are the largest global producer of polyetheramines, propylene carbonates, ethylene carbonates, DGA® agent and morpholine, the second largest global

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producer of ethyleneamines and the third largest North American producer of ethanolamines. We also produce substituted propylamines. We use internally produced ethylene, EO, EG and PO in the manufacture of many of our amines. Our products are manufactured at our Port Neches, Conroe and Freeport, Texas facilities and at our facilities in Llanelli, U.K. Petfurdo, Hungary and Jurong Island, Singapore. Since mid-2010 we have been manufacturing ethyleneamines through our 50/50 joint venture with Zamil Group (the "Arabian Amines Company") located in Jubail, Saudi Arabia. The joint venture has the capacity to produce 60 million pounds of ethyleneamines per annum. Our amines are used in a wide variety of consumer and industrial applications, including personal care products, polyurethane foam, fuel and lubricant additives, paints and coatings, composites, solvents and catalysts. Our key amines customers include Akzo, Chevron, BASF, Hercules, Afton, Unilever, Monsanto and PPG.

        We have the capacity to produce approximately 2.5 billion pounds of surfactant products annually at our eight facilities located in North America, Europe and Australia. We are a leading global manufacturer of nonionic, anionic, cationic and amphoteric surfactants products and are characterized by our breadth of product offering and market coverage. Our surfactant products are primarily used in consumer detergent and industrial cleaning applications. In addition, we manufacture and market a diversified range of mild surfactants and specialty formulations for use in personal care applications. We are also a leading European producer of components for powder and liquid laundry detergents and other cleaners. We continue to strengthen and diversify our surfactant product offering into formulated specialty surfactant products, for use in various industrial applications such as leather and textile treatment, foundry and construction, agrochemicals, fuels and lubricants, polymers and coatings. We are growing our global agrochemical surfactant technology and product offerings. Our key surfactants customers include Sun Products, L'Oreal, Monsanto, Nufarm, Clorox, Henkel, Colgate, Procter & Gamble and Unilever.

        We are North America's second largest producer of LAB, with alkylation capacity of 375 million pounds per year at our plant in Chocolate Bayou, Texas. LAB is a surfactant intermediate which is converted into LAS, a major anionic surfactant used worldwide for the production of consumer, industrial and institutional laundry detergents. We also manufacture a higher-molecular-weight alkylate which is used as an additive to lubricants. Our key customers for LAB and specialty alkylates include Colgate, Lubrizol, Henkel, Procter & Gamble, Unilever and Sun Products.

        We believe we are North America's largest producer of maleic anhydride, a highly versatile chemical intermediate that is used to produce UPRs, which are mainly used in the production of fiberglass reinforced resins for marine, automotive and construction products. Maleic anhydride is also used in the production of lubricants, food additives and artificial sweeteners. We have the capacity to produce approximately 340 million pounds annually at our facilities located in Pensacola, Florida and Geismar, Louisiana. We also own a 50% interest in Sasol-Huntsman, which has been accounted for using the equity method. This joint venture owns and operates a facility in Moers, Germany with an annual capacity of 137 million pounds. In early 2011, a plant expansion will come online raising the capacity of the joint venture to 232 million pounds. We expect to begin consolidating the results of Sasol-Huntsman in early 2011. We also license our maleic anhydride technology and supply our catalysts to licensees and to worldwide merchant customers. As a result of our long-standing research and development efforts aided by our pilot and catalyst preparation plants, we have successfully introduced six generations of our maleic anhydride catalysts. Patent applications have been filed for our seventh generation catalyst which should be commercially available in 2011. Revenue from licensing and catalyst comes from new plant commissioning, as well as current plant retrofits and catalyst change schedules. Our key maleic anhydride customers include AOC, Chevron, Oronite, Cook Composites, Dixie, Lubrizol, Infineum, Reichhold and Bartek.

        We also have the capacity to produce approximately 945 million pounds of EG annually at our facilities in Botany, Australia and Port Neches, Texas.

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Products and Markets

        Performance Specialties.    The following table shows the end-market applications for our performance specialties products:

Product Group
  Applications
Specialty Amines   liquid soaps, personal care, lubricant and fuel additives, polyurethane foams, fabric softeners, paints and coatings, refinery processing, water treating

Polyetheramines

 

polyurethane foams and insulation, construction and flooring, paints and coatings, lubricant and fuel additives, adhesives, epoxy composites, agrochemicals, oilfield chemicals, printing inks, pigment dispersion

Ethyleneamines

 

lubricant and fuel additives, epoxy hardeners, wet strength resins, chelating agents, fungicides

Morpholine/DGA® agent and Gas Treating

 

hydrocarbon processing, construction chemicals, synthetic rubber, water treating, electronics applications, gas treatment and agriculture

Carbonates

 

lubricant and fuel additives, agriculture, electronics applications, textile treatment, solar panels

Specialty Surfactants

 

agricultural herbicides, construction, paper de-inking, lubricants

        Our performance specialties products are organized around the following end markets: coatings, polymers and resins; process additives; resources, fuels and lubricants; and agrochemicals.

        Amines.    Amines broadly refers to the family of intermediate chemicals that are produced by reacting ammonia with various ethylene and propylene derivatives. Generally, amines are valued for their properties as a reactive, emulsifying, dispersant, detergent, solvent or corrosion inhibiting agent. Growth in demand for amines is highly correlated with GDP growth due to its strong links to general industrial and consumer products markets. However, certain segments of the amines market, such as polyetheramines, have grown at rates well in excess of GDP growth due to new product development, technical innovation, and substitution and replacement of competing products. For example, polyetheramines are used by customers who demand increasingly sophisticated performance characteristics as an additive in the manufacture of highly customized epoxy formulations, enabling customers to penetrate new markets and substitute for traditional curing materials. As amines are generally sold based upon the performance characteristics that they provide to customer- specific end use application, pricing does not generally fluctuate directly with movements in underlying raw materials.

        Morpholine/DGA® Agent.    Morpholine and DGA® agent are produced as co-products by reacting ammonia with DEG. Morpholine is used in a number of niche industrial applications including rubber curing (as an accelerator) and flocculants for water treatment. DGA® agent is primarily used in gas treating, electronics, herbicides and metalworking end use applications.

        Carbonates.    Ethylene and propylene carbonates are manufactured by reacting EO and PO with carbon dioxide. Carbonates are used as solvents and as reactive diluents in polymer and coating

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applications. They are also increasingly being used as a photo-resist solvent in the manufacture of printed circuit boards, solar panels, LCD screens and the production of lithium batteries. Also, propylene carbonates have recently received approval by the U.S. Environmental Protection Agency (the "EPA") for use as a solvent in certain agricultural applications. We expect these solvents to replace traditional aromatic solvents that are increasingly subject to legislative restrictions and prohibitions.

        Performance Intermediates.    The following table sets forth the end markets for our performance intermediates products:

Product Group
  End Markets
Surfactants    
 
Alkoxylates

 

household detergents, industrial cleaners, anti-fog chemicals for glass, asphalt emulsions, shampoos, polymerization additives, de-emulsifiers for petroleum production
 
Sulfonates/Sulfates

 

powdered detergents, liquid detergents, shampoos, body washes, dishwashing liquids, industrial cleaners, emulsion polymerization, concrete superplasticizers, gypsum wallboard
 
Esters and Derivatives

 

shampoo, body wash, textile and leather treatment
 
Nitrogen Derivatives

 

bleach thickeners, baby shampoo, fabric conditioners, other personal care products
 
Formulated Blends

 

household detergents, textile and leather treatment, personal care products, pharmaceutical intermediates
 
EO/PO Block Co-Polymers

 

automatic dishwasher detergents

Ethanolamines

 

wood preservatives, herbicides, construction, gas treatment, metalworking

LAB

 

consumer detergents, industrial and institutional detergents, synthetic lubricants

EG

 

polyester fibers and PET bottle resins, antifreeze

        Surfactants.    Surfactants or "surface active agents" are substances that combine a water soluble component with a water insoluble component in the same molecule. While surfactants are most commonly used for their detergency in cleaning applications, they are also valued for their emulsification, foaming, dispersing, penetrating and wetting properties in a variety of industries.

        Demand growth for surfactants is relatively stable and exhibits little cyclicality. The main consumer product applications for surfactants can demand new formulations with improved performance characteristics, which affords considerable opportunity for innovative surfactants manufacturers like us to provide surfactants and blends with differentiated specifications and properties. For basic surfactants, pricing tends to have a strong relationship to underlying raw material prices and usually lags raw material price movements.

        Ethanolamines.    Ethanolamines are a range of chemicals produced by the reaction of EO with ammonia. They are used as intermediates in the production of a variety of industrial, agricultural and consumer products. There are a limited number of competitors due to the technical and cost barriers to entry. Growth in this sector has typically been higher than GDP but saw a decline in late 2009 followed

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by a recovery in demand in 2010. We believe the ethanolamines market in North America is currently balanced.

        LAB.    LAB is a surfactant intermediate which is produced through the reaction of benzene with either normal paraffins or linear alpha olefins. Nearly all the LAB produced globally is converted into LAS, a major anionic surfactant used worldwide for the production of consumer, industrial and institutional laundry detergents.

        Three major manufacturers lead the traditional detergency market for LAB in North America: Procter & Gamble, Henkel and The Sun Products Corp. We believe that two-thirds of the LAB global capacity lies in the hands of ten producers, with three or four major players in each of the three regional markets. Although the North American market for LAB is mature, we expect Latin American and other developing countries to grow as detergent demand grows at a faster rate than GDP. However, growth in demand for specialty alkylates for use in lubricants is expected to be higher than GDP. We have developed a unique manufacturing capability for a high molecular weight alkylate for this market. With a significant technical barrier to entry, our specialty alkylate capability has allowed us greater diversity in our portfolio and strengthened our competitive position versus LAB-only producers.

        EG.    We consume our internally produced EO to produce three types of EG: MEG, DEG and TEG. MEG is consumed primarily in the polyester (fiber and bottle resin) and antifreeze end markets and is also used in a wide variety of industrial applications including synthetic lubricants, plasticizers, solvents and emulsifiers. DEG is consumed internally for the production of Morpholine/DGA® agent and polyols. TEG is used internally for the production of polyols and is sold into the market for dehydration of natural gas. We continue to optimize our EO and EG operations depending on the fundamental market demand for EG.

        Maleic Anhydride and Licensing.    The following table sets forth the end markets for our maleic anhydride products:

Product Group
  End Markets
Maleic anhydride   boat hulls, automotive, construction, lubricant and fuel additives, countertops, agrochemicals, paper, and food additives

Maleic anhydride catalyst and technology licensing

 

maleic anhydride, BDO and its derivatives, and PBT manufacturers

        Maleic anhydride is a chemical intermediate that is produced by oxidizing either benzene or normal butane through the use of a catalyst. The largest use of maleic anhydride in the U.S. is in the production of UPRs, which we believe account for approximately 22% of North American maleic anhydride demand. UPR is the main ingredient in fiberglass reinforced resins, which are used for marine and automotive applications and commercial and residential construction products.

        Our maleic anhydride technology is a proprietary fixed bed process with solvent recovery and is characterized by low butane consumption and an energy-efficient, high-percentage recovery solvent recovery system. This process competes against two other processes, the fluid bed process and the fixed bed process with water recovery. We believe that our process is superior in the areas of feedstock and energy efficiency and solvent recovery. The maleic anhydride-based route to BDO manufacture is currently the preferred process technology and is favored over the other routes, which include PO, butadiene and acetylene as feedstocks. As a result, the growth in demand for BDO has resulted in increased demand for our maleic anhydride technology and catalyst.

        Total North American demand for maleic anhydride in 2010 was approximately 547 million pounds. Over time, demand for maleic anhydride has generally grown at rates that slightly exceed GDP growth.

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However, given its dependence on the UPR market, which is heavily influenced by construction end markets, demand for this application can be cyclical. Generally, changes in price have resulted from changes in industry capacity utilization as opposed to changes in underlying raw material costs.

        On April 1, 2008, we announced that Sasol-Huntsman, our 50/50 maleic anhydride joint venture located in Moers, Germany, would be expanding its manufacturing capacity by approximately 100 million pounds per year. The new capacity is expected to come online in early 2011. The joint venture received secured nonrecourse financing that together with its cash flows from operations was used to fund the expansion.

Sales and Marketing

        We sell over 2,000 products to over 4,000 customers globally through our Performance Products marketing groups, which have extensive market knowledge, considerable chemical industry experience and well established customer relationships.

        Our performance specialties markets are organized around end use market applications, such as coatings, polymers and resins and agrochemical. In these end uses, our marketing efforts are focused on how our product offerings perform in certain customer applications. We believe that this approach enhances the value of our product offerings and creates opportunities for ongoing differentiation in our development activities with our customers. Our performance intermediates and maleic anhydride groups organize their marketing efforts around their products and geographic regions served. We also provide extensive pre- and post-sales technical service support to our customers where our technical service professionals work closely with our research and development functions to tailor our product offerings to meet our customers unique and changing requirements. Finally, these technical service professionals interact closely with our market managers and business leadership teams to help guide future offerings and market approach strategies.

        In addition to our focused direct sales efforts, we maintain an extensive global network of distributors and agents that also sell our products. These distributors and agents typically promote our products to smaller end use customers who cannot be served cost effectively by our direct sales forces.

Manufacturing and Operations

        Our Performance Products segment has the capacity to produce more than seven billion pounds annually of a wide variety of specialty, intermediate and commodity products and formulations at 16 manufacturing locations in North America, Europe, Asia and Australia.

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        These production capacities are as follows:

 
  Current capacity  
Product Area
  North
America
  EAME   APAC   Total  
 
  (millions of pounds)
 

Performance Specialties

                         
 

Amines

    706     186 (1)   40     932  
 

Carbonates

    77                 77  
 

Specialty surfactants

    100     175     70     345  

Performance Intermediates

                         
 

EG

    890           55     945  
 

EO

    1,000           100     1,100  
 

Ethanolamines

    400                 400  
 

Ethylene

    400                 400  
 

LAB

    375                 375  
 

Propylene

    300                 300  
 

Surfactants

    470     1,675     30     2,175  

Maleic anhydride

    340     137 (2)         477  

(1)
Includes up to 30 million pounds of ethyleneamines that are made available from Dow's Terneuzen, Netherlands facility by way of a long-term supply arrangement and 60 million pounds from our consolidated 50/50 joint venture Arabian Amines Company located in Jubail, Saudi Arabia.

(2)
Represents total capacity of a facility owned by Sasol-Huntsman, of which we own a 50% equity interest and Sasol owns the remaining 50% interest. On April 1, 2008, we announced that Sasol-Huntsman would be expanding its manufacturing capacity by approximately 100 million pounds per year. The new capacity is expected to come online in early 2011 and is not included in the production capacity table noted above.

        Our surfactants and amines facilities are located globally, with broad capabilities in amination, sulfonation and ethoxylation. These facilities have a competitive cost base and use modern manufacturing units that allow for flexibility in production capabilities and technical innovation. Through the major restructuring of our surfactant operations, we have significantly improved the competitiveness of our surfactants business.

        Our primary ethylene, propylene, EO, EG and ethanolamines facilities are located in Port Neches, Texas alongside our Polyurethanes' PO/MTBE facility. The Port Neches, Texas facility benefits from extensive logistics infrastructure, which allows for efficient sourcing of other raw materials and distribution of finished products.

        Our LAB facility in Chocolate Bayou, Texas and our maleic anhydride facility in Pensacola, Florida are both located within large, integrated petrochemical manufacturing complexes operated by Ascend. We believe this results in greater scale and lower costs for our products than we would be able to obtain if these facilities were stand-alone operations.

        In 2008, we formed Arabian Amines Company, a joint venture with the Zamil Group, which has constructed an ethyleneamines manufacturing plant in Jubail, Saudi Arabia. Trial production commenced in the second quarter of 2010, and, beginning July 2010, Arabian Amines Company generated significant revenues from the sale of product. The plant has an approximate annual capacity of 60 million pounds. We will purchase and sell all of the production from this joint venture. Arabian Amines Company was accounted for under the equity method during its development stage. We began consolidating this joint venture beginning July 1, 2010.

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Raw Materials

        We have the capacity to use approximately 850 million pounds of ethylene each year produced in part at our Port Neches, Texas facility in the production of EO and ethyleneamines. We consume all of our EO in the manufacture of our EG, surfactants and amines products. We also use internally produced PO and DEG in the manufacture of these products. We have the capacity to produce 400 million pounds of ethylene and 300 million pounds of propylene, depending on feedstocks, at our Port Neches, Texas facility. All of the ethylene is used in the production of EO and substantially all of the propylene is consumed by the PO unit at Port Neches operated by our Polyurethanes business. We purchase or toll the remainder of our ethylene and propylene requirements from third parties.

        In addition to internally produced raw materials, our performance specialties market purchases over 250 compounds in varying quantities, the largest of which includes ethylene dichloride, caustic soda, synthetic alcohols, paraffin, nonyl phenol, ammonia, hydrogen, methylamines and acrylonitrile. The majority of these raw materials are available from multiple sources in the merchant market at competitive prices.

        In our performance intermediates market, our primary raw materials, in addition to internally produced and third-party sourced EO and ethylene, are synthetic and natural alcohols, paraffin, alpha olefins, benzene and nonyl phenol. All of these raw materials are widely available in the merchant market at competitive prices.

        Maleic anhydride is produced by the reaction of n-butane with oxygen using our proprietary catalyst. The principal raw material is n-butane which is purchased pursuant to long-term contracts and delivered to our Pensacola, Florida site by barge and to our facility in Geismar, Louisiana via pipeline. Our maleic anhydride catalyst is toll-manufactured by BASF under a long-term contract according to our proprietary methods. These raw materials are available from multiple sources at competitive prices.

Competition

        In our performance specialties market, there are few competitors for many of our products due to the considerable customization of product formulations, the proprietary nature of many of our product applications and manufacturing processes and the relatively high research and development and technical costs involved. Some of our global competitors include BASF, Air Products, Dow, Tosoh, and Akzo. We compete primarily on the basis of product performance, new product innovation and, to a lesser extent, on the basis of price.

        There are numerous global producers of many of our performance intermediates products. Our main competitors include global companies such as Dow, Sasol, BASF, Petresa, Clariant, Shell, Stepan and Kao, as well as various smaller or more local competitors. We compete on the basis of price with respect to the majority of our product offerings and, to a lesser degree, on the basis of product availability, performance and service with respect to certain of our more value-added products.

        In our maleic anhydride market, we compete primarily on the basis of price, customer service and plant location. Our competitors include Lanxess, Flint Hills Resources and Ashland. We are the leading global producer of maleic anhydride catalyst. Competitors in our maleic anhydride catalyst market include Scientific Design and Polynt. In our maleic anhydride technology licensing market, our primary competitor is Scientific Design. We compete primarily on the basis of technological performance and service.

        The market in which our Performance Products segment operates is highly competitive. Among our competitors in this market are some of the world's largest chemical companies and major integrated petroleum companies that have their own raw material resources. Some of these companies may be able to produce products more economically than we can. In addition, some of our competitors in this market have greater financial resources, which may enable them to invest significant capital into

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their businesses, including expenditures for research and development. If any of our current or future competitors in this market develop proprietary technology that enables them to produce products at a significantly lower cost, our technology could be rendered uneconomical or obsolete.

Advanced Materials

General

        Our Advanced Materials segment is a leading global manufacturer and marketer of technologically advanced epoxy, acrylic and polyurethane-based polymer products. We focus on formulations and systems that are used to address customer specific needs in a wide variety of industrial and consumer applications. Our products are used either as replacements for traditional materials or in applications where traditional materials do not meet demanding engineering specifications. For example, structural adhesives are used to replace metal rivets and advanced composites are used to replace traditional aluminum panels in the manufacture of aerospace components. Our Advanced Materials segment is characterized by the breadth of our product offering, our expertise in complex chemistry, our long-standing relationships with our customers, our ability to develop and adapt our technology and our applications expertise for new markets and new applications.

        We operate synthesis, formulating and production facilities in North America, Europe, Asia, South America and Africa. We market over 3,000 products to more than 3,000 customers in the following end-markets: civil engineering, shipbuilding and marine maintenance, consumer appliances, food and beverage packaging, industrial appliances, consumer/do it yourself ("DIY"), aerospace, DVD, LNG transport, electrical power transmission and distribution, printed circuit boards, consumer and industrial electronics, wind power generation, automotive, recreational sports equipment, medical appliances, design studios and prototype manufacturers.

Products and Markets

        Our product range spans from basic liquid and solid resins, to specialty components like curing agents, matting agents, accelerators, cross-linkers, reactive diluents, thermoplastic polyamides and additives. In addition to these components, which we typically sell to formulators in various industries, we also produce and sell ready to use formulated polymer systems.

        Base Resins and Specialty Component Markets.    Our products are used for the protection of steel and concrete substrates, such as flooring, metal furniture and appliances, buildings, linings for storage tanks and food and beverage cans, and the primer coat of automobile bodies and ships. Epoxy-based surface coatings are among the most widely used industrial coatings due to their structural stability and broad application functionality combined with overall economic efficiency.

        Base resins and specialty components are also used for composite applications. A structural composite is made by combining two or more different materials, such as fibers, resins and other specialty additives, to create a product with enhanced structural properties. Specifically, structural composites are lightweight, high-strength, rigid materials with high resistance to chemicals, moisture and high temperatures. Our product range comprises basic and advanced epoxy resins, curing agents and other advanced chemicals, additives and formulated polymer systems. The four key target markets for our structural composites are aerospace, windmill blades for wind power generation, general industrial and automotive applications, and recreational products (mainly sports equipment such as skis). Structural composites continue to substitute for traditional materials, such as metals and wood, in a wide variety of applications due to their light weight, strength and durability.

        Formulated Systems.    The structural adhesives market requires high-strength "engineering" adhesives for use in the manufacture and repair of items to bond various engineering substrates. Our business focus is on engineering adhesives based on epoxy, polyurethane, acrylic and other technologies

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which are used to bond materials, such as steel, aluminum, engineering plastics and composites in substitution of traditional joining techniques. Our Araldite® brand name has considerable value in the industrial and consumer adhesives markets. In many countries, Araldite® branded products are known for their high-performance adhesive capabilities, and we generally believe that this is the value-added segment of the market where recognition of our long-standing Araldite® brand is a key competitive advantage. Packaging is a key characteristic of our adhesives products. Our range of adhesives is sold in a variety of packs and sizes, targeted to three specific end-markets and sold through targeted routes to market:

        Our electrical materials are formulated polymer systems, which make up the insulation materials used in equipment for the generation, transmission and distribution of electrical power, such as transformers, switch gears, ignition coils, sensors, motors and magnets, and for the protection of electrical and electronic devices and components. The purpose of these products is to insulate, protect or shield either the environment from electrical current or electrical devices from the environment, such as temperature or humidity. Our electrical insulating materials target two key market segments: the heavy electrical equipment market and the light electrical equipment market.

        Products for the heavy electrical equipment market segment are used in power plant components, devices for power grids and insulating parts and components. In addition, there are numerous devices, such as motors and magnetic coils used in trains and medical equipment, which are manufactured using epoxy and related technologies. Products for the light electrical equipment market segment are used in applications such as industrial automation and control, consumer electronics, car electronics and electrical components. The end customers in the electrical insulating materials market encompass the relevant original equipment manufacturer ("OEM") as well as numerous manufacturers of components used in the final products. We also develop, manufacture and market materials used in the production of printed circuit boards. Our products are ultimately used in industries ranging from telecommunications and personal computer mother board manufacture to automotive electronic systems manufacture. Soldermasks are our most important product line in printed circuit board technologies, particularly in Europe. Sales are made mainly under the Probimer®, Probimage®, and Probelec® trademarks. Our Probimer® trademark is a widely recognized brand name for soldermasks.

        We produce polyurethane-based and epoxy formulated polymer systems used in the production of models, prototypes, patterns, molds and a variety of related products for design, prototyping and short-run manufacture. Our products are used extensively in the automotive, aerospace and industrial markets as productivity tools to quickly and efficiently create accurate prototypes and develop experimental models, and to lower the cost of manufacturing items in limited quantities primarily using computer-aided-design techniques. We separate the overall tooling and modeling materials market into two distinct groups—standard tooling and modeling materials and stereolithography technology.

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        Our standard tooling and modeling materials are polymer-based materials used by craftsmen to make the traditional patterns, molds, models, jigs and fixtures required by the foundry, automotive, ceramics and other such industries. Stereolithography is a technology that is used to accurately produce physical three-dimensional models directly from computer-aided-design data without cutting, machining or tooling. The models are produced by selectively curing a light sensitive liquid resin with a laser beam. We sell our stereolithography products to customers in the aerospace, appliance, automotive, consumer, electronics and medical markets.

Sales and Marketing

        We maintain multiple routes to market to service our diverse customer base. These routes to market range from using our own direct sales force for targeted, technically oriented distribution to mass general distribution. Our direct sales force focuses on engineering solutions for decision makers at major customers who purchase significant amounts of product from us. We use technically oriented specialist distributors to augment our sales effort in niche markets and applications where we do not believe it is appropriate to develop direct sales resources. We use mass general distribution channels to sell our products into a wide range of general applications where technical expertise is less important to the user of the products to reduce our overall selling expenses. We believe our use of multiple routes to market enables us to reach a broader customer base at an efficient cost.

        We conduct sales activities through dedicated regional sales teams in the Americas; Europe, Africa, the Middle East and India ("EAMEI"); and Asia. Our global customers are covered by key account managers who are familiar with the specific requirements of these clients. The management of long-standing customer relationships, some of which are 20 to 30 years old, is at the heart of the sales and marketing process. We are also supported by a strong network of distributors. We serve a highly fragmented customer base.

        For our consumer DIY "Do It Yourself" range, we have entered into exclusive branding and distribution arrangements with, for example, Selleys in Australia. Under these arrangements, our distribution partners fund advertising and sales promotions, negotiate and sell to major retail chains, own inventories and provide store deliveries (and sometimes shelf merchandising) in exchange for a reliable, high-quality supply of Araldite® branded, ready-to-sell packaged products.

Manufacturing and Operations

        We are a global business serving customers in three principal geographic regions: EAMEI, the Americas, and Asia. To service our customers efficiently, we maintain manufacturing plants around the world with a strategy of global, regional and local manufacturing employed to optimize the level of

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service and minimize the cost to our customers. The following table summarizes the plants that we operate:

Location
  Description of Facility
Bad Saeckingen, Germany   Formulating Facility
Bergkamen, Germany   Synthesis Facility
Chennai, India(1)   Resins and Synthesis Facility
Duxford, U.K.    Formulating Facility
East Lansing, Michigan, U.S.    Formulating Facility
Istanbul, Turkey(2)   Formulating Facility
Los Angeles, California, U.S.    Formulating Facility
McIntosh, Alabama, U.S.    Resins and Synthesis Facility
Monthey, Switzerland   Resins and Synthesis Facility
Pamplona, Spain   Resins and Synthesis Facility
Panyu, China(2)(3)   Formulation and Synthesis Facility
Sadat City, Egypt   Formulating Facility
Taboão da Serra, Brazil   Formulating Facility

(1)
76%-owned and consolidated manufacturing joint venture with Tamilnadu Petroproducts Limited.

(2)
Leased land and/or building.

(3)
95%-owned and consolidated manufacturing joint venture with Guangdong Panyu Shilou Town Economic Development Co. Ltd.

        Our facilities in Asia and India are well-positioned to take advantage of the market growth that is expected in these regions. Furthermore, we believe that we are the largest producer of epoxy resin compounds in India.

Raw Materials

        The principal raw materials we purchase for the manufacture of basic and advanced epoxy resins are epichlorohydrin, bisphenol A and BLR. We also purchase amines, polyols, isocyanates, acrylic materials, hardeners and fillers for the production of our formulated polymer systems and complex chemicals and additives. Raw material costs constitute a sizeable percentage of sales for certain applications. We have supply contracts with a number of suppliers. The terms of our supply contracts vary, but, in general, these contracts contain provisions that set forth the quantities of product to be supplied and purchased and formula based pricing.

        Additionally, we produce some of our most important raw materials, such as BLR and its basic derivatives, which are the basic building blocks of many of our products. We are the fourth largest producer of BLR in the world. Approximately 50% of the BLR we produce is consumed in the production of our formulated polymer systems. The balance of our BLR is sold as liquid or solid resin in the merchant market, allowing us to increase the utilization of our production plants and lower our overall BLR production cost. We believe that manufacturing a substantial proportion of our principal raw material gives us a competitive advantage over other epoxy-based polymer systems formulators, most of whom must buy BLR from third-party suppliers. This position helps protect us from pricing pressure from BLR suppliers and aids in providing us a stable supply of BLR in difficult market conditions.

        We consume certain amines produced by our Performance Products segment and isocyanates produced by our Polyurethanes segment, which we use to formulate Advanced Materials products.

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Competition

        The market in which our Advanced Materials segment operates is highly competitive, and is dependent on significant capital investment, the development of proprietary technology, and maintenance of product research and development. Among our competitors in this market are some of the world's largest chemical companies and major integrated companies that have their own raw material resources.

        Competition in our basic liquid and solid epoxy resins group is primarily driven by price, and is increasingly more global with industry consolidation in the North American and European markets and the emergence of new competitors in Asia. Our major competitors include Dow, Momentive, BASF, Kukdo, Leuna and NanYa.

        Competition in our specialty components and structural composites product group is primarily driven by product performance, applications expertise and customer certification. Our competitive strengths include our strong technology base, broad range of value-added products, leading market positions, diverse customer base and reputation for customer service. Major competitors include Air Products, Arizona, Momentive, BASF, Cray Valley, Evonics, DIC, Dow, Mitsui, Sumitomo and NanYa.

        Competition in our formulation product group is primarily based on technology, know-how, applications and formulations expertise, product reliability and performance, process expertise and technical support. This product group covers a wide range of industries and the key competition factors vary by industry. Our competitive strengths result from our focus on defined market needs, our long-standing customer relationships, product reliability and technical performance, provision of high level service and recognition as a quality supplier in our chosen sectors. We operate dedicated technology centers in Basel, Switzerland; The Woodlands, Texas; and Panyu, China in support of our product and technology development. Our major competitors can be summarized as follows:

Formulation Product Group
  Competition
Adhesives applications   Henkel/Loctite, ITW, National Starch, Sika, 3M
Electrical insulating materials   Altana, Hexion, Schenectady, Wuxi, Dexter-Hysol, Hitachi Chemical, Nagase Chemtex, Toshiba Chemical
Printed circuit board materials   Coates, Goo, Peters, Taiyo Ink, Tamura
Tooling and modeling solution.    Axson, DSM, Sika

Textile Effects

General

        Our Textile Effects segment is the leading global market share provider for textile chemicals and dyes. Our textile solutions enhance the color of finished textiles and improve such performance characteristics as wrinkle resistance and the ability to repel water and stains. Our Textile Effects segment is characterized by the breadth of our product offering, our long-standing relationships with our customers, our ability to develop and adapt our technology and our applications expertise for new markets and new applications.

        We operate synthesis, formulating and production facilities in North America, Europe, Asia and South America. We market multiple products to customers in multiple end-markets, including the following: consumer fashion apparel, sportswear, career and uniform apparel, military, automotive, home textiles and furnishings, carpet and other functional textiles.

        In June 2010, we announced a restructuring program for our Basel, Switzerland site of our Textile Effects segment. It would involve the consolidation of manufacturing activities and processes at the site,

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as well as the introduction of changes in work organization, with the aim of increasing flexibility while preserving existing capacities and ensuring competitiveness in Basel. We expect to spend approximately $16 million over approximately the next year to complete this project. We have targeted approximately $17 million in annual savings when the restructuring is fully completed.

Products and Markets

        Textiles generally involve a complex matrix of fibers, effects and functionality, and the resulting products range from fashion apparel to bulletproof vests, home linens to air and water filters, and upholstery to automotive interiors. Our broad range of dyestuffs and chemicals enhance both the aesthetic appearance of these products and the functionality needed to ensure that they perform in their end-use markets. Since the requirements for these markets vary dramatically, our business strategy focuses on the two major markets—apparel and technical textiles. We work to provide the right balance of products and service to meet the technical challenges in each of these markets.

        The apparel market, which also includes our home interiors products, focuses on products that provide an aesthetic effect and/or improve the processing efficiency within the textile mill. We offer a complete range of colors for cotton, polyester and nylon that cover the range of shades needed for sportswear, intimate apparel, towels, sheeting and casual wear. Our dyes have been developed to ensure that they offer the highest levels of wash fastness currently available in the market. Optical brighteners and other pretreatment products provide "bright white" effects for apparel, towels and sheeting. Pretreatment and dyeing auxiliaries ensure that these fabrics are processed efficiently and effectively—cleaning the fabrics with fewer chemicals, less energy and less water and thereby minimizing the environmental footprint and reducing the processing costs. Silicone softeners may be used to enhance the feel of products.

        Technical textiles include automotive textiles, carpet, military fabrics, mattress ticking and nonwoven and other technical fabrics. Though the product groups may differ in their end-uses, the articles must provide a high-level of functionality and performance in their respective markets. High-lightfast dyes and UV absorbers are used in automotive interiors and outdoor furnishings to provide colors that don't fade when exposed to sunlight and heat. Powerful stain repellent and release technology imparts durable protection for upholstery, military and medical fabrics, without affecting the color, breathability or feel of the fabric. Specialized dyes and prints create unique camouflage patterns for military uniforms, backpacks and tarps that won't fade through wash and wear or during exposure to the elements.

Sales and Marketing

        For our textile effects products, we focus on providing effect competence and process competence to our customers. Effect competence—delivering value added effects to our customer's products—enables us to capitalize on new and innovative technologies and to assist our customers in their efforts to differentiate themselves from competitors. Process competence—applying know-how and expertise to improve customers' processes—allows us to utilize our technical service to reduce cost and enhance efficiency.

Manufacturing and Operations

        We are a global business serving customers in three principal geographic regions: Europe, Africa and the Middle East ("EAME"), the Americas, and Asia. To service our customers efficiently, we maintain manufacturing plants around the world with a strategy of global, regional and local

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manufacturing employed to optimize the level of service and minimize the cost to our customers. The following table summarizes the plants that we operate:

Location
  Description of Facility
Atotonilquillo, Mexico   Textile Dyes and Chemicals Formulations Facility
Baroda, India   Textile Dyes and Chemicals Synthesis Facility
Basel, Switzerland(1)   Textile Dyes Facility and Technology Center
Bogota, Colombia(1)   Chemicals Formulations Facility
Charlotte, North Carolina, U.S.(1)   Chemicals Formulations Facility
Fraijanes, Guatemala(1)   Chemicals Formulations Facility
Gandaria, Jakarta, Indonesia   Textile Dyes and Chemicals Formulations Facility
Hangzhou, China(1)   Chemicals Formulations Facility
Istanbul, Turkey(1)   Chemicals Formulations Facility
Karachi, Pakistan(1)   Chemicals Formulations Facility
Langweid am Leich, Germany(1)   Chemicals Synthesis Facility
Panyu, China(1)(2)   Chemicals Synthesis Facility and Technology Center
Qingdao, China   Textile Dyes Facility
Samutsakorn (Mahachai), Thailand(1)   Textile Dyes and Chemicals Formulations Facility

(1)
Leased land and/or building.

(2)
95%-owned and consolidated manufacturing joint venture with Guangdong Panyu Shilou Town Economic Development Co. Ltd.

Raw Materials

        The manufacture of textile effects products requires a wide selection of raw materials (approximately 1,200 different chemicals), including amines, fluorochemicals and sulfones. No one raw material represents greater than 3% of our textile effects raw material expenditures. Raw material costs constitute a sizeable percentage of sales for certain applications. We have supply contracts with a number of suppliers. The terms of our supply contracts vary, but, in general, these contracts contain provisions that set forth the quantities of product to be supplied and purchased and formula based pricing.

Competition

        We are the leading global market share provider for textile chemicals and dyes. Competition within the textile chemicals and dyes markets is generally fragmented with few competitors who offer complete solutions for both markets. Our major competitors are Clariant, BASF, Kiri-Dystar and Longsheng. We believe that our competitive strengths include our product offering, which is characterized by its broad range; high quality; significant integration between products and service; reliable technical expertise; long-standing relationships with customers; and strong business infrastructure in Asia. We believe that we have more customer service capability and account management capability than any of our competitors worldwide.

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Pigments

General

        We are a leading global manufacturer and marketer of titanium dioxide, which is a white pigment used to impart whiteness, brightness and opacity to products such as paints, plastics, paper, printing inks, fibers and ceramics. We operate seven titanium dioxide manufacturing facilities located in North America, Europe, Asia and Africa. The global titanium dioxide market is characterized by a small number of large, global producers and a growing compliment of smaller regional producers.

        We offer an extensive range of products, under the Tioxide® and Deltio® brand names, to approximately 1,500 customers in all major titanium dioxide end markets and geographic regions. The geographic diversity of our manufacturing facilities allows our Pigments segment to service local customers, as well as global customers that require delivery to more than one location. Our diverse customer base includes Ampacet, A. Schulman, Akzo Nobel, BASF, Cabot, Clariant, Jotun, PolyOne and PPG. Our pigments business has an aggregate annual nameplate capacity of approximately 560,000 tonnes at our seven production facilities. Four of our titanium dioxide manufacturing plants are located in Europe, one is in North America, one is in Asia, and one is in South Africa. Our North American operation consists of a 50% interest in a manufacturing joint venture with Kronos Worldwide, Inc.

        Our Pigments segment is focused on improving our competitive position and providing customers with innovative products and solutions. In 2008, to further our competitive position we expanded the capacity of our Greatham, U.K. chloride-based facility by 50% to 150,000 tonnes per year. During the first quarter of 2009, we closed our Grimsby, U.K. sulphate-based facility. We recently announced an agreement in principle to an investment of approximately €30 million (approximately $40 million) to build a new magnesium sulfate fertilizer manufacturing operation at our plant in Calais, France. The new facility will enable the closure of part of our Calais effluent treatment plant, which is expected to increase the efficiency, sustainability and cost effectiveness of the entire Calais site. We continue to pursue other projects to improve manufacturing costs at each of our facilities. We are also introducing a number of innovative new products to the market, including our Deltio® range of free-flowing pigments.

Products and Markets

        Historically, global titanium dioxide demand growth rates tend to closely track global GDP growth rates. However, the demand growth rate and its relationship with the GDP growth rate varies by region. Developed markets such as the U.S. and Western Europe exhibit higher absolute consumption but lower demand growth rates, while emerging markets such as Asia exhibit much higher demand growth rates. The titanium dioxide industry experiences some seasonality in its sales reflecting the high exposure to seasonal coatings end use markets. Coating sales generally peak during the spring and summer months in the northern hemisphere, resulting in greater sales volumes during the second and third quarters of the year.

        There are two manufacturing processes for the production of titanium dioxide, the sulfate process and the chloride process. Most recent capacity additions by the five major producers have employed the chloride process technology while those by smaller producers have generally used the sulphate process technology. We currently believe that the chloride process accounts for approximately 55% of global production capacity. However, the global distribution of sulfate- and chloride-based titanium dioxide capacity varies by region, with the sulfate process being predominant in Europe, our primary market. The chloride process is the predominant process used in North America, and both processes are used in Asia. While most end use applications can use pigments produced by either process, regional market preferences typically favor products that are locally available. We believe the chloride and sulfate manufacturing processes compete effectively in the marketplace.

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        Aside from the five major producers, the titanium dioxide industry currently has a large number of small regional or local producers, especially in China. Titanium dioxide supply has historically kept pace with increases in demand as producers increased capacity through low cost incremental debottlenecks, efficiency improvements and, more recently, new capacity additions in China. During periods of low titanium dioxide demand, the industry experiences high stock levels and consequently reduces production to manage working capital. Pricing in the industry is driven primarily by supply/demand balance. Based upon current price levels and the long lead times for planning, governmental approvals and construction, we expect supply to continue for the near term in line with historical demand growth.

Sales and Marketing

        Approximately 85% of our titanium dioxide sales are made through our direct sales and technical services network, enabling us to cooperate more closely with our customers and to respond to our increasingly global customer base. Our concentrated sales effort and local manufacturing presence have allowed us to achieve our leading market shares in a number of the countries where we manufacture titanium dioxide.

        In addition, we have focused on marketing products to higher growth industries. For example, we believe that our pigments business is well-positioned to benefit from the projected growth in the plastics sector which we expect to grow faster than the overall titanium dioxide market over the next several years.

Manufacturing and Operations

        Our pigments business has eight manufacturing sites in seven countries with a total capacity of approximately 560,000 tonnes per year. Approximately 72% of our titanium dioxide capacity is located in Western Europe. The following table presents information regarding our titanium dioxide facilities:

Region
  Site   Annual Capacity (tonnes)   Process

Western Europe

  Greatham, U.K.     150,000   Chloride

  Calais, France     95,000   Sulfate

  Huelva, Spain     80,000   Sulfate

  Scarlino, Italy     80,000   Sulfate

North America

  Lake Charles, Louisiana(1)     70,000   Chloride

Asia

  Teluk Kalung, Malaysia     60,000   Sulfate

Southern Africa

  Umbogintwini, South Africa     25,000   Sulfate
             

Total

        560,000    
             

(1)
This facility is owned and operated by Louisiana Pigment Company, L.P., a manufacturing joint venture that is owned 50% by us and 50% by Kronos Worldwide. The capacity shown reflects our 50% interest in Louisiana Pigment Company, L.P.

        In 2008, we completed the expansion of our Greatham, U.K. facility by 50,000 tonnes. We are also well positioned to selectively invest in new plant capacity based upon our ICON chloride technology. ICON technology allows for the construction of new capacity with world scale economics at a minimum nameplate size of 65,000 tonnes. We believe competing chloride technologies typically require a minimum capacity of 100,000 tonnes to achieve comparable economics. Our chloride additions can be more easily absorbed into the market, which provides higher investment returns than larger capacity additions.

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Joint Venture

        Louisiana Pigment Company, L.P. is our 50/50 joint venture with Kronos Worldwide. We share production off take and operating costs of the plant equally with Kronos Worldwide, though we market our share of the production independently. The operations of the joint venture are under the direction of a supervisory committee on which each partner has equal representation. Our investment in Louisiana Pigment Company, L.P. is accounted for using the equity method.

Raw Materials

        The primary raw materials used to produce titanium dioxide are titanium-bearing ores. We purchase the majority of our ore under long-term supply contracts with a number of ore suppliers. The majority of titanium-bearing ores are sourced from Australia, South Africa and Canada. Ore accounts for approximately 45% of pigment variable manufacturing costs, while utilities (electricity, gas and steam), sulfuric acid and chlorine collectively account for approximately 30% of our variable manufacturing costs.

        The world market for titanium bearing ores is characterized by a small number of large suppliers (Rio Tinto, Iluka and Exxaro) which account for approximately 60% of global supply and from which we purchase approximately 60% of our needs. However, the choice of producers has increased in recent years with a number of emerging suppliers based in India and Africa and we have broadened our supply base by purchasing increasing amounts of our ores from these suppliers. The majority of our ore purchases are made under agreements with terms of three or more years.

        Titanium dioxide producers extract titanium from ores and process it into pigmentary titanium dioxide using either the chloride or sulfate process. Once an intermediate titanium dioxide pigment has been produced, it is "finished" into a product with specific performance characteristics for particular end use applications. The finishing process is common to both the sulfate and chloride processes and is a major determinant of the final product's performance characteristics.

        The sulfate process generally uses less-refined ores that are cheaper to purchase but produce more co-product than the chloride process. Co-products from both processes require treatment prior to disposal in order to comply with environmental regulations. In order to reduce our disposal costs and to increase our cost competitiveness, we have developed and marketed the co-products of our pigments business. We sell over 50% of the co-products generated by our business.

Competition

        The global markets in which our pigments business operates are highly competitive. Competition is based primarily on price. In addition, we also compete on the basis of product quality and service. The major global producers against whom we compete are DuPont, Tronox, Kronos and Cristal, each of which has a global presence and the ability to service all global markets. Some of our competitors may be able to produce products more economically than we can. In addition, some of our competitors in this market have greater financial resources, which may enable them to invest significant capital into their businesses, including expenditures for research and development. If any of our current or future competitors in this market develops proprietary technology that enables them to produce products at a significantly lower cost, our technology could be rendered uneconomical or obsolete. Moreover, the sulphate-based titanium dioxide technology used by our Pigments business is widely available. Accordingly, barriers to entry, apart from capital availability, may be low and the entrance of new competitors into the industry may reduce our ability to capture improving profit margins in circumstances where capacity utilization in the industry is increasing.

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RESEARCH AND DEVELOPMENT

        For the years ended December 31, 2010, 2009 and 2008, we spent $151 million, $145 million and $154 million, respectively, on research and development.

        We support our business with a major commitment to research and development, technical services and process engineering improvement. Our research and development centers are located in The Woodlands, Texas, Everberg, Belgium, and Shanghai, China. Other regional development/technical service centers are located in Billingham, England (pigments); Auburn Hills, Michigan (polyurethanes for the automotive industry); Derry, New Hampshire, Shanghai, China, Deggendorf, Germany and Ternate, Italy (polyurethanes); Melbourne, Australia (surfactants); Port Neches, Texas (process engineering support); Basel, Switzerland and Panyu, China (advanced materials and textile effects); and Mumbai, India (textile effects).

INTELLECTUAL PROPERTY RIGHTS

        Proprietary protection of our processes, apparatuses, and other technology and inventions is important to our businesses. We own approximately 560 unexpired U.S. patents, approximately 155 patent applications (including provisionals) currently pending at the U.S. Patent and Trademark Office, and approximately 3,650 foreign counterparts, including both issued patents and pending patent applications. While a presumption of validity exists with respect to issued U.S. patents, we cannot assure that any of our patents will not be challenged, invalidated, circumvented or rendered unenforceable. Furthermore, we cannot assure the issuance of any pending patent application, or that if patents do issue, that these patents will provide meaningful protection against competitors or against competitive technologies. Additionally, our competitors or other third parties may obtain patents that restrict or preclude our ability to lawfully produce or sell our products in a competitive manner.

        We also rely upon unpatented proprietary know-how and continuing technological innovation and other trade secrets to develop and maintain our competitive position. There can be no assurance, however, that confidentiality agreements into which we enter and have entered will not be breached, that they will provide meaningful protection for our trade secrets or proprietary know-how, or that adequate remedies will be available in the event of an unauthorized use or disclosure of such trade secrets and know-how. In addition, there can be no assurance that others will not obtain knowledge of these trade secrets through independent development or other access by legal means.

        In addition to our own patents and patent applications and proprietary trade secrets and know-how, we are a party to certain licensing arrangements and other agreements authorizing us to use trade secrets, know-how and related technology and/or operate within the scope of certain patents owned by other entities. We also have licensed or sub-licensed intellectual property rights to third parties.

        We have associated brand names with a number of our products, and we have approximately 140 U.S. trademark registrations (including applications for registration currently pending at the U.S. Patent and Trademark Office), and approximately 4,890 foreign counterparts, including both registrations and applications for registration. Some of these registrations and applications include filings under the Madrid system for the international registration of marks and may confer rights in multiple countries. However, there can be no assurance that the trademark registrations will provide meaningful protection against the use of similar trademarks by competitors, or that the value of our trademarks will not be diluted.

        Because of the breadth and nature of our intellectual property rights and our business, we do not believe that any single intellectual property right (other than certain trademarks for which we intend to maintain the applicable registrations) is material to our business. Moreover, we do not believe that the termination of intellectual property rights expected to occur over the next several years, either

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individually or in the aggregate, will materially adversely affect our business, financial condition or results of operations.

EMPLOYEES

        As of December 31, 2010, we employed approximately 12,000 people in our operations around the world. Approximately 2,000 of these employees are located in the U.S., while approximately 10,000 are located in other countries. We believe our relations with our employees are good.

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.

Environmental, Health and Safety Systems

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

EHS Capital Expenditures

        We may incur future costs for capital improvements and general compliance under EHS laws, including costs to acquire, maintain and repair pollution control equipment. For the years ended December 31, 2010, 2009 and 2008, our capital expenditures for EHS matters totaled $85 million, $54 million and $58 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

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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 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 are unable to estimate the cost of the RI/FS or our ultimate liability in this matter, but we do not believe it will be material to our financial condition, results of operations or cash flow.

        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, to be initiated in 2011, will involve groundwater extraction and treatment in one limited area of the site. The second phase, not yet defined, would proceed during site redevelopment. However, because of the current economic conditions in Spain, we believe that the urban development plans have been

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postponed for the immediate future. Therefore, we are unable to further assess the timing, likelihood or 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 of 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 demolition, which commenced in May 2010, is expected to be completed by mid-2011.

        By letter of March 15, 2010, the U.S. Department of Justice (the "DOJ") notified us that 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 until March 31, 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

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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 $48 million and $41 million for environmental liabilities as of December 31, 2010 and 2009, respectively. Of these amounts, $13 million and $5 million were classified as accrued liabilities in our consolidated balance sheets as of December 31, 2010 and 2009, respectively, and $35 million and $36 million were classified as other noncurrent liabilities in our consolidated balance sheets as of December 31, 2010 and 2009, respectively. In certain cases, our remediation liabilities may be payable over periods of up to 30 years. We may incur losses for environmental remediation in excess of the amounts accrued; however, we are not able to estimate the amount or range of such potential excess.

REGULATORY DEVELOPMENTS

        In December 2006, the EU parliament and EU council approved a new EU regulatory framework for chemicals called "REACH" (Registration, Evaluation and Authorization of Chemicals). REACH took effect on June 1, 2007, and the program it establishes will be phased in over 11 years. Under the regulation, companies that manufacture in or import into the 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.

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        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 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

        The U.S. Department of Homeland Security ("DHS") issued the final rule of their "Chemical Facility Anti-Terrorism Standard" in 2007. The initial phase of the rule required all chemical facilities in the U.S. to evaluate their facilities against the DHS Appendix A list of "Chemicals of Interest." Facilities which have specified chemicals in threshold quantities on the Appendix A list were required to submit a "Top Screen" questionnaire to DHS in 2008. In early 2008, we submitted Top Screens for all of our covered facilities. After reviewing the Top Screens, DHS determined that four of our sites were "High Risk" facilities. As a result, we were required to perform security vulnerability assessments at the High Risk sites. The security vulnerability assessments were completed and sent to DHS during the fourth quarter of 2008. Based on their assessment of the security vulnerability assessments, we received notice from DHS that one of our sites was elevated to a high security risk tier. The DHS determined the other three sites to be lower security risk tiers. The three lower tiered sites have submitted Site Security Plans ("SSPs") to the DHS. The SSPs are based on a list of 18 risk-based performance standards, but security improvements recommended from the SSPs are not anticipated to be material. The high tiered site also submitted an SSP to the DHS, and security upgrades as a result of DHS requirements are estimated to cost $8 million to $10 million to be spent during 2011 and 2012.

MTBE DEVELOPMENTS

        We produce MTBE, an oxygenate that is blended with gasoline to reduce vehicle air emissions and to enhance the octane rating of gasoline. Litigation or legislative initiatives restricting the use of MTBE in gasoline may subject us or our products to environmental liability or materially adversely affect our sales and costs. Because MTBE has contaminated some water supplies, its use has become controversial in the U.S. and elsewhere, and its use has been effectively eliminated in the U.S. market. We currently market MTBE, either directly or through third parties, to gasoline additive customers located outside the U.S., although there are additional costs associated with such outside-U.S. sales which may result in decreased profitability compared to historical sales in the U.S. We may also elect to use all or a portion of our precursor 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

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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 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 early October to discuss this matter and 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 employees as appropriate. In November 2010, directions were received from TNPCB to submit a plan for the remediation of the off-site waste disposal areas.

        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 the PAPL's operations.

PROPERTIES

        We own or lease chemical manufacturing and research facilities in the locations indicated in the list below which we believe are adequate for our short-term and anticipated long-term needs. We own or lease office space and storage facilities throughout the U.S. and in many foreign countries. Our principal executive offices are located at 500 Huntsman Way, Salt Lake City, Utah 84108. The following

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is a list of our material owned or leased properties where manufacturing, research and main office facilities are located.

Location
  Business Segment   Description of Facility
Salt Lake City, Utah(1)   Corporate and other   Executive Offices

The Woodlands, Texas(1)

 

Various

 

Operating Headquarters, Global Technology Center

Geismar, Louisiana(2)

 

Polyurethanes and Performance Products

 

MDI, Nitrobenzene(4), Aniline(4), Polyols and Maleic Anhydride Manufacturing Facilities and Polyurethanes Systems House

Rozenburg, The Netherlands(1)

 

Polyurethanes

 

MDI Manufacturing Facility, Polyols Manufacturing Facilities and Polyurethanes Systems House

Caojing, China

 

Polyurethanes

 

MDI Finishing Facilities, Global Technology Center

Caojing, China(3)

 

Polyurethanes

 

Precursor MDI Manufacturing Facility

Deerpark, Australia

 

Polyurethanes

 

Polyurethane Systems House

Cartagena, Colombia

 

Polyurethanes

 

Polyurethane Systems House

Deggendorf, Germany

 

Polyurethanes

 

Polyurethane Systems House

Ternate, Italy

 

Polyurethanes

 

Polyurethane Systems House

Shanghai, China(1)

 

Polyurethanes

 

Polyurethane Systems House, Global Technology Center

Thane (Maharashtra), India(1)

 

Polyurethanes

 

Polyurethane Systems House

Buenos Aires, Argentina(1)

 

Polyurethanes

 

Polyurethane Systems House

Samuprakam, Thailand(1)

 

Polyurethanes

 

Polyurethane Systems House

Kuan Yin, Taiwan(1)

 

Polyurethanes

 

Polyurethane Systems House

Tlalnepantla, Mexico

 

Polyurethanes

 

Polyurethane Systems House

Mississauga, Ontario(1)

 

Polyurethanes

 

Polyurethane Systems House

Obninsk, Russia(4)

 

Polyurethanes

 

Polyurethanes Systems House

Dammam, Saudi Arabia(5)

 

Polyurethanes

 

Polyurethane Systems House

Auburn Hills, Michigan(1)

 

Polyurethanes

 

Polyurethane Research Facility

Everberg, Belgium

 

Polyurethanes and Performance Products

 

Polyurethane and Performance Products Regional Headquarters, Global Technology Center

Derry, New Hampshire(1)

 

Polyurethanes

 

TPU Research Facility

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Location
  Business Segment   Description of Facility
Ringwood, Illinois(1)   Polyurethanes   TPU Manufacturing Facility

Osnabrück, Germany

 

Polyurethanes

 

TPU Manufacturing Facility/ Polyurethane Systems House

Wilton, U.K. 

 

Polyurethanes

 

Aniline and Nitrobenzene Manufacturing Facilities

Port Neches, Texas

 

Polyurethanes and Performance Products

 

Olefins, EO, EG, Surfactants, Amines and PO Manufacturing Facilities

Conroe, Texas

 

Performance Products

 

Amines Manufacturing Facility

Petfurdo, Hungary(1)

 

Performance Products

 

Amines Manufacturing Facility

Llanelli, U.K. 

 

Performance Products

 

Amines Manufacturing Facility

Freeport, Texas(1)

 

Performance Products

 

Amines Manufacturing Facility

Jurong Island, Singapore(1)

 

Performance Products

 

Amines Manufacturing Facility

Jubail, Saudi Arabia(6)

 

Performance Products

 

Amines Manufacturing Facility

Chocolate Bayou, Texas(1)

 

Performance Products

 

LAB Manufacturing Facility

Pensacola, Florida(1)

 

Performance Products

 

Maleic Anhydride Manufacturing Facility

Moers, Germany(7)

 

Performance Products

 

Maleic Anhydride Manufacturing Facility

Dayton, Texas

 

Performance Products

 

Surfactant Manufacturing Facility

Botany, Australia

 

Performance Products

 

Surfactant/EG Manufacturing Facility

St. Mihiel, France

 

Performance Products

 

Surfactant Manufacturing Facility

Lavera, France(1)

 

Performance Products

 

Surfactant Manufacturing Facility

Castiglione, Italy

 

Performance Products

 

Surfactant Manufacturing Facility

Patrica/Frosinone, Italy

 

Performance Products

 

Surfactant Manufacturing Facility

Barcelona, Spain(1)

 

Performance Products

 

Surfactant Manufacturing Facility

Melbourne, Australia

 

Performance Products

 

Research Facility

Bergkamen, Germany

 

Advanced Materials

 

Synthesis Facility

Monthey, Switzerland

 

Advanced Materials

 

Resins and Synthesis Facility

Pamplona, Spain

 

Advanced Materials

 

Resins and Synthesis Facility

McIntosh, Alabama

 

Advanced Materials

 

Resins and Synthesis Facility

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Location
  Business Segment   Description of Facility
Chennai, India(8)   Advanced Materials   Resins and Synthesis Facility

Bad Saeckingen, Germany(1)

 

Advanced Materials

 

Formulating Facility

Duxford, U.K. 

 

Advanced Materials

 

Formulating Facility

Sadat City, Egypt

 

Advanced Materials

 

Formulating Facility

Taboão da Serra, Brazil

 

Advanced Materials

 

Formulating Facility

Panyu, China(1)(9)

 

Advanced Materials

 

Formulating and Synthesis Facility and Technology Center

East Lansing, Michigan

 

Advanced Materials

 

Formulating Facility

Istanbul, Turkey(1)

 

Advanced Materials

 

Formulating Facility

Los Angeles, California

 

Advanced Materials

 

Formulating Facility

Basel, Switzerland(1)

 

Advanced Materials and Textile Effects

 

Technology Center, Advanced Materials headquarters and Textile Effects Textile Dyes Facility

Panyu, China(1)(9)

 

Textile Effects

 

Chemicals Synthesis Facility and Technology Center

Langweid am Leich, Germany(1)

 

Textile Effects

 

Chemicals Synthesis Facility

Charlotte, North Carolina(1)

 

Textile Effects

 

Chemicals Formulations Facility

Samutsakorn (Mahachai), Thailand(1)

 

Textile Effects

 

Textiles Dyes and Chemicals Formulations Facility

Atotonilquillo, Mexico

 

Textile Effects

 

Textile Dyes and Chemicals Formulations Facility

High Point, North Carolina(1)

 

Textile Effects

 

Technology Center

Baroda, India

 

Textile Effects

 

Textile Dyes and Chemicals Synthesis Facility

Gandaria, Indonesia

 

Textile Effects

 

Textile Dyes and Chemicals Formulations Facility

Qingdao, China

 

Textile Effects

 

Textile Dyes Facility

Fraijanes, Guatemala(1)

 

Textile Effects

 

Chemicals Formulations Facility

Bogota, Colombia(1)

 

Textile Effects

 

Chemicals Formulations Facility

Hangzhou, China(1)

 

Textile Effects

 

Chemicals Formulations Facility

Istanbul, Turkey(1)

 

Textile Effects

 

Chemicals Formulations Facility

Karachi, Pakistan(1)

 

Textile Effects

 

Chemicals Formulations Facility

Gateway West, Singapore(1)

 

Textile Effects and Performance Products

 

Textile Effects Headquarters and Performance Products Regional Headquarters

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Location
  Business Segment   Description of Facility
Greatham, U.K.    Pigments   Titanium Dioxide Manufacturing Facility

Calais, France

 

Pigments

 

Titanium Dioxide Manufacturing Facility

Huelva, Spain

 

Pigments

 

Titanium Dioxide Manufacturing Facility

Scarlino, Italy

 

Pigments

 

Titanium Dioxide Manufacturing Facility

Teluk Kalung, Malaysia

 

Pigments

 

Titanium Dioxide Manufacturing Facility

Umbogintwini, South Africa

 

Pigments

 

Titanium Dioxide Manufacturing Facility

Lake Charles, Louisiana(10)

 

Pigments

 

Titanium Dioxide Manufacturing Facility

(1)
Leased land and/or building.

(2)
The Geismar facility is owned as follows: we own 100% of the MDI, polyol and maleic anhydride facilities, and Rubicon LLC, a consolidated manufacturing joint venture with Chemtura Corporation in which we own a 50% interest, owns the aniline and nitrobenzene facilities. Rubicon LLC is a separate legal entity that operates both the assets that we own jointly with Chemtura Corporation and our wholly owned assets at Geismar.

(3)
35% interest in SLIC, our unconsolidated manufacturing joint venture with BASF AG and three Chinese chemical companies.

(4)
45%-owned unconsolidated manufacturing joint venture with NMG.

(5)
51%-owned consolidated manufacturing joint venture with Basic Chemicals Industries Ltd.

(6)
50% interest in Arabian Amines Company, our consolidated manufacturing joint venture with Zamil Group.

(7)
50% interest in Sasol-Huntsman, our unconsolidated manufacturing joint venture with Sasol.

(8)
76%-owned consolidated manufacturing joint venture with Tamilnadu Petroproducts Limited.

(9)
95%-owned consolidated manufacturing joint venture with Guangdong Panyu Shilou Town Economic Development Co. Ltd.

(10)
Owned by Louisiana Pigment Company, L.P., our unconsolidated manufacturing joint venture which is owned 50% by us and 50% by Kronos Worldwide.

LEGAL PROCEEDINGS

        References to "we," "us," "our" or "our company" in the descriptions of legal proceedings below may include references to our parent, Huntsman Corporation. Because all of our parent's operations are conducted by our Company and our subsidiaries, we believe legal proceedings involving our parent are material to us and our subsidiaries.

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Environmental Enforcement Proceedings

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

        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. The authorities alleged a breach of a condition of our operating license, but have not alleged that a pollution event occurred. Although the facility submitted a good faith proposal to settle the matter, the agency elected instead to continue with the proceeding. Consequently, on December 3, 2010, we pled guilty to the one allegation of a breach of our operating license. At the sentencing hearing on March 18, 2011, the court held that we failed to operate our facility in a competent manner and ordered us to pay $68,000 Australian Dollars.

Asbestos Litigation

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

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

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        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.

 
  Year ended
December 31,
2010
  Year ended
December 31,
2009
  Year ended
December 31,
2008
 

Unresolved at beginning of period

    1,138     1,140     1,192  

Tendered during period

    24     18     21  

Resolved during period(1)

    46     20     73  

Unresolved at end of period

    1,116     1,138     1,140  

(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 December 31, 2010, 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 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 December 31, 2010.

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

 
  Year ended
December 31,
2010
  Year ended
December 31,
2009
  Year ended
December 31,
2008
 

Unresolved at beginning of period

    39     43     39  

Filed during period

    5     3     8  

Resolved during period

    7     7     4  

Unresolved at end of period

    37     39     43  

        We paid gross settlement costs for asbestos exposure cases that are not subject to indemnification of $201,000 and nil during the years ended December 31, 2010 and 2009, respectively. As of December 31, 2010, we had an accrual of $225,000 relating to these cases. We cannot assure you that our liability will not exceed our accruals or that our liability associated with these cases would not be material to our financial condition, results of operations or liquidity; 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 December 31, 2010.

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Antitrust Matters

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

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

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

        Two purported class action cases filed May 5 and 17, 2006 pending in the Superior Court of Justice, Ontario Canada and Superior Court, Province of Quebec, District of Quebec, by direct purchasers of MDI, TDI and polyether polyols and by indirect purchasers of these products remain largely dormant although the plaintiff in one case recently filed papers seeking class certification. 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 MDL No. 1616. Finally, we have been named in a proposed third amended complaint by indirect purchasers of MDI, TDI, polyether polyols and polyester polyols pending against Bayer and Chemtura in the U.S. District Court for the District of Massachusetts. The matter is currently stayed pending a settlement of previously asserted claims against Bayer and Chemtura. We opposed the motion for leave to file the proposed amended complaint adding us as a defendant in that action. The plaintiffs in each of these matters make similar claims against the defendants as the class plaintiffs in MDL No. 1616.

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

        In all of the antitrust litigation currently pending against us, the plaintiffs generally are seeking injunctive relief, treble damages, costs of suit and attorneys fees. The plaintiffs' pleadings in these various antitrust suits provide few specifics about any alleged illegal conduct on our part, and we are not aware of any illegal conduct by us or any of our employees. Nevertheless, we have incurred costs related 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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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. For more information, see "Note 25. Casualty Losses and Insurance Recoveries—Port Arthur, Texas Plant Fire" too our consolidated financial statements.

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.

AVAILABLE INFORMATION

        We maintain an internet website at http://www.huntsman.com. Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to these reports are available free of charge through our website as soon as reasonably practicable after we file this material with the SEC. We also provide electronic or paper copies of our SEC filings free of charge upon request.

GLOSSARY OF CHEMICAL TERMS

DEG—di-ethylene glycol

BDO—butane diol

DGA® Agent—DIGLYCOLAMINE® agent

EG—ethylene glycol

EO—ethylene oxide

LAB—linear alkyl benzene

LAS—linear alkylbenzene sulfonate

LER—liquid epoxy resins

LNG—liquefied natural gas

MEG—mono-ethylene glycol

MDI—methyl diphenyl diisocyanate

MTBE—methyl tertiary-butyl ether

PG—propylene glycol

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PO—propylene oxide

Polyols—a substance containing several hydroxyl groups. A diol, triol and tetrol contain two, three and four hydroxyl groups respectively

TBA—tertiary butyl alcohol

TBHP—tert-butyl hydroperoxide

TDI—toluene diisocyanate

TEG—tri-ethylene glycol

TiO2—titanium dioxide pigment

TPU—thermoplastic polyurethane

UPR—unsaturated polyester resin

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MANAGEMENT

        Following is information concerning the Board of Managers of Huntsman International LLC as of March 25, 2011. Given the significant influence of the management of Huntsman Corporation, our parent, on our business, also included below is information concerning the executive officers and Board of Directors of our parent, as of March 9, 2011. Unless the context otherwise requires, references in this management discussion to "we," "us," "our," or "our Company" refer to Huntsman International, together with its subsidiaries.

Board of Managers of Huntsman International LLC

        The Board of Managers of our Company consists of Jon M. Huntsman, Peter R. Huntsman, J. Kimo Esplin and James R. Moore. The members of the Board of Managers of Huntsman International LLC are appointed by our parent as the sole owner of our membership interests and hold office until their successors are duly appointed and qualified. Information with respect to J. Kimo Esplin and James R. Moore is presented below under "—Executive Officers." Information with respect to Jon M. Huntsman and Peter R. Huntsman is presented below under "—Board of Directors of Huntsman Corporation."

Executive Officers

        All of the following executive officers (in addition to Jon M. Huntsman and Peter R. Huntsman, information for each of whom is presented below under "—Board of Directors of Huntsman Corporation") serve at the pleasure of the board of directors of our parent.

        J. Kimo Esplin, age 48, is a Manager of Huntsman International LLC and also serves as Executive Vice President and Chief Financial Officer. Mr. Esplin has served as Chief Financial Officer of all of the Huntsman companies since 1999. From 1994 to 1999, Mr. Esplin served as our Treasurer. Prior to joining Huntsman in 1994, Mr. Esplin was a Vice President in the Investment Banking Division of Bankers Trust Company, where he worked for seven years. Mr. Esplin also serves as a director of Nutraceutical International Corporation, a publicly traded nutrition supplements company.

        James R. Moore, age 66, is a Manager of Huntsman International LLC and also serves as Executive Vice President, General Counsel and Secretary. Prior to his appointment to this position in January 2010, Mr. Moore served as our Vice President and Deputy General Counsel since 2003. Prior to that, Mr. Moore served as Vice President and Chief Environmental Counsel from 2002 to 2003 and Senior Environmental Counsel from 1998 to 2002. From 1989 until joining our Company in 1998, Mr. Moore was a partner at the Seattle law firm of Perkins Coie. Mr. Moore also previously served as a trial attorney with the U.S. Department of Justice, an assistant U.S. Attorney and Regional Counsel, Region 10, of the U.S. Environmental Protection Agency.

        Anthony P. Hankins, age 53, is Chief Executive Officer, Asia Pacific and Division President, Polyurethanes. Mr. Hankins was appointed to the position of Chief Executive Officer, Asia Pacific in February 2011 and Division President, Polyurethanes in March 2004. From May 2003 to February 2004, Mr. Hankins served as President, Performance Products, from January 2002 to April 2003, he served as Global Vice President, Rigids Division for our Polyurethanes business, from October 2000 to December 2001, he served as Vice President—Americas for our Polyurethanes business, and from March 1998 to September 2000, he served as Vice President—Asia Pacific for our Polyurethanes business. Mr. Hankins worked for ICI from 1980 to February 1998, when he joined our Company. At ICI, Mr. Hankins held numerous management positions in the plastics, fibers and polyurethanes businesses. He has extensive international experience, having held senior management positions in Europe, Asia and the U.S.

        Andre Genton, age 51, is Division President, Advanced Materials. Prior to his appointment to this position in February 2009, Mr. Genton served as Vice President & Global Operating Officer for our Advanced Materials business since November 2006. From January 2005 to November 2006, he served

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as Vice President Design & Composites Engineering for our Advanced Materials business. From June 2003 to January 2005 he served as Vice President Global Structural Composites for our Advanced Materials business. Prior to joining Huntsman in 2003, Mr. Genton held a variety of positions with Vantico (formerly a part of Ciba).

        Paul G. Hulme, age 54, is Division President, Textile Effects. Mr. Hulme was appointed to this position in February 2009. From June 2003 to February 2009, Mr. Hulme served as Division President, Materials and Effects. From February 2000 to May 2003, Mr. Hulme served as Vice President, Performance Chemicals, and from December 1999 to February 2000 he served as Operations Director, Polyurethanes. Prior to joining Huntsman in 1999, Mr. Hulme held various positions with ICI in finance, accounting and information systems roles. Mr. Hulme is a Chartered Accountant.

        Stewart A. Monteith, age 55, is Division President, Performance Products. Mr. Monteith was appointed to this position in February 2011. Prior to that time, Mr. Monteith served as Vice President of the Performance Specialties Division, a position he held since August 2003. He also served as Vice President for Global Markets and Business Development. Mr. Monteith joined Huntsman in 1994. Prior to joining Huntsman, Mr. Monteith held various positions with Texaco Chemical Company and Union Carbide.

        Simon Turner, age 47, is Division President, Pigments. Prior to his appointment to this position in November 2008, Mr. Turner served as Senior Vice President, Pigments since April 2008. From September 2004 to April 2008, Mr. Turner served as Vice President of Global Sales and from July 1999 to September 2004, he held positions including General Manager Co-Products and Director Supply Chain and Shared Services. Prior to joining Huntsman in July 1999, Mr. Turner held various positions with ICI.

        Ronald W. Gerrard, age 51, is Senior Vice President, Environmental, Health & Safety and Manufacturing Excellence. Mr. Gerrard was appointed to this position in June 2009. Prior to this appointment, Mr. Gerrard served as Vice President, Global Operations and Technology in our Polyurethanes business from May 2004 to June 2009. From 1999 to May 2004, Mr. Gerrard served as Vice President, Asia; Business Director, Flexible Foams; and Director, EHS and Engineering, also within our Polyurethanes business. Prior to joining Huntsman in 1999, Mr. Gerrard had worked for ICI and for EVC, a joint venture between ICI and Enichem. Mr. Gerrard is a Chartered Engineer.

        Brian V. Ridd, age 53, is Senior Vice President, Purchasing. Mr. Ridd has held this position since July 2000. Mr. Ridd served as Vice President, Purchasing from December 1995 until he was appointed to his current position. Mr. Ridd joined Huntsman in 1984.

        R. Wade Rogers, age 45, is Senior Vice President, Global Human Resources. Mr. Rogers has held this position since August 2009. From May 2004 to August 2009, Mr. Rogers served as Vice President, Global Human Resources, from October 2003 to May 2004, Mr. Rogers served as Director, Human Resources—Americas and from August 2000 to October 2003, he served as Director, Human Resources for our Polymers and Base Chemicals businesses. From the time he joined Huntsman in 1994 to August 2000, Mr. Rogers served as Area Manager, Human Resources—Jefferson County Operations. Prior to joining Huntsman, Mr. Rogers held a variety of positions with Texaco Chemical Company.

        Russ R. Stolle, age 48, is Senior Vice President and Deputy General Counsel. Mr. Stolle was appointed to this position in January 2010. From October 2006 to January 2010, Mr. Stolle served as our Senior Vice President, Global Public Affairs and Communications, from November 2002 to October 2006, he served as Vice President and Deputy General Counsel, from October 2000 to November 2002 he served as Vice President and Chief Technology Counsel and from April 1994 to October 2000 he served as Chief Patent and Licensing Counsel. Prior to joining Huntsman in 1994, Mr. Stolle had been an attorney with Texaco Inc. and an associate with the law firm of Baker & Botts.

        L. Russell Healy, age 55, is Vice President and Controller. Mr. Healy has served in this capacity since April 2004. From August 2001 to April 2004, Mr. Healy served as Vice President, Finance, from

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July 1999 to July 2001, he served as Vice President and Finance Director for Huntsman International, and from October 1995 to June 1999, he served as Vice President, Tax. Prior to joining Huntsman in 1995, Mr. Healy was a partner with the accounting firm of Deloitte & Touche LLP. Mr. Healy is a Certified Public Accountant and holds a master's degree in accounting.

        Sean Douglas, age 46, is our Vice President, Corporate Development since December 2009. Mr. Douglas served as Vice President and Treasurer from 2002 to December 2009, Vice President, Finance from July 2001 to 2002 and Vice President, Administration from January 1997 to July 2001. Mr. Douglas is a Certified Public Accountant and, prior to joining Huntsman in 1990, worked for the accounting firm of Price Waterhouse.

        Kevin C. Hardman, age 47, is Vice President, Tax. Mr. Hardman served as Chief Tax Officer from 1999 until he was appointed to his current position in 2002. Prior to joining Huntsman in 1999, Mr. Hardman was a tax Senior Manager with the accounting firm of Deloitte & Touche LLP, where he worked for 10 years. Mr. Hardman is a Certified Public Accountant and holds a master's degree in tax accounting.

        John R. Heskett, age 42, is Vice President, Treasury and Planning. Mr. Heskett has held this position since December 2009. From September 2008 until October 2009, Mr. Heskett served as a Vice President at Boart Longyear Limited, a publicly listed exploration drilling services and products company. Mr. Heskett previously served as Vice President, Corporate Development and Investor Relations for our Company from August 2004 until September 2008 and was appointed Vice President, Corporate Development in 2002. Mr. Heskett also served as Assistant Treasurer for our Company and several of our subsidiaries. Prior to joining Huntsman in 1997, Mr. Heskett was Assistant Vice President and Relationship Manager for PNC Bank, N.A., where he worked for a number of years.

        Steven C. Jorgensen, age 42, is Vice President of Internal Audit and Controls. Mr. Jorgensen was appointed to this position effective May 2007. Mr. Jorgensen joined Huntsman in May 2004 as Director of Internal Controls and in May 2005 was appointed as Director of Internal Audit and Controls. Prior to joining Huntsman, Mr. Jorgensen was Vice President and Audit Manager with General Electric Consumer Finance, and prior to that he was an audit Senior Manager with the accounting firm of Deloitte & Touche LLP. Mr. Jorgensen is a Certified Public Accountant and holds a masters degree in accounting.

        Kurt D. Ogden, age 42, is Vice President, Investor Relations. Prior to his appointment to this position in February 2009, Mr. Ogden served as Director, Corporate Finance since October 2004. Prior to joining Huntsman in 2004, Mr. Ogden held various positions with Hillenbrand Industries, Pliant Corporation and Huntsman Chemical Corporation. Mr. Ogden is a Certified Public Accountant and holds a master's degree in business administration.

        Maria Csiba-Womersley, age 53, is Vice President and Chief Information Officer. Ms. Csiba-Womersley was appointed to this position effective September 2006. Ms. Csiba-Womersley served as Global eBusiness Director from 2004 to 2006 and also served as our Director of Global IT Planning and Security. Previously, Ms. Csiba-Womersley was a Regional Polymer Sales Manager, a Business Director for Polypropylene and Director of Polymer Logistics. Ms. Csiba-Womersley joined Huntsman in 1997.

Board of Directors of Huntsman Corporation

        The size of our parent's Board of Directors (the "Board") is currently set at ten, divided into three classes serving staggered terms, with one class being elected each year to serve a three year term. Presented below is information with respect to all directors of our parent. The information presented below for each director includes the specific experience, qualifications, attributes and skills that led us to the conclusion that such director should be nominated to serve on the Board in light of our business. This information is current as of March 9, 2011. The following discussion of the Board relates

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to our parent, Huntsman Corporation. References in this discussion to "we," "us," "our," or "our Company" refer to Huntsman Corporation.

Jon M. Huntsman   Jon M. Huntsman, age 73, is the Executive Chairman of the Board of our Company. Prior to his appointment as Executive Chairman effective February 1, 2009, Mr. Huntsman served as Chairman of the Board of our Company since its formation in 2004 and the predecessors to our Company since 1970, when he founded his first plastics company. Mr. Huntsman served as Chief Executive Officer of our Company and our affiliated companies from 1970 to 2000. Mr. Huntsman is a director or manager, as applicable, of Huntsman International and certain of our other subsidiaries. In addition, Mr. Huntsman serves or has served as Chairman or as a member of numerous corporate, philanthropic and industry boards, including the American Red Cross, The Wharton School, University of Pennsylvania, Primary Children's Medical Center Foundation, the Chemical Manufacturers Association and the American Plastics Council. Mr. Huntsman was selected in 1994 as the chemical industry's top Chief Executive Officer for all businesses in Europe and North America. Mr. Huntsman formerly served as Special Assistant to the President of the United States and as Vice Chairman of the U.S. Chamber of Commerce. He is the Chairman and Founder of the Huntsman Cancer Institute. We believe that Mr. Huntsman's vital role in the founding and history of our Company, extensive experience in the chemical industry and proven leadership and business skills support the conclusion that he should serve as one of our directors. Mr. Huntsman is the father of our Chief Executive Officer, Peter R. Huntsman.

Dr. Patrick T. Harker

 

Dr. Harker, age 52, has served as one of our directors since March 2010. Dr. Harker serves as a member of our Governance Committee. Effective as of the Annual Meeting, Dr. Harker will serve as Chairman of our Governance Committee. Since 2007, Dr. Harker has been President of the University of Delaware, Newark, Delaware. From February 2000 through June 2007, Dr. Harker was Dean of the Wharton School of the University of Pennsylvania and served as a Professor of Electrical and Systems Engineering in the University of Pennsylvania's School of Engineering and Applied Science. From 2000 to 2010, Dr. Harker served as a Trustee of the Goldman Sachs Trust and Goldman Sachs Variable Trust. He also served as a Member of the Board of Managers of the Goldman Sachs Hedge Fund Partners Registered Fund LLC from 2004 through 2009. Since May 2009, Dr. Harker has served as a director for Pepco Holdings, Inc. We believe that Dr. Harker's significant experience leading highly-respected educational and business institutions, along with his board experience and background in engineering and applied science, support the conclusion that he should serve as one of our directors.

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Peter R. Huntsman   Peter R. Huntsman, age 48, has served as a director of our Company and affiliated companies since 1994. Mr. Huntsman is President, Chief Executive Officer and a director of our Company. Prior to his appointment in July 2000 as Chief Executive Officer, Mr. Huntsman had served as President and Chief Operating Officer since 1994. In 1987, Mr. Huntsman joined Huntsman Polypropylene Corporation as Vice President before serving as Senior Vice President and General Manager. Mr. Huntsman has also served as Senior Vice President of Huntsman Chemical Corporation and as a Senior Vice President of Huntsman Packaging Corporation, a former subsidiary of our Company. We believe that Mr. Huntsman's important role in the history and management of our Company and its affiliates and his leadership and business skills, including his current position as our Chief Executive Officer, support the conclusion that he should serve as one of our directors. Mr. Huntsman is the son of our Executive Chairman, Jon M. Huntsman.

Wayne A. Reaud

 

Mr. Reaud, age 63, has served as one of our directors since March 2005. Mr. Reaud currently serves as Chairman of our Litigation Committee, which was formed in November 2008, and he serves as a member of our Compensation Committee. Mr. Reaud is a trial lawyer and the founder of the law firm of Reaud, Morgan & Quinn. For over 30 years, he has represented clients in significant cases involving personal injury, product and premises liability, toxic torts and business litigation. Mr. Reaud has handled first impression mass tort litigation involving asbestos premises liability claims, including the largest asbestos product liability class action lawsuit in the history of Texas courts. He also represented the State of Texas in its landmark litigation against the tobacco industry. Mr. Reaud currently serves as Chairman of the Board of the Beaumont Foundation of America and is a Director of the Reaud Charitable Foundation. He is a Life Fellow of the Texas Bar Foundation and a Fellow of the International Society of Barristers, a member of the Philosophical Society and a member of the State Bar of Texas Grievance Committee. Mr. Reaud was chosen as the Most Distinguished Alumni of Texas Tech University Law School in 1998 and also chosen as the Most Distinguished Alumni of Lamar University in 2006. Mr. Reaud was awarded the Honorary Order of the Coif by the University of Texas in 2011. He is listed in Best Lawyers in America. We believe that Mr. Reaud's legal expertise and extensive experience with complex and high-profile litigation and his commitment to service support the conclusion that he should serve as one of our directors.

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Alvin V. Shoemaker   Mr. Shoemaker, age 72, has served as one of our directors since March 2005. Mr. Shoemaker serves as a member of the Audit Committee and the Compensation Committee. Mr. Shoemaker has been a private investor since his retirement as Chairman of the Board of First Boston Corporation and First Boston, Inc. in 1989, a position he assumed in 1983. Mr. Shoemaker also currently serves as a director of Wynn Resorts Limited. We believe that Mr. Shoemaker's extensive board and executive-level management experience and proven leadership and business capabilities support the conclusion that he should serve as one of our directors.

Nolan D. Archibald

 

Mr. Archibald, age 67, has served as one of our directors since March 2005 and he is currently Chairman of the Compensation Committee. Effective as of the Annual Meeting, Mr. Archibald will also serve as Vice Chairman and Lead Independent Director. Mr. Archibald has served as Executive Chairman of Stanley Black & Decker, Inc., a consumer and commercial products company, since March 2010. He served as President and Chief Executive Officer of The Black & Decker Corporation, a consumer and commercial products company, from 1986 until 2010, as well as Chairman of the Board of The Black & Decker Corporation from 1987 until 2010. In addition, Mr. Archibald serves as a director of Lockheed Martin Corporation and Brunswick Corporation. We believe that Mr. Archibald's extensive board and executive-level management experience, and proven leadership and business capabilities support the conclusion that he should serve as one of our directors.

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M. Anthony Burns   Mr. Burns, age 68, has served as one of our directors since March 2010. He is Chairman of the Audit Committee. Effective as of the Annual Meeting, Mr. Burns will also serve as a member of the Governance Committee. Mr. Burns currently serves as Chairman Emeritus of Ryder System, Inc., a provider of transportation and logistics services, a position that he has held since 2002. Mr. Burns served in several positions at Ryder until his retirement in 2002, including Chairman of the Board from 1985 to 2002, Chief Executive Officer from 1983 to 2000 and President from 1979 to 1999. Prior to joining Ryder, Mr. Burns served in management of Mobil Oil Corporation. Mr. Burns also currently serves as a director of Pfizer Inc. and J.C. Penney Company, Inc. He is also a Life Trustee of the University of Miami in Florida and is active in cultural and civic organizations in Florida. We believe that Mr. Burns' long tenure as Chief Executive Officer of Ryder System, a major public company, his valuable leadership and management insights, his financial expertise through service on (and in some cases chairmanship of) the audit committees of other public companies, and his executive compensation experience through service on the compensation committees of several public companies, support the conclusion that he should serve as one of our directors.

Sir Robert J. Margetts

 

Sir Robert, age 64, has served as one of our directors since August 2010. He currently serves on the boards of a number of privately held companies, and was Chairman of Legal & General Group PLC from 2000 until 2010 and BOC Group PLC from 2002 to 2006. Sir Robert served as Chairman—Europe of Huntsman Corporation from 2000 to August 2010. He worked for Imperial Chemical Industries (ICI) in various levels of increasing responsibility from 1969 to 2000, where he ultimately served as the Vice Chairman of its Main Board. We believe that Sir Robert's extensive executive board and executive-level management experience in Europe and his more than 40 years experience in the chemicals industry support the conclusion that he should serve as one of our directors.

H. William Lichtenberger

 

Mr. Lichtenberger has served as one of our directors since March 2005. He was the Chairman and Chief Executive Officer of Praxair, Inc. from 1992 until his retirement in 2000. From 1990 until 1992, he was President and Chief Operating Officer of Union Carbide Corporation. Mr. Lichtenberger served as a director of Ingersoll-Rand Company Limited until June 2009. In addition, until July 2007, Mr. Lichtenberger served as a director of Arch Chemicals, Inc.

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Marsha J. Evans   Ms. Evans has served as one of our directors since August 2005. She served as President and Chief Executive Officer of The American Red Cross from August 2002 until December 2005. Ms. Evans previously served as the National Executive Director (Chief Executive Officer) of Girl Scouts of the USA from 1998 until July 2002. She was acting Commissioner of the Ladies Professional Golf Association from July 2009 to January 2010. She also served with the United States Navy for 29 years, where she was commissioned ensign in 1968 and attained the rank of rear admiral before retiring in 1998. Prior to her retirement with the United States Navy, she served as the Superintendent (president) of the Naval Postgraduate School in Monterey, California, and as the Director of the George C. Marshall European Center for Security Studies.


COMPENSATION DISCUSSION AND ANALYSIS

        The following discussion and analysis relates to our parent, Huntsman Corporation. However, because all of Huntsman Corporation's operations are conducted by us and our subsidiaries, we believe this discussion and analysis is material to an understanding of our Company and our subsidiaries. The managers and officers of Huntsman International do not receive any compensation for services rendered in such capacities in addition to compensation provided by our parent. Unless the context otherwise requires, references in this Compensation Discussion and Analysis to "we," "us," "our," or "our Company" refer to Huntsman Corporation, together with its subsidiaries.

Named Executive Officers

        The following Compensation Discussion and Analysis provides information regarding the compensation paid to our Chief Executive Officer, Chief Financial Officer and the other three most highly compensated executive officers in 2010. We refer to these individuals as "named executive officers." Our named executive officers for 2010 were Jon M. Huntsman, Executive Chairman of the Board, Peter R. Huntsman, President and Chief Executive Officer, J. Kimo Esplin, Executive Vice President and Chief Financial Officer, Anthony P. Hankins, Chief Executive Officer, Asia Pacific and Division President, Polyurethanes, and Daniele Ferrari, Division President, Performance Products. Effective February 3, 2011, Mr. Ferrari resigned to pursue other business opportunities.

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Executive Summary

        As described in more detail throughout this Compensation Discussion and Analysis, the Company's executive compensation program is designed primarily to "pay for performance" based on an allocation among long-term and short-term components developed to establish a proper balance of risks in achieving goals designed to further our business objectives.

        For 2010, the Company delivered strong operating and financial performance. The Compensation Committee believes these results were achieved through the leadership, vision and hard work of the executive team. The 2010 results include:

        In light of the strong performance of the Company during 2010 and its link to our executive compensation arrangements, the Compensation Committee believes that the balanced, conservative compensation programs that were in place during 2010 operated as the committee intended when it designed and implemented the programs, specifically:

        Our executive compensation programs have remained substantially the same for several years. We believe our executive compensation programs are effectively designed and working well. We also believe our compensation philosophy is aligned with the interests of our stockholders and is instrumental to achieving our business strategy. More detailed information regarding our executive compensation program is contained in the remainder of this Compensation Discussion and Analysis section.

Compensation Philosophy and Objectives

        Our executive compensation programs are designed to attract, motivate and retain executives critical to our long-term success and the creation of stockholder value. Our fundamental compensation philosophy is that performance should have a significant impact on compensation and, consequently, we attempt to closely link executive officers' total compensation with the achievement of annual and long-term performance goals. Management and the Compensation Committee believe that compensation decisions are complex and require careful review of individual and Company performance and chemical and general industry compensation levels. The Compensation Committee awards compensation to our executive officers based upon corporate, business division and individual performance and designs compensation so as to motivate executive officers to achieve strategic objectives and to continue to perform at the highest levels.

        Based on the objectives described above, we strive to set a total compensation opportunity within range of the median of the total direct compensation paid to similarly situated personnel at comparable

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companies against whom we compete both in the chemical industry marketplace and in the broader market for executives, key employees and outside directors. Actual compensation may be above or below the median based on the actual performance of our Company and the individual, with the opportunity to achieve upper quartile compensation based on superior performance. This approach is intended to ensure that a significant portion of executive compensation is based on our financial and strategic performance.

        Our compensation philosophy is evidenced and supported by the following compensation governance provisions:

Roles and Responsibilities

        The Compensation Committee, management and an external compensation consultant are involved in the development, review, evaluation and approval of our executive compensation programs.

        Executive Management.    Our Chief Executive Officer sets our strategic direction and strives to promote compensation programs that motivate executives' and employees' behavior consistent with strategic objectives. Our Chief Executive Officer is assisted by our Senior Vice President, Global Human Resources, who provides assistance with the design and development of compensation programs, the interpretation of data and the effects of adjustments and modifications to compensation programs. Our Chief Financial Officer and our General Counsel also assist our Chief Executive Officer by advising on legal and financial considerations relevant to these programs. Under the direction of the Compensation Committee and in coordination with the compensation consultant, management coordinates the annual review of the compensation programs for the executive officers. This review includes an evaluation of individual and corporate performance, competitive practices and trends and various compensation issues. Based on the results of this review, management makes recommendations to the Compensation Committee regarding each element of compensation for each of the executive officers, other than the Chief Executive Officer and the Executive Chairman.

        Compensation Committee.    The Compensation Committee has authority and responsibility for the review, evaluation and approval of the compensation structure and level for all of our executive officers. This includes the articulation of a compensation philosophy, and policies and plans covering our executive officers. In addition, the Compensation Committee and all other independent members of the Board conduct an annual review and approval of each element of the annual compensation of the Executive Chairman and the Chief Executive Officer. This review includes an evaluation of performance, corporate goals and objectives relevant to compensation, and compensation under various circumstances, including upon retirement or a change in control. In connection with this review, the Compensation Committee receives advice from its independent compensation consultant.

        Compensation Consultant.    The Compensation Committee has sole authority to retain and terminate the services of a compensation consultant who reports to the Compensation Committee. The role of the compensation consultant is to advise the Compensation Committee in its oversight role, advise management in the executive compensation design process and provide independent compensation data and analysis to facilitate the annual review of the programs. The compensation consultant attends Compensation Committee meetings as requested by the Compensation Committee.

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A principal at Towers Watson served as an independent compensation consultant retained by the Compensation Committee during its initial executive and director compensation evaluation in 2010.

        Services performed by the compensation consultant for the Compensation Committee during 2010 included evaluation of levels of executive compensation as compared to general market compensation data and peer companies' compensation data, preparation of tally sheets for each of the executive officers, evaluation of proposed compensation programs or changes to existing programs and providing information on current executive compensation trends and regulations. During 2010, we paid Towers Watson an aggregate of $16,275 for services related to determining the amount and form of executive and director compensation.

        In 2010, our Chief Executive Officer did not meet with the compensation consultant outside of Compensation Committee meetings and met with the compensation consultant at such meetings only when members of the Compensation Committee were present. Our management did not retain or consult with any other compensation consultant.

        Although the Compensation Committee's independent compensation consultant did not provide any other services to our Company in 2010, Towers Watson as a firm performed additional services for our Company, including U.S. and global actuarial services, health and welfare consulting and general compensation services. Management's decision to use Towers Watson for these other services was based substantially on the fact that Towers Watson has provided us with these services for a number of years and Towers Watson is familiar with our Company and our benefit plans. During 2010, we paid Towers Watson an aggregate of $2,131,122 for services unrelated to determining the amount and form of executive and director compensation. The services provided by Towers Watson to our Company were provided by a separate group within Towers Watson that did not communicate with the Compensation Committee's independent compensation consultant. We do not believe that the services provided to our Company by Towers Watson affected the independence of the advice that the Compensation Committee received from its compensation consultant related to executive and director compensation in 2010.

        In order to more clearly separate the role of the independent compensation consultant, the Compensation Committee no longer retains Towers Watson on executive and director compensation matters and is in the process of searching for a new provider to serve as its independent compensation consultant. Towers Watson will continue to advise us on compensation matters unrelated to determining the amount and form of executive and director compensation.

Elements of Executive Compensation

        The key elements of direct compensation for the executive officers are base salary, annual incentive compensation, special project bonuses (when appropriate) and equity-based compensation. The mixture of pay elements represents our belief that executive officers should have elements of their compensation tied to both short and long-term objectives. This pay mixture is the result of our historical pay practices, management recommendations and Compensation Committee determinations. The Compensation Committee strives to align the relative proportion of each element of total direct compensation with the competitive market and our objectives, as well as to preserve the flexibility to respond to the continually changing global environment in which we operate. Generally, as employees move to higher levels of responsibility with greater ability to influence our results, the percentage of performance-based pay will increase. The Compensation Committee's goal is also to strike the appropriate balance between annual and long-term incentives, and it may adjust the allocation of pay to best support our objectives.

        In addition to the key elements of base salary, annual incentive compensation, special project bonuses (when appropriate) and equity-based compensation, our executive officers also are eligible for elements of indirect compensation comprised of health and welfare benefits, retirement and savings

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plans and certain perquisites. The Compensation Committee considers each of the key elements and the indirect elements when evaluating the overall compensation program design.

        A detailed discussion of the specific elements of compensation awarded to our named executive officers for 2010 is set forth below in "Compensation Discussion and Analysis—Elements of 2010 Executive Compensation."

        Annual Base Salary.    Management makes recommendations to the Compensation Committee regarding the annual base salary of each of the executive officers, other than the Chief Executive Officer and Executive Chairman, and establishes base salaries that it believes are sufficient to attract and retain individuals with the qualities it deems necessary for our long-term financial success and that are competitive in the marketplace.

        An executive officer's base salary generally reflects the officer's responsibilities, tenure, job performance, special circumstances (such as overseas assignments) and the market for the executive's services. The Compensation Committee reviews the base salary of each executive officer, including the Chief Executive Officer, on an annual basis. In addition to these annual reviews, the Compensation Committee may, at any time, review the salary of an executive who has received a significant promotion, whose responsibilities have changed significantly or who is subject to competitive pressure. Any adjustments are based on the results of the annual review of market pay data, changes in the cost of living, job performance or the expansion of duties and responsibilities. No pre-determined weight or emphasis is placed on any one of these factors.

        Annual Incentive Awards.    Annual incentive compensation enables executive officers and other key employees of our Company (other than the Executive Chairman) to earn a cash bonus for meeting or exceeding our financial goals as well as for individual performance. While we target total compensation within the range of the median to incentivize executives, our compensation program provides executives with the opportunity to receive total compensation in the top 25% of our compensation peer group upon superior performance. This approach enables our Company to remain competitive in attracting, motivating and retaining executives critical to our long-term success and helps us to ensure that the compensation we pay is reasonable compared to our competitors.

        The potential payments available under the annual incentive program for the named executive officers depended on the attainment of performance goals recommended by management and approved by the Compensation Committee at the beginning of the year. Furthermore, as part of the annual incentive compensation award process, the Compensation Committee undertakes a subjective evaluation of each executive officer's performance and success in areas it believes to be significant to us as a whole or to a particular business unit or function. For our Executive Chairman, the Committee looks primarily at Company performance in determining the amount of the bonus award to be provided, but also looks at areas not easily measurable by objective standards, such as his strategic contributions and his leadership in numerous areas. Because of this, Compensation Committee employs its discretion in determining the amount of the bonus award to be provided to our Executive Chairman each year.

        Long-Term Compensation.    We provide executives with long-term incentive compensation through the Huntsman Stock Incentive Plan (the "Stock Incentive Plan"), which was approved by our stockholders prior to our initial public offering and was amended and restated in November 2009.

        The Stock Incentive Plan permits the granting of a variety of stock and stock-based awards. The awards are granted according to a pre-determined schedule developed by management and the Compensation Committee and approved by the Compensation Committee during the first quarter of each year. Pursuant to this schedule, grants of equity-based awards are typically made during the first quarter.

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        Since 2009, other than awards granted to the Executive Chairman, we have granted equity awards with values of 70% in restricted stock or phantom shares and 30% in stock options based on the grant date fair value of such awards. We provide phantom shares in lieu of restricted stock in foreign jurisdictions where tax treatment is more favorable for the recipient with respect to this type of award. We have used this mix of restricted or phantom stock and stock options to obtain the benefit of each of these types of awards. We believe that restricted stock and phantom shares provide value that continues to exist and creates an ongoing retention benefit during times in which our stock price is depressed, including times of general economic downturns similar to the one recently experienced. We believe that stock options provide the opportunity for employees to achieve a higher value and thus create additional motivation for employees to strive for superior performance.

        The Compensation Committee believes that grants of long-term incentive awards to executive officers encourage them to remain with and devote their best efforts to our Company and enhance our ability to attract and retain the services of executives essential for our growth and profitability. In addition, because we do not maintain employment agreements with our executive officers (other than as described in "Employment Agreements" below), our Stock Incentive Plan allows us to provide for customary benefits with respect to certain termination events. Without these awards, our Chief Executive Officer and most other executive officers would not have certain benefits upon termination of their employment typically enjoyed by executive officers at our peer companies, including automatic vesting of restricted stock, stock options and phantom stock. To maintain our ability to provide a competitive compensation package and attract and retain individuals vital to our success, the Compensation Committee believes it is appropriate to continue to grant long-term compensation awards to our executive officers.

        Special Project Bonuses.    Project bonuses constitute an important part of our compensation philosophy by rewarding successful completion of strategic objectives. In previous years, these strategic objectives have included both acquisitions and divestitures of businesses and the implementation of cost reduction and restructuring plans. Given that these project bonuses are customarily related to special initiatives, the Compensation Committee typically does not utilize specific formulas or quantitative metrics in determining the amount of payment for successfully completing such projects. Accordingly, our Chief Executive Officer and our Senior Vice President, Global Human Resources may make recommendations to the Compensation Committee and the Compensation Committee typically exercises wide discretion in determining the amount of such payment, if any, to each executive officer. Nevertheless, as a frame of reference, these project bonus payments have historically been in the range of 50%—150% of annual base salary and are intended to be commensurate with the efforts of the executives and the benefits to our Company.

        Health and Welfare Benefits.    We provide our executive officers with benefits that are intended to be a part of a competitive total compensation package that provides health and welfare and retirement programs comparable to those provided to employees and executives at other companies in the chemicals industry. Executive officers participate in our health and welfare programs on the same basis as our other employees.

        Retirement and Savings Plans.    We provide our executive officers with benefits that are intended to be a part of a competitive total compensation package that provides retirement and savings programs comparable to those provided to employees and executives at other companies in the chemical industry and the general market. The benefit plan descriptions below in the narratives following the "—Pension Benefits in Fiscal 2010" and "—Nonqualified Deferred Compensation in Fiscal 2010" tables provide an explanation of the major features of our retirement and savings plans. Executive officers participate in our qualified retirement and savings plans on the same basis as other employees. We provide defined benefit pension plans, including the Huntsman Defined Benefit Pension Plan (a tax qualified defined benefit pension plan) and the Huntsman Supplemental Executive Retirement Plan (a non-qualified

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supplemental pension plan for executives who exceed the qualified plan limitations). Employees in foreign jurisdictions participate in the retirement and savings plans mandated by applicable law. In addition, we provide the Huntsman Pension Scheme to our U.K. employees, such as Mr. Hankins, and we make annual contributions to the Previndai Executive Integrative Pension Fund on behalf (the "Previndai Pension Fund") of certain employees in Italy, including Mr. Ferrari. We also sponsor and maintain four defined contribution savings plans, including the 401(k) plan, the Supplemental Savings Plan, a money purchase plan and a supplemental executive money purchase plan.

        Perquisites.    We have provided perquisites as a means of providing additional compensation to our Chief Executive Officer and other named executive officers through the availability of benefits that are convenient for the executives to use when faced with the demands of their positions. The Compensation Committee reviews our policies with respect to perquisites and considers whether, and to what extent, it may be appropriate for our Chief Executive Officer and the other named executive officers to reimburse our Company for perquisites.

        Employment Agreements.    We do not enter into employment agreements with our executive officers. However, in accordance with our practice with respect to employees on assignment in a foreign country, Mr. Hankins entered into a letter agreement on November 1, 2000 with our subsidiary Huntsman Polyurethanes Americas detailing the terms of his secondment from Huntsman Polyurethanes (UK) Ltd. The primary purpose of this letter agreement is to provide Mr. Hankins with details regarding repatriation to his home country following the completion of his foreign assignment. This letter agreement also defines the initial elements of Mr. Hankins' compensation package, including base salary and a performance-based bonus, and it provides for customary expatriation arrangements, including an international location allowance expressed as a percentage of his annual salary.

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        Executive Severance Plan.    Our named executive officers, other than Mr. Hankins, do not have employment agreements with our Company which entitle them to payments and benefits upon the termination of employment or a change-in-control. Executives at companies in the chemical industry and the general market against which we compete for executive talent commonly have employment agreements providing for these types of severance payments and benefits. Because most of our executives do not have the benefit of such agreements, we established the Huntsman Executive Severance Plan (the "Executive Severance Plan") in order to remain competitive. We believe that the relative costs of our Executive Severance Plan in light of the expected benefits that would be derived are worth the attendant costs in foreseeable merger or acquisition situations. A description of the Executive Severance Plan and other arrangements relevant to post-employment compensation is found below under the heading "Potential Payments upon Termination or Change of Control."

Annual Review of Executive Compensation

        Management and the Compensation Committee believe that compensation decisions are complex and require careful review of individual and Company performance and chemical and general industry compensation levels. The Compensation Committee awards compensation to our executive officers based upon corporate, business division and individual performance and designs compensation so as to motivate executive officers to achieve strategic objectives and to continue to perform at the highest levels.

        Our management and the Compensation Committee generally strive to maintain an executive compensation program that is structured to provide executive officers with a total compensation package that, at expected levels of performance, is comparable to those provided to other executives holding comparable positions or having similar qualifications in other similarly situated organizations in the chemical industry and the general market. This is done because the Compensation Committee believes that it is necessary to retain key executives who would otherwise be incentivized to leave our Company if a significant pay disparity existed between us and our competitors. These objectives are achieved through an annual review of the compensation of each of our executive officers. Variations from general standards may be made when appropriate to promote specific Company strategies or in response to unusual circumstances or conditions.

        In preparation for the annual review for 2010, the compensation consultant conducted competitive compensation analyses using several sources of data. One source of data specifically utilized in evaluating compensation levels of the executive officers, and particularly the named executive officers, was Proxy Statements filed by our chemical industry peer companies. Additional information regarding the peer group of companies is provided below. Please see "—Compensation Peer Group." We also utilized nationally recognized compensation surveys to assess the competitiveness of executive compensation. Specific survey benchmark matches were identified for each executive officer position.

        The compensation consultant prepared a report to the Compensation Committee that included extensive analyses of compensation based on competitive market data gathered from peer proxy statements and published survey sources. In addition to this report, the compensation consultant prepared a total compensation report, or "tally sheet," for each of the executive officers, including our Chief Executive Officer. Each tally sheet showed the total dollar value of the executive officer's annual compensation, including the executive's base salary, bonus, long-term incentives, lump sum present value of retirement benefits, company contributions for health and welfare plans, tax gross-ups and applicable perquisites. In addition, these tally sheets estimated the potential payment(s) under a variety of termination scenarios (voluntary termination, for-cause termination, without-cause termination or termination by employee with good reason, and termination due to change in control) and are utilized as a tool to provide transparency as to the impact of each compensation component. At each meeting in which the Compensation Committee reviews a component of compensation, it considers the component in light of total compensation.

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        The tally sheets provide the Compensation Committee with context for the decisions they make in relation to total direct compensation. Although they do not necessarily drive decision making with regard to specific components of the total compensation program, the tally sheets enable the Compensation Committee to assess, on a comprehensive basis, total direct compensation and the relationship of various components of the total compensation program to each other. The tally sheets may also influence the Compensation Committee's views on a variety of issues, such as changes to severance plans and employment agreements, special equity grants to promote retention, or changes in long-term variable equity incentives.

        The Compensation Committee reviews different components of compensation at different meetings during the year. Each time a component is reviewed, the Compensation Committee considers a report that contains each executive officer's base salary, annual incentive, equity holdings and merit history for the prior three years, and includes the Chief Executive Officer's recommendations regarding the specific compensation being considered at that meeting. With respect to our named executive officers other than our Chief Executive Officer and our Executive Chairman, this recommendation is made by our Chief Executive Officer after consultation with our Senior Vice President, Global Human Resources. After reviewing these materials, the Compensation Committee considers each executive's performance through a review of objective results, reports from other senior management (for all executives other than our Chief Executive Officer and our Executive Chairman) and, in many cases, personal observation. As part of this process, the Chief Executive Officer provides the Compensation Committee with his evaluation of performance of each executive officer other than our Executive Chairman during the prior year. The Compensation Committee considers all of the information provided to them to arrive at individual compensation decisions.

        In making its decisions regarding each executive officer's compensation, the Compensation Committee considers the nature and scope of all elements of the executive's total compensation package, the executive's responsibilities and his or her effectiveness in supporting our key strategic, operational and financial goals.

Compensation Peer Group

        As an important consideration in determining the appropriate amount for each element of the executive officers' total compensation (base salary, annual incentives, special project bonuses (when appropriate) and long-term incentives), the Compensation Committee considers the compensation paid for similar positions at other companies within a peer group of companies. The peer group is comprised of companies against which we compete in the global chemical industry for executives, key employees and outside directors. The selected peer companies fall within a range of comparison factors (both above and below us) such as revenue, market capitalization and net income. The peer group data supplied by the compensation consultant to the Compensation Committee is not adjusted based on any of these factors. The list of companies that comprise the peer group was initially developed in 2005 and was subsequently modified based on suggestions from the compensation consultant and finalized based on input from our management and the Chairman of the Compensation Committee. Some variation may take place from year to year in the composition of this group based on an analysis provided by the compensation consultant that is reviewed for appropriateness by the Compensation Committee. For example, we removed two companies, LyondellBasell and Rohm and Haas, from our list in 2009 because such companies either filed for bankruptcy or were acquired during 2009. Our current peer group for purposes of 2010 compensation decisions is comprised of the following eleven companies:

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        This competitive market data provides a frame of reference for the Compensation Committee when evaluating executive compensation, but is not the only factor considered for our executives' compensation. In addition to the peer group noted above, the Compensation Committee uses nationally recognized compensation surveys to assess the competitiveness of our executive compensation with the broader market of chemical and general industrial companies. These data are generally provided by the compensation consultant and are the product of published survey sources representing compensation amounts for similar positions within general industry and chemical industry companies. The Compensation Committee uses data from these broad market surveys to provide additional information against which they can compare the competitiveness of our executive compensation.

Elements of 2010 Executive Compensation

        For 2010, the Compensation Committee set the mix of base salary, annual incentive compensation and equity-based compensation as a percentage of total potential direct compensation for each of the named executive officers as reflected in the following table. The Compensation Committee did not award any special project bonuses for 2010.

 
  Percent of Potential Total Direct Compensation  
Officer
  Base Salary   Annual Incentive
Compensation
  Long-Term
Incentive
Awards
 

Jon M. Huntsman

    23 %   58 %   19 %

Peter R. Huntsman

    19 %   37 %   44 %

J. Kimo Esplin

    31 %   24 %   45 %

Anthony P. Hankins

    33 %   20 %   47 %

Daniele Ferrari(1)

    33 %   24 %   43 %

(1)
The 2010 base salary rate used to calculate the base salary percentage for Mr. Ferrari in the above table does not include any amounts for Civil Holiday, indemnity for presence based on local contract, or contribution reimbursement for employee contributions to the mandatory healthcare fund FASI, which items are included with respect to Mr. Ferrari in the "Salary" column of the Summary Compensation Table.

        Annual Base Salary.    As part of its annual review cycle, in 2010 the Compensation Committee reviewed the annual base salary of each of our executive officers. In determining to increase annual base salaries, the Compensation Committee considered the anticipated global economic recovery and its impact on our Company's results and financial position. The Compensation Committee also awarded annual salary increases in 2010 because it had frozen salaries of the named executive officers in 2009 and, therefore, none of the named executive officers had received a salary increase in at least two years at the time the decision was made. The Compensation Committee had not increased our Chief

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Executive Officer's salary since 2006. The following table provides the base salary determinations for our Chief Executive Officer and the other named executive officers in fiscal years 2009 and 2010 and the percentage increase in their 2010 base salary from 2009:

 
  Fiscal Year Salary   Percentage
Increase From
 
Officer
  2009   2010   2009 to 2010  

Jon M. Huntsman

  $ 1,100,000   $ 1,200,000     9.1 %

Peter R. Huntsman

  $ 1,464,500   $ 1,500,000     2.4 %

J. Kimo Esplin

  $ 489,500   $ 504,200     3.0 %

Anthony P. Hankins

  $ 521,900   $ 537,600     3.0 %

Daniele Ferrari(1)

    n/a   $ 423,400     n/a  

(1)
Mr. Ferrari's base salary is based on an exchange rate of 1 EUR to 1.3528 USD, being the exchange rate as of March 19, 2010. March 19, 2010 was an internal date used to estimate pro forma elements of compensation in 2010—a date in March is generally set for these purposes each year. The 2010 base salary rate for Mr. Ferrari in the above table does not include any amounts for Civil Holiday, indemnity for presence based on local contract, or contribution reimbursement for employee contributions to the mandatory healthcare fund FASI, which items are included with respect to Mr. Ferrari in the "Salary" column of the Summary Compensation Table.

        Annual Incentive Awards.    For the named executive officers (other than the Executive Chairman), our annual incentive compensation program for 2010 provided for target annual incentive compensation of 100% of base salary for our Chief Executive Officer and 60% of base salary for the other named executive officers, with maximum possible annual incentive compensation set at 200% of base salary for our Chief Executive Officer and 120% of base salary for the other named executive officers. The target and maximum bonus amounts were set to align within the total compensation median range of those amounts for comparable executive positions within our peer group and with other chemical and general industrial companies as represented in nationally-recognized executive compensation surveys. Potential payout of individual bonuses was dependent upon both group performance and individual contributions to our success. In 2010, the Executive Chairman was eligible for a bonus of up to $3 million, the specific amount to be determined in the discretion of the Compensation Committee at year-end.

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        The following table summarizes the bonus targets, performance components and corresponding weightings for each of our named executive officers for 2010 bonuses.

Officer
  Target
Incentive
Award
  Maximum
Possible
Incentive Award
  Performance Components   Weightings  
Jon M. Huntsman     n/a   $ 3,000,000   Compensation Committee discretion     100 %

Peter R. Huntsman

 

$

1,500,000

 

$

3,000,000

 

Corporate adjusted EBITDA

 

 

60

%
                Debt reduction, corporate net operating cash flow and compliance     20 %
                Individual performance     20 %

J. Kimo Esplin

 

$

302,520

 

$

605,040

 

Corporate adjusted EBITDA

 

 

50

%
                Corporate net operating cash flow     20 %
                Compliance     20 %
                Individual performance     10 %

Anthony P. Hankins

 

$

322,560

 

$

645,120

 

Corporate adjusted EBITDA

 

 

20

%
                Polyurethanes adjusted EBITDA     30 %
                Corporate net operating cash flow     20 %
                Compliance     20 %
                Individual performance     10 %

Daniele Ferrari

 

$

254,040

 

$

508,080

 

Corporate adjusted EBITDA

 

 

20

%
                Performance Products Adjusted EBITDA     30 %
                Corporate net operating cash flow     20 %
                Compliance     20 %
                Individual performance     10 %

        The Compensation Committee selected these performance measures for use in the annual incentive portion of compensation because of their importance to our operations. To achieve the maximum possible incentive award, an executive must achieve the maximum on each of the referenced performance components and for their individual performance. The Compensation Committee uses different weightings for each named executive officer in order to align annual incentives with the performance components most within their control. For 2010, the Compensation Committee added corporate net operating cash flow as a new performance component to the Annual Incentive Awards for our named executive officers. The Compensation Committee added this component because it views net operating cash flow as critical to our business and weighted this factor accordingly. For our Chief Executive Officer for 2010, compliance, net operating cash flow and debt reduction together comprised 20% of the total annual incentive award. Each sub-component within this category was not assigned a specific weighting consistent with our Compensation Committee's desire to preserve its discretion in weighting these sub-components relative to then-current business conditions.

        Adjusted EBITDA and Net Operating Cash Flow.    The Compensation Committee used corporate and divisional adjusted EBITDA targets because both the Compensation Committee and our Company believe that it is the primary measure by which our stockholders measure the financial performance of our Company, thereby aligning the interests of management with the interests of our stockholders. Adjusted 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. The adjusted EBITDA measure used in connection with evaluation of annual incentive compensation is adjusted on the same basis and for the same factors as the adjusted EBITDA reported in our fiscal year-end earnings release. Adjusted EBITDA was calculated by eliminating the following from EBITDA: gains and losses from discontinued operations; restructuring, impairment and plant closing (credits) costs; income and expense associated with the terminated merger and related litigation;

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acquisition related expenses; losses on the sale of accounts receivable to our securitization program; unallocated foreign currency (gain) loss; certain legal and contract settlements; losses from early extinguishment of debt; extraordinary loss (gain) on the acquisition of a business; and loss (gain) on disposition of business/assets.

        Beyond corporate and divisional adjusted EBITDA, the Compensation Committee also identified corporate net operating cash flow as an important objective for 2010 consistent with the Company's strategic goals for debt reduction and improved liquidity. Achievement of the corporate net operating cash flows target constituted 20% of the possible annual incentive award for all named executive officers other than our Chief Executive Officer.

        For 2010, the Compensation Committee established threshold, target and maximum performance goals for our named executive offices for each of the following performance measures to be achieved by our Company and its divisions as follows:

 
  2010 (in millions)  
Performance Criteria
  Threshold Goal
(75% of target)
  Target Goal
(100% of target)
  Maximum Goal
(120% of target)
 

Corporate adjusted EBITDA

  $ 501   $ 668   $ 802  

Corporate net operating cash flow

  $ 150   $ 200   $ 240  

Polyurethanes adjusted EBITDA

  $ 272   $ 363   $ 436  

Performance Products adjusted EBITDA

  $ 184   $ 246   $ 295  

        At achievement of 75% or less of the applicable target goal for these components, we would not pay the executive any incentive amount for that component. We scale the incentive amounts we pay for these components for achievement of percentages of target goal between 75% to 100% and 100% to 120% based on a linear progression between these points. In addition, if we achieve corporate adjusted EBITDA of less than 85% of the target goal, the payouts for all other components are capped at their target levels. If corporate adjusted EBITDA is less than 75% of budget, then payment of incentive awards for any component is at the discretion of our Chief Executive Officer and the Compensation Committee. The Compensation Committee believes that requiring a minimum threshold be met to receive a bonus payment both aligns executives' interests with that of stockholders and prevents excessive bonus payments in times of poor financial performance.

        2010 targets were designed to require significant effort to achieve, yet to be realistic enough to incentivize our executive officers' performance. For example, the Compensation Committee set the corporate adjusted EBITDA target for 2010 at 126% of 2009 achievement. Divisional adjusted EBITDA targets were also set higher in 2010 than in 2009.

        For 2010, actual performance and performance as a percentage of target were as follows:

Performance Criteria
  2010
Performance
(in millions)
  Percentage
of target
 

Corporate adjusted EBITDA

  $ 872     131 %

Corporate net operating cash flow

  $ 124     68 %

Polyurethanes adjusted EBITDA

  $ 320     88 %

Performance Products adjusted EBITDA

  $ 367     149 %

        Compliance.    The compliance component of the annual incentive award program encompassed three discrete performance measures: compliance with rules promulgated under the Sarbanes-Oxley Act of 2002 ("SOX") and corporate policies, environmental performance objectives and injury reduction objectives. All of our executive officers other than our Executive Chairman had performance objectives in these three areas. The Compensation Committee tied a portion of the executive officers' annual

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incentive award to performance in these critical areas because it believes that this practice discourages risk-taking that focuses excessively on short-term profits at the sacrifice of the long-term health of our Company.

        In 2010, achievement of the SOX and corporate policies objective constituted 6.7% of the total incentive award for all named executive officers other than our Chief Executive Officer. For 2010, the Compensation Committee established the compliance target as the fulfillment of all required training on corporate policies, the absence of any material weakness in our Company's 404 audit as determined by the independent audit firm Deloitte & Touche and the achievement of process safety management targets. As required training on corporate policies was completed, no material weakness in Company's 404 audit was identified and the other objectives were achieved, this objective was achieved at or above target by all such named executive officers.

        In addition, each named executive officer other than our Chief Executive Officer also had 6.7% of their bonus eligibility tied to environmental performance objectives and 6.7% tied to injury reduction objectives (collectively referred to as "EH&S objectives"). The Company EH&S objectives were achieved at or above target in three of the past four years. For Mr. Esplin, these EH&S objectives related to the performance of our entire company and were determined by the Compensation Committee to be achieved for 2010 above target on the environmental performance objectives and below the payout threshold on the corporate recordable safety achievement. The EH&S objectives for Mr. Hankins related to only the EH&S performance of the Polyurethanes business. Mr. Hankins was determined to be above target for the environmental performance objectives and below the payout threshold on the safety objectives for 2010. Likewise, Mr. Ferrari's EH&S objectives were focused on the Performance Products business and he was below the payout threshold on both the environmental and safety objectives.

        For our Chief Executive Officer for 2010, compliance, net operating cash flow and debt reduction together comprised 20% of the total annual incentive award. Each sub-component within this category was not assigned a specific weighting consistent with our Compensation Committee's desire to preserve its discretion in weighting these sub-components relative to then-current business conditions. As described above, all of our named executive officers were at or above target for the SOX and corporate policies sub-component including the fulfillment of all required training on corporate policies, the absence of any material weakness in our Company's 404 audit and the achievement of process safety management targets. In addition, the Compensation Committee considered the EH&S objectives related to the performance of our entire company and determined they were achieved above target on the environmental performance objectives and below the payout threshold on the corporate recordable safety achievement. Accordingly, given our Chief Executive Officer's contribution to our compliance programs and our debt reduction efforts (where our gross debt in 2010 including our accounts receivable securitization program was reduced by a total of $320 million), the Compensation Committee awarded our Chief Executive Officer the maximum incentive for which he was eligible for this portion of his annual incentive award.

        Based on these results, the Compensation Committee awarded annual incentive awards as a percentage of base salary for the Chief Executive Officer of 200%, for Mr. Esplin of 80%, for Mr. Hankins of 58% and for Mr. Ferrari of 74%. The Compensation Committee determined to award the Executive Chairman a bonus of $3,000,000 in consideration of our strong performance and his successful leadership and strategic contributions in 2010.

        Long-Term Compensation.    In determining the types and amounts of equity-based awards to grant to each executive officer in 2010, the Compensation Committee first considered the value of the equity award made to each named executive officer in 2009, taking into account any expansion of duties and job responsibilities. Then, the Compensation Committee reviewed analyses provided by the compensation consultant of the types and amounts of awards paid for similar positions at companies in our peer group and other chemical and general industrial companies. For 2010, grants were targeted at

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levels intended to represent an estimated potential financial value that, when combined with base salary and annual incentive, would be near the market median value for total direct compensation (base salary plus annual incentive plus long-term compensation) paid to comparable executive positions at companies in our peer group and other chemical and general industrial companies as represented in nationally-recognized executive compensation surveys. The survey information is contained in a report prepared by the Compensation Committee's compensation consultant that includes a detailed analysis of actual compensation and trends based on competitive market data gathered from peer proxy statements and published survey sources. This is the same report the Compensation Committee utilizes for setting total annual compensation, as described above under "—Annual Review of Executive Compensation." As noted above, we targeted the median range of total compensation because we believe it is necessary to remain competitive in our ability to attract, motivate and retain executives critical to our long-term success but want to ensure that the compensation we pay is reasonable compared to companies in our peer group and other chemical and general industrial companies.

        The Compensation Committee also considered benchmarking information in the form of a breakdown by percentiles of awards granted to similarly situated executives at companies in our peer group and other chemical and general industrial companies, which is contained in the report prepared by the Compensation Committee's consultant. The Compensation Committee considered this information to provide a reference point as to how our named executive officers' award levels compare to the comparative companies. The amounts of the awards made in 2010 to named executive officers were generally at or below the 50th percentile of our peer group and other chemical and general industrial companies, based on the information provided by the compensation consultant.

        The value of the awards approved by the Compensation Committee was then converted to a number of shares based on the grant date fair value of the respective award on the date of grant. The awards approved for the Chief Executive Officer and other named executive officers for 2010 were as follows:

Officer
  Stock Options   Restricted or
Phantom Stock
  Total Shares(1)  

Jon M. Huntsman

    0     74,074     74,074  

Peter R. Huntsman

    150,215     181,481     331,696  

J. Kimo Esplin

    32,189     38,889     71,078  

Anthony P. Hankins

    32,189     38,889     71,078  

Daniele Ferrari

    23,605     28,519     52,124  

(1)
Additional details regarding these grants are provided under "Executive Compensation—Grants of Plan-Based Awards in Fiscal 2010" below.

        Special Project Bonuses.    Although we have authorized special project bonuses in the past and may continue to do so upon successful completion of strategic objectives, no such bonuses were paid to our named executive officers for services performed in 2010.

Compensation Policies and Practices as they Relate to Risk Management

        The Compensation Committee believes that our Company's compensation program has been appropriately designed to provide a level of incentives that does not encourage our executive officers and employees to take unnecessary risks in managing their respective business divisions or functions and carrying out their employment responsibilities. As discussed above, a substantial portion of our executive officers' compensation is performance-based, consistent with our approach to executive compensation. Our annual incentive compensation program is designed to reward annual financial and/or strategic performance in areas considered critical to the short- and long-term success of our Company and features a cap on the maximum amount that can be earned in any single year. In addition, we measure performance on a variety of bonus criteria other than Company profit to

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determine an executive's annual incentive compensation award, such as environmental, health and safety goals, cost saving initiatives and corporate compliance. We believe this discourages risk-taking that focuses excessively on short-term profits at the sacrifice of the long-term health of our Company. Likewise, our long-term equity incentive awards are directly aligned with long-term stockholder interests through their link to our stock price and multi-year ratable vesting schedules. Our executive stock ownership guidelines further support this long-term focus by requiring our executives to personally own and hold significant levels of our Company's stock. In addition, we intend to implement a claw back policy once SEC regulations are final to discourage risk-taking that focuses excessively on short-term financial performance. In combination, the Compensation Committee believes that the various elements of our executive compensation program sufficiently tie our executives' compensation opportunities to our focus on sustained long-term growth and performance.

Equity Ownership Policy

        The Board has adopted Director and Executive Stock Ownership Guidelines (the "Guidelines"), which apply to our directors and executive officers. The Guidelines were amended and restated in 2010 to include directors and to adjust the Guidelines to account for the current market price of our common stock. The purpose of stock ownership requirements is to more closely align our directors' and executives' interests with our stockholders' and to encourage them to make decisions that will be in our long-term best interests—through all industry cycles and market conditions. The Guidelines require current directors and executive officers to achieve and maintain share ownership levels of our stock equal to five times base salary for the Chief Executive Officer, two times base salary for all other executive officers and three times annual retainer for directors. For current directors and executive officers, the Guidelines must be achieved based on such participant's 2010 base salary or annual retainer (as the case may be) and the closing common stock price on November 10, 2010. A director or executive officer who becomes subject to the Guidelines in the future will have his or her stock ownership requirement established based upon his or her annual retainer or base salary at the time he or she becomes subject to the Guidelines and our closing common stock price for the day on which he or she becomes subject to the Guidelines. Once the stock ownership level is established, the number of shares of common stock needed to meet a participant's required ownership level generally does not change as a result of changes in annual base salary or annual retainer (as the case may be) or fluctuations in our common stock price. Shares that count toward satisfaction of the ownership requirement under the Guidelines include:

        Participants are required to achieve their specified ownership levels within five years of their appointment as a director or executive officer. Current directors and executives were required to meet the stock ownership requirement under the Guidelines by December 31, 2010 in the case of executives subject to the Guidelines as of September 1, 2005 and December 31, 2015 in the case of directors who were not subject to the Guidelines before the 2010 amendment and restatement. Until these levels are achieved, participants are required to retain at least 50% of net shares delivered through our Stock Incentive Plan ("net shares" means the shares remaining after deducting shares for the payment of taxes and, in the case of stock options, after deducting shares for the exercise price of stock options). Shares acquired by a participant prior to application of the Guidelines to such participant are not subject to the retention restriction. Once achieved, the specified ownership level must be maintained

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for as long as the participant is subject to the Guidelines. Exclusions for estate planning, gifts to charity, education and primary residence apply to the retention requirement. However, exclusions do not affect the requirement that a participant achieve their specified ownership levels within the five-year period. In addition, hardship exemptions may be available in rare instances. A copy of the Guidelines is available on our website at www.huntsman.com.

        As of March 9, 2011, all of the named executive officers and directors were in compliance with the Guidelines. The following table provides the minimum share ownership target of each named executive officer and director and the percentage of the ownership guideline achieved by the officer or director as of the determination date:

Officer
  Ownership   Share Ownership Target   % of Guideline Achieved  

Jon M. Huntsman

    2x     174,800     100 %

Peter R. Huntsman

    5x     546,200     100 %

J. Kimo Esplin

    2x     73,400     100 %

Anthony P. Hankins

    2x     78,300     100 %

Nolan D. Archibald

    3x     26,200     100 %

M. Anthony Burns(1)

    3x     26,200     62 %

Marsha J. Evans

    3x     26,200     100 %

Patrick T. Harker(1)

    3x     26,200     62 %

H. William Lichtenberger

    3x     26,200     100 %

Robert J. Margetts(1)

    3x     26,200     48 %

Wayne A. Reaud

    3x     26,200     100 %

Alvin V. Shoemaker

    3x     26,200     100 %

(1)
These directors were appointed in 2010. Pursuant to the Guidelines, directors have until December 31, 2015 to achieve their respective stock ownership level.

Prohibited Transactions

        Our Insider Trading Policy includes trading restrictions for all employees and related persons preventing such persons from engaging in short-term, hedging or speculative transactions in our Company's securities. Such persons may not execute transactions in short sales, options, such as puts and calls, or any other derivative securities or margin accounts. In addition, persons subject to the policy must exercise caution when holding securities in a margin account where such securities may be pledged as collateral.

Accounting and Tax Treatment of the Elements of Compensation

        We account for stock-based awards, including stock options and restricted stock awards, in accordance with FASB ASC Topic 718 (formerly Statement of Financial Accounting Standards No. 123R) Share Based Payment ("FAS 123(R)").

        The financial reporting and income tax consequences to our Company of individual compensation elements are important considerations for the Compensation Committee when it is analyzing the overall level of compensation and the mix of compensation among individual elements. Overall, the Compensation Committee seeks to balance its objective of ensuring an effective compensation package for the named executive officers with the need to maximize the immediate deductibility of compensation—while ensuring an appropriate and transparent impact on reported earnings and other closely followed financial measures.

        In making its compensation decisions, the Compensation Committee has considered the implications of Section 162(m) of the Internal Revenue Code. Section 162(m) of the Internal Revenue Code disallows a tax deduction by us for individual executive compensation exceeding $1 million in any

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taxable year for our Chief Executive Officer and the other three most highly compensated senior executive officers (other than our Chief Executive Officer and Chief Financial Officer), unless the compensation is performance-based under a plan that is approved by our stockholders and that meets certain other technical requirements. As a result, the Compensation Committee designs much of the total compensation packages for the named executive officers to qualify for the exemption of "performance-based" compensation from the deductibility limit. However, the Compensation Committee does have the discretion to design and use compensation elements that may not be deductible within Section 162(m) when necessary for competitive reasons, to attract or retain a key executive, to enable us to retain flexibility in maximizing our pay for performance philosophy or where achieving maximum tax deductibility would not be in our best interest.

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EXECUTIVE COMPENSATION

        The following discussion of executive compensation relates to our parent, Huntsman Corporation. However, because all of Huntsman Corporation's operations are conducted by our Company and our subsidiaries, we believe this discussion is material to an understanding of our Company and our subsidiaries. The managers and officers of Huntsman International do not receive any compensation for services rendered in such capacities in addition to compensation provided by our parent. Unless the context requires otherwise, references in this executive compensation discussion to "we," "us," "our," or "our Company" refer to Huntsman Corporation, together with its subsidiaries.

Summary Compensation Table

        The following table details compensation earned in the fiscal years ending 2010, 2009 and 2008 by our named executive officers. Our compensation policies are discussed in "Compensation Discussion and Analysis" above.

Name and Principal Position
  Year   Salary   Bonus(1)   Stock awards(2)   Option
awards(3)
  Non-equity
incentive plan
compensation(4)
  Change in
pension
value &
nonqualified
deferred
compensation
earnings(5)
  All other
compensation(6)
  Total  

Jon M. Huntsman

    2010   $ 1,200,000   $ 3,000,000   $ 1,000,000   $ 0   $ 0   $ 352,041   $ 305,350   $ 5,857,391  
 

Executive Chairman

    2009   $ 1,008,333   $ 1,800,000   $ 0   $ 0   $ 0   $ 115,550   $ 199,585   $ 3,123,468  
 

of the Board

    2008   $ 0   $ 0   $ 0   $ 0   $ 0   $ 0   $ 16,227,028   $ 16,227,028  

Peter R. Huntsman

   
2010
 
$

1,500,000
 
$

0
 
$

2,450,000
 
$

1,050,000
 
$

3,000,000
 
$

1,115,375
 
$

511,821
 
$

9,627,196
 
 

President, CEO & Director

    2009   $ 1,464,500   $ 2,064,500   $ 1,036,000   $ 196,000   $ 2,400,000   $ 938,285   $ 149,166   $ 8,248,451  
 

    2008   $ 1,464,500   $ 0   $ 3,322,329   $ 0   $ 0   $ 362,589   $ 295,894   $ 5,445,312  

J. Kimo Esplin

   
2010
 
$

504,200
 
$

0
 
$

525,000
 
$

225,000
 
$

401,100
 
$

232,134
 
$

171,838
 
$

2,059,272
 
 

Executive VP and CFO

    2009   $ 489,500   $ 470,700   $ 490,000   $ 210,000   $ 446,500   $ 189,227   $ 74,031   $ 2,369,958  
 

    2008   $ 485,772   $ 0   $ 791,053   $ 0   $ 0   $ 79,465   $ 96,056   $ 1,452,346  

Anthony P. Hankins(7)

   
2010
 
$

537,600
 
$

0
 
$

525,000
 
$

225,000
 
$

314,200
 
$

1,016,074
 
$

366,952
 
$

2,984,826
 
 

Division President,

    2009   $ 521,900   $ 501,800   $ 385,000   $ 165,000   $ 455,200   $ 0   $ 311,136   $ 2,340,036  
 

Polyurethanes

    2008   $ 517,358   $ 0   $ 474,622   $ 0   $ 0   $ 161,862   $ 378,269   $ 1,532,111  

Daniele Ferrari(8)

   
2010
 
$

461,655
 
$

0
 
$

385,000
 
$

165,000
 
$

313,444
 
$

0
 
$

211,280
 
$

1,536,379
 
 

Division President,

                                                       
 

Performance Products

                                                       

(1)
For more information regarding the bonus that was earned by Jon M. Huntsman in 2010 and paid during the first quarter of 2011, please see "Compensation Discussion and Analysis—Elements of Executive Compensation—Annual Incentive Awards" and "—Elements of 2010 Executive Compensation—Annual Incentive Awards."

(2)
This column reflects the aggregate grant date fair value of restricted stock computed in accordance with FASB ASC Topic 718. The restricted shares vest ratably in three equal annual installments beginning on the first anniversary of the grant date. For purposes of stock-based awards, fair value is calculated using the closing price of our stock on the date of grant. For information on the valuation assumptions with regard to restricted stock expenses, refer to the notes to our financial statements in our annual report on Form 10-K for the applicable year ended 2010, 2009 or 2008, respectively, as filed with the SEC. These amounts reflect the fair value of the restricted stock awards and may not correspond to the actual value that will be recognized by the named executive officers.

(3)
This column reflects the aggregate grant date fair value of stock options computed in accordance with FASB ASC Topic 718. The fair value of each stock option award is determined on the date of the grant using the Black-Scholes valuation model. For information on the valuation assumptions regarding option awards, refer to the notes to our financial statements in our annual report on Form 10-K for the applicable year ended 2010, 2009 or 2008, respectively, as filed with the SEC.

(4)
This column reflects the annual incentive awards that were earned for 2010 and paid during the first quarter of 2011, which are discussed in further detail under "Compensation Discussion and Analysis—Elements of Executive Compensation—Annual Incentive Awards" and "—Elements of 2010 Executive Compensation—Annual Incentive Awards."

(5)
This column reflects the amount of any change in pension value in 2010 for each of the named executive officers. See "—Pension Benefits in Fiscal 2010" for additional information, including the present value assumptions used in this calculation. None of the named executive officers had above-market or preferential earnings on non-qualified deferred compensation during 2010. See "—Nonqualified Deferred Compensation in Fiscal 2010" for additional information.

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(6)
The methodology used to compute the aggregate incremental cost of perquisites and other personal benefits for each individual named executive officer is based on the total cost to our Company when the total cost of those perquisites and personal benefits exceeds $10,000 in the aggregate for a named executive officer. The table below details the components reported in the "All other compensation" column of the Summary Compensation Table for 2010. Amounts in the table were either paid directly by us or were reimbursed by us to the named executive officers.

 
   
   
   
   
   
  Company Contribution    
   
 
Name
  Health &
Welfare
Benefits
  Personal
Use
Auto
  Personal
Use
Aircraft
  Air Travel
Allowance
  Foreign
Assign-
ment
  401(k)
Plan
  Supp
Savings
Plan
  Money
Purchase
Pension
  SEMPP   Previndai
Pension
Fund
  TFR
Termination
Indemnity
  Tax
Gross-
up
  Total  

Jon M. Huntsman(a)

  $ 18,768   $ 7,590   $ 278,992                                       $ 305,350  

Peter R. Huntsman(b)

  $ 18,768   $ 861               $ 4,900   $ 3,350   $ 19,600   $ 457,560           $ 6,782   $ 511,821  

J. Kimo Esplin(c)

  $ 18,661   $ 7,306       $ 2,000       $ 4,900   $ 23,528   $ 19,600   $ 94,112           $ 1,731   $ 171,838  

Anthony P. Hankins(d)

  $ 18,767               $ 130,133   $ 4,900   $ 11,375   $ 19,600   $ 99,968           $ 82,209   $ 366,952  

Daniele Ferrari(e)

  $ 10,983   $ 35,641                               $ 48,524   $ 116,132       $ 211,280  

(a)
The health and welfare value represents premiums paid directly by us for life insurance, accidental death and dismemberment, long-term disability, occupational/travel accident, medical and dental coverage. The Company cost for personal use of our aircraft is calculated according to a time sharing agreement whereby incremental total direct costs including fuel, maintenance, repairs, insurance, etc. are assigned to us by number of flight hours used. We followed a quarterly cost calculation method to account for the 107.8 personal flight hours used by Jon M. Huntsman during 2010. See "Compensation Discussion and Analysis—Elements of Executive Compensation—Perquisites—Company Car" for additional information regarding personal use auto benefits.

(b)
The health and welfare value represents premiums paid directly by us for life insurance, accidental death and dismemberment, long-term disability, occupational/travel accident, medical and dental coverage. During 2010, we contributed $460,910 in the aggregate to the SEMPP and Supplemental Savings Plan on Mr. Peter R. Huntsman's behalf and have included this total amount in our Nonqualified Deferred Compensation Table below. Associated with the SEMPP and Supplemental Savings Plan, we incurred $6,782 to gross-up Medicare taxes associated with our contributions to these plans. See "Compensation Discussion and Analysis—Elements of Executive Compensation—Perquisites—Company Car" for additional information regarding personal use auto benefits.

(c)
The health and welfare value represents premiums paid directly by us for life insurance, accidental death and dismemberment, long-term disability, occupational/travel accident, medical and dental coverage. During 2010, we contributed $117,640 to the SEMPP and Supplemental Savings Plan on Mr. Esplin's behalf and have included this amount in our Nonqualified Deferred Compensation Table below. Associated with the SEMPP and Supplemental Savings Plan, we incurred $1,731 to gross-up Medicare taxes associated with our contributions to these plans. See "Compensation Discussion and Analysis—Elements of Executive Compensation—Perquisites—Company Car" for additional information regarding personal use auto benefits, and see "Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards in Fiscal 2010—Air Travel Allowance" for additional information regarding air travel allowance benefits.

(d)
Health and welfare benefits include medical and dental coverage. As a citizen of the U.K. with residence in the U.S., we incurred foreign assignment costs on Mr. Hankins' behalf during 2010 that included $51,695 in housing allowances and costs and $78,438 for perquisites such as membership dues reimbursement and international location allowance. In addition, we incurred $80,571 in tax gross-ups and equalization associated with Mr. Hankins' foreign assignment. During 2010, we contributed $111,343 in the aggregate to the SEMPP and Supplemental Savings Plans on Mr. Hankins' behalf and have included this in our Nonqualified Deferred Compensation Table below. Associated with the SEMPP and Supplemental Savings Plan, we incurred $1,638 to gross-up Medicare taxes associated with our contributions to these plans.

(e)
The health and welfare value represents costs for mandatory National Collective Law Agreement (NCLA) and company-sponsored coverage for healthcare programs including medical check-up, life, accidental death and disability. Mr. Ferrari is a participant in the Previndai Pension Fund, whereby he receives a mandatory pension contribution together with a supplemental contribution at the Company's discretion. Upon termination of employment for any reason, employees in Italy receive a termination indemnity (the "Trattamento di fine Rapporto" or "TFR"). The TFR is accrued annually and calculated as a percentage of base pay, bonus, and equity earnings. The TFR value reported above for Mr. Ferrari represents the 2010 accrual amount and revaluation earnings. For a discussion of the amounts actually received by Mr. Ferrari pursuant to his TFR account in connection with Mr. Ferrari's resignation effective February 3, 2011, please see "Potential Payments upon Termination or Change in Control." Mr. Ferrari's compensation values are based on an exchange rate of 1 EUR to 1.3528 USD, being the exchange rate as of March 19, 2010 (which is the internal date used to estimate pro forma elements of compensation). See "Compensation Discussion and Analysis—Elements of Executive Compensation—Perquisites—Company Car" for additional information regarding personal use auto benefits.

(7)
The change in pension value in 2009 for Mr. Hankins was ($757,218), but is shown as zero in the Summary Compensation Table in accordance with applicable rules of the SEC. For reporting purposes, the 2010 pension value for Mr. Hankins' has been converted using a GBP to USD rate of exchange of 1.5016 being the exchange rate as of March 19, 2010 (which is the internal date used to estimate pro forma elements of compensation).

(8)
The aggregate amount reported in the "Salary" column for Mr. Ferrari for 2010 includes $16,386 for Civil Holiday paid by law, $1,705 indemnity for presence based on local contract, and $2,240 contribution reimbursement for employee contribution to the mandatory healthcare fund FASI (EUR $800 for 2010). For reporting purposes, all payment figures to Mr. Ferrari have been converted to U.S. dollars using a 1 EUR to 1.3528 USD, being the exchange rate as of March 19, 2010.

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Grants of Plan-Based Awards in Fiscal 2010

        The following table provides information about non-equity incentive awards granted through our annual incentive compensation plan and equity awards granted through our Stock Incentive Plan to the named executive officers in 2010. The date of action indicates the date equity award values were approved by our Compensation Committee.

 
   
   
  Estimated Future Payouts Under
Non-Equity Incentive Plan
Awards(1)
   
   
   
   
 
 
   
   
   
   
  Exercise or
Base Price
of Option
Awards(4)
($/Sh)
  Grant Date
Fair Value
of Stock and
Option Awards(5)
($)
 
 
   
   
  All Other
Stock-Based
Awards(2)
(#)
  All Other
Option
Awards(3)
(#)
 
Name
  Grant
Date
  Date of
Action
  Threshold
($)
  Target
($)
  Max
($)
 

Jon M. Huntsman

    02/23/10     02/03/10   $ 0             74,074           $ 1,000,000  

Peter R. Huntsman

    02/23/10     02/03/10   $ 0   $ 1,500,000   $ 3,000,000     181,481     150,215   $ 13.50   $ 3,500,000  

J. Kimo Esplin

    02/23/10     02/03/10   $ 0   $ 302,520   $ 605,040     38,889     32,189   $ 13.50   $ 750,000  

Anthony P. Hankins

    02/23/10     02/03/10   $ 0   $ 322,560   $ 645,120     38,889     32,189   $ 13.50   $ 750,000  

Daniele Ferrari

    02/23/10     02/03/10   $ 0   $ 270,000   $ 540,000     28,519     23,605   $ 13.50   $ 550,000  

(1)
This column shows annual incentive cash awards granted to our named executive officers under our annual incentive compensation program for 2010. See the chart and accompanying narrative disclosure in "Compensation Discussion and Analysis—Elements of Executive Compensation—Annual Incentive Awards" for additional information with respect to these amounts.

(2)
This column shows the number of restricted shares of stock or phantom shares granted under the Stock Incentive Plan to the named executive officers in 2010. Only Mr. Ferrari received phantom shares. The restricted and phantom shares vest ratably in three equal annual installments beginning on the first anniversary of the grant date. During the restriction period, each restricted share entitles the individual to vote such share and each restricted share and phantom share entitles the individual to accrue quarterly payments by us equal to the quarterly dividend on one share of our common stock.

(3)
This column shows the number of nonqualified options granted under the Stock Incentive Plan to the named executive officers in 2010. The option awards vest ratably in three equal annual installments and become exercisable beginning on the first anniversary of the grant date.

(4)
The exercise price of the nonqualified options disclosed in this column is equal to the closing price of our common stock on the New York Stock Exchange on the date of grant.

(5)
This column shows the full grant date fair value in accordance with FASB ASC Topic 718. These awards are not subject to performance conditions.

Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards in Fiscal 2010

        The following is a discussion of material factors necessary to obtain an understanding of the information disclosed under "—Summary Compensation Table" and "—Grants of Plan-Based Awards in Fiscal 2010."

        Consistent with the Company's foreign assignment policy, Mr. Hankins receives payments in connection with his foreign assignment to work in the United States. For more information regarding Mr. Hankins' letter agreement with the Company, please see "Compensation Discussion and Analysis—Elements of Executive Compensation—Employment Agreements" above.

        Pursuant to our Business Expense and Travel Policy, we offer all employees the opportunity to receive an air travel allowance to encourage cost savings for the Company. When an employee is authorized to fly business class but chooses to fly coach class, the Company pays the employee an amount equal to half the difference between the lowest roundtrip business class ticket and the fair paid up to a maximum of $2,000.

        For the named executive officers, our annual incentive compensation program for 2010 provided for target annual incentive compensation of 100% of base salary for our Chief Executive Officer and

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60% of base salary for the other named executive officers, except for Jon M. Huntsman who is eligible for a maximum award of $3 million, with maximum possible annual incentive compensation set at 200% of base salary for our Chief Executive Officer and 120% of base salary for the other named executive officers (other than Jon M. Huntsman). The target and maximum bonus amounts were set to align within the total compensation median range of those amounts for comparable executive positions within our peer group and with other chemical and general industrial companies. Potential payout of individual bonuses was dependent upon both group performance and individual contributions to our success. The performance measures were selected for use in the annual incentive portion of compensation because of their importance to our operations. To achieve the maximum possible incentive award, an executive must achieve the maximum on each of the applicable performance components and for their individual performance. Jon M. Huntsman's incentive award was based entirely on the discretion of the Compensation Committee. Peter R. Huntsman's incentive award was based on the following performance measures: corporate adjusted EBITDA; compliance, corporate net operating cash flow; and personal performance. Messrs. Esplin's incentive awards were based on the following performance measures: corporate adjusted EBITDA; corporate net operating cash flow; compliance; and personal performance. Mr. Hankins' and Mr. Ferrari's incentive awards were based on the following performance measures: corporate adjusted EBITDA; divisional adjusted EBITDA; corporate net operating cash flow; compliance; and personal performance. The weighting applied to each performance measure for each named executive officer is described under "Compensation Discussion and Analysis—Elements of Executive Compensation—Annual Incentive Awards."

        Grants were targeted at levels intended to represent an estimated potential financial value that, when combined with base salary and annual incentive, would be near the market median value for total direct compensation (base salary plus annual incentive plus long-term compensation) paid to comparable executive positions at companies in our peer group and other chemical and general industrial companies. In 2010, stock grants for executive officers, other than Jon M. Huntsman, were based upon a distribution of award value of 70% in restricted stock and 30% in stock options based on the grant date fair value of such awards.

        Restricted stock awards vest ratably in three equal annual installments beginning on the first anniversary of the grant date. During the restriction period, each restricted share entitles the individual to vote such share and to accrue quarterly payments by us equal to the quarterly dividend on one share of our common stock. The option awards vest ratably in three equal annual installments and become exercisable beginning on the first anniversary of the grant date. Phantom stock awards vest ratably in three equal installments. Upon vesting of shares of phantom stock, our Company may issue shares of common stock, cash equal to the fair market value of such common stock or a combination of shares and cash. During the vesting period, each phantom share entitles the individual to accrue quarterly payments by us equal to the quarterly dividend on one share of our common stock.

        The key elements of direct compensation for the named executive officers are base salary, annual incentive compensation, special project bonuses and equity-based compensation. The Compensation Committee strives to align the relative proportion of each element of total direct compensation with the competitive market and our objectives, as well as to preserve the flexibility to respond to the continually changing global environment in which we operate. Generally, as employees move to higher levels of responsibility with greater ability to influence our results, the percentage of performance-based pay will increase. The Compensation Committee's goal is also to strike the appropriate balance between annual and long-term incentives, and it may adjust the allocation of pay to best support our objectives. No special project bonuses were paid to our named executive officers for services performed in 2010. The mix of these four elements during 2010 for each of the named executive officers is illustrated in more detail under "Compensation Discussion and Analysis—Elements of 2010 Executive Compensation."

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Outstanding Equity Awards at 2010 Fiscal Year-End

        The following table provides information on the current holdings of stock options and stock awards by the named executive officers from our Stock Incentive Plan. The market value of the stock awards is based on the closing market price of our stock on December 31, 2010, which was $15.61.

 
   
  Option Awards(1)    
   
 
 
   
  Stock Awards(2)  
 
   
  Securities Underlying
Unexercised Options
   
   
 
 
   
   
   
   
  Market Value of
Shares or Units of
Stock that have
not vested(3)
($)
 
 
   
   
   
  Shares or Units of
Stock that have
not vested
(#)
 
Name
  Date of
Award
  Exercisable
(#)
  Unexercisable
(#)
  Exercise
Price
($)
  Expiration
Date
 

Jon M. Huntsman(4)

    02/23/10                     74,074   $ 1,156,295  

Peter R. Huntsman(5)

   
02/23/10
   
0
   
150,215
 
$

13.50
   
02/23/20
   
181,481
 
$

2,832,918
 

    03/02/09     133,334     266,666   $ 2.59     03/02/19     266,666   $ 4,162,656  

    02/26/08     n/a     n/a     n/a     n/a     45,091   $ 703,871  

    02/20/07     464,785     0   $ 20.66     02/20/17     0   $ 0  

    03/01/06     374,618     0   $ 20.50     03/01/16     0   $ 0  

    02/10/05     454,950     0   $ 23.00     02/10/15     0   $ 0  

J. Kimo Esplin(6)

   
02/23/10
   
0
   
32,189
 
$

13.50
   
02/23/20
   
38,889
 
$

607,057
 

    03/02/09     142,857     285,714   $ 2.59     03/02/19     126,126   $ 1,968,827  

    02/26/08     n/a     n/a     n/a     n/a     10,736   $ 167,589  

    02/20/07     110,663     0   $ 20.66     02/20/17     0   $ 0  

    03/01/06     93,655     0   $ 20.50     03/01/16     0   $ 0  

    02/10/05     157,483     0   $ 23.00     02/10/15     0   $ 0  

Anthony P. Hankins(7)

   
02/23/10
   
0
   
32,189
 
$

13.50
   
02/23/20
   
38,889
 
$

607,057
 

    03/02/09     112,245     224,490   $ 2.59     03/02/19     99,099   $ 1,546,935  

    02/26/08     n/a     n/a     n/a     n/a     6,442   $ 100,560  

    02/20/07     66,398     0   $ 20.66     02/20/17     0   $ 0  

    03/01/06     56,193     0   $ 20.50     03/01/16     0   $ 0  

    02/10/05     157,483     0   $ 23.00     02/10/15     0   $ 0  

Daniele Ferrari(8)

   
02/23/10
   
0
   
23,605
 
$

13.50
   
02/23/20
   
28,519
 
$

445,182
 

    09/02/09     0     11,834   $ 7.72     09/02/19     12,090   $ 188,725  

    03/02/09     0     57,142   $ 2.59     03/02/19     25,225   $ 393,762  

    02/26/08     n/a     n/a     n/a     n/a     1,610   $ 25,132  

    02/20/07     27,666     0   $ 20.66     08/03/11     0   $ 0  

    03/01/06     18,731     0   $ 20.50     08/03/11     0   $ 0  

    02/10/05     24,497     0   $ 23.00     08/03/11     0   $ 0  

(1)
Option awards vest ratably in three equal annual installments and become exercisable on the anniversary of each respective grant date. Outstanding option awards granted on February 10, 2005, March 1, 2006, and February 20, 2007 are 100% vested. No option awards were granted in 2008. Outstanding option awards granted on March 2, 2009 are 662/3% vested and will vest as to 100% on March 2, 2012. Outstanding option awards granted February 23, 2010 are 331/3% vested and will vest as to 662/3% on February 23, 2012, and 100% on February 23, 2013.

(2)
Restricted stock and phantom share awards vest ratably in three equal annual installments and lapse their associated restrictions on the anniversary of each respective grant date. Restricted stock and phantom share awards have generally been granted on the same day as option awards and vest on the same schedule as footnoted for option awards above, with the exception of 2008 as only restricted stock and phantom share awards were granted and not option awards. Restricted stock and phantom share awards granted on February 26, 2008 vest 331/3% on February 26, 2009, 662/3% on February 26, 2010, and 100% on February 26, 2011. Mr. Ferrari was issued phantom shares in lieu of restricted stock and is the only named executive officer that received phantom shares. Upon vesting, phantom shares can settle in common stock, cash, or a

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(3)
The market value of unvested stock reported in this column is calculated by multiplying $15.61, the closing market price of our stock at the end of 2010, by the number of unvested restricted shares or phantom shares for each grant listed above.

(4)
Jon M. Huntsman was not awarded stock or option awards from the date of our initial public offering through the end of 2009.

(5)
On February 26, 2008, we granted Peter R. Huntsman 135,274 shares of restricted stock. On March 2, 2009, we granted Peter R. Huntsman 400,000 options at an exercise price of $2.59, and 400,000 shares of restricted stock. On February 23, 2010, we granted Peter R. Huntsman 150,215 options at an exercise price of $13.50, and 181,481 shares of restricted stock.

(6)
On February 26, 2008, we granted Mr. Esplin 32,209 shares of restricted stock. On March 2, 2009, we granted Mr. Esplin 428,571 options at an exercise price of $2.59, and 189,189 shares of restricted stock. On February 23, 2010, we granted Mr. Esplin 32,189 options at an exercise price of $13.50, and 38,889 shares of restricted stock.

(7)
On February 26, 2008, we granted Mr. Hankins 19,325 shares of restricted stock. On March 2, 2009, we granted Mr. Hankins 336,735 options at an exercise price of $2.59, and 148,649 shares of restricted stock. On February 23, 2010, we granted Mr. Hankins 32,189 options at an exercise price of $13.50, and 38,889 shares of restricted stock.

(8)
On February 26, 2008, we granted Mr. Ferrari 4,831 phantom shares. On March 2, 2009, we granted Mr. Ferrari 85,714 options at an exercise price of $2.59 and 37,838 phantom shares. On March 17, 2010, Mr. Ferrari exercised 28,572 vested options from his March 2, 2009 grant. These exercisable options were not included above as they were exercised prior to the end of the fiscal year. For further details of this exercise, please see "Option Exercises and Stock Vested During Fiscal 2010" below. On September 2, 2009, we granted Mr. Ferrari 17,751 options at an exercise price of $7.72 and 18,135 phantom shares. On December 3, 2010, Mr. Ferrari exercised 5,917 vested options from his September 2, 2009 grant. These exercisable options were not included in above as they were exercised prior to the end of the fiscal year. For further details of this exercise, please see "Option Exercises and Stock Vested During Fiscal 2010" below. On February 23, 2010, we granted Mr. Ferrari 23,605 options at an exercise price of $13.50 and 28,519 phantom shares. In connection with Mr. Ferrari's resignation effective February 3, 2011, his vested stock options may be exercised at any time during the six month period following his resignation. All stock option shares or phantom shares that were not vested on February 3, 2011 were automatically cancelled and forfeited without payment.

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Option Exercises and Stock Vested During Fiscal 2010

        The following table presents information regarding the exercise of stock options by named executive officers during 2010, and on the vesting during 2010 of other restricted stock and phantom share awards previously granted to the named executive officers.

 
  Option Awards(1)   Stock and Phantom
Share Awards(2)
 
Name
  Number of
Shares Acquired
on Exercise
(#)
  Value Realized
on Exercise
($)
  Number of
Shares Acquired
on Vesting
(#)
  Value Realized
on Vesting
($)
 

Jon M. Huntsman(3)

                 

Peter R. Huntsman

            215,717   $ 2,924,538  

J. Kimo Esplin

            82,678   $ 1,122,540  

Anthony P. Hankins

            61,318   $ 832,914  

Daniele Ferrari

    34,489   $ 358,498     22,488   $ 264,575  

(1)
The following tabular disclosure provides information regarding the value realized for options exercised.

 
   
   
   
   
  Options Exercised  
Name
  Grant
Date
  Exercise
Date
  Price on
Grant Date
  Price on
Exercise Date
  (#)   Value
Realized
 

Daniele Ferrari

    03/02/09     03/17/10   $ 2.59   $ 13.50     28,572   $ 311,586  

    09/02/09     12/03/10   $ 7.72   $ 15.65     5,917   $ 46,912  
                                   

                            34,489   $ 358,498  
(2)
All named executive officers, other than Mr. Ferrari, receive restricted stock awards. Mr. Ferrari receives phantom share awards. The following tabular disclosure provides information regarding the market value of the underlying shares on the vesting date and the number of shares that were withheld in connection with each transaction to satisfy tax obligations.

 
   
   
   
  Restricted Stock
or Phantom
Shares Vested
  Shares
Withheld for
Tax Obligation
  Net Shares Issued  
Name
  Grant
Date
  Vest
Date
  Closing Price
on Vest Date
  (#)   Value
Realized
  (#)   Value
Paid
  (#)   Market
Value
 

Peter R. Huntsman

    02/20/07     02/20/10   $ 13.16     37,292   $ 490,763     9,864   $ 129,810     27,428   $ 360,952  

    02/26/08     02/26/10   $ 13.73     45,091   $ 619,099     12,727   $ 174,742     32,364   $ 444,358  

    03/02/09     03/02/10   $ 13.61     133,334   $ 1,814,676     48,601   $ 661,460     84,733   $ 1,153,216  
                                             

                      215,717   $ 2,924,538     71,192   $ 966,012     144,525   $ 1,958,526  

J. Kimo Esplin

    02/20/07     02/20/10   $ 13.16     8,879   $ 116,848     3,070   $ 40,401     5,809   $ 76,446  

    02/26/08     02/26/10   $ 13.73     10,736   $ 147,405     3,461   $ 47,520     7,275   $ 99,886  

    03/02/09     03/02/10   $ 13.61     63,063   $ 858,287     24,963   $ 339,746     38,100   $ 518,541  
                                             

                      82,678   $ 1,122,540     31,494   $ 427,667     51,184   $ 694,873  

Anthony P. Hankins

    02/20/07     02/20/10   $ 13.16     5,327   $ 70,103     1,664   $ 21,898     3,663   $ 48,205  

    02/26/08     02/26/10   $ 13.73     6,441   $ 88,435     1,704   $ 23,396     4,737   $ 65,039  

    03/02/09     03/02/10   $ 13.61     49,550   $ 674,376     15,566   $ 211,853     33,984   $ 462,522  
                                             

                      61,318   $ 832,914     18,934   $ 257,147     42,384   $ 575,766  

Daniele Ferrari

    02/20/07     02/20/10   $ 12.20     2,220   $ 27,084     858   $ 10,468     1,362   $ 16,616  

    02/26/08     02/26/10   $ 12.51     1,610   $ 20,141     622   $ 7,781     988   $ 12,360  

    03/02/09     03/02/10   $ 12.66     12,613   $ 159,681     4,872   $ 61,680     7,741   $ 98,001  

    09/02/09     03/02/10   $ 9.54     6,045   $ 57,669     2,335   $ 22,276     3,710   $ 35,393  
                                             

                      22,488   $ 264,575     8,687   $ 102,205     13,801   $ 162,370  
(3)
Jon M. Huntsman did not participate in the Stock Incentive Plan prior to 2010 and realized no earnings from vested awards in 2010.

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Pension Benefits in Fiscal 2010

        The table below sets forth information on the pension benefits for the named executive officers under our pension plans, each of which is more fully described in the narrative following the table. There is no company-sponsored defined benefit pension plan in Italy. Mr. Ferrari, however, is a participant in the Previndai Executive Integrative Pension Fund, whereby he received a mandatory industry-wide contribution paid by the Company for 2010. The amounts reported in the table below equal the present value of the accumulated benefit at December 31, 2010 for the named executive officer, other than Mr. Ferrari, under each plan based upon the assumptions described below.

Name
  Plan Name   Years of
Credited
Service(1)
(#)
  Present Value
of Accumulated
Benefit(2)
($)
  Payments
During Last
Fiscal Year
($)
 

Jon M. Huntsman

  Huntsman Pension Plan     33.167   $ 55,995   $ 0  

  Supplemental Executive Retirement Plan         $ 411,596   $ 3,137,512  

Peter R. Huntsman

 

Huntsman Pension Plan

   
27.417
 
$

471,347
 
$

0
 

  Supplemental Executive Retirement Plan         $ 5,520,335   $ 0  

J. Kimo Esplin

 

Huntsman Pension Plan

   
16.417
 
$

282,193
 
$

0
 

  Supplemental Executive Retirement Plan         $ 830,515   $ 0  

Anthony P. Hankins

 

Huntsman Pension Scheme (U.K.)

   
31.225
 
$

3,741,073
 
$

0
 

(1)
The number of years of service credited to the named executive officer is determined using the same pension plan measurement date used for financial statement reporting purposes. These assumptions are discussed in "Note 18. Employee Benefit Plans" to our consolidated financial statement included in our Annual Report on Form 10-K for the year ended December 31, 2010.

(2)
The actuarial present value of the accumulated benefits is determined using the same assumptions as used for financial reporting purposes. These assumptions are discussed in "Note 18. Employee Benefit Plans" to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2010. For purpose of performing these calculations, a normal retirement age of 65 was utilized for Messrs. Peter R. Huntsman and Esplin, and a normal retirement age of 62 was used for Mr. Hankins. With the exception of Jon M. Huntsman, all accrued benefits are assumed payable at the plan's normal retirement age of 65 (earliest unreduced age). It is assumed that Jon M. Huntsman's benefits are payable immediately.

        In the U.S., we sponsor the Huntsman Defined Benefit Pension Plan (the "Huntsman Pension Plan"), a tax-qualified defined benefit pension plan. Effective July 1, 2004, the formula used to calculate future benefits under the Huntsman Pension Plan was changed to a cash balance formula. The benefits accrued under the plans as of June 30, 2004 were used to calculate opening cash balance accounts. Of our named executive officers, Messrs. Jon M. Huntsman, Peter R. Huntsman and Esplin were participants in the Huntsman Pension Plan in 2010.

        The Huntsman Supplemental Executive Retirement Plan (the "Supplemental Executive Retirement Plan") is a non-qualified supplemental pension plan that provides benefits for designated executive officers based on certain compensation amounts not included in the calculation of benefits payable under the Huntsman Pension Plan. Of our named executive officers, Messrs. Jon M. Huntsman, Peter R. Huntsman and Esplin were participants in the Supplemental Executive Retirement Plan in 2010. The compensation taken into account for these named executive officers under the Supplemental Executive Retirement Plan includes amounts in excess of the qualified plan limitations. The Supplemental Executive Retirement Plan benefit is calculated as the difference between (1) the benefit determined using the Huntsman Pension Plan formula with unlimited base salary plus bonus, and (2) the benefit determined using base salary plus bonus as limited by federal regulations.

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        We also sponsor retirement benefit plans in connection with our operations in the U.K. through the Huntsman Pension Scheme. Of our named executive officers, Mr. Hankins participates in the Huntsman Pension Scheme in the U.K. In Italy, certain of our employees, including Mr. Ferrari, participate in the Previndai Pension Fund as mandated by Italian law. See below in this narrative for more information regarding these pension funds.

        Of our named executive officers, Messrs. Jon M. Huntsman, Peter R. Huntsman and Esplin were participants in 2010 in the Huntsman Pension Plan and the Supplemental Executive Retirement Plan described in "Compensation Discussion and Analysis" above. The Supplemental Executive Retirement Plan provides defined benefit retirement benefits that would otherwise have been available under the Huntsman Pension Plan but for statutory limitations applicable to tax-qualified plans. Both plans express benefits as a hypothetical cash balance account established in each participant's name.

        A participant's account receives two forms of credits: "pay credits" and "interest credits." Pay credits equal a percentage of a participant's compensation and are credited to a participant's account on an annual basis. "Compensation" for this purpose includes both salary and bonus as described above under "—Summary Compensation Table." "Compensation" under the Huntsman Pension Plan is subject to the compensation limit applicable to tax-qualified plans $245,000 for 2010. The benefit that would be available under the Huntsman Pension Plan, but for this limitation, is provided under the Supplemental Executive Retirement Plan. The applicable pay credit percentage ranges between 9% and 12% depending on the participant's combined age and years of service as of the start of each plan year. The pay credits for the Huntsman Defined Benefit Pension Plan are $29,400 for Jon M. Huntsman, $25,725 for Peter R. Huntsman, and $22,050 for Mr. Esplin. The pay credits for the Supplemental Executive Retirement Plan are $330,600, $600,548, and $120,980 for Messrs. Jon M. Huntsman, Peter R. Huntsman and Esplin, respectively.

        "Interest credits" for a plan year are based on the 30-year U.S. Treasury yield for November of the prior year. The minimum annual interest credit rate is 5.0%. The interest credits for the Huntsman Defined Benefit Pension Plan are $1,470 for Jon M. Huntsman, and $22,212, and $12,971 for Messrs Peter R. Huntsman, and Esplin, respectively. The interest credits for the Supplemental Executive Retirement Plan are $4,580, $245,891, and $37,061 for Messrs. Jon M. Huntsman, Peter R. Huntsman and Esplin respectively

        Pursuant to the terms of the Huntsman Pension Plan, at termination of employment for any reason after having completed at least three years of service, a participant will receive the amount then credited to the participant's cash balance account in an actuarially equivalent joint and survivor annuity (if married) or single life annuity (if not married). Participants may also choose from other optional forms of benefit, including a lump-sum payment in the amount of the cash balance account. For participants in the prior Supplemental Executive Retirement Plan (including named executive officers Peter R. Huntsman and Mr. Esplin), the Huntsman Pension Plan also includes a minimum benefit that guarantees that a participant's benefit will not be less than the benefit accrued under the prior formula at transition (July 1, 2004) plus the benefit attributable to pay credits, with interest credits, beginning July 1, 2004. Under the prior plan provisions, the monthly basic benefit equaled one-twelfth of 1.4% of average earnings multiplied by pension service prior to January 1, 2000, plus 1.5% of average earnings multiplied by pension service after January 1, 2000, less 50% of the Social Security benefit prorated by pension service, payable as a life annuity to the participant. The prior Supplemental Executive Retirement Plan mirrored the benefit from the Huntsman Defined Benefit Pension Plan. For participants taking an annuity, early retirement reductions apply if retirement occurs before normal retirement age (defined as age 65 with 5 years of service) and on or after the earlier of (1) both attaining age 50 and age plus vesting service equal to 80 or more, or (2) age 55 with 10 years of vesting service. The effect of these reductions is to reduce the annuity amount paid by 5% per year for each year beginning at age 59 until age 50 where the amount paid would be 50%.

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        Vested benefits under the Supplemental Executive Retirement Plan are paid 30 days following a participant's separation from service, unless the participant is a "specified employee" for purposes of Section 409A of the Internal Revenue Code ("Section 409A"), in which case payment will be delayed for six months. Vested benefits are paid in a single cash lump sum unless the participant elects: (1) a life annuity, (2) a life annuity with payments guaranteed for 120 months, or (3) a joint and survivor annuity providing survivor benefits equal to 50 or 100 percent (as elected by the participant) of the annuity payable to the participant. Benefits are unvested until the earlier to occur of: (1) completion of ten years of service, (2) termination on account of death, "Disability," on or after attainment of "Normal Retirement Age," or (3) termination without "Reasonable Cause." Each named executive officer is fully vested in his benefit under the Supplemental Executive Retirement Plan. Jon M. Huntsman is currently receiving distributions from his Supplemental Executive Retirement account in connection with his prior retirement from the Company in 2001. Jon M. Huntsman continued to serve as Chairman of the Board of Directors from that time until 2009, when we entered into a new employment arrangement with him whereby he serves as our Executive Chairman.

        "Disability" under the Huntsman Pension Plan provides that for a disabled participant, service and benefit accruals continue for 24 months. After 24 months, disabled participants are deemed to be terminated participants. Disability is defined as total and permanent disability, as determined by the administrator of the Company's long-term disability plan.

        "Normal Retirement Age" is retirement eligibility upon age 65 with 5 years of service under the Huntsman Pension Plan and Supplemental Executive Retirement Plan.

        "Reasonable Cause" means: (1) the grossly negligent, fraudulent, dishonest or willful violation of any law or the material violation of any of our significant policies that materially and adversely affects us, or (2) the failure of the participant to substantially perform his duties.

        Mr. Hankins participates in the Huntsman Pension Scheme in the U.K. The Huntsman Pension Scheme, which is available to all employees in the U.K., provides standard benefits equal to 2.2% (1/45th) of final pensionable compensation up to $22,084 (£11,250), plus 1.83% of final pensionable compensation above $22,084 (£11,250), minus 1/50th of the current State pension benefit, times actual years of service; subject to a maximum limit of 2/3rd of final pensionable compensation times actual years of service, divided by total possible service to retirement. Final pensionable compensation is gross salary received during the 12 months prior to retirement less any profit sharing payments. Normal retirement age for the Huntsman Pension Scheme in the U.K. is age 62 and participants retiring as early as age 50 may receive a reduced pension amount between 37% at age 50 and 66.7% at age 61, which is increased by 2.5% per year until the participant reaches 62. These benefits also include U.K. social security benefits. As of December 31, 2010, Mr. Hankins had approximately 31 years of service in the U.K., and is fully vested in these benefits.

        Mr. Ferrari participates in the Previndai Pension Fund, whereby he receives an annual, mandatory industry-wide contribution paid by the Company equal to 4% of his pensionable pay up to €150,000. In 2010, we made a mandatory contribution of $8,117 (€6,000) to the Previndai Pension Fund. Participants in the Previndai Pension Fund are able to select investment choices among a variety of market-based investment options. The Company does not receive reports and is not aware of the current accumulated value of the amount held in Mr. Ferrari's Previndai Pension Fund account. Mr. Ferrari's compensation values are based on an exchange rate of 1 EUR to 1.3528 USD, being the exchange rate as of March 19, 2010 (which is the internal date used to estimate pro forma elements of compensation). We also contribute supplemental amounts at our discretion to the Previndai Pension Fund on Mr. Ferrari's behalf as further detailed in "Nonqualified Deferred Compensation in Fiscal 2010" below.

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Nonqualified Deferred Compensation in Fiscal 2010

        The table below provides information on the non-qualified deferred compensation of the named executive officers in 2010 under the Supplemental Savings Plan and the SEMPP. All of our named executive officers participate in these plans with the exception of Jon M. Huntsman who is not eligible for the SEMPP and does not participate in the Supplemental Savings Plan and Mr. Ferrari who is not eligible to participate in either plan. As discussed below, Mr. Ferrari is a participant in the Previndai Pension Fund, whereby he receives a mandatory pension contribution together with a supplemental contribution at the Company's discretion. The named executive officers cannot withdraw any amounts from their deferred compensation balances for a period of six months following the date of their termination of employment or retirement. No withdrawals or distributions were made in 2010.

Name
  Executive
Contributions(1)
  Huntsman
Contributions(2)
  Aggregate
Earnings(3)
  Aggregate
Withdrawals/
Distributions
  Aggregate
Balance
at Last FYE(4)
 

Jon M. Huntsman

  $ 0   $ 0   $ 0   $ 0   $ 0  

Peter R. Huntsman

  $ 0   $ 460,910 (5) $ 26,920   $ 0   $ 2,039,173 (6)

J. Kimo Esplin

  $ 167,815   $ 117,640 (7) $ 49,923   $ 0   $ 1,969,134 (8)

Anthony P Hankins

  $ 16,050   $ 111,343 (9) $ 28,933   $ 0   $ 1,251,870 (10)

(1)
These contributions represent deferrals under the Supplemental Savings Plan and are included in the Salary column of the Summary Compensation Table for 2010 set forth above.

(2)
These amounts represent contributions to our Supplemental Savings Plan and the SEMPP and are included in the All Other Compensation column of the Summary Compensation Table for 2010 set forth above.

(3)
No above market or preferential earnings are provided under our non-qualified defined contribution plans because the investment choices available under such plans are identical to the investment choices available in the 401(k) Plan and the MPP, which are our qualified plans. Consequently, none of the earnings reported in this table are included in the Summary Compensation Table set forth above.

(4)
Amounts reflected in this column for Messrs. Esplin and Mr. Hankins were previously reported as compensation to the executive officer in the Summary Compensation Table as follows: Mr. Esplin, $73,425 in 2009 and $96,960 in 2008; and Mr. Hankins, $10,438 in 2009 and $51,688 in 2008.

(5)
This amount includes a contribution of $3,350 to the Supplemental Savings Plan and a contribution of $457,560 to the SEMPP.

(6)
This amount includes $47,854 from our Supplemental Savings Plan and $1,991,319 from our SEMPP.

(7)
This amount includes a contribution of $23,528 to the Supplemental Savings Plan and a contribution of $94,112 to the SEMPP.

(8)
This amount includes $1,513,064 from our Supplemental Savings Plan and $456,070 from our SEMPP.

(9)
This amount includes a contribution of $11,375 to the Supplemental Savings Plan and a contribution of $99,968 to the SEMPP.

(10)
This amount includes $991,899 from our Supplemental Savings Plan and $259,971 from our SEMPP.

        We provide executive officers the opportunity to participate in up to four defined contribution savings plans: a salary deferral plan (the "401(k) Plan"); a supplemental savings plan (the

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"Supplemental Savings Plan"); a money purchase pension plan (the "MPP"); and a supplemental executive money purchase pension plan (the "SEMPP"). With the exception of Jon M. Huntsman and Mr. Ferrari, our named executive officers are participants in each of these savings plans. Jon M. Huntsman is not eligible for the MPP or the SEMPP and does not participate in the 401(k) Plan or the Supplemental Savings Plan; Mr. Ferrari is not currently eligible to participate in any of these plans. The 401(k) Plan is a tax-qualified broad-based employee savings plan; employee contributions up to 25% of base salary and annual incentive bonuses are permitted up to dollar limits established annually by the Internal Revenue Service.

        The Supplemental Savings Plan is a non-qualified plan and allows designated executive officers to defer up to 75% of eligible salary and up to 75% of annual incentive award bonuses. The Supplemental Savings Plan also provides benefits for participants in the form of Company matching contributions based on certain compensation amounts not included in the calculation of benefits payable under the 401(k) Plan because of limits under federal law on compensation that can be counted and amounts that can be allocated to accounts within the 401(k) Plan. As required by Section 409A, deferrals must be elected in the calendar year preceding the year in which the compensation deferred is earned.

        The MPP is a tax-qualified broad-based employee savings plan. Our contributions vary by service: 0.5% of compensation for 3 to 6 years of service, 3% of compensation for 7 to 9 years of service and 8% of compensation for 10+ years of service, subject to IRS limits. Employees can direct the investments for their accounts. The MPP has been closed to new participants since January 2004. The Company continues to make annual contributions to existing MPP participants.

        The SEMPP is a non-qualified plan for senior executives that provides for benefits not allowed under the MPP due to IRS compensation and allocation limits. Employees are vested in this account upon meeting 10 years of service, upon attaining normal retirement age, death or disability, or upon termination of employment without reasonable cause. The SEMPP permits distributions following termination of employment as a lump sum, life annuity, joint & survivor annuity or monthly installments over a period not more than 10 years.

        The Supplemental Savings Plan provides for payment of benefits to a participant upon the earlier to occur of a "Change of Control" or a termination of the participant's service. Benefits paid upon a "Change of Control" are always paid in a single lump sum payment. Benefits payable upon a separation from service can be made (at the election of the participant) in either a single lump sum payment or in substantially equal installments over a period selected by the participant that does not exceed ten years. In addition, the participant may request distribution of all or portion of the amounts credited to his account upon an "Unforeseeable Emergency." Payments upon separation from service will be delayed six months in accordance with Section 409A in the event a participant is a "specified employee" for purposes of Section 409A.

        The Supplemental Savings Plan defines a "Change of Control" as the occurrence of either of the following events:

        In addition, any "Change of Control" must also constitute a change in control for purposes of Section 409A.

        A participant will be deemed to have incurred an "Unforeseeable Emergency" if he suffers a severe financial hardship resulting from (1) an illness or accident with respect to him, his spouse or a

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dependent, (2) the loss of property due to casualty or (3) other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the participant's control determined by us to constitute an unforeseeable emergency for purposes of Section 409A.

        The SEMPP provides for benefits that would not otherwise be available under our MPP due to statutory limitations imposed on tax-qualified retirement plans. The plan provides for the payment of vested benefits upon a participant's separation from service except to the extent the participant is a "specified employee" for purposes of Section 409A in which case benefits will be delayed six months. A participant's benefits vest on the earlier to occur of (1) completion of ten years of service, (2) termination on account of death, "Disability," or on or after attainment of "Normal Retirement Age," or (3) termination without "Reasonable Cause." "Disability," "Normal Retirement Age," and "Reasonable Cause" have the same meanings as set forth above in our description of the Supplemental Executive Retirement Plan under "—Pension Benefits in Fiscal 2010." Each named executive officer is currently vested in his SEMPP benefit.

        Benefits are payable in one of the following forms elected by a participant:

        Participants are entitled to elect the investment of their accounts under both the Supplemental Savings Plan and the SEMPP. Although no assets may actually be invested, a participant's benefit value is based on the gains or losses of the investments they choose. No above market or preferential earnings are provided under our non-qualified defined contributions plans because the investment choices available under the plans are identical to the investment choices available in the 401(k) Plan and the MPP. Consequently none of the earnings reported under "—Nonqualified Deferred Compensation in Fiscal 2010" are included in the Summary Compensation Table set forth above. Participants may change their investment options at any time by submitting a change form to the plan administrator.

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        The table below lists the investment funds available to participants in the 401(k) Plan, the Supplemental Savings Plan, the MPP and SEMPP. The table also provides the rate of return for each fund for 2010. All funds and rates of return are the same for all four defined contribution plans.

Investment Funds
  Ticker
Symbol
  2010
Performance
 

American Beacon Large Cap Value Institutional

  AADEX     14.6 %

American Beacon Small Cap Value Institutional

  AVFIX     26.2 %

American Century Inflation Adjusted Bond Institutional

  AIANX     5.7 %

American Century Real Estate Institutional

  REAIX     29.1 %

American Funds Growth Fund of America R5

  RGAFX     12.6 %

Dimensional Emerging Markets Value Portfolio

  DFEVX     22.1 %

Fidelity Freedom Fund Income

  FFFAX     7.6 %

Fidelity Freedom Fund 2010

  FFFCX     11.7 %

Fidelity Freedom Fund 2020

  FFFDX     12.9 %

Fidelity Freedom Fund 2030

  FFFEX     14.0 %

Fidelity Freedom Fund 2040

  FFFFX     14.6 %

Fidelity Freedom Fund 2050

  FFFHX     14.9 %

Fidelity International Discovery

  FIGRX     11.0 %

Fidelity Low Priced Stock

  FLPSX     20.7 %

First Eagle Overseas Class A

  SGOVX     19.2 %

Hartford Capital Appreciation Fund Class Y

  HCAYX     13.4 %

Morgan Stanly Institutional Fund Trust Mid Cap Growth P

  MACGX     32.7 %

PIMCO Commodity Real Return Strategy Institutional

  PCRIX     24.1 %

PIMCO Developing Local Markets Institutional

  PLMIX     7.9 %

PIMCO Total Return Institutional

  PTTRX     8.8 %

Royce Value Plus Service

  RYVPX     19.7 %

Vanguard Institutional Index Institutional

  VINIX     15.1 %

Vanguard Retirement Savings Trust II

  N/A     3.1 %

Vanguard Select Value

  VASVX     19.4 %

        Mr. Ferrari is a participant in the Previndai Pension Fund, whereby he receives an annual mandatory pension contribution together with annual supplemental contributions at the Company's discretion. The annual supplemental contribution is equal to 4% of Mr. Ferrari's 2010 pensionable pay. In addition to the mandatory contribution made on Mr. Ferrari's behalf discussed above in "Pension Benefits in Fiscal 2010," we contributed a supplemental amount of $40,407 (€29,869) to the Previndai Pension Fund. Participants in the Previndai Pension Fund are able to select investment choices among a variety of market-based investment options. No above market or preferential earnings are provided under the Previndai Pension Fund. The Company does not receive reports and is not aware of the aggregate value, including earnings, held in Mr. Ferrari's Previndai Pension Fund account. Mr. Ferrari's compensation values are based on an exchange rate of 1 EUR to 1.3528 USD, being the exchange rate as of March 19, 2010 (which is the internal date used to estimate pro forma elements of compensation). See "Pension Benefits in Fiscal 2010" above for more information regarding mandatory contributions made on behalf of Mr. Ferrari.

Potential Payments upon Termination or Change of Control

        As described above under "Compensation Discussion and Analysis," other than a letter agreement with Mr. Hankins, we do not maintain employment agreements with our named executive officers; the executives instead will be entitled to potential severance benefits under our Executive Severance Plan.

        The tables below quantify the benefits available under these arrangements (assuming that the vesting of outstanding equity awards held by our named executive officers is accelerated by our

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Compensation Committee, which is permitted at its sole discretion). Pursuant to our Executive Severance Plan, each of our named executive officers, other than Mr. Hankins and Mr. Ferrari, will be entitled to receive a single lump sum severance payment in an amount equal to two times his or her annual base salary in the event of a termination without "Reasonable Cause" or upon a termination by the executive for "Good Reason." The cash payment will be paid to the executive within the 60 days following an applicable termination of employment. In addition to cash payments, the Executive Severance Plan also provides the continuation of medical benefits for two years following termination, and outplacement services for a period of one year. Mr. Hankins is a citizen of the U.K. and, as such, he is entitled to 12 months notice and 175% of his annual base pay upon termination as is the case with all U.K. associates in our polyurethanes business. Accordingly, his potential severance payment is 33 times base monthly salary upon termination.

        Under the terms of the Huntsman Executive Severance Plan, the Chief Executive Officer and the other named executive officers are entitled to payments and benefits upon the occurrence of specified events including termination of employment (with and without cause) and upon a change-in-control of our Company.

        Under the Executive Severance Plan, if a participant's employment is terminated without reasonable cause or the participant terminates employment for good reason, we will provide the participant with severance benefits in the form of a cash payment, healthcare in the form of a cash payment and outplacement services. The receipt of these benefits will be conditioned, however, upon the participant's reemployment with an employer in our controlled group within the thirty day period immediately following the participant's termination of employment, upon the participant's refusal to sign a waiver and release of claims in our favor if we request such a waiver and release, or the participant is entitled to severance benefits under a separate agreement or plan maintained by us.

        The Executive Severance Plan utilizes the same definition of "Reasonable Cause" as set forth above with respect to our Supplemental Executive Retirement Plan. A termination for "Good Reason" pursuant to the Executive Severance Plan will be deemed to occur upon voluntary termination of employment as a result of the significant detrimental reduction or change to the executive's job responsibilities or in his current base compensation, which we do not remedy within a ten day period following the executive's written notice to us regarding the reduction or change, or change in the executive's principal place of work by more than fifty miles from his or her principal place of work in effect immediately prior to such change, which is not remedied by the Company within thirty days of written notice by the executive of the reduction or change. While "disability" and "retirement" are not defined terms under the Executive Severance Plan, as part of its administrative functions as the administrator of the plan, our Compensation Committee has the authority to determine the existence or either of these scenarios for the executives.

        The amount of the cash payment under the Executive Severance Plan for each of our named executive officers will be equal to two times his base compensation at termination. Healthcare coverage continuation is addressed through a lump-sum payment intended to address the departing executive's monthly healthcare premiums for a period equivalent to 24 months. Outplacement services will be provided for a period of 12 months following termination.

        Equity awards granted under our Stock Incentive Plan provide for accelerated vesting upon a Change of Control at the discretion of our Compensation Committee. A "Change of Control" under the Stock Incentive Plan means the occurrence of any of the following:

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        If there is a change of control, the Compensation Committee may, in its discretion, provide for:

        Any such provision made by the Compensation Committee could benefit all participants in the Stock Incentive Plan, including the named executive officers.

        Pursuant to our Supplemental Savings Plan, upon a change in control (as defined in the Supplemental Savings Plan), participants, including the named executive officers, may elect to receive the present value of the benefits payable to them under this plan.

        Historically, based on information provided by our compensation consultant, we determined that it was necessary to provide executives with two times base yearly compensation as severance in order to attract and retain executive talent necessary for our business, as similar or greater amounts of severance were provided to executives employed by our competitors. For 2010, the Compensation Committee kept severance at this same level, as information provided by the compensation consultant indicated that this level of severance is consistent with our objective of providing compensation within range of the median paid to similarly situated executives at comparable companies within our peer group and with other chemical and general industrial companies.

        As described in "Compensation Discussion and Analysis—Annual Review of Executive Compensation," information regarding potential payments to be made under termination scenarios was included in the tally sheets provided to the Compensation Committee. While this information was available to the Compensation Committee when it reviewed other components of compensation for 2010, it did not have a material effect on decisions regarding these other compensation components.

        The tables below reflect the compensation payable to or on behalf of each named executive officer upon retirement, disability, death, an involuntary termination without cause, or a change of control. The amounts shown assume that such termination or change of control was effective as of December 31, 2010, and thus includes amounts earned through such time. All equity acceleration values have been calculated using the closing price of our stock on December 31, 2010 of $15.61. The actual amounts we will be required to disburse can only be determined at the time of the applicable circumstance. Amounts payable under the Supplemental Savings Plan and SEMPP are described under "—Nonqualified Deferred Compensation in Fiscal 2010" above. Please note that while a termination of employment would accelerate the time in which an executive's pension plan account could be distributed to him and is thus noted below, amounts in this column will only be paid once, despite

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being listed both below and under "—Pension Benefits in Fiscal 2010" above. Our Compensation Committee has the authority to require an executive to sign and not revoke a general waiver and release in our favor prior to receiving benefits under the Executive Severance Plan, thus in some cases the amounts below may be subject to the execution of such an agreement.

 
  Retirement   Disability   Death   Involuntary
Termination
without Cause
  Change of
Control
 

Compensation

                               
 

Cash Severance(1)

  $ 0   $ 0   $ 0   $ 2,400,000   $ 0  
 

Stock and Options (unvested & accelerated)(2)

  $ 0   $ 0   $ 0   $ 0   $ 1,156,295  

Benefit Plans

                               
 

Huntsman Pension Plan(3)

  $ 60,270   $ 60,270   $ 60,270   $ 60,270   $ 0  
 

Supplemental Executive Retirement Plan(3)

  $ 426,780   $ 426,780   $ 426,780   $ 426,780   $ 0  
 

Health & Welfare(4)

  $ 0   $ 0   $ 0   $ 19,816   $ 0  
 

Outplacement Services(5)

  $ 0   $ 0   $ 0   $ 9,000   $ 0  

(1)
This amount is equal to twice Mr. Huntsman's annual salary as set forth in our Executive Severance Plan. This amount is not payable if his employment is terminated in connection with his retirement, a disability, or for cause.

(2)
Any acceleration of vesting of an equity-based award requires the approval of the Compensation Committee, which we assume for purposes of this table would have occurred on December 31, 2010. An acceleration of Mr. Huntsman's unvested shares of restricted stock would have an estimated value of $1,156,295. Mr. Huntsman had no option-based awards as of December 31, 2010.

(3)
These benefits are more fully described under "—Pension Benefits in Fiscal 2010" above. Amounts may be payable as a lump sum cash payment or various periodic annuity payments, at the participant's election, but for purposes of calculating amounts for this table we have assumed a lump sum payment was chosen.

(4)
Calculated by multiplying 150% of the employer and employee premiums payable with respect to healthcare continuation pursuant to the coverage elected by the executive as of December 31, 2010 by 24. We assumed a monthly premium 50% larger than current premiums to reflect annual increases in premium costs in order to ensure that the amounts reported above include the total amount for which we are potentially responsible to provide such coverage. If Mr. Huntsman's employment is terminated in connection with his retirement, a disability, or for cause, we are not required to provide the subsidy noted.

(5)
We contract with a third-party provider for 12 months of outplacement services. To the extent Mr. Huntsman might utilize these services, we expect the Company cost would be approximately $9,000.

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  Retirement   Disability   Death   Involuntary
Termination
without Cause
  Change of
Control
 

Compensation

                               
 

Cash Severance(1)

  $ 0   $ 0   $ 0   $ 3,000,000   $ 0  
 

Stock and Options (unvested & accelerated)(2)

  $ 0   $ 0   $ 0   $ 0   $ 11,896,975  

Benefit Plans

                               
 

Huntsman Pension Plan(3)

  $ 492,174   $ 492,174   $ 492,174   $ 492,174   $ 0  
 

Supplemental Executive Retirement Plan(3)

  $ 5,764,262   $ 5,764,262   $ 5,764,262   $ 5,764,262   $ 0  
 

Health & Welfare(4)

  $ 0   $ 0   $ 0   $ 19,816   $ 0  
 

Outplacement Services(5)

  $ 0   $ 0   $ 0   $ 9,000   $ 0  

(1)
This amount is equal to twice Mr. Huntsman's annual salary as set forth in our Executive Severance Plan. This amount is not payable if his employment is terminated in connection with his retirement, a disability, or for cause.

(2)
Any acceleration of vesting of an equity-based award requires the approval of the Compensation Committee, which we assume for purposes of this table would have occurred on December 31, 2010. An acceleration of Mr. Huntsman's unvested shares of restricted stock would have an estimated value of $7,699,445, and an acceleration of Mr. Huntsman's unvested options would have an estimated value of $4,197,530.

(3)
These benefits are more fully described under "—Pension Benefits in Fiscal 2010" above. Amounts may be payable as a lump sum cash payment or various periodic annuity payments, at the participant's election, but for purposes of calculating amounts for this table we have assumed a lump sum payment was chosen.

(4)
Calculated by multiplying 150% of the employer and employee premiums payable with respect to healthcare continuation pursuant to the coverage elected by the executive as of December 31, 2010 by 24. We assumed a monthly premium 50% larger than current premiums to reflect annual increases in premium costs in order to ensure that the amounts reported above include the total amount for which we are potentially responsible to provide such coverage. If Mr. Huntsman's employment is terminated in connection with his retirement, a disability, or for cause, we are not required to provide the subsidy noted.

(5)
We contract with a third-party provider for 12 months of outplacement services. To the extent Mr. Huntsman might utilize these services, we expect the Company cost would be $9,000.

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  Retirement   Disability   Death   Involuntary
Termination
without Cause
  Change of
Control
 

Compensation

                               
 

Cash Severance(1)

  $ 0   $ 0   $ 0   $ 1,008,400   $ 0  
 

Stock and Options (unvested & accelerated)(2)

  $ 0   $ 0   $ 0   $ 0   $ 6,618,942  

Benefit Plans

                               
 

Huntsman Pension Plan(3)

  $ 294,431   $ 294,431   $ 294,431   $ 294,431   $ 0  
 

Supplemental Executive Retirement Plan(3)

  $ 899,265   $ 899,265   $ 899,265   $ 899,265   $ 0  
 

Health & Welfare(4)

  $ 0   $ 0   $ 0   $ 17,125   $ 0  
 

Outplacement Services(5)

  $ 0   $ 0   $ 0   $ 9,000   $ 0  

(1)
This amount is equal to twice Mr. Esplin's annual salary as set forth in our Executive Severance Plan. This amount is not payable if his employment is terminated in connection with his retirement, a disability, or for cause.

(2)
Any acceleration of vesting of an equity-based award requires the approval of the Compensation Committee, which we assume for purposes of this table would have occurred on December 31, 2010. An acceleration of Mr. Esplin's unvested shares of restricted stock would have an estimated value of $2,743,473, and an acceleration of Mr. Esplin's unvested options would have an estimated value of $3,875,469.

(3)
These benefits are more fully described under "—Pension Benefits in Fiscal 2010" above. Amounts may be payable as a lump sum cash payment or various periodic annuity payments, at the participant's election, but for purposes of calculating amounts for this table we have assumed a lump sum payment was chosen.

(4)
Calculated by multiplying 150% of the employer and employee premiums payable with respect to healthcare continuation pursuant to the coverage elected by the executive as of December 31, 2010 by 24. We assumed a monthly premium 50% larger than current premiums to reflect annual increases in premium costs in order to ensure that the amounts reported above include the total amount for which we are potentially responsible to provide such coverage. If Mr. Esplin's employment is terminated in connection with his retirement, a disability, or for cause, we are not required to provide the subsidy noted.

(5)
We contract with a third-party provider for 12 months of outplacement services. To the extent Mr. Esplin might utilize these services, we expect the Company cost would be $9,000.

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  Retirement   Disability   Death   Involuntary
Termination
without Cause
  Change of
Control
 

Compensation

                               
 

Cash Severance(1)

  $ 0   $ 0   $ 0   $ 1,479,845   $ 0  
 

Stock and Options (unvested & accelerated)(2)

  $ 0   $ 0   $ 0   $ 0   $ 5,332,885  

Benefit Plans

                               
 

Huntsman Pension Scheme in the U.K.(3)

  $ 287,000   $ 358,750   $ 260,094   $ 287,000   $ 0  
 

Outplacement Services(4)

  $ 0   $ 0   $ 0   $ 9,000   $ 0  

(1)
This amount is based on a total of 33 months (21 months plus 12 months notice) of Mr. Hankins' year-end base pensionable pay and applies a GBP to USD exchange rate of 1.5016. This amount is not payable if his employment is terminated in connection with his retirement, a disability, or for cause.

(2)
Any acceleration of vesting of an equity-based award requires the approval of the Compensation Committee, which we assume for purposes of this table would have occurred on December 31, 2010. An acceleration of Mr. Hankins' unvested shares of restricted stock would have an estimated value of $2,254,552, and an acceleration of Mr. Hankins' unvested options would have an estimated value of $3,078,333.

(3)
The retirement amount represents the accrued retirement benefit at normal retirement (age 62) in the form of an annual annuity. The earliest this benefit can be realized is age 53 at which time it would be actuarially reduced to $175,070.

(4)
We contract with a third-party provider for 12 months of outplacement services. To the extent Mr. Hankins might utilize these services, we expect the Company cost would be $9,000.

        We did not pay Mr. Ferrari any severance payments or any other payments in connection with his resignation, effective February 3, 2011. Upon termination of employment for any reason, employees in Italy are entitled to receive a termination indemnity ("Trattamento di fine Rapporto" or "TFR"). The TFR is an employer-only payment accrued annually and calculated as a percentage of base pay, bonus and equity earnings. Prior to January 1, 2007, we retained the TFR amount and recorded the TFR accrual in addition to an annual revaluation amount to an unfunded notional account (the "prior TFR"). For payments from January 1, 2007 forward, the annual TFR accrual was transferred to the Previndai Pension Fund (the "Previndai TFR"). Upon his resignation, we distributed $88,705 of accrued amounts from the prior TFR to Mr. Ferrari. Since January 1, 2007 we have transferred an aggregate of $282,480 to the Previndai TFR. At the employee's election, this amount may be distributed to the employee or maintained in a TFR account. Following transfer to the Previndai TFR, we do not receive statements of earnings or other information about amounts held and we do not know whether Mr. Ferrari elected to receive the amount held in the Previndai TFR. Mr. Ferrari's compensation values are based on an exchange rate of 1 EUR to 1.3528 USD, being the exchange rate as of March 19, 2010.

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DIRECTOR COMPENSATION

        The following discussion of director compensation relates to our parent, Huntsman Corporation. However, because all of Huntsman Corporation's operations are conducted by our Company and our subsidiaries, we believe this discussion is material to an understanding of our Company and our subsidiaries. The managers of Huntsman International do not receive any compensation for services rendered in such capacities in addition to compensation provided by our parent. Unless the context otherwise requires, references in this director compensation discussion to "we," "us," "our," or "our Company" refer to Huntsman Corporation, together with its subsidiaries.

        Annual compensation for our non-employee directors is comprised of cash and stock-based equity compensation. Cash compensation paid to our non-employee directors consists of an annual retainer and supplemental retainers for the chairs and members of Board committees. Stock-based equity compensation for fiscal 2010 consisted of awards granted under our Stock Incentive Plan of stock or stock units at the election of each director. Jon M. Huntsman, the Executive Chairman of the Board, and Peter R. Huntsman, our President and Chief Executive Officer, serve as directors of the Company but are not included in this table since they were also employees of the Company during 2010. Messrs. Jon M. Huntsman and Peter R. Huntsman do not receive any additional compensation for their services as directors of our Company; thus, their total compensation is shown in the Summary Compensation Table.

        The Board believes that compensation for non-employee directors should be competitive and should fairly compensate directors for the time and skills devoted to serving our Company but, for independent directors, should not be so great as to compromise independence. With the assistance of outside compensation consultants, the Compensation Committee periodically reviews our director compensation practices and compares them against the practices of companies in our compensation peer group as well as against the practices of public company boards generally.

        Non-employee directors receive an annualized cash retainer of $120,000 paid in quarterly installments and an annual stock-based award with a value of approximately $120,000 on the grant date. In addition, each member of the Audit Committee receives an additional annual cash retainer of $20,000 and each member of the Compensation, Governance and Litigation committees received an additional annual cash retainer of $10,000. The Lead Independent Director receives an additional annual cash retainer of $50,000. The chairperson of the Audit Committee receives an annual cash retainer of $30,000, and the chairpersons of the Compensation, Governance, and Litigation committees each receive annual cash retainers of $20,000, in each case, in addition to the retainers received for being members of these committees. Directors receive pro rata amounts of the above fees for partial year service.

        Beginning in 2009, annual stock-based awards to our non-employee directors were vested in full on the grant date, while in prior years annual stock-based awards vested in three equal annual installments beginning on the first anniversary of the grant date.

        On September 21, 2010, an ad hoc committee (the "Ad Hoc Committee") of the Board recommended to the Board, and the Board approved, payment of compensation amounts described below (the "Director Awards") to Messrs. Shoemaker, Archibald, Lichtenberger, Reaud and Michaelson and Ms. Evans, each of whom served on the Transaction Committee. The Ad Hoc Committee consisted of Mr. Burns and Dr. Harker, each an independent director who did not serve on the Transaction Committee.

        The Director Awards were recommended and approved to compensate members of the Transaction Committee for their extraordinary time commitments to further the efforts of the Company's litigation matter with Hexion and Apollo Global Management, LLC ("Apollo"), following Hexion's notice on June 18, 2008 that it would not consummate the contemplated merger with the

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Company. The resulting settlement with Hexion and Apollo avoided further prolonged and costly litigation, resulted in extraordinarily favorable terms for the Company and contributed significantly to the improvement of the Company's financial outlook.

        The Director Awards consisted of a cash award of $250,000 and a grant of restricted stock or restricted stock units, at the director's election, with a value of approximately $250,000 on the grant date to each member of the Transaction Committee other than (i) Mr. Shoemaker, whose Director Award consisted of a cash award of $450,000 and restricted stock units with a value of approximately $450,000 on the grant date, for his service as Chairman of the Transaction Committee, and (ii) Mr. Michaelson, who was granted fully vested common stock instead of restricted stock as he ceased his service on the Board in May 2010. The stock-based awards granted to sitting directors vest in three equal annual installments beginning September 21, 2011, provided that, in the event any member of the Transaction Committee is no longer serving on the Board before the award is fully vested, and such director was not removed for cause, the vesting of such director's award will accelerate and become fully vested on the date of such director's departure from the Board.

        We also offer non-employee directors the opportunity to participate in the Huntsman Outside Directors Elective Deferral Plan. This is an unfunded nonqualified plan established primarily for the purpose of providing our independent directors with the ability to defer the receipt of director fees. Benefits under the plan are payable in cash distributable either in a lump sum or in installments beginning 30 days after the director ceases to be a member of our Board.

        All of our directors are reimbursed for reasonable out-of-pocket expenses incurred for attending meetings of the Board or its committees and for other reasonable expenses related to the performance of their duties as directors.

        The Board believes that our total director compensation package is competitive with the compensation offered by other companies and is fair and appropriate in light of the responsibilities and obligations of our independent directors.

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        The total 2010 compensation for our non-employee directors is shown in the following table:


Director Compensation Table

Name
  Fees Earned or
Paid in Cash
($)(1)
  Stock
Awards
($)(2)
  All Other
Compensation
($)(3)
  Total
($)
 

Nolan D. Archibald(4)

  $ 400,000   $ 370,000   $ 0   $ 770,000  

M. Anthony Burns(5)

  $ 127,500   $ 90,000   $ 0   $ 217,500  

Marsha Evans(6)

  $ 380,000   $ 370,000   $ 0   $ 750,000  

Patrick T. Harker(7)

  $ 97,500   $ 90,000   $ 0   $ 187,500  

H. William Lichtenberger(8)

  $ 470,000   $ 370,000   $ 0   $ 840,000  

Robert J. Margetts(3)

  $ 60,000   $ 60,000   $ 15,400   $ 135,400  

Richard A. Michaelson(9)

  $ 310,000   $ 370,000   $ 0   $ 680,000  

Wayne A. Reaud(10)

  $ 410,000   $ 370,000   $ 0   $ 780,000  

Alvin V. Shoemaker(11)

  $ 600,000   $ 570,000   $ 0   $ 1,170,000  

(1)
This column includes the following annual retainer and committee membership and chairmanship fees:

 
Director
  Annual
Retainer
  Audit
Committee
  Compensation
Committee
  Nominating
and Corporate
Governance
Committee
  Litigation
Committee
  Lead
Independent
Director
  Transaction
Committee
 
 

Nolan D. Archibald

  $ 120,000       $ 30,000 *             $ 250,000  
 

M. Anthony Burns

  $ 90,000   $ 37,500 *                    
 

Marsha Evans

  $ 120,000           $ 10,000           $ 250,000  
 

Patrick T. Harker

  $ 90,000           $ 7,500              
 

H. William Lichtenberger

  $ 120,000   $ 20,000       $ 30,000 *     $ 50,000   $ 250,000  
 

Robert J. Margetts

  $ 60,000                          
 

Richard A. Michaelson

  $ 40,000   $ 16,667 *     $ 3,333           $ 250,000  
 

Wayne A. Reaud

  $ 120,000       $ 10,000       $ 30,000 *     $ 250,000  
 

Alvin V. Shoemaker

  $ 120,000   $ 20,000   $ 10,000               $ 450,000 *
(2)
This column represents the aggregate grant date fair value of stock awards or stock unit awards granted in 2010 in accordance with FASB ASC Topic 718. See Note 23. Stock-Based Compensation to our consolidated financial statements on Form 10-K for fiscal year 2010 for additional detail regarding assumptions underlying the value of these equity awards. The stock awards granted on February 23, 2010, May 19, 2010, and August 9, 2010 were fully vested on the day of grant; stock and stock unit awards granted prior to 2009 and those granted on September 21, 2010 were subject to vesting ratably in three equal annual installments beginning on the first anniversary of the grant date. Stock awards granted on September 21, 2010 vest in full in the event any member of the Transaction Committee is no longer serving on the Board before the award is fully vested and such

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  Granted 02/23/10
$13.50 per share
  Granted 05/19/10
$9.53 per share
  Granted 08/09/10
$10.38 per share
  Granted 09/21/10
$10.69 per share
  Aggregate 2010
Grants
 
 
Director
  (#)   ($)   (#)   ($)   (#)   ($)   (#)   ($)   (#)   ($)  
 

Nolan D. Archibald

    8,889   $ 120,000                     23,386   $ 250,000     32,275   $ 370,000  
 

M. Anthony Burns

            9,444   $ 90,000                     9,444   $ 90,000  
 

Marsha Evans

    8,889   $ 120,000                     23,386   $ 250,000     32,275   $ 370,000  
 

Patrick T. Harker

            9,444   $ 90,000                     9,444   $ 90,000  
 

H. William Lichtenberger

    8,889   $ 120,000                     23,386   $ 250,000     32,275   $ 370,000  
 

Robert J. Margetts

                    5,780   $ 60,000             5,780   $ 60,000  
 

Richard A. Michaelson

    8,889   $ 120,000                     23,386   $ 250,000     32,275   $ 370,000  
 

Wayne A. Reaud

    8,889   $ 120,000                     23,386   $ 250,000     32,275   $ 370,000  
 

Alvin V. Shoemaker

    8,889   $ 120,000                     42,095   $ 450,000     50,984   $ 570,000  
(3)
Sir Robert has served as one of our non-employee directors since August 2010. Prior to his being named a director in August 2010, Sir Robert was employed by the Company, during which time the Company paid a portion of the cost of an office in London, including office expenses and a personal assistant, for his use. Sir Robert also used the office for matters unrelated to his employment with the Company. After Sir Robert was named a director, the Company paid $15,400 for continued use of the office while we wound down that arrangement. The table above does not report any amounts paid to or on behalf of Sir Robert by us during 2010 prior to the commencement of his service as a director.

(4)
As discussed above, this includes a special one-time cash award of $250,000 and grant of restricted stock worth $250,000 for service on the Transaction Committee.

(5)
Mr. Burns has served as one of our non-employee directors since May 2010.

(6)
As discussed above, this includes a special one-time cash award of $250,000 and grant of restricted stock units worth $250,000 for service on the Transaction Committee.

(7)
Dr. Harker has served as one of our non-employee directors since March 2010.

(8)
As discussed above, this includes a special one-time cash award of $250,000 and grant of restricted stock units worth $250,000 for service on the Transaction Committee.

(9)
As discussed above, this includes a special one-time cash award of $250,000 and grant of common stock worth $250,000 for service on the Transaction Committee. Mr. Michaelson departed service as one of our non-employee directors in May 2010.

(10)
As discussed above, this includes a special one-time cash award of $250,000 and grant of restricted stock units worth $250,000 for service on the Transaction Committee.

(11)
As discussed above, this includes a special one-time cash award of $450,000 and grant of restricted stock units worth $450,000 for service on the Transaction Committee including service as the committee chair.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

        Our parent, Huntsman Corporation, owns all of our outstanding membership interests. The following discussion of security ownership relates to our parent, Huntsman Corporation. Because all of Huntsman Corporation's operations are conducted by our Company and our subsidiaries, we believe this discussion is material to an understanding of our Company and our subsidiaries.

        The following table presents information regarding beneficial ownership of our common stock as of March 9, 2011 by:

        Under the regulations of the SEC, shares are generally deemed to be "beneficially owned" by a person if the person directly or indirectly has or shares voting power or investment power (including the power to dispose) over the shares, whether or not the person has any pecuniary interest in the shares, or if the person has the right to acquire voting power or investment power of the shares within 60 days, including through the exercise of any option, warrant or right. In accordance with the regulations of the SEC, in computing the number of shares of common stock beneficially owned by a person and the percentage ownership of such person, we deemed to be outstanding all shares of common stock subject to options or other rights held by the person that are currently exercisable or exercisable within 60 days of March 9, 2011. We did not deem such shares outstanding, however, for the purpose of computing the percentage ownership of any other person.

 
  Beneficial Ownership(1)  
Name of Beneficial Owner
  Shares   Percent(2)  

5% or more beneficial owners:

             

Goldman Sachs Asset Management(3)

    14,124,551     5.9 %

Huntsman Family Holdings Company LLC

    20,931,827     8.7 %

The Huntsman Foundation

    21,782,000     9.1 %

Directors and named executive officers:

             

Jon M. Huntsman(4)

    42,916,489     17.8 %

Nolan D. Archibald(5)

    171,178     *  

M. Anthony Burns

    16,266     *  

Marsha J. Evans(6)

    127,792     *  

Patrick T. Harker

    16,266     *  

Peter R. Huntsman(7)

    3,408,269     1.42 %

H. William Lichtenberger(8)

    232,792     *  

Robert J. Margetts(9)

    12,602     *  

Wayne A. Reaud(10)

    1,506,892     *  

Alvin V. Shoemaker(11)

    133,274     *  

J. Kimo Esplin(12)

    1,078,223     *  

Anthony P. Hankins(13)

    804,316     *  

Daniele Ferrari(14)

    70,994     *  

All directors and executive officers as a group (21 persons)(4)(7)(15)

    53,262,852     22.13 %

*
Less than 1%

(1)
Unless otherwise indicated, the address of each beneficial owner is c/o Huntsman Corporation, 500 Huntsman Way, Salt Lake City, Utah 84108 and such beneficial owner has sole voting and dispositive power over such shares.

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(2)
Based upon an aggregate of 240,693,541 shares of common stock outstanding on March 9, 2011.

(3)
As reported in Schedule 13G filed with the SEC on February 11, 2011 by Goldman Sachs Asset Management. Goldman Sachs Asset Management consists of Goldman Sachs Asset Management, L.P. and GS Investment Strategies, LLC. Based on such 13G filing, Goldman Sachs Asset Management has shared voting power over 12,937,265 shares and shared dispositive power over 14,124,551 shares. The address of Goldman Sachs Asset Management is 200 West Street, New York, NY 10282.

(4)
Includes the following shares of which Jon M. Huntsman may be deemed to be the beneficial owner: (i) 20,931,827 shares held by Huntsman Family Holdings Company LLC, by virtue of being the holder of the largest number of ownership interests in such company (ii) 22,900 shares held by the Karen H. Huntsman Inheritance Trust, by virtue of being the spouse of the trustee of such trust, and (iii) the 21,782,000 shares which he contributed to The Huntsman Foundation on June 25, 2007, by virtue of having the right to appoint all trustees on the Board of Trustees of such foundation and the right to remove any such trustees with or without cause or for any reason. Jon M. Huntsman expressly disclaims beneficial ownership of any shares held by Huntsman Family Holdings Company LLC, except to the extent of his pecuniary interest therein and any shares held by the Karen H. Huntsman Inheritance Trust or The Huntsman Foundation.

(5)
Includes options to purchase 50,000 shares of common stock that are exercisable within 60 days of March 9, 2011, and 22,571 vested stock units the shares underlying which will be deliverable upon termination of service.

(6)
Includes options to purchase 50,000 shares of common stock that are exercisable within 60 days of March 9, 2011, and 62,043 vested stock units the shares underlying which will be deliverable upon termination of service.

(7)
Includes options to purchase 1,611,092 shares of common stock that are exercisable within 60 days of March 9, 2011. Also includes 191,000 shares of which Peter R. Huntsman may be deemed to be the beneficial owner that are held by his spouse as Uniform Gifts to Minors Act custodian for each of six of Peter R. Huntsman's children. Peter R. Huntsman expressly disclaims beneficial ownership of any such shares held by his spouse.

(8)
Includes options to purchase 50,000 shares of common stock that are exercisable within 60 days of March 9, 2011, and 67,512 vested stock units the shares underlying which will be deliverable upon termination of service.

(9)
Includes 12,602 vested stock units the shares underlying which will be deliverable upon termination of service.

(10)
Includes options to purchase 50,000 shares of common stock that are exercisable within 60 days of March 9, 2011, and 77,792 vested stock units the shares underlying which will be deliverable upon termination of service.

(11)
Includes options to purchase 50,000 shares of common stock that are exercisable within 60 days of March 9, 2011, and 62,043 vested stock units the shares underlying which will be deliverable upon termination of service.

(12)
Includes options to purchase 658,245 shares of common stock that are exercisable within 60 days of March 9, 2011.

(13)
Includes options to purchase 515,294 shares of common stock that are exercisable within 60 days of March 9, 2011.

(14)
Includes options to purchase 70,894 shares of common stock that are exercisable within 60 days of March 9, 2011. Mr. Ferrari resigned effective February 3, 2011. Mr. Ferrari's beneficial ownership is reported as of his resignation date.

(15)
Includes options to purchase a total of 4,918,470 shares of common stock that are exercisable within 60 days of March 9, 2011, a total 304,563 vested stock units the shares underlying which will be delivered to the applicable holder upon termination of service.

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CORPORATE GOVERNANCE

        The following discussion of corporate governance relates to our parent, Huntsman Corporation. Huntsman International is a wholly-owned subsidiary of Huntsman Corporation and as a result it does not have common interests listed on an exchange. However, because all of Huntsman Corporation's operations are conducted by our Company and our subsidiaries, we have included the following discussion of the corporate governance of our parent. Unless the context otherwise requires, references in this corporate governance discussion to "we," "us," "our," or "our Company" refer to Huntsman Corporation, together with its subsidiaries.

Board Independence

        It is important to our Company for investors to have confidence that the individuals serving as independent directors on the Board do not have a relationship with us that would impair their independence. Under the NYSE corporate governance rules, the Board must have a majority of independent directors. For a director to qualify as independent, the Board must affirmatively determine that the director has no material relationship with our Company, either directly or as a partner, shareholder or officer of an organization that has a relationship with our Company. To assist it in making independence determinations, the Board has adopted independence criteria which can be found on our website at www.huntsman.com. Under these criteria, a director is not independent if:

        With the assistance of legal counsel to our Company, the Governance Committee has reviewed the applicable legal and NYSE standards for independence, as well as our independence criteria. A

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summary of the answers to annual questionnaires completed by each of the directors and nominees for director and a report of transactions and relationships between each director and nominee for director, or any of his or her family members, and our Company, senior management and independent registered accounting firm have been made available to the Governance Committee. In its review, the Governance Committee specifically considered the relationships discussed under "Certain Relationships and Related Transactions—Transactions," Messrs. Jon M. Huntsman and Reaud's service together on the board of directors of a private foundation, an annual retainer paid to Mr. Reaud's former law firm, Reaud, Morgan & Quinn, of $200,000 for legal services and certain director awards paid in 2010 to each of Messrs. Shoemaker, Archibald, Lichtenberger and Reaud and Ms. Evans for their service on the transaction committee of the Board (the "Transaction Committee"). On the basis of this review, the Governance Committee delivered a report to the full Board, and the Board made its independence determinations based on the Governance Committee's report and the supporting information. As a result of this review, the Board has determined that Ms. Evans and Messrs. Archibald, Burns, Lichtenberger, Reaud, Shoemaker and Dr. Harker, who currently constitute a majority of the Board, are independent. These independent directors currently comprise in full the membership of each standing Board committee described in this report.

        Jon M. Huntsman, the Executive Chairman of the Board, is not considered to be an independent director because he is employed by our Company and he is the father of Peter R. Huntsman, our President, Chief Executive Officer and director. Peter R. Huntsman, our President and Chief Executive Officer, is not considered to be an independent director because he is employed by our Company and he is the son of Jon M. Huntsman, our Executive Chairman. Sir Robert is not considered to be an independent director because he has been an employee of our Company within the last three years.

Board Meetings

        The Board and its committees meet throughout the year on a set schedule, and also hold special meetings and act by written consent from time to time as appropriate. The Board met seven times in 2010. During 2010, the non-management directors met in executive session four times and the independent directors met in executive session four times. During 2010, each director attended at least 75% of the aggregate of:

Board Leadership Structure and Executive Sessions of the Board

        According to our Bylaws, the Chairman of the Board is elected by all of the directors on the Board to preside at all meetings of the stockholders and of the Board. The Chairman of the Board is also required to make reports to the Board and the stockholders and to ensure that all orders and resolutions of the Board and any of its committees are carried into effect. Our Bylaws also allow the Board to elect an Executive Chairman. If elected, the Executive Chairman fills the role of Chairman of the Board and has other powers and duties including, among others, consulting on the strategic vision of our Company and serving as a facilitator for communication between our officers and the Board. In accordance with our Corporate Governance Guidelines, the Executive Chairman is also responsible for establishing the agenda for each Board meeting. At the beginning of the year, the Executive Chairman establishes a schedule of agenda subjects to be discussed during the year (to the degree this can be foreseen). Each Board member is also free to suggest the inclusion of additional items on the agenda and to raise at any Board meeting subjects that are not on the agenda for that meeting. Jon M.

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Huntsman is currently the Executive Chairman. As such, he also fills the role of Chairman of the Board. Jon M. Huntsman is the father of Peter R. Huntsman, our Chief Executive Officer.

        In accordance with our Corporate Governance Guidelines, the Board has no policy with respect to the separation of the offices of Chairman of the Board and Chief Executive Officer. Our Bylaws expressly allow our Chairman of the Board to serve as President or Chief Executive Officer, if so elected by the Board. The Board believes that this issue should be considered periodically as part of the succession planning process and that it is in the best interests of our Company for the Board to make a determination regarding this issue each time it appoints a new Chief Executive Officer. Based on these principles, the Board may determine that it is appropriate in the future to combine the roles of Chairman of the Board and Chief Executive Officer.

        Our Bylaws also allow the Board to elect one or more Vice Chairmen to preside at Board and stockholder meetings and to perform such other duties as may be delegated by the Board, in either case in the absence of Chairman of the Board. The Board believes that it obtains effective additional Board leadership through the role of the Vice Chairman, which is currently filled by Mr. Lichtenberger, who also served as Lead Independent Director. Upon Mr. Lichtenberger's resignation effective as of the Annual Meeting, Mr. Archibald will serve as our only Vice Chairman and Lead Independent Director.

        In accordance with our Corporate Governance Guidelines, the non-management directors meet in executive session without management at each regularly scheduled Board meeting, or more frequently as needed at the call of one or more of our non-management directors. Our Corporate Governance Guidelines also require that our independent directors meet in executive session at least once annually without those non-management directors who are not independent, or more frequently as needed at the call of one or more of our independent directors. Our Vice Chairman of the Board and Lead Independent Director has been designated as the presiding director at these sessions.

        We believe that the appropriate Board leadership structure for our Company may vary, depending on the circumstances facing the Board and our Company at any given time. For example, we have revised the Board's leadership structure in the past to address specific needs, such as the formation of a Litigation Committee and the appointment of Jon M. Huntsman to Executive Chairman in recognition of his ongoing strategic leadership at both a Board and an executive level. We believe that our current Board leadership structure efficiently addresses the present needs of our Company, and allows the Board to fulfill its role in exercising effective, independent oversight of our management on behalf of our stockholders. The Board further believes that we have in place effective structures, processes and arrangements to ensure that the work of the Board is completed in a manner that maintains the highest standards of corporate governance, independence and leadership, as well as continued accountability of management.

Board Role in Risk Oversight

        The Board is responsible for overseeing our Company's management of risk. The Board strives to effectively oversee our Company's enterprise-wide risk management in a way that balances managing risks while enhancing the long-term value of our Company for the benefit of the stockholders. The Board understands that its focus on effective risk oversight is critical to setting our Company's tone and culture towards effective risk management. To administer its oversight function, the Board seeks to understand our Company's risk philosophy by having discussions with management to establish a mutual understanding of our Company's overall appetite for risk. The Board maintains an active dialogue with management about existing risk management processes and how management identifies, assesses and manages our Company's most significant risk exposures. The Board expects frequent updates from management about our Company's most significant risks so as to enable it to evaluate whether management is responding appropriately.

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        The Board relies on each of its committees to help oversee the risk management responsibilities relating to the functions performed by such committees. Our Audit Committee periodically discusses with management our Company's major financial risk exposures and the steps management has taken to monitor and control such exposures, including our Company's risk assessment and risk management policies. Our Compensation Committee helps the Board to identify our Company's exposure to any risks potentially created by our compensation programs and practices. Our Governance Committee oversees risks relating to our Company's corporate compliance programs and assists the Board and management in promoting an organizational culture that encourages commitment to ethical conduct and a commitment to compliance with the law. Each of these committees is required to make regular reports of its actions and any recommendations to the Board, including recommendations to assist the Board with its overall risk oversight function. During each regularly scheduled Board meeting each year, the full Board also reviews our Company's long-term strategic plans for a particular division and the principal issues, including foreseeable risks that division expects to face in the future.

        We believe that the oversight function of the Board and its committees combined with its active dialogue with management about effective risk management provides our Company with the appropriate framework to help ensure effective risk oversight.

Board Committees

        The Board currently has, and appoints the members of, independent Audit, Compensation, and Governance committees. Each of these committees has a written charter approved by the Board. These charters are available on our website at www.huntsman.com. We will also furnish copies of our charters to any person who requests them. Requests for copies should be directed to the Corporate Secretary, 500 Huntsman Way, Salt Lake City, Utah, 84108 or to CorporateSecretary@huntsman.com.

        As of March 25 2011, the committees are structured as follows:

Audit   Compensation   Nominating and
Corporate Governance
M. Anthony Burns (Chair)   Nolan D. Archibald (Chair)   H. William Lichtenberger (Chair)
H. William Lichtenberger   Wayne A. Reaud   Marsha J. Evans
Alvin V. Shoemaker   Alvin V. Shoemaker   Patrick T. Harker

        Audit Committee.    The Audit Committee has been established to assist the Board in monitoring:

        The Audit Committee has sole responsibility for the appointment, retention and termination of the independent registered public accounting firm and is directly responsible for the compensation and oversight of the work of the independent registered public accounting firm. Under the independence criteria that the Board has adopted, which can be found on our website at www.huntsman.com, a member of the Audit Committee will not be considered independent if:

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        Furthermore, under these independence standards, (1) each member of the Audit Committee must be financially literate, (2) at least one member of the Audit Committee must have accounting or related financial management expertise and qualify as an "audit committee financial expert" and (3) no member of the Audit Committee may simultaneously serve on the audit committees of more than two other public companies. For purposes of (2) above, the Board considers any Audit Committee member who satisfies the SEC's definition of "audit committee financial expert" to have accounting or related financial management expertise. Each of these independence criteria is interpreted and applied by the Board in its business judgment and in a manner consistent with applicable NYSE and SEC guidance.

        The Board has determined that each member of the Audit Committee qualifies as independent under these independence standards and under Rule 10A-3 promulgated under the Securities Exchange Act of 1934. The Board has also determined that Mr. Burns, the Chairman of the Audit Committee, qualifies as an "audit committee financial expert" as defined by the regulations of the SEC. As described above, Mr. Burns is also independent. No member of the Audit Committee serves on more than two other public company audit committees. Mr. Lichtenberger will retire from the board as of the Annual Meeting and will cease to serve on the Audit Committee upon his retirement. At this time, our Board has not yet determined who will replace Mr. Lichtenberger as a member of the Audit Committee.

        The Audit Committee held six meetings in 2010.

        The report of the Audit Committee appears under the heading "Report of the Audit Committee of the Board" above.

        Compensation Committee.    The Compensation Committee's function is to support the Board in fulfilling its oversight responsibilities relating to senior management and director compensation. In this regard, the Board and Compensation Committee seek to align total compensation for the Chief Executive Officer and other senior executives with the long-term interests of stockholders. The Compensation Committee also oversees our incentive and equity-based compensation plans. Each of the members of the Compensation Committee is independent within the meaning of current NYSE rules.

        The Compensation Committee operates pursuant to a charter, which is available on our website at www.huntsman.com. Under its charter, the stated purposes of the Compensation Committee are:

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        The Compensation Committee's charter permits the Compensation Committee to form and delegate some or all of its authority to subcommittees when it deems appropriate. In particular, the Compensation Committee may delegate the approval of both cash and equity award grants and other responsibilities regarding the administration of compensatory programs to a subcommittee consisting solely of members of the Compensation Committee who are non-employee directors or outside directors, or in some limited circumstances, to management.

        The Compensation Committee typically meets at least four times each year to address various compensation issues and processes. Our Chief Executive Officer does not have the ability to call Compensation Committee meetings, but generally attends Compensation Committee meetings at the Compensation Committee's request to answer questions and provide input regarding the performance of our executive officers. However, the Chief Executive Officer is not present while decisions regarding his compensation are made. In addition, each Compensation Committee meeting usually includes an executive session without members of management present. The Compensation Committee met five times during 2010, and four of these meetings included an executive session. Our Chief Executive Officer attended three Compensation Committee meetings in 2010. The Compensation Committee regularly reports to the full Board regarding executive compensation matters.

        The report of the Compensation Committee appears under the heading "Compensation Committee Report" below.

        Nominating and Corporate Governance Committee.    The Governance Committee is appointed by the Board to ensure that the Board governance system performs well. The duties of the Governance Committee include:

        Ms. Evans is not standing for re-election as a director and will cease to serve on the Governance Committee upon the expiration of her term. In addition, Mr. Lichtenberger will retire from the Board as of the Annual Meeting and will cease to serve as Chairman of the Governance Committee upon his retirement. The Board has appointed Dr. Harker to replace Mr. Lichtenberger as Chairman of the Governance Committee and Mr. Burns to serve as a member of the Governance Committee, effective as of the Annual Meeting. At this time, our Board has not yet determined who will replace Ms. Evans as a member of the Governance Committee.

        The Governance Committee held five meetings in 2010.

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Director Qualification Standards and Diversity

        The Governance Committee's minimum qualifications and specific qualities and skills required for directors are set forth in Section 1 of our Corporate Governance Guidelines, which are available on our website at www.huntsman.com. These Guidelines require that a majority of directors on the Board must meet the criteria for independence required by the NYSE, and that each director functions consistent with the highest level of professional ethics and integrity. Each of our directors is expected to devote sufficient time and effort to learn the business of our Company and the Board, to use his or her own unique skills and experiences to provide independent oversight to our business, to participate in a constructive and collegial manner, to exhibit a high level of commitment to our Company and to exhibit independent thought and judgment. Although we do not have a separate diversity policy relating to the identification and evaluation of nominees for director, our Corporate Governance Guidelines require that the Governance Committee consider each candidate's background, ability, judgment, skills and experience in the context of the needs of the Board when evaluating director nominees. The Governance Committee believes it is important for Board members to possess skills and knowledge in the areas of leadership of large, complex organizations, finance, strategic planning, legal, government relations and relevant industries, especially the chemical industry. These considerations help the Board as a whole to have the appropriate mix of characteristics, skills and experiences for the optimal functioning of the Board in its oversight of our Company. As part of its periodic self-assessment process, the Governance Committee annually reviews and evaluates its performance, including overall composition of the Board and the criteria that it uses for selecting nominees in light of the specific skills and characteristics necessary for the optimal functioning of the Board in its oversight of our Company.

Director Nomination Process

        The Governance Committee identifies director candidates through a variety of means, including recommendations from other Board members and management. From time to time, the Governance Committee may use third-party search consultants to identify director candidates. The Governance Committee will also consider stockholder recommendations for candidates for the Board. All stockholder recommendations must comply with the notice requirements contained in Section 2.8 of our Bylaws, which requires, among other things, detailed information concerning the stockholder making the proposal (and the beneficial owner on whose behalf the proposal is made, if any), the name and address of the stockholder and specific information concerning such stockholder's interests in our Company's securities, including derivative instruments. In addition, the notice must include the recommended candidate's name, biographical data, qualifications, details regarding any material monetary agreements between the stockholder and the proposed nominee and a written questionnaire completed by the proposed nominee. Our Bylaws are available on our website at www.huntsman.com under the tab "Investor Relations." We will also furnish copies of our Bylaws to any person who requests them. Requests for copies should be directed to the Corporate Secretary, 500 Huntsman Way, Salt Lake City, Utah, 84108 or to CorporateSecretary@huntsman.com. For additional information about stockholder nominations, including nominations for the 2012 Annual Meeting of Stockholders, see "Stockholder Proposals and Director Nominations for the 2012 Annual Meeting."

        From time to time, the Governance Committee may request additional information from the nominee or the stockholder. The Governance Committee screens all potential candidates in the same manner regardless of the source of the recommendation. The Governance Committee determines whether the candidate meets our minimum qualifications and specific qualities and skills for directors and whether requesting additional information or an interview is appropriate. The procedures set forth in Section 2.8 of our Bylaws are the exclusive means for a stockholder to make director nominations or submit other proposals before an annual or special meeting of the stockholders.

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Stockholder Communications Policy

        Stockholders and other interested parties may communicate directly and confidentially with the Board, the non-management directors, the independent directors or the Lead Independent Director by sending a letter addressed to the intended recipients, c/o Corporate Secretary, Huntsman Corporation, 500 Huntsman Way, Salt Lake City, Utah 84108 or by sending an email specifying the intended recipients to CorporateSecretary@huntsman.com. The Corporate Secretary will review such communications and, if appropriate, forward them only to the intended recipients. Communications that do not relate to the responsibilities of the intended recipients as directors of Huntsman (such as communications that are commercial or frivolous in nature) will not be forwarded. In addition, communications that appear to be unduly hostile, intimidating, threatening, illegal or similarly inappropriate will not be forwarded. A copy of our Stockholder Communications Policy is available on our website at www.huntsman.com.

Corporate Governance Guidelines

        The Board has adopted Corporate Governance Guidelines, and the Governance Committee is responsible for implementing the guidelines and making recommendations to the Board concerning corporate governance matters. The guidelines are available on our website at www.huntsman.com. We will also furnish copies of the guidelines to any person who requests them. Requests for copies should be directed to the Corporate Secretary, 500 Huntsman Way, Salt Lake City, Utah, 84108 or to CorporateSecretary@huntsman.com.

        Among other matters, the guidelines include the following:

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Financial Code of Ethics and Business Conduct Guidelines

        The Board has adopted a Financial Code of Ethics applicable to our Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer. Among other matters, this code of ethics is designed to promote:

        In addition, the Board has adopted our Business Conduct Guidelines. The Board requires all directors, officers and employees to adhere to these guidelines in addressing the legal and ethical issues encountered in conducting their work. The Financial Code of Ethics and Business Conduct Guidelines are available on our website at www.huntsman.com. We will also furnish copies of the Financial Code of Ethics and Business Conduct Guidelines to any person who requests them. Requests for copies should be directed to the Corporate Secretary, 500 Huntsman Way, Salt Lake City, Utah, 84108 or to CorporateSecretary@huntsman.com.

Director Attendance at the Annual Meeting of Stockholders

        We believe that there are benefits to having members of the Board attend our annual meetings of stockholders. From time to time, however, a member of the Board might have a compelling and legitimate reason for not attending an annual meeting. As a result, the Board has decided that director attendance at our annual meetings of stockholders should be strongly encouraged, but is not required.

        In 2010, all of the then-current directors attended the Annual Meeting in person.

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CERTAIN RELATIONSHIPS AND TRANSACTIONS WITH RELATED PERSONS

        The following discussion of certain relationships and transactions with related persons relates to our parent, Huntsman Corporation. However, because all of Huntsman Corporation's operations are conducted by our Company and our subsidiaries, we believe this discussion is material to an understanding of our Company and our subsidiaries. Unless the context otherwise requires, references in this discussion to "we," "us," "our," or "our Company" refer to Huntsman Corporation, together with its subsidiaries.

Policies and Procedures

        Effective as of February 1, 2007, the Board adopted a policy and the procedures for review, approval and monitoring of transactions involving our Company and "related persons" (directors, executive officers, stockholders owning five percent or greater of our common stock, or their respective immediate family members). The policy covers any related person transaction involving amounts exceeding $120,000 in which a related person has a direct or indirect material interest.

        Related person transactions must be approved by the Audit Committee, which will approve the transaction only if it determines that the transaction is in, or is not inconsistent with, our interests. In evaluating the transaction, the Audit Committee will consider all relevant factors, including as applicable (1) the benefit to us in entering into the transaction; (2) the alternatives to entering into a related person transaction; and (3) whether the transaction is on terms comparable to those available to third parties.

        If a director is involved in the transaction, he or she will be recused from all discussions and decisions about the transaction. The transaction must be approved in advance of its consummation. The Audit Committee will periodically monitor the transaction to ensure that there are no changed circumstances that would render it advisable for us to amend or terminate the transaction and will review the transaction annually to determine whether it continues to be in our interests.

        The Audit Committee approved our lease payments for the Salt Lake City office building, described below, in accordance with the above policy and continues to monitor the other arrangements described below consistent with the above policy although such arrangements had been entered into prior to the adoption of the policy described above.

Transactions

        Pursuant to an agreement entered into in 2001, our subsidiary Airstar Corporation ("Airstar") subleases a Gulfstream IV-SP Aircraft (the "Aircraft") from Jstar Corporation ("Jstar"), a corporation wholly owned by Jon M. Huntsman, the Executive Chairman of the Board and father of our Chief Executive Officer, Peter R. Huntsman. Monthly sublease payments from Airstar to Jstar are in the approximate amount of $200,000 and an aggregate of $3.8 million is payable from January 1, 2010 through the end of the current lease term. These monthly sublease payments are used to fund financing costs paid by Jstar to a leasing company. An unrelated third-party pays $2 million per year to our subsidiary for such third-party's part-time use of the Aircraft (or an alternate owned by us if the Aircraft is unavailable), subject to an annual adjustment, which we believe to be at least fair market value for the number of flight hours used by such third-party. We bear all other costs of operating the Aircraft. In accordance with our Aircraft Use Policy, we have entered into aircraft time-sharing agreements with certain members of the Huntsman family, pursuant to which these persons pay for the costs of any personal use of the Aircraft by them.

        An agreement was reached prior to the initial public offering of our common stock in February 2005 with the Huntsman Foundation, a private charitable foundation established by Jon M. and Karen

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H. Huntsman to further the charitable interests of the Huntsman family, that we would donate our Salt Lake City office building and our option to acquire an adjacent undeveloped parcel of land to the foundation free of debt. Jon and Karen Huntsman are the parents of our Chief Executive Officer, Peter R. Huntsman, and Jon M. Huntsman is the Executive Chairman of the Board. On March 24, 2010, we completed this donation. At the time of the donation, the building had an appraised value of approximately $10.1 million. We continue to occupy and use a portion of the building under a lease pursuant to which we make annual lease payments of approximately $1.5 million to the Huntsman Foundation. During 2010, we made payments of $1.1 million to the Huntsman Foundation under the lease and an aggregate of $5.6 million will be paid pursuant to the terms of the lease from the time of the donation through the end of the initial term of the lease in 2013. The lease expires on December 31, 2013, subject to two five-year extensions, at our option.

        James H. Huntsman is the Vice President, Americas of our Advanced Materials business. He is the son of Jon M. Huntsman, the Executive Chairman of the Board, and the brother of Peter R. Huntsman, our Chief Executive Officer. During 2010, James Huntsman was paid a salary of $252,000 and earned a bonus of $103,300. During 2010, he was also granted 7,511 option awards with an exercise price of $13.50, the closing price of a share of our common stock on the grant date. These options vest and become exercisable ratably in three equal annual installments beginning on the first anniversary of the grant date. In addition, he was granted 9,074 restricted stock awards in 2010 that will vest ratably in three equal annual installments beginning on the first anniversary of the grant date.

        For 2011, it is anticipated that James Huntsman will be paid a salary of $263,300 and may earn a bonus of up to 60% of his 2011 salary, the amount to be determined in 2012. During 2011, he was also granted 9,490 option awards with an exercise price of $17.59, the closing price of a share of our common stock on the grant date. These options vest and become exercisable ratably in three equal annual installments beginning on the first anniversary of the grant date. In addition, he was granted 4,974 restricted stock awards in 2011 that will vest ratably in three equal annual installments beginning on the first anniversary of the grant date. The Compensation Committee reviews and approves, for corporate and executive officers and their family members that are employees, all annual and other compensation arrangements and components. All amounts paid or to be paid to James Huntsman for 2010 and 2011 were approved by the Compensation Committee.

        In connection with a reorganization transaction we consummated upon the completion of our initial public offering, we entered into a registration rights agreement with Huntsman Family Holdings Company LLC and other stockholders pursuant to which they were granted demand and piggyback registration rights for the shares of our common stock controlled by them. The agreement provides that we will pay the costs and expenses, other than underwriting discounts and commissions, related to the registration and sale of shares of our common stock that are registered pursuant to the agreement. The agreement contains customary registration procedures and indemnification and contribution provisions for the benefit of Huntsman Family Holdings and us. In addition, all of our stockholders who received shares of our common stock in the reorganization transaction, including certain of our directors, executive officers and other key officers, have the right to include their shares in certain registrations. Our Executive Chairman, Jon M. Huntsman, and our Chief Executive Officer and director, Peter R. Huntsman, are affiliates of Huntsman Family Holdings. In addition, J. Kimo Esplin and L. Russell Healy, our executive officers, are parties to the registration rights agreement.

        We entered into indemnification agreements with our directors and officers, including each of our named executive officers, in connection with the completion of our initial public offering. Pursuant to

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these agreements, we agree to provide customary indemnification to our officers and directors against expenses incurred by such persons in connection with their service as directors or officers (as applicable) or in connection with their service at our request as directors, officers, trustees, employees or agents of other entities.


DESCRIPTION OF NEW NOTES

        You can find the definitions of certain terms used in this description under the subheading "—Certain Definitions." In this description, "Huntsman International" refers only to Huntsman International LLC and not to any of its subsidiaries. Additionally, "guarantors" refers to our subsidiaries who will initially guarantee the notes as described below and any other Restricted Subsidiary of Huntsman International that in the future agrees to become a guarantor.

        The old notes were, and the new notes will be, issued under an indenture dated September 24, 2010 among our Company, the guarantors and Wells Fargo Bank, N.A., as trustee (the "Trustee"). The terms of the new notes include those stated in the indenture and those made part of the indenture by reference to the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act").

        The indenture provides for the initial issuance of $350 million aggregate principal amount of old notes and for the additional issuance of the $180 million aggregate principal amount of old notes. The indenture also provides for unlimited additional issuances of notes (including the new notes to be issued in exchange for the old notes), which we refer to in this description as the additional notes. Any issuance of additional notes will be subject to our compliance with the covenant described below under "Certain Covenants—Limitation on Incurrence of Additional Indebtedness" and provided that no Default or Event of Default exists under the indenture at the time of issuance or would result therefrom. All additional notes (including the new notes) will be identical to other notes issued under the indenture and will constitute a part of the same series, including with respect to redemption and matters requiring approval of the holders. There can be no assurances, however, that any additional notes subsequently issued under the indenture will be treated as fungible with the initial notes for United States federal income tax purposes.

        The following description is a summary of the material provisions of the indenture dated September 24, 2010, the exchange and registration rights agreement dated September 24, 2010 and the exchange and registration rights agreement dated November 12, 2010, by and among Huntsman International and the initial purchasers of the notes, for the benefit of the holders of the old notes. It does not restate those agreements in their entirety. The outstanding old notes that you currently hold and the new notes that will be issued upon exchange of the old notes that you hold will be identical in all material respects, except that the new notes will have been registered under the Securities Act. Accordingly, unless specified to the contrary, the following description applies to both the outstanding old notes that you currently hold and the new notes to be issued upon exchange of your old notes. We urge you to read the indenture and the exchange and registration rights agreements because they, and not this description, define your rights as holders of the notes. Copies of the indenture and the exchange and registration rights agreement with respect to the $350 million of old notes sold pursuant to a purchase agreement dated September 14, 2010 were filed with the Securities and Exchange Commission as exhibits to our current report on Form 8-K dated September 30, 2010, and a copy of the exchange and registration rights agreement with respect to $180 million of old notes sold pursuant to a purchase agreement dated October 28, 2010 was filed with the Securities and Exchange Commission as an exhibit to our current report on Form 8-K dated November 15, 2010. You may read and copy these exhibits and any reports, statements or other information that we and our parent have filed with the SEC, at the SEC's public reference room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. You may also request copies of these documents, upon payment of a duplicating fee, by writing to the Public Reference Section of the SEC. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the SEC's Public Reference Rooms. The SEC also maintains an Internet site at http://www.sec.gov from which you can access our filings and our parent's filings.

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        The registered holder of a note will be treated as its owner for all purposes under the terms of the indenture. Only registered holders will have rights under the indenture.

Brief Description of the Notes and the Guarantees

The Notes

        The notes are:

        Since the notes are unsecured, in the event of a bankruptcy or insolvency, Huntsman International's secured lenders will have a prior secured claim to any collateral securing the debt owed to them.

The Guarantees

        As of the date of this prospectus, Airstar Corporation, Huntsman Advanced Materials Americas LLC, Huntsman Advanced Materials LLC, Huntsman Australia Inc., Huntsman Chemical Purchasing Corporation, Huntsman Enterprises, Inc., Huntsman Ethyleneamines LLC, Huntsman Fuels LLC, Huntsman International Financial LLC, Huntsman International Fuels LLC, Huntsman International Trading Corporation, Huntsman MA Investment Corporation, Huntsman MA Services Corporation, Huntsman Petrochemical LLC, Huntsman Petrochemical Purchasing Corporation, Huntsman Procurement Corporation, Huntsman Propylene Oxide LLC, Huntsman Purchasing, Ltd., Polymer Materials Inc., Tioxide Americas LLC and Tioxide Group, are our only subsidiaries that will guarantee Huntsman International's obligations under the notes. Other Restricted Subsidiaries may become guarantors in the future as provided in the indenture. The obligations of the guarantors under their guarantees will be limited as necessary to minimize the risk that such guarantees would constitute a fraudulent conveyance under applicable law. See "Risk Factors—The notes and guarantees may be void, avoided or subordinated under laws governing fraudulent transfers and insolvency."

        The guarantees of the notes:

        Since the guarantees are unsecured obligations of each guarantor, in the event of a bankruptcy or insolvency, such guarantor's secured lenders will have a prior secured claim to any collateral securing the debt owed to them.

        As of December 31, 2010, Huntsman International and the guarantors had approximately $2.2 billion of Senior Debt (excluding intercompany indebtedness) outstanding (of which approximately $1.7 billion is secured indebtedness). Huntsman International and the guarantors had approximately $1.8 billion of other Indebtedness (excluding intercompany indebtedness, except for the $535 million note payable to Huntsman Corporation) outstanding (after giving effect to the issuance of the notes and the application of the estimated net proceeds from this offering) that will rank pari passu with the

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notes. In addition, Huntsman International's subsidiaries which are not guarantors had approximately $712 million of Indebtedness (excluding intercompany indebtedness) outstanding at December 31, 2010. See "Note 30. Condensed Consolidating Financial Information" to our consolidated financial statements for certain financial information about our non-guarantor subsidiaries. The address of each of the guarantors is: c/o Huntsman International LLC, 500 Huntsman Way, Salt Lake City, Utah 84108, and their phone number is (801) 584-5700.

        The obligations of any guarantor under its guarantee of the notes will be automatically and unconditionally released and discharged when any of the following occurs:

Subordination

        The payment of principal, premium and interest, if any, on the notes is subordinated to the prior payment in full in cash of all Senior Debt of Huntsman International.

        The holders of Senior Debt are entitled to receive payment in full in cash of Obligations due in respect of Senior Debt (including interest after the commencement of any such proceeding at the rate specified in the applicable Senior Debt) before the holders of notes are entitled to receive any payment with respect to the notes (except that holders of notes may receive and retain Permitted Junior Securities and payments made from the trust described under "—Legal Defeasance and Covenant Defeasance"), in the event of any distribution to creditors of Huntsman International:

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        Huntsman International also may not make any payment in respect of the notes (except in Permitted Junior Securities or from the trust described under "—Legal Defeasance and Covenant Defeasance") if:

        Payments on the notes may and shall be resumed:

        No new Payment Blockage Notice may be delivered unless and until 360 days have elapsed since the effectiveness of the immediately prior Payment Blockage Notice.

        No nonpayment default that existed or was continuing on the date of delivery of any Payment Blockage Notice to the trustee shall be, or be made, the basis for a subsequent Payment Blockage Notice unless such default shall have been cured or waived for a period of not less than 90 days.

        Huntsman International must promptly notify holders of Senior Debt if payment of the notes is accelerated because of an Event of Default.

        As a result of the subordination provisions described above, in the event of a bankruptcy, liquidation or reorganization of Huntsman International, holders of the notes may recover less ratably than creditors of Huntsman International who are holders of unsubordinated indebtedness (including trade payables). See "Risk Factors—The notes and the subsidiary guarantees are subordinated to our and the subsidiary guarantors' senior debt."

Principal, Maturity and Interest of Notes

        The notes will be issued in denominations of $2,000 and integral multiples of $1,000 in excess thereof. The notes will mature on March 15, 2021, at the principal amount, plus accrued and unpaid interest to the maturity date.

        Interest on the notes will accrue at the rate of 85/8% per annum. Interest on the notes is payable semi-annually in arrears on March 15 and September 15, commencing on March 15, 2011. Huntsman International will make each interest payment to the holders of record of the notes on the immediately preceding March 1 and September 1.

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        Interest on the notes will accrue from the date of original issuance or, if interest has already been paid, from the date it was most recently paid. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.

Optional Redemption

        At any time prior to September 15, 2013, Huntsman International may on any one or more occasions redeem up to 40% of the aggregate principal amount of the notes outstanding under the indenture, at a redemption price of 108.625% of the principal amount thereof for the notes, plus accrued and unpaid interest to the redemption date, with the net cash proceeds of one or more Equity Offerings; provided that

        Notice of any such redemption must be given within 90 days after the date of such Equity Offering.

        Prior to September 15, 2015, Huntsman International may redeem all or a part of the notes upon not less than 30 nor more than 60 days' notice, at a redemption price (the "Make-Whole Price") equal to the greater of

plus in each case accrued interest to the redemption date.

        On or after September 15, 2015, Huntsman International may redeem all or a part of the notes upon not less than 30 nor more than 60 days' notice, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest thereon, if any, to the applicable redemption date, if redeemed during the twelve-month period beginning on September 15 of the years indicated below:

Year
  Redemption price of the notes  

2015

    104.3125 %

2016

    102.8750 %

2017

    101.4375 %

2018 and thereafter

    100.0000 %

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Selection and Notice

        If less than all the notes are to be redeemed at any time in connection with an optional redemption, the trustee will select notes on a pro rata basis, by lot or by any other such method as the trustee shall deem fair and appropriate, subject to the procedures of DTC.

        No notes of $2,000 or less shall be redeemed in part. Notices of redemption shall be sent by first class mail or sent electronically at least 30 but not more than 60 days before the redemption date to each holder of notes to be redeemed at its registered address except that redemption notices may be sent more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance of the notes or a satisfaction and discharge of the indenture, in each case in accordance with the provisions of the indenture.

        A notice of redemption shall state:

Upon surrender of a physical note to be redeemed in part, Huntsman International will issue a new note in a principal amount equal to and in exchange for the unredeemed portion of the original note in the name of the holder upon cancellation of the original note.

Repurchase at the Option of Holders upon Change of Control

        If a Change of Control occurs, each holder of notes will have the right to require Huntsman International to repurchase all or any part (equal to $2,000 and integral multiples of $1,000 in excess thereof) of that holder's notes pursuant to the Change of Control Offer. In the Change of Control Offer, Huntsman International will offer a Change of Control Payment in cash equal to 101% of the aggregate principal amount of notes repurchased plus accrued and unpaid interest thereon, if any, to the date of purchase. Within 30 days following any Change of Control, Huntsman International will send a notice to each holder describing the transaction or transactions that constitute the Change of Control and offering to repurchase notes on the Change of Control Payment Date specified in such notice, pursuant to the procedures required by the indenture and described in such notice. Huntsman International will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of the notes as a result of a Change of Control.

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        On the Change of Control Payment Date, Huntsman International will, to the extent lawful:

        The Paying Agent will promptly pay to each holder of notes so tendered the Change of Control Payment for such notes, and, with respect to physical notes, the trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each holder a new note equal in principal amount to any unpurchased portion of the notes surrendered, if any; provided that each such new note will be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof.

        Prior to complying with any provisions of this "Change of Control" covenant, but in any event within 30 days following a Change of Control, Huntsman International must either

        The provisions described above that require Huntsman International to make a Change of Control Offer following a Change of Control are applicable regardless of whether or not any other provisions of the indenture are applicable. Except as described above with respect to a Change of Control, the indenture does not contain provisions that permit the holders of the notes to require that Huntsman International repurchase or redeem the notes in the event of a takeover, recapitalization or similar transaction.

        Huntsman International will not be required to make a Change of Control Offer upon a Change of Control if a third party (1) makes the Change of Control Offer in the manner, at the times and in compliance with the requirements set forth in the indenture applicable to a Change of Control Offer made by Huntsman International and (2) purchases all notes validly tendered and not withdrawn under such Change of Control Offer.

Certain Covenants

        As of the Issue Date, all the subsidiaries of Huntsman International were "Restricted Subsidiaries" other than Huntsman China Investments B.V., Huntsman Distribution Corporation, Huntsman SA Investment Corporation, Huntsman Styrenics Investments Holdings LLC, Huntsman Verwaltungs GmbH, Huntsman Pigments LLC and their respective subsidiaries. However, under certain circumstances we are permitted to designate certain of our other subsidiaries as "Unrestricted Subsidiaries." Unrestricted Subsidiaries are not subject to the restrictive covenants in the indenture. As of the date hereof, Huntsman Offshore Investments Limited is also an Unrestricted Subsidiary.

        Covenant Termination.    After such time as (i) the notes have been assigned an Investment Grade Rating by either Rating Agency (the "Investment Grade Rating Date") and (ii) no Default or Event of Default under the indenture shall have occurred and be continuing, and notwithstanding that the notes

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may later cease to have an Investment Grade Rating by any Rating Agency, Huntsman International and its Restricted Subsidiaries shall no longer be subject to the covenants described below under the following sections:

        Set forth below are summaries of certain covenants contained in the indenture.

        Limitation on Incurrence of Additional Indebtedness.    Huntsman International will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume, guarantee, acquire, become liable, contingently or otherwise, with respect to, or otherwise become responsible for payment of (collectively, "incur") any Indebtedness other than Permitted Indebtedness; provided, however, that if no Default or Event of Default shall have occurred and be continuing at the time of or as a consequence of the incurrence of any such Indebtedness, Huntsman International and its Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness), in each case if on the date of the incurrence of such Indebtedness, after giving effect to the incurrence thereof, the Consolidated Fixed Charge Coverage Ratio of Huntsman International is greater than 2.0 to 1.0.

        Limitation on Restricted Payments.    Huntsman International will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, make any Restricted Payment if at the time of such Restricted Payment or immediately after giving effect thereto,

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        Notwithstanding the foregoing, the provisions set forth in the immediately preceding paragraph do not prohibit:

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        In determining the aggregate amount of Restricted Payments made subsequent to January 1, 2010 in accordance with clause (c) of the second preceding paragraph, cash amounts expended pursuant to clauses (1), (2), (3)(B)(x) and (4) of the preceding paragraph shall be included in such calculation and Restricted Payments made pursuant to the other clauses of the preceding paragraph shall not be so included.

        Not later than the date of making any Restricted Payment pursuant to clause (c) of the second preceding paragraph or clause (9) of the immediately preceding paragraph, Huntsman International shall deliver to the trustee an officers' certificate stating that such Restricted Payment complies with the indenture and setting forth in reasonable detail the basis upon which the required calculations were computed, which calculations may be based upon Huntsman International's quarterly financial statements last provided to the trustee pursuant to "—Reports to Holders."

        Limitation on Asset Sales.    Huntsman International will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless

        Upon the consummation of an Asset Sale, Huntsman International may apply, or cause the applicable Restricted Subsidiary to apply, the Net Cash Proceeds relating to the Asset Sale within 415 days of having received the Net Cash Proceeds:

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        On the 416th day after an Asset Sale or any earlier date, if any, on which the board of Huntsman International or the board of the applicable Restricted Subsidiary determines not to apply the Net Cash Proceeds in accordance with the preceding paragraph (each, a "Net Proceeds Offer Trigger Date"), such aggregate amount of Net Cash Proceeds which have not been applied or contractually committed to be applied (and to the extent not subsequently applied, the Net Proceeds Offer Trigger Date related thereto shall be deemed to be the date of termination of such contractual commitment or any earlier date, if any, on which the board of Huntsman International or the board of the applicable Restricted Subsidiary determines not to apply the Net Cash Proceeds in accordance with such contractual commitment) on or before such Net Proceeds Offer Trigger Date as permitted by the preceding paragraph (the "Net Proceeds Offer Amount") shall be applied by Huntsman International or such Restricted Subsidiary to make an offer to purchase (or repay, prepay or redeem, as the case may be) (the "Net Proceeds Offer") on a date that is not less than 30 nor more than 45 days following the applicable Net Proceeds Offer Trigger Date, from:

on a pro rata basis, the maximum principal amount of notes and other Indebtedness that may be purchased with the Net Proceeds Offer Amount. Notwithstanding the foregoing, the obligation to make a Net Proceeds Offer shall be suspended until such time as the aggregate amount of the Net Proceeds Offer Amount is equal to or exceeds $75 million. The offer price in any Net Proceeds Offer will be equal to 100% of the principal value of the notes to be purchased, plus any accrued and unpaid interest to the date of purchase.

        The following events will be deemed to constitute an Asset Sale and the Net Cash Proceeds for such Asset Sale must be applied in accordance with this covenant:

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        Notwithstanding the provisions described in the immediately preceding paragraphs, Huntsman International and its Restricted Subsidiaries may consummate an Asset Sale without complying with such provisions to the extent

        Any consideration that does not constitute Replacement Assets that is received by Huntsman International or any of its Restricted Subsidiaries in connection with any Asset Sale permitted under this paragraph will constitute Net Cash Proceeds and will be subject to the provisions described in the preceding paragraphs.

        Each Net Proceeds Offer will be sent to the record holders as shown on the register of holders within 30 days following the Net Proceeds Offer Trigger Date, with a copy to the trustee, and shall comply with the procedures set forth in the indenture. Upon receiving notice of the Net Proceeds Offer, holders may elect to tender their notes in whole or in part in integral multiples of $1,000 in exchange for cash, provided that no notes of $2,000 or less may remain outstanding thereafter. To the extent holders properly tender notes in an amount exceeding the Net Proceeds Offer Amount, notes of tendering holders will be purchased on a pro rata basis (based on amounts tendered). A Net Proceeds Offer shall remain open for a period of 20 business days or such longer period as may be required by law.

        Huntsman International will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of notes pursuant to a Net Proceeds Offer. To the extent that the provisions of any securities laws or regulations conflict with the "Limitation on Asset Sale" provisions of the indenture, Huntsman International shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under the "Limitation on Asset Sale" provisions of the indenture by virtue thereof.

        After consummation of any Net Proceeds Offer, any Net Proceeds Offer Amount not applied to any such purchase may be used for any purpose permitted by the other provisions of the indenture, and the Net Proceeds Offer Amount shall be reset to zero.

        Limitation on Dividend and Other Payment Restrictions Affecting Subsidiaries.    Huntsman International will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or permit to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary of Huntsman International to (A) pay dividends or make any other distributions on or in respect of its Capital Stock to Huntsman International or any Restricted Subsidiary; (B) make loans or advances or to pay any Indebtedness or other obligation owed to Huntsman International or any other Restricted Subsidiary of Huntsman International; or (C) transfer any of its property or assets to Huntsman International or any other Restricted Subsidiary of Huntsman International, except for such encumbrances or restrictions existing under or by reason of:

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provided, however, that the provisions relating to such encumbrance or restriction contained in any such Indebtedness are no less favorable to Huntsman International in any material respect as determined by the board of managers of Huntsman International in their reasonable and good faith judgment than the provisions relating to such encumbrance or restriction contained in agreements referred to in such clause (2), (4), (5), (8), (11), (12) or (13).

        Limitation on Preferred Stock of Restricted Subsidiaries.    Huntsman International will not permit any of its Restricted Subsidiaries to issue any Preferred Stock (other than to Huntsman International or to another Restricted Subsidiary of Huntsman International) or permit any person (other than Huntsman International or a Restricted Subsidiary of Huntsman International) to own any Preferred Stock of any Restricted Subsidiary of Huntsman International; provided, however, that any person that is not a Restricted Subsidiary of Huntsman International may issue Preferred Stock to equity holders of such person in exchange for equity interests if after such issuance such person becomes a Restricted Subsidiary of Huntsman International.

        Limitation on Liens.    Huntsman International shall not, and shall not permit any of its Restricted Subsidiaries to, create, incur or otherwise cause or suffer to exist or become effective any Liens of any kind upon any property or assets of Huntsman International or any Restricted Subsidiary, now owned or hereafter acquired, which secures Pari Passu Indebtedness or Indebtedness subordinated to the notes unless such Indebtedness is incurred in accordance with the indenture governing the notes and

        Prohibition on Incurrence of Senior Subordinated Debt.    Huntsman International will not incur or suffer to exist Indebtedness that is senior in right of payment to the notes and subordinate in right of payment to any other Indebtedness of Huntsman International.

        For purposes of the foregoing the phrase "subordinate in right of payment" means debt subordination only and not lien subordination, and accordingly, (i) unsecured indebtedness shall not be deemed to be subordinated in right of payment to secured indebtedness merely by virtue of the fact that it is unsecured and (ii) junior liens, second liens and other contractual arrangements that provide for priorities among holders of the same or different issues of indebtedness with respect to any collateral or the proceeds of collateral shall not constitute subordination in right of payment.

        Merger, Consolidation and Sale of Assets.    Huntsman International will not, in a single transaction or series of related transactions, consolidate or merge with or into any person, or sell, transfer, or otherwise dispose of (or permit any Restricted Subsidiary of Huntsman International to sell, assign, transfer, lease, convey or otherwise dispose of) all or substantially all of Huntsman International's assets (determined on a consolidated basis for Huntsman International and Huntsman International's Restricted Subsidiaries) unless:

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        Each guarantor (other than any guarantor whose guarantee is to be released in accordance with the terms of the guarantee and the indenture in connection with any transaction complying with the provisions of "—Limitation on Asset Sales") will not, and Huntsman International will not cause or permit any guarantor to, consolidate with or merge with or into any person other than Huntsman International or any other guarantor unless:

Any merger or consolidation of a guarantor with and into Huntsman International (with Huntsman International being the surviving entity) or another guarantor need not comply with the first paragraph of this covenant.

        Notwithstanding anything in this section to the contrary,

        Limitations on Transactions with Affiliates.    Huntsman International will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, enter into or permit to exist any transaction

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or series of related transactions with, or for the benefit of, any of its Affiliates (each an "Affiliate Transaction"), other than

        The board of managers of Huntsman International or the board of the relevant Restricted Subsidiary must approve each Affiliate Transaction to which they are a party that involves aggregate payments or other property with a fair market value in excess of $25.0 million. This approval must be evidenced by a board resolution that states that the board has determined that the transaction complies with the foregoing provisions.

        If Huntsman International or any Restricted Subsidiary of Huntsman International enters into an Affiliate Transaction that involves an aggregate fair market value of more than $50.0 million, then prior to the consummation of the Affiliate Transaction, the parties to such Affiliate Transaction must obtain a favorable opinion as to the fairness of such transaction or series of related transactions to Huntsman International or the relevant Restricted Subsidiary, as the case may be, from a financial point of view, from an Independent Financial Advisor and file the same with the trustee.

        The restrictions described in the preceding paragraphs of this covenant do not apply to:

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        Limitation of Guarantees by Restricted Subsidiaries.    Huntsman International will not permit any of its Restricted Subsidiaries, directly or indirectly, by way of the pledge of any intercompany note or otherwise, to assume, guarantee or in any other manner become liable with respect to any Indebtedness of Huntsman International or any other Restricted Subsidiary other than:

unless, in any such case:

        Conduct of Business.    Huntsman International and its Restricted Subsidiaries (other than a Securitization Entity) will not engage in any businesses which are not the same, similar or related to the businesses in which Huntsman International and its Restricted Subsidiaries were engaged on the Issue Date, except to the extent that after engaging in any new business, Huntsman International and its Restricted Subsidiaries, taken as a whole, remain substantially engaged in similar lines of business as were conducted by them on the Issue Date.

        Reports to Holders.    Whether or not required by the SEC, so long as any notes are outstanding, Huntsman International will furnish to the trustee and to the holders of notes, within the time periods specified in the SEC's rules and regulations including any extension periods available under such rules and regulations and excluding any requirement and time periods applicable to "accelerated filers" (as defined in Rule 12b-2 under the Exchange Act) under such rules and regulations, and make available to securities analysts and potential investors upon request:

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Notwithstanding the foregoing, Huntsman International shall not be required to furnish any information or reports that are separate from information or reports furnished by Huntsman Corporation, and the requirements specified in this paragraph shall be deemed to be satisfied upon Huntsman Corporation's filing of its required reports within the time periods specified in the SEC's rules and regulations including any extension periods available under such rules and regulations, in each case provided that the assets, liabilities, revenues and net income of Huntsman Corporation are substantially similar to those of Huntsman International at the time of such filing.

        If Huntsman International has designated as an Unrestricted Subsidiary any of its subsidiaries that would constitute a significant subsidiary within the meaning of Regulation S-X under the Exchange Act, then the quarterly and annual financial information required by the preceding paragraph shall include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes or schedules thereto, or in Narrative Analysis of Results of Operations, of the financial condition and results of operations of Huntsman International and its Restricted Subsidiaries separate from the financial condition and results of operations of any such Unrestricted Subsidiaries of Huntsman International.

        In the event that any direct or indirect parent company of Huntsman International is or becomes a Guarantor of the notes, the indenture will permit Huntsman International to satisfy its obligations in this covenant with respect to financial information relating to Huntsman International by furnishing financial information relating to such direct or indirect parent company as provided in Section 3-10 of Regulation S-X under the Exchange Act.

Events of Default

        Each of the following events is an "Event of Default" under the indenture:

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        If an Event of Default arising from certain events of bankruptcy with respect to Huntsman International occurs and is continuing, then all unpaid principal of, and premium, if any, and accrued and unpaid interest on all of the outstanding notes will become immediately due and payable without further action or notice. If any other Event of Default occurs and is continuing, then the trustee or the holders of at least 25% in principal amount of outstanding notes may declare the principal of and accrued interest on all the notes to be due and payable by notice in writing (the "Acceleration Notice") to Huntsman International and the trustee, which notice must also specify that it is a "notice of acceleration." In that event, the notes will become immediately due and payable unless, if there are any amounts outstanding under the Designated Senior Debt, then the notes will become immediately due and payable only upon the first to occur of:

        At any time after a declaration of acceleration with respect to the notes as described in the preceding paragraph, the holders of a majority in principal amount of the notes may rescind and cancel such declaration and its consequences

No such rescission shall affect any subsequent Default or impair any right consequent thereto.

        The holders of a majority in principal amount of the notes may waive any existing Default or Event of Default under the indenture, and its consequences, except a default in the payment of the principal of or interest on any notes.

        Holders of the notes may not enforce the indenture or the notes except as provided in the indenture. Subject to certain limitations, the holders of a majority in aggregate principal amount of the then outstanding notes may direct the trustee in its exercise of any trust or power or may exercise any

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of the trustee's powers. Subject to the provisions of the indenture relating to the duties of the trustee, the trustee will be under no obligation to exercise any of its rights or powers under the indenture at the request, order or direction of any of the holders, unless such holders have offered to the trustee indemnity satisfactory to it. The trustee may withhold from holders of the notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal, premium or interest) if it determines in good faith that withholding notice is in their interest.

        Under the indenture, Huntsman International will be required to provide an officers' certificate to the trustee promptly upon any such officer obtaining knowledge of any Default or Event of Default, and will provide such certification at least annually as to whether or not they know of any Default or Event of Default, that has occurred and, if applicable, describe such Default or Event of Default and the status thereof.

Legal Defeasance and Covenant Defeasance

        Huntsman International may, at its option and at any time, elect to have its obligations and the obligations of the guarantors discharged with respect to the outstanding notes ("Legal Defeasance"). Legal Defeasance means that Huntsman International will be deemed to have paid and discharged the entire indebtedness represented by the outstanding notes, except for:

        In addition, Huntsman International may, at its option and at any time, elect to have the obligations of Huntsman International released with respect to certain covenants that are described in the indenture ("Covenant Defeasance") and will be absolved from liability thereafter for failing to comply with such obligations with respect to the notes. In the event Covenant Defeasance occurs, certain events (not including non-payment, bankruptcy, receivership, reorganization and insolvency events) described under "Events of Default" will no longer constitute an Event of Default with respect to the notes.

        In order to exercise either Legal Defeasance or Covenant Defeasance:

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Satisfaction and Discharge

        The indenture will be discharged and will cease to be of further effect (except as to surviving rights or registration of transfer or exchange of the notes, as expressly provided for in the indenture) as to all outstanding notes when

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All funds that remain unclaimed for one year will be paid to Huntsman International, and thereafter holders of notes must look to Huntsman International for payment as general creditors.

Cancellation

        All notes which are redeemed by or on behalf of Huntsman International will be cancelled and, accordingly, may not be reissued or resold. If Huntsman International purchases any notes, such acquisition shall not operate as a redemption unless such notes are surrendered for cancellation.

Withholding Taxes

        As described under "Certain United States Federal Income Tax Consequences—Non-U.S. Holders," a holder of notes may be subject to withholding taxes and Huntsman International will not be required to pay any additional amounts to cover such withholding taxes.

Modification of the Indenture

        Without the consent of each holder of an outstanding note affected thereby, no amendment of the indenture, the notes or the guarantees may:

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Other modifications and amendments of the indenture, the notes or the guarantees may be made with the consent of the holders of a majority in principal amount of the then outstanding notes affected thereby.

        Without the consent of any holders of notes, Huntsman International, the guarantors and the trustee also may amend or supplement the indenture or the notes or the guarantees to:

Governing Law

        The indenture will provide that it, the notes and the guarantees will be governed by, and construed in accordance with, the laws of the State of New York.

The Trustee

        The indenture will provide that, except during the continuance of an Event of Default, the trustee will perform only such duties as are specifically set forth in the indenture. During the existence of an Event of Default, the trustee will exercise such rights and powers vested in it by the indenture, and use the same degree of care and skill in its exercise as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.

        The indenture and the provisions of the Trust Indenture Act will contain certain limitations on the rights of the trustee, should it become a creditor of Huntsman International, to obtain payments of claims in certain cases or to realize on certain property received in respect of any such claim as security or otherwise. Subject to the Trust Indenture Act, the trustee will be permitted to engage in other transactions; provided that if the trustee acquires any conflicting interest as described in the Trust Indenture Act, it must eliminate such conflict or resign.

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Certain Definitions

        Set forth below is a summary of certain of the defined terms used in the indenture. Reference is made to the indenture for the full definition of all such terms, as well as any other terms used herein for which no definition is provided.

        "Acquired Indebtedness" means Indebtedness of a person or any of its subsidiaries existing at the time such person becomes a Restricted Subsidiary of Huntsman International or at the time it merges or consolidates with Huntsman International or any of its Restricted Subsidiaries or assumed in connection with the acquisition of assets from such person and in each case not incurred by such person in connection with, or in anticipation or contemplation of, such person becoming a Restricted Subsidiary of Huntsman International or such acquisition, merger or consolidation, except for Indebtedness of a person or any of its subsidiaries that is repaid at the time such person becomes a Restricted Subsidiary of Huntsman International or at the time it merges or consolidates with Huntsman International or any of its Restricted Subsidiaries.

        "Adjusted Treasury Rate" means with respect to any redemption date, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date, plus 0.50%.

        "Affiliate" means, with respect to any specified person, any other person who directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such specified person. The term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative of the foregoing; provided however that none of the initial purchasers or their Affiliates shall be deemed to be an Affiliate of Huntsman International.

        "Asset Acquisition" means:

        "Asset Sale" means any direct or indirect sale, issuance, conveyance, transfer, lease (other than operating leases entered into in the ordinary course of business), assignment or other transfer for value by Huntsman International or any of its Restricted Subsidiaries (including any Sale and Leaseback Transaction) to any person other than Huntsman International or a Restricted Subsidiary of Huntsman International of (A) any Capital Stock of any Restricted Subsidiary of Huntsman International; or (B) any other property or assets of Huntsman International or any Restricted Subsidiary of Huntsman International other than in the ordinary course of business; provided, however, that Asset Sales shall not include

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        "Capital Stock" means:

        "Capitalized Lease Obligation" means, as to any person, the obligations of such person under a lease that are required to be classified and accounted for as capital lease obligations under GAAP and, for purposes of this definition, the amount of such obligations at any date shall be the capitalized amount of such obligations at such date, determined in accordance with GAAP.

        "Cash Equivalents" means:

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        "Change of Control" means:

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        "Commodity Agreement" means any commodity futures contract, commodity option or other similar agreement or arrangement entered into by Huntsman International or any of its Restricted Subsidiaries designed to protect Huntsman International or any of its Restricted Subsidiaries against fluctuations in the price of commodities actually at that time used in the ordinary course of business of Huntsman International or its Restricted Subsidiaries.

        "Common Stock" of any person means any and all shares, interests or other participations in, and other equivalents (however designated and whether voting or non-voting) of such person's common stock, whether outstanding on the Issue Date or issued after the Issue Date, and includes, without limitation, all series and classes of such common stock.

        "Comparable Treasury Issue" means the United States Treasury Security selected by an Independent Investment Banker as having a maturity comparable to the remaining term of the notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such notes.

        "Comparable Treasury Price" means, with respect to any redemption date, (1) the average of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) on the third Business Day preceding such redemption date, as set forth in the daily statistical release (or any successor release) published by the Federal Reserve Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S. Government Securities" or (2) if such release (or any successor release) is not published or does not contain such prices on such Business Day, (A) the Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest of such Reference Treasury Dealer Quotations, or (B) if the trustee obtains fewer than three such Reference Treasury Dealer Quotations, the average of all such Quotations.

        "Consolidated EBITDA" means, with respect to any person, for any period, the sum (without duplication) of

all as determined on a consolidated basis for such person and its Restricted Subsidiaries in accordance with GAAP.

        "Consolidated Fixed Charge Coverage Ratio" means, with respect to any person, the ratio of Consolidated EBITDA of such person during the four full fiscal quarters for which financial statements are available under "—Reports to Holders" (the "Four Quarter Period") ending on or prior to the date of the transaction giving rise to the need to calculate the Consolidated Fixed Charge Coverage Ratio (the "Transaction Date") to Consolidated Fixed Charges of such person for the Four Quarter Period.

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        For purposes of this definition, "Consolidated EBITDA" and "Consolidated Fixed Charges" shall be calculated after giving effect on a pro forma basis for the period of such calculation to:

        If such person or any of its Restricted Subsidiaries directly or indirectly guarantees Indebtedness of a person other than Huntsman International or a Restricted Subsidiary, the preceding paragraph will give effect to the incurrence of such guaranteed Indebtedness as if such person or any Restricted Subsidiary of such person had directly incurred or otherwise assumed such guaranteed Indebtedness. Furthermore, in calculating "Consolidated Fixed Charges" for purposes of determining the denominator (but not the numerator) of this "Consolidated Fixed Charge Coverage Ratio,"

        "Consolidated Fixed Charges" means, with respect to any person for any period, the sum, without duplication, of

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        "Consolidated Interest Expense" means, with respect to any person for any period, the sum of, without duplication:

        "Consolidated Leverage Ratio" means, for any Person, the ratio of (i) Indebtedness of such Person and its Restricted Subsidiary to (ii) Consolidated EBITDA of such Person calculated as set forth in the definition of Consolidated Fixed Charge Coverage Ratio.

        "Consolidated Net Income" means, with respect to any person, for any period, the sum of

provided that there shall be excluded therefrom

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        "Consolidated Non-cash Charges" means, with respect to any person, for any period, the aggregate depreciation, amortization and other non-cash charges of such person and its Restricted Subsidiaries reducing Consolidated Net Income of such person and its Restricted Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP (excluding any such charges constituting an extraordinary item or loss or any such charge which requires an accrual of or a reserve for cash charges for any future period).

        "Continuing Managers" means, as of any date, the collective reference to:

        "Credit Agreement" means:

        "Credit Facilities" means any one or more debt facilities, indentures or other agreements governing Indebtedness, including the Credit Agreement.

        "Currency Agreement" means any foreign exchange contract, currency swap agreement or other similar agreement or arrangement designed to protect Huntsman International or any Restricted Subsidiary of Huntsman International against fluctuations in currency values.

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        "Default" means an event or condition the occurrence of which is, or with the lapse of time or the giving of notice or both would be, an Event of Default.

        "Designated Senior Debt" means:

        "Disqualified Capital Stock" means that portion of any Capital Stock which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the sole option of the holder thereof on or prior to the final maturity date of the notes.

        "Domestic Subsidiary" means any subsidiary other than a Foreign Subsidiary.

        "Equity Offering" means any sale of Qualified Capital Stock of Huntsman International or any capital contribution to the equity of Huntsman International from any person other than a subsidiary of Huntsman International.

        "Exchange Act" means the Securities Exchange Act of 1934, as amended, or any successor statute or statutes thereto.

        "fair market value" means, with respect to any asset or property, the price which could be negotiated in an arm's length, free market transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction. Fair market value (i) with respect to a determination of value in excess of $100 million shall be determined by the Board of Managers of Huntsman International acting reasonably and in good faith and shall be evidenced by a Board Resolution delivered to the Trustee or (ii) in all other cases, by an officers' certificate delivered to the Trustee.

        "Foreign Cash Equivalents" means:

        "Foreign Subsidiary" means any subsidiary of Huntsman International (other than a guarantor) organized under the laws of, and conducting a substantial portion of its business in, any jurisdiction other than the United States of America or any state thereof or the District of Columbia.

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        "GAAP" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession of the United States, which were in effect as of the Issue Date.

        "GOP" means MatlinPatterson Global Opportunities Partners L.P. and any other entity managed by its investment advisor, MatlinPatterson Global Advisers LLC.

        "Guarantor Senior Debt" means with respect to any guarantor, the principal of, premium, if any, and interest (including any interest accruing subsequent to the filing of a petition of bankruptcy at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable law) on any Indebtedness of a guarantor, whether outstanding on the Issue Date or thereafter created, incurred or assumed, except for any such Indebtedness that is expressly subordinated or equal in right of payment to the guarantee of such guarantor. "Guarantor Senior Debt" also includes the principal of, premium, if any, interest (including any interest accruing subsequent to the filing of a petition of bankruptcy at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable law) on, and all other amounts owing in respect of,

        Notwithstanding the foregoing, "Guarantor Senior Debt" does not include

        "Holdings U.K." means, Huntsman (Holdings) UK, a private unlimited company incorporated under the laws of England and Wales.

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        "Huntsman Affiliate" means Huntsman International or any of its Affiliates (other than Huntsman International and its subsidiaries).

        "Huntsman Corporation" means Huntsman Corporation, a Delaware corporation.

        "Huntsman Parent Company" means Huntsman Corporation or any entity of which Huntsman International is a direct or indirect wholly owned subsidiary.

        "Huntsman Public Parent" means any Huntsman Parent Company that has completed an Initial Public Equity Offering, including Huntsman Corporation.

        "Indebtedness" means with respect to any person, without duplication,

For purposes hereof, the "maximum fixed repurchase price" of any Disqualified Capital Stock which does not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Capital Stock as if such Disqualified Capital Stock were purchased on any date on which Indebtedness shall be required to be determined pursuant to the indenture, and if such price is based upon, or measured by, the fair market value of such Disqualified Capital Stock, such fair market value shall be determined reasonably and in good faith by the board of directors or managers of the issuer of such Disqualified Capital Stock. Notwithstanding the foregoing, "Indebtedness" shall not include:

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        "Independent Financial Advisor" means a firm which, in the judgment of the board of managers of Huntsman International, is independent and qualified to perform the task for which it is to be engaged.

        "Independent Investment Banker" means any Reference Treasury Dealer appointed by the trustee after consultation with Huntsman International.

        "Initial Public Equity Offering" means a firm commitment underwritten offering of shares of Capital Stock of the applicable Person registered on Form S-1 under the Securities Act.

        "Interest Swap Obligations" means the obligations of any person pursuant to any arrangement with any other person, whereby, directly or indirectly, such person is entitled to receive from time to time periodic payments calculated by applying either a floating or a fixed rate of interest on a stated notional amount in exchange for payments made by such other person calculated by applying a fixed or a floating rate of interest on the same notional amount and shall include, without limitation, interest rate swaps, caps, floors, collars and similar agreements.

        "Investment" means, with respect to any person, any direct or indirect loan or other extension of credit (including, without limitation, a guarantee) or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase or acquisition by such person of any Capital Stock, bonds, notes, debentures or other securities or evidences of Indebtedness issued by, any other person.

        "Investment" excludes extensions of trade credit by Huntsman International and its Restricted Subsidiaries on commercially reasonable terms in accordance with normal trade practices of Huntsman International or such Restricted Subsidiary, as the case may be. For the purposes of the "Limitation on Restricted Payments" covenant,

provided that no such payment of dividends or distributions or receipt of any such other amounts shall reduce the amount of any Investment if such payment of dividends or distributions or receipt of any such amounts would be included in Consolidated Net Income.

        If Huntsman International or any Restricted Subsidiary of Huntsman International sells or otherwise disposes of any Common Stock of any direct or indirect Restricted Subsidiary of Huntsman International such that, after giving effect to any such sale or disposition, Huntsman International no longer owns, directly or indirectly, greater than 50% of the outstanding Common Stock of such Restricted Subsidiary, Huntsman International will be deemed to have made an Investment on the date of any such sale or disposition equal to the fair market value of the Common Stock of such Restricted Subsidiary not sold or disposed of.

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        "Investment Grade Rating" means a rating equal to or higher than Baa3 (or the equivalent) by Moody's and BBB- (or the equivalent) by S&P.

        "Issue Date" means the date on which notes are first issued under the indenture.

        "Lien" means any lien, mortgage, deed of trust, pledge, security interest, charge or encumbrance of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof and any agreement to give any security interest), but not including any interests in accounts receivable and related assets conveyed by Huntsman International or any of its subsidiaries or other entities formed as necessary or customary under the laws of the relevant jurisdiction in connection with any Qualified Securitization Transaction.

        "Moody's" means Moody's Investors Service, Inc. and its successors.

        "Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds in the form of cash or Cash Equivalents including payments in respect of deferred payment obligations when received in the form of cash or Cash Equivalents (other than the portion of any such deferred payment constituting interest) received by Huntsman International or any of its Restricted Subsidiaries from such Asset Sale net of

        "Obligations" means all obligations for principal, premium, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness.

        "Organizational Documents" means, with respect to any person, such person's memorandum, articles or certificate of incorporation, bylaws, partnership agreement, joint venture agreement, limited liability company agreement or other similar governing documents and any document setting forth the designation, amount and/or relative rights, limitations and preferences of any class or series of such person's Capital Stock.

        "Pari Passu Indebtedness" means, in the case of the notes, any Indebtedness of Huntsman International that ranks equally in right of payment with the notes and, in the case of the guarantees, any Indebtedness of the applicable guarantor that ranks equally in right of payment to the guarantee of such guarantor.

        "Paying Agent" means any Person (other than Huntsman International and any of its Affiliates) authorized by Huntsman International to pay the principal of (and premium, if any) or interest on any notes on behalf of Huntsman International and perform all the other obligations and duties of a "Paying Agent" described in the Indenture. The Paying Agent shall initially be the trustee.

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        "Permitted Indebtedness" means, without duplication, each of the following:

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For purposes of determining compliance with the "Limitation on Incurrence of Additional Indebtedness" covenant, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness described in clauses (1) through (22) above or is entitled to be incurred pursuant to the Consolidated Fixed Charge Coverage Ratio provisions of such covenant, Huntsman International shall, in its sole discretion, classify (or later reclassify) such item of Indebtedness in any manner that complies with this covenant; provided that $1.4 billion of Indebtedness outstanding under the Credit Agreement on the Issue Date (and any refinancings thereof) shall be deemed to have been incurred pursuant to clause (2) above. Accrual of interest, accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on Disqualified Capital Stock in the form of additional shares of the same class of Disqualified Capital Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Capital Stock for purposes of the "Limitations on Incurrence of Additional Indebtedness" covenant.

        "Permitted Investments" means:

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        "Permitted Joint Venture" means, with respect to any Person:

        "Permitted Junior Securities" means:

        "Permitted Tax Distribution" for any fiscal year means any payments made in compliance with clause (6) of the second paragraph under "Certain Covenants—Limitation on Restricted Payments."

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        "Preferred Stock" of any person means any Capital Stock of such person that has preferential rights to any other Capital Stock of such person with respect to dividends or redemptions or upon liquidation.

        "Qualified Capital Stock" means any Capital Stock that is not Disqualified Capital Stock.

        "Qualified Securitization Transaction" means any transaction or series of transactions that may be entered into by Huntsman International or any of its subsidiaries pursuant to which Huntsman International or any of its subsidiaries may sell, convey or otherwise transfer pursuant to terms necessary or customary in the relevant jurisdiction, directly or indirectly, to

or may grant a security interest, in any accounts receivable or any participations or other interests therein (whether now existing or arising or acquired in the future) of Huntsman International or any of its subsidiaries or other entities formed as necessary or customary under the laws of the relevant jurisdiction, and any assets related thereto including, without limitation, all collateral securing such accounts receivable, all contracts and contract rights and all guarantees or other obligations in respect of such accounts receivable, proceeds of such accounts receivable and other assets (including contract rights) which are necessarily or customarily transferred in the relevant jurisdiction or in respect of which security interests are necessarily or customarily granted in the relevant jurisdiction in connection with asset securitization transactions involving accounts receivable.

        Following the Initial Public Equity Offering of a Huntsman Public Parent, references in the foregoing definition to "Huntsman International" shall be deemed also to refer to such Huntsman Public Parent.

        "Rating Agencies" means Moody's and S&P.

        "Reference Treasury Dealer" means any four of Goldman, Sachs & Co., Banc of America Securities LLC, Barclays Capital Inc., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, HSBC Securities (USA) Inc. and J.P. Morgan Securities LLC, and their respective successors; provided, however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer in New York City (a "Primary Treasury Dealer"), the Company shall substitute therefor another Reference Treasury Dealer.

        "Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any redemption date, the average as determined by the trustee, of the bid and asked prices of the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the trustee by such Reference Treasury Dealer at 5:00 p.m. on the third Business Day preceding such redemption date.

        "Refinance" means, in respect of any security or Indebtedness, to refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue a security or Indebtedness in exchange or replacement for, such security or Indebtedness in whole or in part. "Refinanced" and "Refinancing" shall have correlative meanings.

        "Refinancing Indebtedness" means any Refinancing by Huntsman International or any Restricted Subsidiary of Huntsman International of Indebtedness incurred in accordance with the Fixed Charge Coverage Ratio test set forth in the "Limitation on Incurrence of Additional Indebtedness" covenant or

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Indebtedness described in clauses (1), (3), (10), (14)(b) or (15) of the definition of "Permitted Indebtedness," in each case that does not

provided that if such Indebtedness being Refinanced

        "Representative" means the indenture trustee or other trustee, agent or representative in respect of any Designated Senior Debt; provided that if, and for so long as, any Designated Senior Debt lacks such a representative, then the Representative for such Designated Senior Debt shall at all times constitute the holders of a majority in outstanding principal amount of such Designated Senior Debt in respect of any Designated Senior Debt.

        "Restricted Subsidiary" of any person means any subsidiary of such person which at the time of determination is not an Unrestricted Subsidiary.

        "S&P" means Standard & Poor's Ratings Services, a division of the McGraw-Hill Companies, Inc. and its successors.

        "Sale and Leaseback Transaction" means any direct or indirect arrangement with any person or to which any such person is a party, providing for the leasing to Huntsman International or a Restricted Subsidiary of any property, whether owned by Huntsman International or any Restricted Subsidiary on the Issue Date or later acquired, which has been or is to be sold or transferred by Huntsman

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International or such Restricted Subsidiary to such person or to any other person from whom funds have been or are to be advanced by such person on the security of such property.

        "Securitization Entity" means a wholly owned subsidiary of Huntsman International (or Tioxide Group, Holdings U.K. or another person in which Huntsman International or any subsidiary of Huntsman International makes an Investment and to which Huntsman International or any subsidiary of Huntsman International transfers, directly or indirectly, accounts receivable or participations or interests therein or related assets) which engages in no activities other than in connection with the financing of accounts receivable and which is designated by the board of managers of Huntsman International (as provided below) as a Securitization Entity

Any such designation by the board of managers of Huntsman International shall be evidenced to the trustee by filing with the trustee a certified copy of the resolution of the board of managers of Huntsman International giving effect to such designation and an officers' certificate certifying that such designation complied with the foregoing conditions; provided that Huntsman Receivables Finance LLC and Huntsman Receivables Finance II LLC shall be deemed to be so designated as of the Issue Date. Following the Initial Public Equity Offering of a Huntsman Public Parent, references in the foregoing definition to "Huntsman International" shall be deemed also to refer to such Huntsman Public Parent.

        "Senior Debt" means the principal of, premium, if any, and interest (including any interest accruing subsequent to the filing of a petition of bankruptcy at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable law) on any Indebtedness of Huntsman International, whether outstanding on the Issue Date or thereafter created, incurred or assumed, unless, in the case of any particular Indebtedness, the instrument creating or evidencing the same or pursuant to which the same is outstanding expressly provides that such

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Indebtedness shall not be senior in right of payment to the notes. Without limiting the generality of the foregoing, "Senior Debt" also includes the principal of, premium, if any, interest (including any interest accruing subsequent to the filing of a petition of bankruptcy at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable law) on, and all other amounts owing in respect of,

Notwithstanding the foregoing, "Senior Debt" does not include

        "Significant Subsidiary" means any Restricted Subsidiary of Huntsman International which, at the date of determination, is a "Significant Subsidiary" as such term is defined in Regulation S-X under the Exchange Act.

        "Specified Venture Capital Stock" means Qualified Capital Stock of Huntsman International issued to Huntsman Parent Company or a person who is not an Affiliate of Huntsman International and the proceeds from the issuance of which are applied within 180 days after the issuance thereof to an Investment in an Unrestricted Subsidiary or joint venture.

        "Standard Securitization Undertakings" means obligations, representations, warranties, covenants and indemnities entered into by Huntsman International or any Securitization Entity or any subsidiary of Huntsman International which are customary or necessary in the relevant jurisdiction in an accounts receivable securitization transaction. Following the Initial Public Equity Offering of a Huntsman Public Parent, references in the foregoing definition to "Huntsman International" shall be deemed also to refer to such Huntsman Public Parent.

        "Subordinated Indebtedness" means Indebtedness of Huntsman International or any guarantor which is expressly subordinated in right of payment to the notes or the guarantee of such guarantor, as the case may be.

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        "subsidiary" means with respect to any person, (1) any corporation of which the outstanding Capital Stock having at least a majority of the votes entitled to be cast in the election of managers or directors, as applicable, under ordinary circumstances shall at the time be owned, directly or indirectly, by such person; or (2) any other person of which at least a majority of the voting interests under ordinary circumstances is at the time, directly or indirectly, owned by such person.

        "Tax Sharing Agreement" means the Tax Sharing Agreement dated as of August 16, 2005 between Huntsman International and Huntsman Corporation as in existence on the Issue Date or any amendment thereto or replacement thereof so long as any such amendment or replacement provisions are not more disadvantageous to the holders of notes in any material respect than the provisions of the agreement being amended or replaced.

        "Total Assets of Huntsman International" means, as of any determination dates, the total assets of Huntsman International and its consolidated subsidiaries, as determined in accordance with GAAP at the end of the most recent fiscal quarter for which financial statements are available under "—Reports to Holders."

        "Unrestricted Subsidiary" of any person means:

Huntsman China Investments B.V., Huntsman Distribution Corporation, Huntsman SA Investment Corporation, Huntsman Styrenics Investments Holdings LLC, Huntsman Verwaltungs GmbH, Huntsman Pigments LLC and their respective subsidiaries shall each be Unrestricted Subsidiaries on the date of the indenture without further action. The board of managers of Huntsman International may, after the Issue Date, designate any subsidiary (including any newly acquired or newly formed subsidiary) to be an Unrestricted Subsidiary if:

The board of managers of Huntsman International may designate any Unrestricted Subsidiary to be a Restricted Subsidiary only if:

Any such designation by the board of managers of Huntsman International will be evidenced to the trustee by promptly filing with the trustee a copy of the board resolution approving the designation and an officers' certificate certifying that the designation complied with the indenture.

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        "Weighted Average Life to Maturity" means, when applied to any Indebtedness at any date, the number of years obtained by dividing:

Book-Entry; Delivery and Form

        The new notes will initially be represented by one or more permanent global notes in fully registered form without interest coupons (each, a "Global Note") and will be deposited with the trustee under the indenture governing the notes as a custodian for The Depository Trust Company ("DTC") and registered in the name of a nominee of such depositary. You may hold your beneficial interests in the Global Note directly through DTC if you have an account with DTC or indirectly through organizations which have accounts with DTC, including Euroclear and Clearstream. Except as set forth below, owners of beneficial interests in a Global Note will not be entitled to take physical delivery of their certificates (each a "Certificated Security").

        We expect that pursuant to procedures established by DTC (i) upon the issuance of the Global Notes, DTC or its custodian will credit, on its internal system, the principal amount of the individual beneficial interests represented by such Global Notes to the respective accounts of persons who have accounts with such depositary and (ii) ownership of beneficial interests in the Global Notes will be shown on, and the transfer of such ownership will be effected only through, records maintained by DTC or its nominee (with respect to interests of participants) and the records of participants (with respect to interests of persons other than participants). Ownership of beneficial interests in the Global Notes will be limited to persons who have accounts with DTC ("participants") or persons who hold interests through participants. Holders may hold their interests in the Global Notes directly through DTC if they are participants in such system, or indirectly through organizations which are participants in such system.

        So long as DTC, or its nominee, is the registered owner or holder of the notes, DTC or such nominee, as the case may be, will be considered the sole owner or holder of the notes represented by such Global Notes for all purposes under the indenture. No beneficial owner of an interest in the Global Notes will be able to transfer that interest except in accordance with DTC's procedures, in addition to those provided for under the indenture with respect to the notes.

        Payments of the principal of, premium (if any), and interest on, the Global Notes will be made to DTC or its nominee, as the case may be, as the registered owner thereof. Neither us nor the trustee will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in the Global Notes or for maintaining, supervising or reviewing any records relating to such beneficial ownership interest.

        We expect that DTC or its nominee, upon receipt of any payment of principal, premium, if any, interest on the Global Notes, will credit participants' accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of the Global Notes as shown on the records of DTC or its nominee. We also expect that payments by participants to owners of beneficial interests in the Global Notes held through such participants will be governed by standing instructions and customary practice, as is now the case with securities held for the accounts of customers registered

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in the names of nominees for such customers. Such payments will be the responsibility of such participants.

        Transfers between participants in DTC will be effected in the ordinary way through DTC's same-day funds system in accordance with DTC rules and will be settled in same day funds. If a holder requires physical delivery of a Certificated Security for any reason, including to sell notes to persons in states which require physical delivery of the notes, or to pledge such securities, such holder must transfer its interest in a Global Note, in accordance with the normal procedures of DTC and with the procedures set forth in the indenture.

        DTC has advised us that it will take any action permitted to be taken by a holder of notes (including the presentation of notes for exchange as described below) only at the direction of one or more participants to whose account the DTC interests in the Global Notes are credited and only in respect of such portion of the aggregate principal amount of notes as to which such participant or participants has or have given such direction. However, if there is an event of default under the indenture, DTC will exchange the Global Notes for Certificated Securities, which it will distribute to its participants.

        DTC has advised us as follows: DTC is a limited purpose trust company organized under the laws of the State of New York, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the Uniform Commercial Code and a "Clearing Agency" registered pursuant to the provisions of Section 17A of the Exchange Act. DTC was created to hold securities for its participants and facilitate the clearance and settlement of securities transactions between participants through electronic book-entry changes in accounts of its participants, thereby eliminating the need for physical movement of certificates. Participants include securities brokers and dealers, banks, trust companies and clearing corporations and certain other organizations. Indirect access to the DTC system is available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly.

        Although DTC has agreed to the foregoing procedures in order to facilitate transfers of interests in the Global Notes among participants of DTC, it is under no obligation to perform such procedures, and such procedures may be discontinued at any time. Neither we nor the trustee will have any responsibility for the performance by DTC or its participants or indirect participants of their respective obligations under the rules and procedures governing their operations.

        Certificated Securities shall be issued in exchange for beneficial interests in the Global Notes (i) if there is an event of default under the indenture or (ii) if DTC is at any time unwilling or unable to continue as a depositary for the Global Notes and a successor depositary is not appointed by us.

Exchange Offer; Registration Rights

        We, the guarantors and the initial purchasers of the old notes, entered into an exchange and registration rights agreement on September 24, 2010 with respect to $350 million of old notes and on November 12, 2010 with respect to $180 million of old notes. Pursuant to the exchange and registration rights agreements, we agreed that we would, at our expense and for the benefit of the holders of the old notes, use our reasonable best efforts to:

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        We have agreed to commence the exchange offer promptly after the effectiveness of the registration statement of which this prospectus is a part. We will keep the exchange offer open for not less than 20 full business days (or longer if required by applicable law) after the date notice of the exchange offer is mailed to the holders of old notes. For each of the old notes validly tendered and not withdrawn before the expiration of the exchange offer, the holder who surrendered such old note will receive a new note having a principal amount equal to that of the surrendered old note.

        Under existing interpretations of the SEC contained in several no-action letters to third parties, the new notes will be freely transferable by holders thereof after the exchange offer without further registration under the Securities Act However, any holder using the exchange offer to participate in a distribution of the new notes (i) may not rely on applicable interpretations of the staff of the SEC and (ii) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. Each holder that wishes to exchange its old notes for new notes will be required to represent

        A Participating Broker-Dealer may be an "underwriter" within the meaning of the Securities Act, but the letter of transmittal states that the representation and prospectus delivery required above will not be deemed an admission by the Participating Broker-Dealer that it is an "underwriter" within the meaning of the Securities Act.

        We agree to make available, during the period required by the Securities Act, a prospectus meeting the requirements of the Securities Act for use by Participating Broker-Dealers and other persons, if any, with similar prospectus delivery requirements for use in connection with any resale of new notes.

        If on or before the date of consummation of the exchange offer we are not permitted to effect an exchange offer because of any change in law or in currently prevailing interpretations of the staff of the SEC, then we will, in lieu of effecting registration of exchange notes, use our reasonable best efforts to cause a shelf registration covering resales of the notes (the "Shelf Registration Statement") to become effective and to remain effective until the earlier of two years following the effective date of such registration statement or such time as all of the applicable notes have been sold thereunder.

        We will, in the event that a Shelf Registration Statement is filed, provide to each holder copies of the prospectus that is a part of the Shelf Registration Statement, notify each such holder when the Shelf Registration Statement for the notes has become effective and take certain other actions as are required to permit unrestricted resales of the notes. A holder that sells notes pursuant to the Shelf

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Registration Statement will generally be required to be named as a selling securityholder in the related prospectus and to deliver a prospectus to purchasers, will be subject to certain of the civil liability provisions under Securities Act in connection with such sales and will be bound by the provisions of the registration rights agreement that are applicable to such a holder (including certain indemnification rights and obligations).

        Although we intend to file the registration statement described above, we cannot assure you that the registration statement will be filed or, if filed, will become effective.

        In the event that:

then the per annum interest rate on the notes will increase, for the period from the occurrence of the Registration Default until such time as no Registration Default is in effect (at which time the interest rate will be reduced to its initial rate), by 0.125% during the first 90-day period following the occurrence of such Registration Default, which rate shall increase by an additional 0.125% during each subsequent 90-day period, up to a maximum of 0.5%.


MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

        The following discussion is a summary of the material United States federal income tax consequences relevant to the exchange of old notes for new notes, but is not intended to be a complete analysis of all potential tax effects. This discussion is based upon current provisions of the Internal Revenue Code of 1986, as amended, applicable Treasury regulations, judicial authority and administrative rulings and practice. There can be no assurance that the Internal Revenue Service (the "IRS") will not take a contrary view, and no ruling from the IRS has been or will be sought. Future legislative, judicial or administrative changes or interpretation could alter or modify the statements and conditions set forth herein. Any such changes or interpretations could be retroactive and could affect the tax consequences to holders. Certain holders (including insurance companies, tax-exempt organizations, financial institutions, broker-dealers, foreign corporations and persons who are not citizens or residents of the United States) may be subject to special rules not discussed below.

        The exchange of old notes for new notes pursuant to the exchange offer will not be treated as a taxable event to holders for United States federal income tax purposes. Rather, the new notes received by a holder will be treated as a continuation of the old notes in the hands of such holder. Accordingly, the holding period of the new notes will be the same as the holding period of the old notes and the tax basis in the new notes will be the same as the basis in the old notes, as measured immediately before the exchange.

        WE RECOMMEND THAT EACH HOLDER CONSULT SUCH HOLDER'S OWN TAX ADVISOR AS TO THE PARTICULAR TAX CONSEQUENCES OF EXCHANGING SUCH

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HOLDER'S OLD NOTES FOR NEW NOTES, INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS.


PLAN OF DISTRIBUTION

        Each broker-dealer that receives new notes for its own account in the exchange offer must acknowledge that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of those notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of new notes received in the exchange offer for old notes where such old notes were acquired as a result of market-making activities or other trading activities. We have agreed that, for a period of 120 days after the consummation of the exchange offer, we will make this prospectus, as amended and supplemented, available to any broker-dealer for use in connection with any such resale.

        Neither we nor any of the guarantors will receive any proceeds from any sale of new notes by broker-dealers. New notes received by broker-dealers for their own account in the exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the new notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or at negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker- dealer or the purchasers of any such new notes. Any broker-dealer that resells new notes that were received by it for its own account in the exchange offer and any broker or dealer that participates in a distribution of such new notes may be deemed to be an "underwriter" within the meaning of the Securities Act, and profit on any such resale of notes issued in the exchange and any commission or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that, by acknowledging that it will deliver and by delivering a prospectus, a broker- dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.

        For a period of 120 days after the consummation of the exchange offer, we will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests such documents in the letter of transmittal. We have agreed to pay all expenses incident to the exchange offer and will indemnify the holders of the new notes, including any broker-dealers, against certain liabilities, including liabilities under the Securities Act. We note, however, that, in the opinion of the SEC, indemnification against liabilities arising under federal securities laws is against public policy and may be unenforceable.


LEGAL MATTERS

        Certain legal matters as to the enforceability of the obligations of Huntsman International LLC under the notes and the enforceability of the obligations of the guarantors under the related guarantees will be passed upon for these entities and for us by Stoel Rives LLP, Salt Lake City, Utah. Certain legal matters as to the enforceability of the guarantee of the notes by Huntsman Ethyleneamines LLC, Huntsman Fuels LLC, Huntsman International Fuels LLC and Huntsman Propylene Oxide LLC will be passed upon for these entities by Vinson & Elkins L.L.P., Houston, Texas. Certain legal matters as to the validity of the enforceability of the notes by Tioxide Americas LLC will be passed upon for Tioxide Americas LLC by Walkers, Cayman Islands. Certain legal matters as to the enforceability of the guarantee of the notes by Tioxide Group will be passed upon for Tioxide Group by Dickinson Dees LLP.

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EXPERTS

        The consolidated financial statements and the related financial statement schedule of Huntsman International LLC as of December 31, 2010 and 2009 and for each of the three years in the period ended December 31, 2010, included in this prospectus have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing herein (which report expresses an unqualified opinion on the consolidated financial statements and financial statement schedule and includes explanatory paragraphs relating to the adoption of new accounting guidance which changed our method of accounting for transfers of accounts receivable under our accounts receivable securitization programs, effective January 1, 2010). Such consolidated financial statements and financial statement schedule have been so included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.


WHERE YOU CAN FIND MORE INFORMATION

        We have filed with the SEC a registration statement on Form S-4 (Reg. No. 333                        ) with respect to the securities being offered hereby. This prospectus does not contain all of the information contained in the registration statement, including the exhibits and schedules. You should refer to the registration statement, including the exhibits and schedules, for further information about us and the securities being offered hereby. Statements we make in this prospectus about certain contracts or other documents are not necessarily complete. When we make such statements, we refer you to the copies of the contracts or documents that are filed as exhibits to the registration statement because those statements are qualified in all respects by reference to those exhibits.

        We and our parent file annual, quarterly and current reports and other information with the SEC. You may read and copy reports and other information that we or our parent file with the SEC at the public reference facilities maintained by the SEC at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for more information on the public reference rooms. The SEC also maintains an Internet site at http://www.sec.gov from which you can access our filings and our parent's filings. See "Description of New Notes—Certain Covenants—Reports to Holders" for information about the reports and other information that we are required to furnish to holders of notes and how those obligations may be satisfied.

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

 
  Page

Huntsman International LLC and Subsidiaries:

   

Consolidated Financial Statements

   
 

Report of Independent Registered Public Accounting Firm

  F-2
 

Consolidated Balance Sheets as of December 31, 2010 and 2009

  F-3
 

Consolidated Statements of Operations and Comprehensive Income (Loss) for the Years Ended December 31, 2010, 2009 and 2008

  F-4
 

Consolidated Statements of Equity for the Years Ended December 31, 2010, 2009 and 2008

  F-5
 

Consolidated Statements of Cash Flows for the Years Ended December 31, 2010, 2009 and 2008

  F-6
 

Notes to Consolidated Financial Statements

  F-8

Schedule to Consolidated Financial Statements

   
 

Schedule to Consolidated Financial Statements, Schedule II—Valuation and Qualifying Accounts

  F-89

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Managers and Members of
Huntsman International LLC and subsidiaries

        We have audited the accompanying consolidated balance sheets of Huntsman International LLC and subsidiaries (the "Company") as of December 31, 2010 and 2009, and the related consolidated statements of operations and comprehensive (loss) income, equity, and cash flows for each of the three years in the period ended December 31, 2010. Our audits also included the financial statement schedule listed in the Index on page F-1. These financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on the financial statements and financial statement schedule based on our audits.

        We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

        In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Huntsman International LLC and subsidiaries as of December 31, 2010 and 2009, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2010, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

        As discussed in Notes 2, 14 and 16 to the consolidated financial statements, the Company adopted new accounting guidance which changed its method of accounting for transfers of accounts receivable under the Company's accounts receivable securitization programs, effective January 1, 2010.

        We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company's internal control over financial reporting as of December 31, 2010, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 17, 2011 (not presented herein) expressed an unqualified opinion on the Company's internal control over financial reporting.

/s/ DELOITTE & TOUCHE LLP

Houston, Texas
February 17, 2011

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars in Millions)

 
  December 31,
2010
  December 31,
2009
 

ASSETS

             

Current assets:

             
 

Cash and cash equivalents(a)

  $ 561   $ 919  
 

Restricted cash

    7     5  
 

Accounts and notes receivable (net of allowance for doubtful accounts of $52 and $56, respectively), ($589 and nil pledged as collateral, respectively)(a)

    1,464     1,018  
 

Accounts receivable from affiliates

    100     32  
 

Inventories(a)

    1,396     1,184  
 

Prepaid expenses

    45     42  
 

Deferred income taxes

    40     33  
 

Other current assets(a)

    109     109  
           
   

Total current assets

    3,722     3,342  

Property, plant and equipment, net(a)

    3,469     3,357  

Investment in unconsolidated affiliates

    234     250  

Intangible assets, net(a)

    107     129  

Goodwill

    94     94  

Deferred income taxes

    179     158  

Notes receivable from affiliates

    7     8  

Other noncurrent assets(a)

    495     355  
           
   

Total assets

  $ 8,307   $ 7,693  
           

LIABILITIES AND EQUITY

             

Current liabilities:

             
 

Accounts payable(a)

  $ 840   $ 715  
 

Accounts payable to affiliates

    59     41  
 

Accrued liabilities(a)

    626     613  
 

Deferred income taxes

    63     2  
 

Note payable to affiliate

    100     25  
 

Current portion of debt(a)

    519     195  
           
   

Total current liabilities

    2,207     1,591  

Long-term debt(a)

    3,627     3,781  

Notes payable to affiliates

    439     530  

Deferred income taxes

    94     79  

Other noncurrent liabilities(a)

    852     865  
           
   

Total liabilities

    7,219     6,846  

Commitments and contingencies (Notes 20 and 21)

             

Equity

             

Huntsman International LLC members' equity:

             
 

Members' equity, 2,728 units issued and outstanding

    3,049     3,021  
 

Accumulated deficit

    (1,667 )   (1,847 )
 

Accumulated other comprehensive loss

    (354 )   (348 )
           
   

Total Huntsman International LLC members' equity

    1,028     826  

Noncontrolling interests in subsidiaries

    60     21  
           
   

Total equity

    1,088     847  
           
   

Total liabilities and equity

  $ 8,307   $ 7,693  
           

(a)
At December 31, 2010 and 2009, respectively, $7 and nil of cash and cash equivalents, $8 and $9 of accounts and notes receivable (net), $45 and $33 of inventories, $2 each of other current assets, $275 and $16 of property, plant and equipment (net), $7 and nil of intangible assets (net), $18 each of other noncurrent assets, $56 and $42 of accounts payable, $16 and $9 of accrued liabilities, $15 and $2 of current portion of debt, $185 and nil of long-term debt, and $109 and $93 of other noncurrent liabilities from consolidated variable interest entities are included in the respective Balance Sheet captions above. See "Note 7. Variable Interest Entities."

See accompanying notes to consolidated financial statements.

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE (LOSS) INCOME

(Dollars in Millions)

 
  Year ended December 31,  
 
  2010   2009   2008  

Revenues:

                   
 

Trade sales, services and fees, net

  $ 9,049   $ 7,569   $ 9,892  
 

Related party sales

    201     96     164  
               
   

Total revenues

    9,250     7,665     10,056  

Cost of goods sold

    7,772     6,570     8,759  
               

Gross profit

    1,478     1,095     1,297  

Operating expenses:

                   
 

Selling, general and administrative

    855     839     870  
 

Research and development

    151     145     154  
 

Other operating (income) expense

        (18 )   27  
 

Restructuring, impairment and plant closing costs

    29     88     31  
               
   

Total expenses

    1,035     1,054     1,082  
               

Operating income

    443     41     215  

Interest expense, net

    (248 )   (240 )   (263 )

Loss on accounts receivable securitization program

        (23 )   (27 )

Equity in income of investment in unconsolidated affiliates

    24     3     14  

Loss on early extinguishment of debt

    (37 )   (21 )   (1 )

Other income

    2         1  
               

Income (loss) from continuing operations before income taxes

    184     (240 )   (61 )

Income tax expense (benefit)

    40     159     (2 )
               

Income (loss) from continuing operations

    144     (399 )   (59 )

Income (loss) from discontinued operations, (including gain (loss) on disposal of $1 in 2009 and $11 in 2008), net of tax

    42     (19 )   84  
               

Income (loss) before extraordinary gain (loss)

    186     (418 )   25  

Extraordinary (loss) gain on the acquisition of a business, net of tax of nil

    (1 )   6     14  
               

Net income (loss)

    185     (412 )   39  

Net (income) loss attributable to noncontrolling interests

    (5 )   2     (1 )
               

Net income (loss) attributable to Huntsman International LLC

  $ 180   $ (410 ) $ 38  
               

Net income (loss)

  $ 185   $ (412 ) $ 39  

Other comprehensive (loss) income

    (7 )   207     (744 )
               

Comprehensive income (loss)

    178     (205 )   (705 )

Comprehensive (income) loss attributable to noncontrolling interests

    (4 )   1     2  
               

Comprehensive income (loss) attributable to Huntsman International LLC

  $ 174   $ (204 ) $ (703 )
               

See accompanying notes to consolidated financial statements.

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(Dollars in Millions)

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

Balance, January 1, 2008

    2,728   $ 2,845   $ (1,143 ) $ 187   $ 27   $ 1,916  

Net income

            38         1     39  

Other comprehensive loss

                (741 )   (3 )   (744 )

Effect of adoption of ASC 715-20-55, net of tax

            (3 )           (3 )

Contribution from parent, net of distributions

        20                 20  

Dividends paid to parent

            (306 )       (3 )   (309 )
                           

Balance, December 31, 2008

    2,728     2,865     (1,414 )   (554 )   22     919  

Net loss

            (410 )       (2 )   (412 )

Other comprehensive loss

                206     1     207  

Contribution from parent, net of distributions

        156                 156  

Dividends paid to parent

            (23 )           (23 )
                           

Balance, December 31, 2009

    2,728     3,021     (1,847 )   (348 )   21     847  

Net income

            180         5     185  

Other comprehensive loss

                (6 )   (1 )   (7 )

Consolidation of a variable interest entity

                    35     35  

Contribution from parent, net of distributions

        24                 24  

Excess tax benefit related to stock-based compensation

        4                 4  
                           

Balance, December 31, 2010

    2,728   $ 3,049   $ (1,667 ) $ (354 ) $ 60   $ 1,088  
                           

See accompanying notes to consolidated financial statements.

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in Millions)

 
  Year Ended December 31,  
 
  2010   2009   2008  

Operating Activities:

                   

Net income (loss)

  $ 185   $ (412 ) $ 39  

Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:

                   

Extraordinary loss (gain) on the acquisition of a business, net of tax

    1     (6 )   (14 )

Equity in income of investment in unconsolidated affiliates

    (24 )   (3 )   (14 )

Dividends received from unconsolidated affiliates

        11     11  

Depreciation and amortization

    382     420     374  

Provision for losses on accounts receivable

    6     9     6  

Loss (gain) on disposal of businesses/assets, net

    8     (2 )   6  

Loss on early extinguishment of debt

    37     21     1  

Noncash interest expense

    40     39     2  

Noncash restructuring, impairment and plant closing costs

    2     13     7  

Deferred income taxes

    45     68     26  

Noncash loss (gain) on foreign currency transactions

    22     (26 )   4  

Noncash compensation

    24     16     20  

Portion of insurance settlement representing investing activities

    (34 )        

Noncash gain on partial fire insurance settlement

            (135 )

Other, net

    1     1     4  

Changes in operating assets and liabilities:

                   
 

Accounts and notes receivable

    (183 )   (88 )   263  
 

Accounts receivable from A/R Programs

    (254 )        
 

Inventories

    (207 )   351     (119 )
 

Prepaid expenses

    (2 )   5     (9 )
 

Other current assets

    (1 )   (6 )   (5 )
 

Other noncurrent assets

    (102 )   (32 )   41  
 

Accounts payable

    97     4     (193 )
 

Accrued liabilities

    (32 )   5     (17 )
 

Other noncurrent liabilities

    (57 )   32     (259 )
               

Net cash (used in) provided by operating activities

    (46 )   420     39  
               

Investing Activities:

                   

Capital expenditures

    (236 )   (189 )   (418 )

Proceeds from insurance settlement treated as reimbursement of capital expenditures

    34          

Acquisition of business, net of cash acquired and post-closing adjustments

        (31 )   (2 )

Proceeds from sale of businesses/assets, net of adjustments

    2     5     (26 )

Cash assumed in connection with the initial consolidation of a variable interest entity

    14          

(Increase) decrease in receivable from affiliate

    (57 )   (7 )   179  

Investment in unconsolidated affiliates

            (44 )

Cash received from unconsolidated affiliates

    4     7     10  

Change in restricted cash

    (2 )       (8 )

Other, net

    3     3     (5 )
               

Net cash used in investing activities

    (238 )   (212 )   (314 )
               

(continued)

 

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Dollars in Millions)

 
  Year Ended December 31,  
 
  2010   2009   2008  

Financing Activities:

                   

Net (repayments) borrowings under revolving loan facilities

  $ (6 ) $ (14 ) $ 11  

Revolving loan facility from A/R Programs

    254          

Net (repayments) borrowings on overdraft facilities

    (2 )   (12 )   8  

Repayments of short-term debt

    (175 )   (13 )   73  

Borrowings on short-term debt

    212          

Repayments of long-term debt

    (1,207 )   (542 )   (11 )

Proceeds from issuance of long-term debt

    923     880     28  

Repayments of notes payable to affiliate

    (125 )   (403 )    

Proceeds from notes payable to affiliate

    110     529     423  

Repayments of notes payable

    (53 )   (63 )   (55 )

Borrowings on notes payable

    46     64     48  

Debt issuance costs paid

    (29 )   (5 )   (5 )

Call premiums related to early extinguishment of debt

    (28 )   (14 )    

Excess tax benefit related to stock-based compensation

    4          

Contribution from parent

        236      

Dividends paid to parent

        (23 )   (306 )

Other, net

    (2 )   (1 )   (1 )
               

Net cash (used in) provided by financing activities

    (78 )   619     213  
               

Effect of exchange rate changes on cash

    4     5     (5 )
               

(Decrease) Increase in cash and cash equivalents

    (358 )   832     (67 )

Cash and cash equivalents at beginning of period

    919     87     154  
               

Cash and cash equivalents at end of period

  $ 561   $ 919   $ 87  
               

Supplemental cash flow information:

                   
 

Cash paid for interest

  $ 194   $ 221   $ 265  
 

Cash paid for income taxes

    32     27     34  

        During 2010, 2009 and 2008, the amount of capital expenditures in accounts payable increased (decreased) by $48, $(13) and $9, respectively. During the years ended 2010, 2009 and 2008, Huntsman Corporation contributed $24, $16 and $20, respectively to stock based compensation. In connection with our June 23, 2009 acquisition of Baroda, $5 of payables from us to MCIL were forgiven. Beginning July 1, 2010, we began consolidating Arabian Amines Company, our ethyleneamines manufacturing joint venture in Jubail, Saudi Arabia. For more information, see "Note 7. Variable Interest Entities."

        During 2010, 2009 and 2008, capital expenditures of $236, $189 and $418, respectively, were reimbursed in part by $34, nil and nil, respectively, from insurance settlement proceeds. During 2010, we received $110 from the settlement of our insurance claims related to the 2006 fire at our Port Arthur Texas plant, $34 of which was considered as a reimbursement of capital expenditures.

See accompanying notes to consolidated financial statements.

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. GENERAL

DEFINITIONS

        We are a wholly-owned subsidiary of Huntsman Corporation, which we refer to in these notes as our "parent." Unless the context otherwise requires, references in these financial statements to "we," "us," "our" or "our Company" refer to Huntsman International LLC, together with its subsidiaries, and not to Huntsman Corporation and its other subsidiaries; references to "guarantors" or "guarantor subsidiaries" refer to our subsidiaries that have guaranteed our debt obligations, including the notes, consisting of substantially all of our domestic subsidiaries and certain of our foreign 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 Investment BV (our unconsolidated manufacturing joint venture with BASF AG and three Chinese chemical companies).

        Each capitalized term used without definition in these notes to consolidated financial statements has the meaning specified in the prospectus to which these notes to consolidated financial statements are included. In these financial statements, 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.

DESCRIPTION OF BUSINESS

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

        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. In a series of transactions beginning in 2006, we sold or shutdown substantially all of our Australian styrenics, Polymers and Base Chemicals operations. We report the results of our former Australian styrenics, Polymers and Base Chemicals businesses as discontinued operations. See "Note 27. Discontinued Operations."

COMPANY

        Our Company, a Delaware limited liability company, was formed in 1999. We are a wholly-owned subsidiary of Huntsman Corporation.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

        Our consolidated financial statements include the accounts of our wholly-owned and majority-owned subsidiaries and any variable interest entities for which we are the primary beneficiary. All

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)


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. During the first quarter of 2010, we began reporting our LIFO inventory valuation reserves as part of Corporate and other; these reserves were previously reported in our Performance Products segment. During the third quarter of 2010, we began reporting the amounts outstanding under the A/R Programs as part of our Polyurethanes, Performance Products, Advanced Materials, Textile Effects and Pigments segments' assets. These amounts were previously reported as Corporate and other segment assets. In addition, we eliminated intercompany balances from the assets of each reportable segment. During the fourth quarter of 2010, we began reporting the (income) loss attributable to noncontrolling interests in the reporting segment to which the subsidiary relates. Previously, (income) loss attributable to noncontrolling interests was reported in our Corporate and other segment. All relevant information for prior periods has been reclassified to reflect these changes.

SUBSEQUENT EVENTS

        We have evaluated material subsequent events through the date these financial statements were issued.

REVENUE RECOGNITION

        We generate substantially all of our revenues through sales in the open market and long-term supply agreements. We recognize revenue when it is realized or realizable and earned. Revenue for product sales is recognized when a sales arrangement exists, risk and title to the product transfer to the customer, collectibility is reasonably assured and pricing is fixed or determinable. The transfer of risk and title to the product to the customer usually occurs at the time shipment is made.

        Revenue arrangements that contain multiple deliverables, which relate primarily to licensing of technology, are evaluated to determine whether the arrangements should be divided into separate units of accounting and how the arrangement consideration should be measured and allocated among the separate units of accounting.

COST OF GOODS SOLD

        We classify the costs of manufacturing and distributing our products as cost of goods sold. Manufacturing costs include variable costs, primarily raw materials and energy, and fixed expenses directly associated with production. Manufacturing costs also include, among other things, plant site operating costs and overhead (including depreciation), production planning and logistics costs, repair

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)


and maintenance costs, plant site purchasing costs, and engineering and technical support costs. Distribution, freight and warehousing costs are also included in cost of goods sold.

CASH AND CASH EQUIVALENTS

        We consider cash in checking accounts and cash in short-term highly liquid investments with remaining maturities of three months or less at the date of purchase, to be cash and cash equivalents. Cash flows from discontinued operations are not presented separately in the accompanying consolidated statements of cash flows.

ALLOWANCE FOR DOUBTFUL TRADE RECEIVABLES

        An allowance for doubtful trade receivables is estimated based on a combination of write-off history, aging analysis and any specific, known troubled accounts.

SECURITIZATION OF ACCOUNTS RECEIVABLE

        Under our A/R Programs, we grant an undivided interest in certain of our trade receivables to the U.S. SPE and the EU SPE. This undivided interest serves as security for the issuance of debt. The A/R Programs provide for financing through a conduit program (in both U.S. dollars and euros). Receivables transferred under the A/R Programs qualified as sales through December 31, 2009. Upon adoption of new accounting guidance on January 1, 2010, transfers of accounts receivable under our A/R Programs no longer met the criteria for derecognition. Accordingly, the amounts outstanding under our A/R Programs are accounted for as secured borrowings in 2010. See "Note 14. Debt—Accounts Receivable Securitization" and "Note 16. Off-Balance Sheet Securitization of Accounts Receivable."

INVENTORIES

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

PROPERTY, PLANT AND EQUIPMENT

        Property, plant and equipment is stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives or lease term as follows:

Buildings and equipment

  10 - 33 years

Plant and equipment

  3 - 25 years

Furniture, fixtures and leasehold improvements

  5 - 20 years

        Interest expense capitalized as part of plant and equipment was $1 million, $3 million and $17 million for the years ended December 31, 2010, 2009 and 2008, respectively.

        Periodic maintenance and repairs applicable to major units of manufacturing facilities (a "turnaround") are accounted for on the deferral basis by capitalizing the costs of the turnaround and amortizing the costs over the estimated period until the next turnaround. Normal maintenance and repairs of plant and equipment are charged to expense as incurred. Renewals, betterments and major

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)


repairs that materially extend the useful life of the assets are capitalized, and the assets replaced, if any, are retired.

INVESTMENT IN UNCONSOLIDATED AFFILIATES

        Investments in companies in which we exercise significant management influence, but do not control, are accounted for using the equity method. Investments in companies in which we do not exercise significant influence are accounted for using the cost method.

INTANGIBLE ASSETS AND GOODWILL

        Intangible assets are stated at cost (fair value at the time of acquisition) and are amortized using the straight-line method over the estimated useful lives or the life of the related agreement as follows:

Patents and technology

  5 - 30 years

Trademarks

  15 - 30 years

Licenses and other agreements

  5 - 15 years

Other intangibles

  5 - 15 years

        Goodwill represents costs in excess of fair values assigned to the underlying net assets of acquired businesses. Goodwill is not subject to any method of amortization, but is tested for impairment annually (at the beginning of the third quarter) and when events and circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. When the fair value is less than the carrying value of the related reporting unit, we are required to reduce the amount of goodwill through a charge to earnings. Fair value is estimated using the market approach, as well as the income approach based on discounted cash flow projections. Goodwill has been assigned to reporting units for purposes of impairment testing.

OTHER NONCURRENT ASSETS

        Other noncurrent assets consist primarily of spare parts, deferred debt issuance costs, the overfunded portion related to defined benefit plans for employees and capitalized turnaround costs. Debt issuance costs are amortized using the interest method over the term of the related debt.

CARRYING VALUE OF LONG-LIVED ASSETS

        We review long-lived assets and all amortizable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Recoverability is based upon current and anticipated undiscounted cash flows, and we recognize an impairment when such estimated cash flows are less than the carrying value of the asset. Measurement of the amount of impairment, if any, is based upon the difference between carrying value and fair value. Fair value is generally estimated by discounting estimated future cash flows using a discount rate commensurate with the risks involved. See "Note 11. Restructuring, Impairment and Plant Closing Costs" and "Note 27. Discontinued Operations."

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

FINANCIAL INSTRUMENTS

        The carrying amounts reported in the balance sheet for cash and cash equivalents, accounts receivable and accounts payable approximate fair value because of the immediate or short-term maturity of these financial instruments. The fair value of non-qualified employee benefit plan investments is estimated using prevailing market prices. The estimated fair values of our long-term debt are based on quoted market prices for the identical liability when traded as an asset in an active market.

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. Uncertainties regarding expected future income in certain jurisdictions could affect the realization of deferred tax assets in those jurisdictions.

        We do not provide for income taxes or benefits on the undistributed earnings of our non-U.S. subsidiaries as earnings are reinvested and, in the opinion of management, will continue to be reinvested indefinitely.

        Accounting for uncertainty in income taxes prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The application of income tax law is inherently complex. We are required to determine if an income tax position meets the criteria of more-likely-than-not to be realized based on the merits of the position under tax law, in order to recognize an income tax benefit. This requires us to make many assumptions and judgments regarding the merits of income tax positions and the application of income tax law. Additionally, if a tax position meets the recognition criteria of more-likely-than-not we are required to make judgments and assumptions to measure the amount of the tax benefits to recognize based on the probability of the amount of tax benefits that would be realized if the tax position was challenged by the taxing authorities. Interpretations and guidance surrounding income tax laws and regulations change over time. As a consequence, changes in assumptions and judgments can materially affect amounts recognized in the consolidated financial statements.

DERIVATIVES AND HEDGING ACTIVITIES

        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. Changes in the fair value of the hedge in the net investment of certain international operations are recorded in other comprehensive income, to the extent effective. The effectiveness of a cash flow hedging relationship is established at the inception of the hedge, and

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)


after inception we perform effectiveness assessments at least every three months. A derivative designated as a cash flow hedge is determined to be effective if the change in value of the hedge divided by the change in value of the hedged item is within a range of 80% to 125%. Hedge ineffectiveness in a cash flow hedge occurs only if the cumulative gain or loss on the derivative hedging instrument exceeds the cumulative change in the expected future cash flows on the hedged transaction. For a derivative that does not qualify or has not been designated as a hedge, changes in fair value are recognized in earnings.

ENVIRONMENTAL EXPENDITURES

        Environmental related restoration and remediation costs are recorded as liabilities when site restoration and environmental remediation and clean-up obligations are either known or considered probable and the related costs can be reasonably estimated. Other environmental expenditures that are principally maintenance or preventative in nature are recorded when expended and incurred and are expensed or capitalized as appropriate. See "Note 21. Environmental, Health and Safety Matters."

ASSET RETIREMENT OBLIGATIONS

        We accrue for asset retirement obligations, which consist primarily of landfill closure costs and asbestos abatement costs, in the period in which the obligations are incurred. Asset retirement obligations are accrued at estimated fair value. When the liability is initially recorded, we capitalize the cost by increasing the carrying amount of the related long-lived asset. Over time, the liability is accreted to its settlement value and the capitalized cost is depreciated over the useful life of the related asset. Upon settlement of the liability, we will recognize a gain or loss for any difference between the settlement amount and the liability recorded. See "Note 12. Asset Retirement Obligations."

RESEARCH AND DEVELOPMENT

        Research and development costs are expensed as incurred.

FOREIGN CURRENCY TRANSLATION

        The accounts of our operating subsidiaries outside of the U.S., unless they are operating in highly inflationary economic environments, consider the functional currency to be the currency of the economic environment in which they operate. Accordingly, assets and liabilities are translated at rates prevailing at the balance sheet date. Revenues, expenses, gains and losses are translated at a weighted average rate for the period. Cumulative translation adjustments are recorded to equity as a component of accumulated other comprehensive (loss) income.

        If a subsidiary operates in an economic environment that is considered to be highly inflationary (100% cumulative inflation over a three year period), the U.S. dollar is considered to be the functional currency and gains and losses from remeasurement to the U.S. dollar from the local currency are included in the statement of operations. Where a subsidiary's operations are effectively run, managed, financed and contracted in U.S. dollars, such as certain finance subsidiaries outside of the U.S., the U.S. dollar is considered to be the functional currency.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

        Foreign currency transaction gains and losses are recorded in other operating expense (income) in the consolidated statements of operations and were net (losses) gains of $(2) million, $13 million, and $(12) million for the years ended December 31, 2010, 2009 and 2008, respectively.

STOCK-BASED COMPENSATION

        We measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. That cost will be recognized over the period during which the employee is required to provide services in exchange for the award. See "Note 23. Stock-Based Compensation Plan."

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

Accounting Pronouncements Adopted During 2010

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

        In January 2010, the FASB issued ASU No. 2010-06, Fair Value Measurements and Disclosures (Topic 820)—Improving Disclosures about Fair Value Measurements. This ASU clarifies existing disclosure requirements to provide a greater level of disaggregated information and to provide more information regarding valuation techniques and inputs to fair value measurements. It requires additional disclosure related to transfers between the three levels of fair value measurement, as well as information about purchases, sales, issuances, and settlements in the roll forward of activity for Level 3 measurements. The enhanced disclosures required by this ASU are effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity for Level 3 measurements, which is effective for interim and annual reporting periods beginning after December 15, 2010. See "Note 17. Fair Value."

        Effective January 1, 2010, we adopted ASU No. 2009-17, Consolidations (Topic 810)—Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities, which codified Statement of Financial Accounting Standards ("SFAS") No. 167, Amendments to FASB Interpretation No. 46(R). This statement amends FASB Interpretation No. ("FIN") 46(R), Consolidation of Variable Interest Entities, to replace the quantitative-based risks and rewards calculation for determining which enterprise has a controlling financial interest in a variable interest entity ("VIE") with a qualitative approach. This new approach focuses on identifying which enterprise has the power to direct the activities of a VIE that most significantly impact the entity's economic performance and (1) the obligation to absorb losses of the entity or (2) the right to receive benefits from the entity. It also requires ongoing assessments of whether an enterprise is the primary beneficiary of a VIE and amends the types of events that trigger a reassessment of whether an entity is a VIE. Further, it requires additional disclosures about an enterprise's involvement in variable interest entities. The initial adoption of this statement did not have a significant impact on our consolidated financial statements. See "Note 7. Variable Interest Entities."

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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

Accounting Pronouncements Pending Adoption in Future Periods

        In October 2009, the FASB issued ASU No. 2009-13, Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements—a consensus of the FASB Emerging Issues Task Force. This ASU provides amendments to the criteria for separating consideration in multiple-deliverable arrangements. The amendments in this ASU replace the term "fair value" in the revenue allocation guidance with "selling price" to clarify that the allocation of revenue is based on entity-specific assumptions rather than assumptions of a marketplace participant, and they establish a selling price hierarchy for determining the selling price of a deliverable. The amendments in this ASU will eliminate the residual method of allocation and require that arrangement consideration be allocated at the inception of the arrangement to all deliverables using the relative selling price method, and they significantly expand the required disclosures related to multiple-deliverable revenue arrangements. The amendments in this ASU will be effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning after June 15, 2010. We do not expect the adoption of this statement to have a significant impact on our consolidated financial statements.

        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 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. These amendments 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 do not expect the adoption of this statement to have a significant impact on our consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3. BUSINESS COMBINATIONS

LAFFANS ACQUISITION

        On July 31, 2010, we announced that we entered into a definitive agreement to acquire the chemical business of Laffans, an amines and surfactants manufacturer located in Ankleshwar, India. The acquisition is expected to cost approximately $21 million including a non-compete agreement and other obligations. The acquisition is expected to occur in the first half of 2011, subject to certain terms and conditions. The acquired business will be integrated into our Performance Products segment.

BARODA ACQUISITION

        On June 23, 2009, we announced the acquisition of Baroda, a manufacturing facility for the production of intermediates and specialty dyes for textiles, located in Baroda, India. We initially entered into an agreement to acquire Baroda on June 29, 2007. On February 6, 2009, we entered into a non-binding agreement in principle with MCIL under which the purchase price was revised to be approximately $35 million (U.S. dollar equivalents), which included receivables existing on the closing date due to MCIL from our affiliates, which were also settled at acquisition. Payment of the acquisition cost was phased in various tranches. The first tranche of $7 million was paid during 2008; additional tranches were paid during 2009; and a final payment of $2 million was made upon completion of the audit of net working capital acquired in the first quarter of 2010. In addition, $5 million of accounts payable by us to MCIL were forgiven in connection with this acquisition.

        We have accounted for the Baroda acquisition using the acquisition method. As such, we analyzed the fair value of tangible and intangible assets acquired and liabilities assumed. The allocation of acquisition cost to the assets acquired and liabilities assumed is summarized as follows (dollars in millions):

Acquisition cost:

       
 

Cash payments made in 2008

  $ 7  
 

Cash payments made in 2009

    31  
 

Cash payments made in 2010

    2  
 

Forgiveness of amounts payable from us to MCIL

    (5 )
       

Total acquisition cost

  $ 35  
       

Fair value of assets acquired and liabilities assumed:

       
 

Accounts receivable

  $ 2  
 

Inventories

    3  
 

Other current assets

    2  
 

Property, plant and equipment

    31  
 

Intangible assets

    3  
 

Deferred tax asset

    2  
 

Accounts payable

    (3 )
 

Short-term debt

    (3 )
 

Deferred tax liability

    (2 )
       

Total fair value of net assets acquired

  $ 35  
       

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3. BUSINESS COMBINATIONS (Continued)

TEXTILE EFFECTS ACQUISITION

        On June 30, 2006, we acquired Ciba's textile effects business and accounted for the Textile Effects Acquisition using the purchase method. As such, we analyzed the fair value of tangible and intangible assets acquired and liabilities assumed and we determined the excess of fair value of net assets over cost. Because the fair value of the acquired assets and liabilities assumed exceeded the purchase price, the valuation of the long-lived assets acquired was reduced to zero. Accordingly, no basis was assigned to property, plant and equipment or any other non-current nonfinancial assets and the remaining excess was recorded as an extraordinary gain, net of taxes (which were not applicable because the gain was recorded in purchase accounting). During 2010, 2009 and 2008, we recorded an additional extraordinary (loss) gain on the acquisition of $(1) million, $6 million and $14 million, respectively, related to settlement of contingent purchase price consideration, the reversal of accruals for certain restructuring and employee termination costs recorded in connection with the Textile Effects Acquisition and a reimbursement by Ciba of certain costs pursuant to the acquisition agreements.

4. INVENTORIES

        Inventories consisted of the following (dollars in millions):

 
  December 31,
2010
  December 31,
2009
 

Raw materials and supplies

  $ 321   $ 240  

Work in progress

    99     77  

Finished goods

    1,043     917  
           

Total

    1,463     1,234  

LIFO reserves

    (67 )   (50 )
           

Net

  $ 1,396   $ 1,184  
           

        As of December 31, 2010 and 2009, approximately 12% and 10%, respectively, of inventories were recorded using the LIFO cost method. For 2009, inventory quantities were reduced, resulting in a liquidation of certain LIFO inventory layers carried at costs that were higher than the cost of current purchases, the effect of which increased cost of sales by approximately $1 million.

        In the normal course of operations we, at times, exchange raw materials and finished goods with other companies for the purpose of reducing transportation costs. The net non-monetary open exchange positions are valued at cost. The amounts included in inventory under non-monetary open exchange agreements receivable by us for both December 31, 2010 and 2009 were $3 million each. Other open exchanges are settled in cash and result in a net deferred profit margin. The amounts under these open exchange agreements for both December 31, 2010 and 2009 were nil.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

5. PROPERTY, PLANT AND EQUIPMENT

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

 
  December 31,  
 
  2010   2009  

Land

  $ 148   $ 146  

Buildings

    624     579  

Plant and equipment

    5,781     5,650  

Construction in progress

    255     174  
           

Total

    6,808     6,549  

Less accumulated depreciation

    (3,339 )   (3,192 )
           

Net

  $ 3,469   $ 3,357  
           

        Depreciation expense for the years ended December 31, 2010, 2009 and 2008 was $340 million, $371 million and $334 million, respectively, of which $1 million, $2 million and $2 million related to discontinued operations in 2010, 2009 and 2008, respectively.

        Property, plant and equipment includes gross assets acquired under capital leases of $15 million each at December 31, 2010 and 2009, related amounts included in accumulated depreciation were $15 million and $13 million at December 31, 2010 and 2009, respectively.

6. INVESTMENT IN UNCONSOLIDATED AFFILIATES

        Our ownership percentage and investment in unconsolidated affiliates were as follows (dollars in millions):

 
  December 31,  
 
  2010   2009  

Equity Method:

             

Sasol-Huntsman GmbH and Co. KG (50%)

  $ 44   $ 26  

Arabian Amines Company (50%)(1)

        40  

Louisiana Pigment Company, L.P. (50%)

    98     100  

BASF Huntsman Shanghai Isocyanate Investment BV (50%)(2)

    65     63  

International Polyurethanes Investments B.V. (45%)

    16     15  

Others

    6     1  
           
 

Total equity method investments

    229     245  

Cost Method:

             

International Diol Company (4.35%)

    5     5  
           
   

Total investments

  $ 234   $ 250  
           

(1)
We began consolidating Arabian Amines Company as of July 1, 2010. See "Note 7. Variable Interest Entities."

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

6. INVESTMENT IN UNCONSOLIDATED AFFILIATES (Continued)

(2)
We own 50% of BASF Huntsman Shanghai Isocyanate Investment BV. BASF Huntsman Shanghai Isocyanate Investment BV owns a 70% interest in SLIC, thus giving us an indirect 35% interest in SLIC.

        Summarized applicable financial information of our unconsolidated affiliate Sasol-Huntsman as of December 31, 2010 and 2009 and for the years ended December 31, 2010, 2009 and 2008 is presented below (dollars in millions):

 
  2010   2009   2008  

Current assets

  $ 55   $ 47        

Noncurrent assets

    123     79        

Current liabilities

    22     19        

Noncurrent liabilities

    83     31        

Revenues

    108     68   $ 123  

Gross profit

    14     9     23  

Net income

    10     3     13  

        Summarized applicable financial information of our other unconsolidated affiliates as of December 31, 2010 and 2009 and for the years ended December 31, 2010, 2009 and 2008 is presented below (dollars in millions):

 
  2010   2009   2008  

Assets

  $ 722   $ 939        

Liabilities

    306     472        

Revenues

    936     593   $ 718  

Net income

    10     3     15  

        In 2008, we and our joint venture partner, the Zamil Group, formed Arabian Amines Company, our ethyleneamines manufacturing joint venture in Jubail, Saudi Arabia. Arabian Amines Company's funding requirements have been satisfied through a combination of debt and equity, with the equity already provided on a 50/50 basis by us and the Zamil Group. Trial production commenced in the second quarter of 2010 and from July 2010, Arabian Amines Company generated significant revenues from the sale of product. The plant has an approximate annual capacity of 60 million pounds. We purchase and sell all of the production from this joint venture. Arabian Amines Company was accounted for under the equity method during its development stage; we began consolidating this joint venture beginning July 1, 2010. For more information, see "Note 7. Variable Interest Entities."

        During 2010, we recorded an immaterial non-recurring $18 million credit to equity income of investment in unconsolidated affiliates to appropriately reflect our investment in the Sasol-Huntsman joint venture. This credit represented a cumulative correction of an error that was also individually immaterial in each year since our initial investment in the joint venture in 1997. In connection with the current expansion of the maleic anhydride capacity at our Sasol-Huntsman joint venture we believe that a reconsideration event will occur in early 2011 when the plant expansion begins production. As a result of our assessment, we concluded that the joint venture is a VIE and that we are the primary beneficiary. Accordingly, we will begin consolidating this joint venture during the first quarter of 2011.

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

7. VARIABLE INTEREST ENTITIES

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

        Creditors of these entities have no recourse to our general credit. As the primary beneficiary of three variable interest entities at December 31, 2010, the joint ventures' assets, liabilities and results of operations are included in our consolidated financial statements.

        The following table summarizes the carrying amount of Rubicon LLC and Pacific Iron Products' assets and liabilities included in our consolidated balance sheet, before intercompany eliminations, as of December 31, 2010 and 2009 (dollars in millions):

 
  December 31,
2010
  December 31,
2009
 

Current assets

  $ 57   $ 75  

Property, plant and equipment, net

    17     16  

Other noncurrent assets

    55     36  

Deferred income taxes

    40     38  
           

Total assets

  $ 169   $ 165  
           

Current liabilities

  $ 74   $ 74  

Long-term debt

    3     4  

Other noncurrent liabilities

    104     92  
           

Total liabilities

  $ 181   $ 170  
           

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

7. VARIABLE INTEREST ENTITIES (Continued)

        The following table summarizes the carrying amount of Arabian Amines Company's assets and liabilities included in our consolidated balance sheet, before intercompany eliminations, as of December 31, 2010 and July 1, 2010 (dollars in millions):

 
  December 31,
2010
  July 1,
2010
 

Current assets

  $ 33   $ 28  

Property, plant and equipment, net

    258     260  

Other noncurrent assets

    1     1  

Intangible assets

    7     7  
           

Total assets

  $ 299   $ 296  
           

Current liabilities

  $ 37   $ 39  

Long-term debt

    185     181  

Other noncurrent liabilities

    5     6  
           

Total liabilities

  $ 227   $ 226  
           

        Arabian Amines Company's assets and liabilities were recorded at estimated fair value as of July 1, 2010. Arabian Amines Company had revenues and earnings of $25 million and $2 million, respectively, for the period from the date of consolidation to December 31, 2010. All sales were intercompany sales to the Company and were eliminated upon consolidation.

8. INTANGIBLE ASSETS

        The gross carrying amount and accumulated amortization of intangible assets were as follows (dollars in millions):

 
  December 31, 2010   December 31, 2009  
 
  Carrying
Amount
  Accumulated
Amortization
  Net   Carrying
Amount
  Accumulated
Amortization
  Net  

Patents, trademarks and technology

  $ 363   $ 286   $ 77   $ 360   $ 263   $ 97  

Licenses and other agreements

    25     12     13     18     10     8  

Non-compete agreements

    2     2         2     2      

Other intangibles

    77     60     17     74     50     24  
                           

Total

  $ 467   $ 360   $ 107   $ 454   $ 325   $ 129  
                           

        Amortization expense was $30 million, $35 million and $28 million for the years ended December 31, 2010, 2009 and 2008, respectively.

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

8. INTANGIBLE ASSETS (Continued)

        Our estimated future amortization expense for intangible assets over the next five years is as follows (dollars in millions):

Year ending December 31:
   
 

2011

  $ 28  

2012

    23  

2013

    20  

2014

    10  

2015

    6  

9. OTHER NONCURRENT ASSETS

        Other noncurrent assets consisted of the following (dollars in millions):

 
  December 31,  
 
  2010   2009  

Pension assets

  $ 75     31  

Debt issuance costs

    33     16  

Capitalized turnaround costs

    164     98  

Spare parts inventory

    81     82  

Catalyst assets

    21     18  

Deposits

    55     56  

Other noncurrent assets

    66     54  
           

Total

  $ 495   $ 355  
           

        Amortization expense of catalyst assets for the years ended December 31, 2010, 2009 and 2008 was $12 million, $14 million and $12 million, respectively.

10. ACCRUED LIABILITIES

        Accrued liabilities consisted of the following (dollars in millions):

 
  December 31,  
 
  2010   2009  

Payroll and related costs

  $ 166   $ 168  

Interest

    40     24  

Volume and rebate accruals

    86     77  

Income taxes

    33     20  

Taxes other than income taxes

    77     72  

Restructuring and plant closing costs

    47     71  

Environmental accruals

    13     5  

Pension liabilities

    11     13  

Other postretirement benefits

    12     13  

Self-insured casualty loss reserves

    17     22  

Other miscellaneous accruals

    124     128  
           

Total

  $ 626   $ 613  
           

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

11. RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS

        As of December 31, 2010, 2009 and 2008, accrued restructuring, impairment and plant closing costs by type of cost and initiative consisted of the following (dollars in millions):

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

Accrued liabilities as of January 1, 2008

  $ 75   $ 13   $ 4   $ 4   $ 96  

Adjustment to Textile Effects opening balance sheet liabilities

    (13 )       (1 )       (14 )

2008 charges for 2005 and prior initiatives

    1         1         2  

2008 charges for 2008 initiatives

    27             1     28  

Reversal of reserves no longer required

    (1 )               (1 )

2008 payments for 2005 and prior initiatives

    (5 )       (2 )       (7 )

2008 payments for 2006 initiatives

    (19 )   (11 )       (1 )   (31 )

2008 payments for 2008 initiatives

    (3 )           (1 )   (4 )

Net activity of discontinued operations

    (1 )               (1 )

Foreign currency effect on liability balance

    7                 7  
                       

Accrued liabilities as of December 31, 2008

    68     2     2     3     75  

Adjustment to Textile Effects opening balance sheet liabilities

    (5 )               (5 )

2009 charges for 2006 initiatives

        1             1  

2009 charges for 2008 initiatives

    5                 5  

2009 charges for 2009 initiatives

    56     8         14     78  

Reversal of reserves no longer required

    (8 )               (8 )

2009 payments for 2005 and prior initiatives

    (5 )               (5 )

2009 payments for 2006 initiatives

    (28 )   (1 )           (29 )

2009 payments for 2008 initiatives

    (17 )               (17 )

2009 payments for 2009 initiatives

    (32 )   (8 )       (12 )   (52 )

Net activity of discontinued operations

    26             8     34  

Foreign currency effect on reserve balance

                (2 )   (2 )
                       

Accrued liabilities as of December 31, 2009

    60     2     2     11     75  

2010 charges for 2005 and prior initiatives

    1                 1  

2010 charges for 2008 initiatives

    1                 1  

2010 charges for 2009 initiatives

    4             5     9  

2010 charges for 2010 initiatives

    22             1     23  

Reversal of reserves no longer required

    (6 )       (1 )       (7 )

2010 payments for 2005 and prior initiatives

    (1 )   (1 )           (2 )

2010 payments for 2006 initiatives

    (3 )               (3 )

2010 payments for 2008 initiatives

    (7 )               (7 )

2010 payments for 2009 initiatives

    (11 )           (5 )   (16 )

2010 payments for 2010 initiatives

    (1 )           (2 )   (3 )

Net activity of discontinued operations

    (26 )               (26 )

Foreign currency effect on liability balance

    3             1     4  
                       

Accrued liabilities as of December 31, 2010

  $ 36   $ 1   $ 1   $ 11   $ 49  
                       

(1)
The total workforce reduction reserves of $36 million relate to the termination of 256 positions, of which 216 positions had not been terminated as of December 31, 2010.

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(2)
Accrued liabilities remaining at December 31, 2010 and 2009, by year of initiatives were as follows (dollars in millions):

 
  December 31,  
 
  2010   2009  

2005 and prior initiatives

  $ 2   $ 3  

2006 initiatives

    2     5  

2008 initiatives

    1     7  

2009 initiatives

    20     60  

2010 initiatives

    24      
           

Total

  $ 49   $ 75  
           

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

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

Accrued liabilities as of January 1, 2008

  $ 4   $ 2   $ 1   $ 80   $ 8   $ 1   $   $ 96  

Adjustment to Textile Effects opening balance sheet liabilities

                (14 )               (14 )

2008 charges for 2005 and prior initiatives

                    2             2  

2008 charges for 2008 initiatives

                24     3         1     28  

Reversal of reserves no longer required

                    (1 )           (1 )

2008 payments for 2005 and prior initiatives

    (1 )   (1 )       (1 )   (4 )           (7 )

2008 payments for 2006 initiatives

                (31 )               (31 )

2008 payments for 2008 initiatives

                (3 )           (1 )   (4 )

Net activity of discontinued operations

                        (1 )       (1 )

Foreign currency effect on liability balance

                8     (1 )           7  
                                   

Accrued liabilities as of December 31, 2008

    3     1     1     63     7             75  

Adjustment to Textile Effects opening balance sheet liabilities

                (5 )               (5 )

2009 charges for 2006 initiatives

                1                 1  

2009 charges for 2008 initiatives

    1             2     2             5  

2009 charges for 2009 initiatives

            12     10     45         11     78  

Reversal of reserves no longer required

                (7 )   (1 )           (8 )

2009 payments for 2005 and prior initiatives

    (2 )   (1 )           (2 )           (5 )

2009 payments for 2006 initiatives

                (29 )               (29 )

2009 payments for 2008 initiatives

                (13 )   (4 )           (17 )

2009 payments for 2009 initiatives

            (6 )   (4 )   (35 )       (7 )   (52 )

Net activity of discontinued operations

                            34         34  

Foreign currency effect on liability balance

                (1 )   (1 )           (2 )
                                   

Accrued liabilities as of December 31, 2009

    2         7     17     11     34     4     75  

2010 charges for 2005 and prior initiatives

                    1             1  

2010 charges for 2008 initiatives

                1                 1  

2010 charges for 2009 initiatives

            1         8             9  

2010 charges for 2010 initiatives

        2         15             6     23  

Reversal of reserves no longer required

            (3 )   (1 )   (2 )       (1 )   (7 )

2010 payments for 2005 and prior initiatives

    (1 )               (1 )           (2 )

2010 payments for 2006 initiatives

                (3 )               (3 )

2010 payments for 2008 initiatives

    (1 )           (5 )   (1 )           (7 )

2010 payments for 2009 initiatives

            (3 )   (2 )   (8 )       (3 )   (16 )

2010 payments for 2010 initiatives

        (1 )                   (2 )   (3 )

Net activity of discontinued operations

                        (26 )       (26 )

Foreign currency effect on liability balance

                3             1     4  
                                   

Accrued liabilities as of December 31, 2010

  $   $ 1   $ 2   $ 25   $ 8   $ 8   $ 5   $ 49  
                                   

Current portion of restructuring reserves

  $   $ 1   $ 1   $ 25   $ 7   $ 8   $ 5   $ 47  

Long-term portion of restructuring reserve

            1         1             2  

Estimated additional future charges for current restructuring projects

                                                 

Estimated additional charges within one year

  $   $   $   $   $ 7   $   $   $ 7  

Estimated additional charges beyond one year

                    1             1  

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

        Details with respect to cash and non-cash restructuring charges for the years ended December 31, 2010, 2009 and 2008 by initiative are provided below (dollars in millions):

Cash charges:

       
 

2010 charges for 2005 and prior initiatives

  $ 1  
 

2010 charges for 2008 initiatives

    1  
 

2010 charges for 2009 initiatives

    9  
 

2010 charges for 2010 initiatives

    23  
 

Reversal of reserves no longer required

    (7 )

Non-cash charges

    2  
       

Total 2010 Restructuring, Impairment and Plant Closing Costs

  $ 29  
       

Cash charges:

       
 

2009 charges for 2006 initiatives

  $ 1  
 

2009 charges for 2008 initiatives

    5  
 

2009 charges for 2009 initiatives

    78  
 

Reversal of reserves no longer required

    (8 )

Non-cash charges

    12  
       

Total 2009 Restructuring, Impairment and Plant Closing Costs

  $ 88  
       

Cash charges:

       
 

2008 charges for 2005 and prior initiatives

  $ 2  
 

2008 charges for 2008 initiatives

    28  
 

Reversal of reserves no longer required

    (1 )

Non-cash charges

    2  
       

Total 2008 Restructuring, Impairment and Plant Closing Costs

  $ 31  
       

2010 RESTRUCTURING ACTIVITIES

        As of December 31, 2010, our Performance Products segment restructuring reserve consisted of $1 million related to workforce reductions in connection with a new Performance Products organizational structure. During 2010, we recorded charges of $2 million related to workforce reductions in connection with this project.

        As of December 31, 2010, our Advanced Materials segment restructuring reserve consisted of $2 million related to workforce reductions in connection with a reorganization designed to implement a regional management structure. During 2010, we recorded net reversals of $2 million primarily related to workforce reductions in connection to this project.

        As of December 31, 2010, our Textile Effects segment restructuring reserve consisted of $25 million of which $2 million related to opening balance sheet liabilities from the Textile Effects Acquisition, $1 million related to the streamlining of the textile effects business into two global strategic business units as announced during the fourth quarter of 2008, $3 million related to workforce reductions at our production facility in Langweid, Germany, and $19 million related to the consolidation of manufacturing activities and processes at our site in Basel, Switzerland. During 2010,

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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


our Textile Effects segment recorded net charges of $15 million primarily related to the consolidation of manufacturing activities and processes at our site in Basel, Switzerland.

        As of December 31, 2010, our Pigments segment restructuring reserve consisted of $8 million primarily related to workforce reductions at our Huelva, Spain and Scarlino, Italy plants. During 2010, our Pigments segment recorded net charges of $7 million primarily related to the closure of our Grimsby, U.K. plant. We expect to incur additional charges of $8 million through December 31, 2012, primarily related to the closure of our Grimsby, U.K. plant.

        The restructuring reserve related to discontinued operations as of December 31, 2010 of $8 million was associated with the closure of our Australian styrenics business. For more information, see "Note 27. Discontinued Operations—Australian Styrenics Business Shutdown."

        As of December 31, 2010, our Corporate and other segment restructuring reserve consisted of $5 million primarily related to a reorganization and regional consolidation of our transactional accounting and purchasing activities. During 2010, we recorded net charges of $5 million in Corporate and other primarily related to workforce reductions in connection with these projects.

2009 RESTRUCTURING ACTIVITIES

        As of December 31, 2009, our Polyurethanes segment restructuring reserve consisted of $2 million related to restructuring initiatives at our Rozenburg, Netherlands site (as announced in 2003).

        As of December 31, 2009, our Advanced Materials segment restructuring reserve consisted of $7 million related to workforce reductions in connection with a reorganization designed to implement a regional management structure. During 2009, we recorded charges of $12 million related to this reorganization project.

        As of December 31, 2009, our Textile Effects segment restructuring reserve consisted of $17 million, of which $5 million related to opening balance sheet liabilities from the Textile Effects Acquisition, $5 million related to the streamlining of the textile effects business into two global strategic business units as announced during the fourth quarter of 2008, and $7 million related to workforce reductions at our production facility in Langweid, Germany. During 2009, we recorded charges of $13 million primarily related to workforce reductions at our Germany production facility. We also reversed accruals of $7 million primarily related to the streamlining of the textile effects business and $5 million related to certain employee termination costs recorded in connection with the Textile Effects Acquisition.

        As of December 31, 2009, our Pigments segment restructuring reserve consisted of $11 million primarily related to workforce reductions at our Huelva, Spain plant. During 2009, we recorded charges of $47 million, of which $29 million primarily related to the closure of our Grimsby plant and $18 million primarily related to workforce reductions at our Huelva, Spain plant. Of the $29 million of charges at our Grimsby plant, $14 million related to contract terminations, $7 million related to workforce reductions and $8 million related to decommissioning. We also recorded non-cash charges of $4 million primarily related to a provision against engineering spare parts at our Grimsby plant.

        As of December 31, 2009, the restructuring reserve associated with discontinued operations of $34 million related to the closure of our former styrenics business in West Footscray, Australia. During 2009, we recorded charges of $63 million in discontinued operations related to the closure of this

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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


business, of which $25 million related to workforce reductions, $30 million related to estimated environmental remediation costs and $8 million related to contract termination costs.

        As of December 31, 2009, our Corporate and other segment restructuring reserve consisted of $4 million related to our 2009 fixed cost reduction project announced in the first quarter of 2009. During 2009, we recorded charges of $11 million and non-cash charges of $3 million in Corporate and other related to other aspects of our 2009 fixed cost reduction project.

2008 RESTRUCTURING ACTIVITIES

        As of December 31, 2008, our Polyurethanes segment restructuring reserve consisted of $3 million related to restructuring initiatives at our Rozenburg, Netherlands site (as announced in 2003).

        As of December 31, 2008, our Performance Products segment reserve consisted of $1 million related to various restructuring programs across our European surfactants business. During 2008, we recorded a non-cash charge of $1 million related to the closure of our Guelph, Canada plant.

        As of December 31, 2008, our Advanced Materials segment restructuring reserve consisted of $1 million related to various restructuring programs. During 2008, our Advanced Materials segment recorded a non-cash impairment charge of $1 million related to our Deer Park, Australia and Germany fixed assets.

        As of December 31, 2008, our Textile Effects segment restructuring reserve consisted of $63 million, of which $40 million related to opening balance sheet liabilities from the Textile Effects Acquisition and $23 million related to our 2008 restructuring initiatives. During 2008, our Textile Effects segment recorded cash charges for 2008 initiatives of $24 million primarily related to the streamlining of the Textile Effects business into two global strategic business units, Apparel & Home Textiles and Specialty Textiles, as announced during the fourth quarter of 2008. We also reversed accruals of $14 million for certain employee termination costs recorded in connection with the Textile Effects Acquisition.

        As of December 31, 2008, our Pigments segment reserve consisted of $7 million related to the restructuring of commercial and business support activities and workforce reductions in connection with our Huelva, Spain operations. During 2008, our Pigments segment recorded charges of $5 million related to the restructuring of commercial and business support activities.

12. ASSET RETIREMENT OBLIGATIONS

        Asset retirement obligations consist primarily of landfill capping, closure and post-closure costs and asbestos abatement costs. We are legally required to perform capping and closure and post-closure care on the landfills and asbestos abatement on certain of our premises. For each asset retirement obligation we recognized the estimated fair value of a liability and capitalized the cost as part of the cost basis of the related asset.

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12. ASSET RETIREMENT OBLIGATIONS (Continued)

        The following table describes changes to our asset retirement obligation liabilities, all of which were recorded in Other noncurrent liabilities on the accompanying balance sheets (dollars in millions):

 
  December 31,  
 
  2010   2009  

Asset retirement obligation at beginning of year

  $ 21   $ 20  

Accretion expense

    1     1  

Liabilities incurred

    1      

Foreign currency effect on reserve balance

    1      
           

Asset retirement obligation at end of year

  $ 24   $ 21  
           

13. OTHER NONCURRENT LIABILITIES

        Other noncurrent liabilities consisted of the following (dollars in millions):

 
  December 31,  
 
  2010   2009  

Pension liabilities

  $ 538   $ 534  

Other postretirement benefits

    124     122  

Environmental accruals

    35     36  

Restructuring and plant closing costs

    2     4  

Asset retirement obligations

    24     21  

Other noncurrent liabilities

    129     148  
           

Total

  $ 852   $ 865  
           

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

14. DEBT

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

 
  December 31,
2010
  December 31,
2009
 

Senior Credit Facilities:

             
 

Term loans

  $ 1,688   $ 1,968  

Amounts outstanding under A/R programs

    238      

Senior notes

    452     434  

Senior subordinated notes

    1,279     1,294  

Australian credit facilities

    33     34  

HPS (China) debt

    188     163  

Variable interest entities—Arabian Amines Company

    200      

Other

    68     83  
           

Total debt—excluding debt to affiliates

  $ 4,146   $ 3,976  
           

Total current portion of debt

  $ 519   $ 195  

Long-term portion

    3,627     3,781  
           

Total debt—excluding debt to affiliates

  $ 4,146   $ 3,976  
           

Total debt—excluding debt to affiliates

  $ 4,146     3,976  

Notes payable to affiliates-current

    100     25  

Notes payable to affiliates-noncurrent

    439     530  
           

Total debt

  $ 4,685   $ 4,531  
           

Senior Credit Facilities

        As of December 31, 2010, our Senior Credit Facilities consisted of the following (dollars in millions):

Facility
  Committed
Amount
  Principal
Outstanding
  Carrying
Value
  Interest Rate(2)   Maturity  

Revolving Facility

  $300       $ (1) USD LIBOR plus 3.0%     2014 (3)

Term Loan B

  NA   $ 1,302   $ 1,302   USD LIBOR plus 1.50%     2014 (3)

Term Loan C

  NA   $ 427   $ 386   USD LIBOR plus 2.25%     2016 (3)

(1)
We had no borrowings outstanding under our Revolving Facility; we had approximately $29 million (U.S. dollar equivalents) of letters of credit and bank guarantees issued and outstanding under our Revolving Facility.

(2)
The applicable interest rate of the Revolving Facility and Term Loan B are subject to certain secured leverage ratio thresholds. As of December 31, 2010, the weighted average interest rate on our outstanding balances under the Senior Credit Facilities was approximately 2%.

(3)
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, Term Loan B and Term Loan C will accelerate if we do not repay, or refinance, all but $100 million of our

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

14. DEBT (Continued)

NA—Not applicable

        During 2010, we took the following actions with respect to our Senior Credit Facilities:

        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.

Accounts Receivable Securitization

        Our A/R Programs are structured so that we grant a participating undivided interest in certain of our trade receivables to the U.S. SPE and the EU SPE. We retain the servicing rights and a retained interest in the securitized receivables. Information regarding the A/R Programs as of December 31, 2010 is as follows (monetary amounts in millions):

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

U.S. A/R Program

  October 2012     $125     $27.5   USD LIBOR rate
plus 3.75%

U.S. A/R Program

  October 2011     $125     $27.5   CP rate plus 3.50%

EU A/R Program

  October 2011     €225
(approximately $297

)
  € 139
(approximately $183

)
GBP LIBOR rate,
USD LIBOR rate or
EURIBOR rate
plus 3.75%

(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.

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

14. DEBT (Continued)

        As of December 31, 2010, $552 million of accounts receivable were pledged as collateral under the A/R Programs.

Notes

        As of December 31, 2010, we had outstanding the following notes (monetary amounts in millions):

Notes
  Maturity   Interest Rate   Amount Outstanding

Senior Notes

  June 2016     5.500 %(1) $600 ($452 carrying value)

Senior Subordinated Notes

  March 2021     8.625 % $530 ($544 carrying value)

Senior Subordinated Notes

  March 2020     8.625 % $350

Senior Subordinated Notes

  January 2015     7.375 % $175

Senior Subordinated Notes

  January 2015     7.500 % €  76 (approximately $100)

Senior Subordinated Notes

  March 2013     6.875 % €  84 (approximately $110)

(1)
The effective interest rate at issuance was 11.73%.

        During 2010, we completed the following note offerings:

        Our notes are governed by indentures which impose certain limitations on our Company, including among other things limitations on the incurrence of debt, distributions, certain restricted payments, asset sales, and affiliate transactions. The notes are unsecured obligations and are guaranteed by certain subsidiaries named as guarantors.

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

14. DEBT (Continued)

Redemption of Notes and Loss on Early Extinguishment of Debt

        During 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
 

November 29, 2010

  7.875% Senior Subordinated Notes due 2014     $  88     $  92   $ 3  

November 26, 2010

  7.875% Senior Subordinated Notes due 2014     $100     $104   $ 4  

October 12, 2010

  7.875% Senior Subordinated Notes due 2014     $159     $165   $ 7  

September 27, 2010

  6.875% Senior Subordinated Notes due 2013     €132
(approximately $177

)
  €137
(approximately $183

)
$ 7  

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  

        For 2010, in connection with redemptions described in the table above, we recorded a loss on early extinguishment of debt of $30 million. As noted in "—Senior Credit Facilities" above, we also recognized a $7 million loss on early extinguishment of debt in 2010 on the prepayment of $274 million of Term Loans. For 2009, we recorded a loss on early extinguishment of debt of $21 million.

        On January 18, 2011, we redeemed $100 million of our $175 million 7.375% senior subordinated notes due 2015. The total redemption payment, excluding accrued interest was $102 million, which included $2 million of call premiums. We expect to record a loss on early extinguishment of debt for this transaction in the first quarter of 2011 of $3 million.

Variable Interest Entity Debt

        Arabian Amines Company has the following loan commitments and debt financing:

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

14. DEBT (Continued)

Other Debt

        In September 2010, we replaced our $25 million European overdraft facility (which terminated on April 1, 2010) with a new $25 million European overdraft facility. This facility is a demand facility that we use for the working capital needs of our European subsidiaries. In addition, we continue to maintain certain other foreign overdraft facilities used for working capital needs. As of December 31, 2010 we had no borrowings on our European overdraft facility.

        As of December 31, 2010, HPS had $16 million outstanding in U.S. dollar borrowings and 480 million in RMB term loan and working capital loan borrowings (approximately $73 million) under secured facilities for the construction of its plant. During 2010, HPS refinanced RMB 130 million (approximately $20 million) in working capital loans. 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 December 31, 2010, the interest rate was approximately 1% for U.S. dollar borrowings, 5.5% for RMB term loan borrowings and 4.9% for RMB working capital loans.

        HPS also has a loan facility with the stated capacity for discounting up to CNY700 million (approximately $106 million); drafts are discounted using a discount rate of the three-month SHIBOR plus the applicable margin. As of December 31, 2010, the all in discount rate was approximately 5%. As of December 31, 2010, HPS has discounted with recourse CNY659 million (approximately $99 million) of commercial drafts, all of which is classified as Current portion of debt on the accompanying consolidated balance sheets.

Note Payable to Huntsman Corporation

        As of December 31, 2010, Huntsman Corporation has loaned $535 million to us under an existing promissory note. The Intercompany Note is unsecured and $100 million of the outstanding amount is classified as current as of December 31, 2010 on the accompanying consolidated balance sheets. As of December 31, 2010, under the terms of the Intercompany Note, we promise to pay Huntsman Corporation interest on the unpaid principal amount at a rate per annum based on the previous monthly average borrowing rate obtained under our A/R Program, 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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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

14. DEBT (Continued)

COMPLIANCE WITH COVENANTS

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

        Our Senior Credit Facilities are subject to a single financial covenant, the Leverage Covenant, which applies only to the Revolving Facility. 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 our 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 we failed to comply with the Leverage Covenant, then we would not have access to liquidity under our Revolving Facility. If we failed to comply with the Leverage Covenant at a time when we had uncollateralized loans or letters of credit outstanding under the Revolving Facility, we would be in default under the Senior Credit Facilities, and, unless we obtained a waiver or forbearance with respect to such default (as to which we can provide no assurance), we 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 performance metrics with respect to receivables. Any material failure to meet the applicable A/R Program's 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 us to 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.

MATURITIES

        The scheduled maturities of our debt (excluding debt to affiliates) by year as of December 31, 2010 are as follows (dollars in millions):

Year ending December 31:
   
 

2011

  $ 519  

2012

    83  

2013

    187  

2014

    1,323  

2015

    203  

Thereafter

    1,831  
       

  $ 4,146  
       

15. 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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

15. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Continued)


derivative instruments, to manage certain of these exposures. 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 income (loss).

INTEREST RATE RISKS

        Through our borrowing activities, we are exposed to interest rate risk. Such risk arises due to the structure of our debt portfolio, including the duration of the portfolio and the mix of fixed and floating interest rates. Actions taken to reduce interest rate risk include managing the mix and rate characteristics of various interest bearing liabilities, as well as entering into interest rate derivative instruments.

        From time to time, we may purchase interest rate swaps and/or interest rate collars to reduce the impact of changes in interest rates on our floating-rate long-term debt. Under interest rate swaps, we agree with other parties to exchange, at specified intervals, the difference between fixed-rate and floating-rate interest amounts calculated by reference to an agreed notional principal amount. The collars entitle us to receive from the counterparties (major banks) the amounts, if any, by which our interest payments on certain of our floating-rate borrowings exceed a certain rate, and require us to pay to the counterparties (major banks) the amount, if any, by which our interest payments on certain of our floating-rate borrowings are less than a certain rate.

        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 it has been 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 December 31, 2010 and 2009, the fair value of the hedge was $(2) million and $1 million, and was recorded in other noncurrent liabilities and assets, respectively.

        On January 19, 2010, we entered into an additional five-year interest rate contract to hedge the variability caused by monthly changes in cash flow due to associated changes in LIBOR under our Senior Credit Facilities. The notional value of the contract is $50 million, and it has been designated as a cash flow hedge. The effective portion of the changes in the fair value of the swap was recorded as other comprehensive loss. We will pay a fixed 2.8% on the hedge and receive the one-month LIBOR rate. As of December 31, 2010, the fair value of the hedge was $(2) million and was recorded in other noncurrent liabilities.

        Beginning in 2009, Arabian Amines Company entered into a 12 year floating to fixed interest rate contract providing for a receipt of 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 us. See "Note 7. Variable Interest Entities." The notional amount of the swap as of December 31, 2010 was $63 million, and the interest rate contract is not designated as a cash flow hedge. As of December 31, 2010, the fair value of the swap was $(5) million and was recorded as other noncurrent liabilities on the accompanying consolidated balance sheets. For 2010, we recorded a reduction in interest expense of $1 million.

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

15. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Continued)

        For the years ended December 31, 2010 and 2009, the changes in accumulated other comprehensive (loss) income associated with these cash flow hedging activities was approximately $5 million and $(1) million, respectively.

        During 2011, accumulated other comprehensive income (loss) of nil is expected to be reclassified to earnings. The actual amount that will be reclassified to earnings over the next twelve months may vary from this amount due to changing market conditions. We would be exposed to credit losses in the event of nonperformance by a counterparty to our derivative financial instruments. We anticipate, however, that the counterparties will be able to fully satisfy their obligations under the contracts. Market risk arises from changes in interest rates.

FOREIGN EXCHANGE RATE RISK

        Our cash flows and earnings are subject to fluctuations due to exchange rate variation. Our revenues and expenses are denominated in various currencies. We 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 December 31, 2010 and 2009, we had approximately $183 million and $100 million notional amount (in U.S. dollar equivalents) outstanding, respectively, in foreign currency contracts with a term of approximately one month.

        In conjunction with the issuance of our 8.625% senior subordinated notes due 2020, we entered into cross-currency interest rate contracts with three counterparties. On March 17, 2010, we made payments of $350 million to these counterparties and received €255 million from these counterparties, and on maturity (March 15, 2015) we are required to pay € 255 million to these counterparties and will receive $350 million from these counterparties. On March 15 and September 15 of each year, we will receive U.S. dollar interest payments of approximately $15 million (equivalent to an annual rate of 8.625%) and make interest payments of approximately €11 million (equivalent to an annual rate of approximately 8.41%). This swap is designated as a hedge of net investment for financial reporting purposes. As of December 31, 2010, the fair value of this swap was $19 million and was recorded as noncurrent assets in our consolidated balance sheet. For 2010, the effective portion of the changes in the fair value of $7 million was recorded in other comprehensive income; with the ineffective portion of $12 million, recorded as an (addition) reduction to interest expense. On July 15, 2010, we changed the method of assessing the effectiveness of this hedge from the spot method to the forward method, which we believe will reduce the ineffective portion and lower volatility in interest expense in future periods.

        In 2008, we unwound a cross currency interest rate swap pursuant to which we had swapped $153 million of LIBOR floating rate debt payments for €116 million of EURIBOR floating rate debt payments. This swap was not designated as a hedge for financial reporting purposes. For 2008, we recorded a foreign currency gain on this swap of $21 million in the consolidated statements of operations.

        Also in 2008, we unwound a cross currency interest rate swap pursuant to which we had swapped $96 million of LIBOR floating rate debt payments for €71 million of EURIBOR floating rate debt

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

15. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Continued)

payments. This swap was designated as a hedge of a net investment for financial reporting purposes. We received a cash benefit from the unwind of $3 million in the fourth quarter of 2008. For 2008, the effective portion of the changes in the fair value of $14 million was recorded as income in other comprehensive (loss) income, with ineffectiveness of $2 million recorded in interest expense in our consolidated statements of operations.

        A significant portion of our 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 income. From time to time, we review such designation of intercompany loans.

        We review our non-U.S. dollar denominated debt to determine the appropriate amounts designated as hedges. As of December 31, 2010, we have designated approximately €338 million (approximately $446 million) of euro-denominated debt as a hedge of our net investment. For the years ended December 31, 2010, 2009 and 2008, the amount of (loss) gain recognized on the hedge of our net investment was $34 million, $(5) million and $31 million, respectively, and was recorded in other comprehensive income (loss). As of December 31, 2010, we had approximately €926 million (approximately $1,222 million) in net euro assets.

COMMODITY PRICES RISK

        Our exposure to changing commodity prices is somewhat limited since the majority of our raw materials are acquired at posted or market related prices, and sales prices for many of our finished products are at market related prices which are largely set on a monthly or quarterly basis in line with industry practice. Consequently, we do not generally hedge our commodity exposures.

16. OFF-BALANCE SHEET SECURITIZATION OF ACCOUNTS RECEIVABLE

        Our A/R Programs are structured so that we grant an undivided interest in certain of our trade receivables to the U.S. SPE and the EU SPE. We retain the servicing rights and a retained interest in the securitized receivables. Receivables transferred under the A/R Programs qualified as sales through December 31, 2009. Upon adoption of new accounting guidance in 2010, transfers of accounts receivable under our A/R Programs no longer met the criteria for derecognition. Accordingly, the amounts outstanding under our A/R Programs are accounted for as secured borrowings as of January 1, 2010. See "Note 2. Recently Issued Accounting Pronouncements" and "Note 14. Debt—Accounts Receivable Securitization" for 2010 securitization activity.

        On October 16, 2009, we entered into a Termination and Release Agreement, pursuant to which we terminated our prior accounts receivable securitization program ("Prior A/R Program") and replaced it with a new U.S. A/R Program and a new EU A/R Program. At that time, the receivables

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

16. OFF-BALANCE SHEET SECURITIZATION OF ACCOUNTS RECEIVABLE (Continued)


trust repaid the entire balance of commercial paper outstanding under our Prior A/R Program using proceeds received from the new programs.

        As of December 31, 2009, the A/R Programs had $254 million in U.S. dollar equivalents in loans outstanding (consisting of $55 million and €139 million).

        As of December 31, 2008, our prior Receivables Trust had $446 million in U.S. dollar equivalents in commercial paper outstanding (consisting of $175 million and approximately €191 million (approximately $271 million)) and held $25 million of cash collateral that was used subsequent to year-end to redeem outstanding commercial paper.

        As of December 31, 2009, the retained interest of accounts receivables under the program of $262 million was reported at fair value in accounts and notes receivable in the consolidated balance sheets. The value of the retained interest was subject to credit and interest rate risk. Additional information regarding the receivables under the A/R Programs for 2009, and receivables under the Prior A/R Program for 2008 are as follows (dollars in millions):

 
  Year Ended
December 31,
 
 
  2009   2008  

New sales of receivables

  $ 4,285   $ 5,187  

Cash collections from receivables reinvested

    4,344     5,117  

Servicing fees received

    5     7  

Losses on discount on receivables and fees

    23     27  

Total receivables over 60 days past due

    17     21  

        The key economic assumptions used in valuing the residual interest at December 31, 2009 are presented below:

US Accounts Receivable Securitization Program
   

Weighted average life (in days)

  30 - 37

Credit losses (annual rate)

  Less than 1%

Discount rate (weighted average life)

  Less than 1%

 

European Accounts Receivable Securitization Program
   

Weighted average life (in days)

  48 - 54

Credit losses (annual rate)

  Less than 1%

Discount rate (weighted average life)

  Less than 1%

        A 10% and 20% adverse change in any of the key economic assumptions would not have a material impact on the fair value of the retained interest.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

17. FAIR VALUE

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

 
  December 31,  
 
  2010   2009  
 
  Carrying
Value
  Estimated
Fair Value
  Carrying
Value
  Estimated
Fair Value
 

Non-qualified employee benefit plan investments

  $ 11   $ 11   $ 10   $ 10  

Cross-currency interest rate contacts

    19     19          

Interest rate contracts

    (9 )   (9 )   1     1  

Long-term debt (including current portion)

    (4,146 )   (4,371 )   (3,976 )   (3,951 )

        The carrying amounts reported in the balance sheets for cash and cash equivalents, accounts receivable and accounts payable approximate fair value because of the immediate or short-term maturity of these financial instruments. The fair value of non-qualified employee benefit plan investments is estimated using prevailing market prices. The estimated fair values of our long-term debt 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 December 31, 2010 and 2009. Although management is not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since December 31, 2010, and current estimates of fair value may differ significantly from the amounts presented herein.

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

17. FAIR VALUE (Continued)

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

 
   
  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 contract(1)

    19             19  
                   

Total assets

  $ 30   $ 11   $   $ 19  
                   

Liabilities:

                         
 

Derivatives:

                         
   

Interest rate contracts(2)

  $ (9 ) $   $ (9 ) $  
                   

 

 
   
  Fair Value Amounts Using  
Description
  December 31,
2009
  Quoted prices in active
markets for identical
assets (Level 1)
  Significant other
observable inputs
(Level 2)
  Significant
unobservable inputs
(Level 3)
 

Assets:

                         
 

Available-for-sale equity securities:

                         
   

Equity mutual funds

  $ 10   $ 10   $   $  
 

Retained interest in securitized receivables(3)

    262             262  
 

Interest rate contracts(2)

    1         1      
                   

Total assets

  $ 273   $ 10   $ 1   $ 262  
                   

(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.

(3)
The income approach is used to value these assets. Fair value is based on the present value of expected cash flows, calculated using management's best estimates of key assumptions including credit losses and discount rates commensurate with the risks involved.

        During the year ended December 31, 2010, no changes were made to the valuation techniques used to measure fair value.

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

17. FAIR VALUE (Continued)

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

2010
  Realized Interest
in Securitized
Receivables
  Cross-Currency
Interest Rate
Contracts
  Total  
 

Beginning balance, January 1, 2010

  $ 262   $   $ 262  
 

Total gains (losses):

                   
   

Included in earnings

        12     12  
     

Included in other comprehensive income (loss)

        7     7  

Purchases, issuances and settlements(1)

    (262 )       (262 )
               

Ending balance, December 31, 2010

  $   $ 19   $ 19  
               

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 December 31, 2010

  $   $ 12   $ 12  
               

 

2009
  Realized Interest in
Securitized Receivables
 

Beginning balance, January 1, 2009

  $ 147  

Total gains (losses) included in earnings

    (13 )

Purchases, issuances and settlements(1)

    128  
       

Ending balance, December 31, 2009

  $ 262  
       

The amount of total gains for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets still held at December 31, 2009

  $ 2  
       

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

        Gains (realized and unrealized) included in earnings for 2010 are reported in interest expense and other comprehensive loss as follows (dollars in millions):

 
  Interest expense   Other comprehensive
income (loss)
 

2010:

             

Total net gains included in earnings

  $ 12   $  

Changes in unrealized gains relating to assets still held at December 31, 2010

  $ 12   $ 7  

 

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

17. FAIR VALUE (Continued)

 
  Loss on
A/R Programs
  Other income  

2009:

             

Total net (losses) gains included in earnings

  $ (20 ) $ 7  

Changes in unrealized (losses) gains relating to assets still held at December 31, 2009

  $ (5 ) $ 7  

18. EMPLOYEE BENEFIT PLANS

DEFINED BENEFIT AND OTHER POSTRETIREMENT BENEFIT PLANS

        Our employees participate in a trusteed, non-contributory defined benefit pension plan (the "Plan") that covers substantially all of our full-time U.S. employees. Effective July 1, 2004, the Plan formula for employees not covered by a collective bargaining agreement was converted to a cash balance design. For represented employees, participation in the cash balance design is subject to the terms of negotiated contracts. For participating employees, benefits accrued under the prior formula were converted to opening cash balance accounts. The new cash balance benefit formula provides annual pay credits from 4% to 12% of eligible pay, depending on age and service, plus accrued interest. Participants in the plan on July 1, 2004 may be eligible for additional annual pay credits from 1% to 8%, depending on their age and service as of that date, for up to five years. The conversion to the cash balance plan did not have a significant impact on the accrued benefit liability, the funded status or ongoing pension expense.

        We sponsor defined benefit plans in a number of countries outside of the U.S. The availability of these plans, and their specific design provisions, are consistent with local competitive practices and regulations.

        During the fourth quarter of 2010, our Tioxide U.K. pension plan was closed to new entrants. For existing participants, benefits will only grow as a result of increases in pay. A defined contribution plan was established to replace the Tioxide U.K. pension plan for future benefit accruals.

        We also sponsor unfunded postretirement benefit plans other than pensions, which provide medical and life insurance benefits.

        Our postretirement benefit plans provide a fully insured Medicare Part D plan including prescription drug benefits affected by the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the "Act"). We cannot determine whether the medical benefits provided by our postretirement benefit plans are actuarially equivalent to those provided by the Act. We do not collect a subsidy and our net periodic postretirement benefits cost, and related benefit obligation, do not reflect an amount associated with the subsidy.

        On March 23, 2010, President Obama signed into law the Patient Protection and Affordable Care Act. On March 30, 2010, President Obama signed into law a reconciliation measure, the Health Care and Education Reconciliation Act of 2010. The passage of this legislation has resulted in comprehensive reform of health care in the U.S. We do not believe that this will have a significant impact of our financial position.

        We adopted certain provisions of ASC 715-20-65-1 on January 1, 2008, which requires us to recognize the overfunded or underfunded status of our defined benefit postretirement plan(s) (other

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

18. EMPLOYEE BENEFIT PLANS (Continued)


than multiemployer plans) as an asset or liability in our statement of financial position and to recognize changes in the funded status in the year in which the changes occur through comprehensive income. Beginning with our fiscal year ended December 31, 2008, ASC 715-20-65-1 requires that the assumptions used to measure our benefit obligations and annual expenses be determined as of the balance sheet date and all plan assets be reported as of that date. We used the second approach as described in ASC 715-20-65-1(c)(4) to transition our measurement date from November 30 to December 31. Under this approach, we recorded a charge to beginning retained earnings, net of tax, of $3 million, as of January 1, 2008.

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

18. EMPLOYEE BENEFIT PLANS (Continued)

        The following table sets forth the funded status of the plans for us and the amounts recognized in the consolidated balance sheets at December 31, 2010 and 2009 (dollars in millions):

 
  Defined Benefit Plans   Other Postretirement
Benefit Plans
 
 
  2010   2009   2010   2009  
 
  U.S.
Plans
  Non-U.S.
Plans
  U.S.
Plans
  Non-U.S.
Plans
  U.S.
Plans
  Non-U.S.
Plans
  U.S.
Plans
  Non-U.S.
Plans
 

Change in benefit obligation

                                                 
 

Benefit obligation at beginning of year

  $ 705   $ 2,152   $ 654   $ 2,009   $ 127   $ 8   $ 146   $ 3  
 

Service cost

    21     44     20     43     3         3     3  
 

Interest cost

    40     102     41     102     7         8      
 

Participant contributions

        13         13     4         4      
 

Plan amendments

                1             (3 )    
 

Foreign currency exchange rate changes

        (23 )       86                 1  
 

Settlements/transfers

        (10 )       (5 )                
 

Curtailments

                (12 )                
 

Special termination benefits

                2                  
 

Actuarial loss (gain)

    34     64     35     1     5         (14 )   2  
 

Benefits paid

    (39 )   (87 )   (45 )   (88 )   (17 )   (1 )   (17 )   (1 )
                                   

Benefit obligation at end of year

  $ 761   $ 2,255   $ 705   $ 2,152   $ 129   $ 7   $ 127   $ 8  
                                   

Change in plan assets

                                                 
 

Fair value of plan assets at beginning of year

  $ 461   $ 1,880   $ 348   $ 1,592   $   $   $   $  
 

Actual return on plan assets

    61     163     83     230                  
 

Foreign currency exchange rate changes

        (15 )       75                  
 

Participant contributions

        13         14     4         4      
 

Other

        2         (1 )                
 

Company contributions

    34     79     75     63     13     1     13     1  
 

Settlements/transfers

        (10 )       (5 )                
 

Benefits paid

    (39 )   (87 )   (45 )   (88 )   (17 )   (1 )   (17 )   (1 )
                                   

Fair value of plan assets at end of year

  $ 517   $ 2,025   $ 461   $ 1,880   $   $   $   $  
                                   

Funded status

                                                 

Fair value of plan assets

  $ 517   $ 2,025   $ 461   $ 1,880   $   $   $   $  

Benefit obligation

    761     2,255     705     2,152     129     7     127     8  
                                   

Accrued benefit cost

  $ (244 ) $ (230 ) $ (244 ) $ (272 ) $ (129 ) $ (7 ) $ (127 ) $ (8 )
                                   

Amounts recognized in balance sheet:

                                                 

Noncurrent asset

  $   $ 75   $   $ 31   $   $   $   $  

Current liability

    (5 )   (6 )   (6 )   (7 )   (12 )       (12 )   (1 )

Noncurrent liability

    (239 )   (299 )   (238 )   (296 )   (117 )   (7 )   (115 )   (7 )
                                   

  $ (244 ) $ (230 ) $ (244 ) $ (272 ) $ (129 ) $ (7 ) $ (127 ) $ (8 )
                                   

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

18. EMPLOYEE BENEFIT PLANS (Continued)

 

 
  Defined Benefit Plans   Other Postretirement Benefit Plans  
 
  2010   2009   2010   2009  
 
  U.S.
Plans
  Non-U.S.
Plans
  U.S.
Plans
  Non-U.S.
Plans
  U.S.
Plans
  Non-U.S.
Plans
  U.S.
Plans
  Non-U.S.
Plans
 

Amounts recognized in accumulated other comprehensive loss (income):

                                                 

Net actuarial loss

  $ 284   $ 513   $ 279   $ 513   $ 26   $ 1   $ 22   $ 1  

Prior service cost

    (27 )   2     (31 )       (13 )       (16 )    

Transition obligation

    1         1                      
                                   

  $ 258   $ 515   $ 249   $ 513   $ 13   $ 1   $ 6   $ 1  
                                   

        The amounts in accumulated other comprehensive loss that are expected to be recognized as components of net periodic benefit cost during the next fiscal year are as follows (dollars in millions):

 
  Defined Benefit Plans   Other Postretirement
Benefit Plans
 
 
  U.S. Plans   Non-U.S.
Plans
  U.S. Plans   Non-U.S.
Plans
 

Actuarial loss

  $ 14   $ 18   $ 2   $  

Prior service cost

    (5 )   (2 )   (3 )    
                   

Total

  $ 9   $ 16   $ (1 ) $  
                   

        Components of net periodic benefit costs for the years ended December 31, 2010, 2009 and 2008 were as follows (dollars in millions):

 
  Defined Benefit Plans  
 
  U.S. plans   Non-U.S. plans  
 
  2010   2009   2008   2010   2009   2008  

Service cost

  $ 21   $ 20   $ 24   $ 44   $ 43   $ 50  

Interest cost

    40     41     40     102     102     113  

Expected return on plan assets

    (42 )   (41 )   (42 )   (121 )   (104 )   (148 )

Amortization of transition obligation

            1         1      

Amortization of prior service cost

    (5 )   (5 )   (5 )   (1 )   (1 )   (1 )

Amortization of actuarial loss

    11     7     5     19     33     5  

Settlement loss

        2                 1  

Special termination benefits

                    2     1  
                           

Net periodic benefit cost

  $ 25   $ 24   $ 23   $ 43   $ 76   $ 21  
                           

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

18. EMPLOYEE BENEFIT PLANS (Continued)

 

 
  Other Postretirement Benefit Plans  
 
  U.S. plans   Non-U.S. plans  
 
  2010   2009   2008   2010   2009   2008  

Service cost

  $ 3   $ 3   $ 3   $   $ 3   $  

Interest cost

    7     8     8              

Amortization of prior service cost

    (3 )   (4 )   (2 )            

Amortization of actuarial loss

    1     1     2              
                           

Net periodic benefit cost

  $ 8   $ 8   $ 11   $   $ 3   $  
                           

        The amounts recognized in net periodic benefit cost and other comprehensive income (loss) as of December 31, 2010 and 2009 were as follows (dollars in millions):

 
  Defined Benefit Plans  
 
  U.S. plans   Non-U.S. plans  
 
  2010   2009   2008   2010   2009   2008  

Current year actuarial (gain) loss

  $ 16   $ (7 ) $ 185   $ 20   $ (124 ) $ 517  

Amortization of actuarial (gain) loss

    (11 )   (7 )   (5 )   (19 )   (33 )   (5 )

Current year prior service cost

                    1     1  

Amortization of prior service cost

    4     5     5     1     1     1  

Amortization of transition (asset)

            (1 )       (1 )   (1 )

Curtailment effects

                    (12 )    

Settlements

        (2 )               (1 )
                           

Total recognized in other comprehensive (income) loss

    9     (11 )   184     2     (168 )   512  

Net periodic benefit cost

    25     24     23     43     76     21  
                           

Total recognized in net periodic benefit cost and other comprehensive loss

  $ 34   $ 13   $ 207   $ 45   $ (92 ) $ 533  
                           

 

 
  Other Postretirement Benefit Plans  
 
  U.S. plans   Non-U.S. plans  
 
  2010   2009   2008   2010   2009   2008  

Current year actuarial (gain) loss

  $ 5   $ (14 ) $ 7   $   $   $  

Amortization of actuarial (gain) loss

    (2 )   (1 )   (2 )            

Current year prior service cost

        (5 )                

Amortization of prior service cost

    3     4     2              
                           

Total recognized in other comprehensive (income) loss

    6     (16 )   7              

Net periodic benefit cost

    8     8     11         3      
                           

Total recognized in net periodic benefit cost and other comprehensive loss

  $ 14   $ (8 ) $ 18   $   $ 3   $  
                           

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

18. EMPLOYEE BENEFIT PLANS (Continued)

        The following weighted-average assumptions were used to determine the projected benefit obligation at the measurement date and the net periodic pension cost for the year:

 
  Defined Benefit Plans  
 
  U.S. plans   Non U.S. plans  
 
  2010   2009   2008   2010   2009   2008  

Projected benefit obligation:

                                     
 

Discount rate

    5.70 %   5.90 %   6.47 %   4.69 %   4.94 %   5.04 %
 

Rate of compensation increase

    3.88 %   3.88 %   3.77 %   3.38 %   3.23 %   3.21 %

Net periodic pension cost:

                                     
 

Discount rate

    5.90 %   6.47 %   6.21 %   4.94 %   5.04 %   5.09 %
 

Rate of compensation increase

    3.88 %   3.77 %   3.89 %   3.23 %   3.21 %   3.24 %
 

Expected return on plan assets

    8.20 %   8.25 %   8.25 %   6.65 %   6.62 %   6.89 %

 

 
  Other Postretirement Benefit Plans  
 
  U.S. plans   Non U.S. plans  
 
  2010   2009   2008   2010   2009   2008  

Projected benefit obligation:

                                     
 

Discount rate

    5.46 %   5.59 %   6.39 %   6.69 %   7.47 %   7.60 %

Net periodic pension cost:

                                     
 

Discount rate

    5.59 %   6.39 %   6.05 %   7.47 %   7.60 %   5.25 %

        In both 2010 and 2009, the health care trend rate used to measure the expected increase in the cost of benefits was assumed to be 8% decreasing to 5% after 2016. Assumed health care cost trend rates can have a significant effect on the amounts reported for the postretirement benefit plans. A one-percent- point change in assumed health care cost trend rates would have the following effects (dollars in millions):

Asset category
  Increase   Decrease  

Effect on total of service and interest cost

  $   $  

Effect on postretirement benefit obligation

    2     (2 )

        The projected benefit obligation and fair value of plan assets for the defined benefit plans with projected benefit obligations in excess of plan assets as of December 31, 2010 and 2009 were as follows (dollars in millions):

 
  U.S. plans   Non U.S. plans  
 
  2010   2009   2010   2009  

Projected benefit obligation in excess of plan assets

                         

Projected benefit obligation

  $ 761   $ 705   $ 1,797   $ 1,669  

Fair value of plan assets

    517     461     1,493     1,366  

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

18. EMPLOYEE BENEFIT PLANS (Continued)

        The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for the defined benefit plans with an accumulated benefit obligation in excess of plan assets as of December 31, 2010 and 2009 were as follows (dollars in millions):

 
  U.S. plans   Non U.S.
plans
 
 
  2010   2009   2010   2009  

Accumulated benefit obligation in excess of plan assets

                         

Projected benefit obligation

  $ 761   $ 705   $ 745   $ 685  

Accumulated benefit obligation

    712     674     684     599  

Fair value of plan assets

    517     461     514     460  

        Expected future contributions and benefit payments are as follows (dollars in millions):

 
  U.S. Plans   Non-U.S. Plans  
 
  Defined
Benefit
Plans
  Other
Postretirement
Benefit
Plans
  Defined
Benefit
Plans
  Other
Postretirement
Benefit
Plans
 

2011 expected employer contributions:

                         
 

To plan trusts

  $ 69   $ 12   $ 77   $ 1  

Expected benefit payments:

                         
 

2011

    42     12     92     1  
 

2012

    45     11     92     1  
 

2013

    45     11     91     1  
 

2014

    48     11     93     1  
 

2015

    48     11     98     1  
 

2016 - 2020

    278     51     516     3  

        Our investment strategy with respect to pension assets is to pursue an investment plan that, over the long term, is expected to protect the funded status of the plan, enhance the real purchasing power of plan assets, and not threaten the plan's ability to meet currently committed obligations. Additionally, our investment strategy is to achieve returns on plan assets, subject to a prudent level of portfolio risk. Plan assets are invested in a broad range of investments. These investments are diversified in terms of domestic and international equities, both growth and value funds, including small, mid and large capitalization equities; short-term and long-term debt securities; real estate; and cash and cash equivalents. The investments are further diversified within each asset category. The portfolio diversification provides protection against a single investment or asset category having a disproportionate impact on the aggregate performance of the plan assets.

        Our pension plan assets are managed by outside investment managers. The investment managers value our plan assets using quoted market prices, other observable inputs or unobservable inputs. We have established target allocations for each asset category. Our pension plan assets are periodically rebalanced based upon our target allocations.

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

18. EMPLOYEE BENEFIT PLANS (Continued)

        The fair value of plan assets for the pension plans was $2.5 billion and $2.3 billion at December 31, 2010 and 2009, respectively. The following plan assets are measured at fair value on a recurring basis (dollars in millions):

 
   
  Fair Value Amounts Using  
Asset category
  December 31,
2010
  Quoted prices in active
markets for identical
assets (Level 1)(1)
  Significant other
observable inputs
(Level 2)(2)
  Significant
unobservable inputs
(Level 3)(3)
 

U.S. pension plans:

                         
 

Equities

  $ 295   $ 174   $ 121   $  
 

Fixed income

    155     97     57     1  
 

Real estate/other

    64     45         19  
 

Cash

    3     3          
                   
   

Total U.S. pension plan assets

  $ 517   $ 319   $ 178   $ 20  
                   

Non-U.S. pension plans:

                         
 

Equities

  $ 864   $ 436   $ 428   $  
 

Fixed income

    891     244     647      
 

Real estate/other

    255     1     254      
 

Cash

    15     15          
                   
   

Total Non-U.S. pension plan assets

  $ 2,025   $ 696   $ 1,329   $  
                   

 

 
   
  Fair Value Amounts Using  
Asset category
  December 31,
2009
  Quoted prices in active
markets for identical
assets (Level 1)(1)
  Significant other
observable inputs
(Level 2)(2)
  Significant
unobservable inputs
(Level 3)(3)
 

U.S. pension plans:

                         
 

Equities

  $ 257   $ 138   $ 119   $  
 

Fixed income

    144     93     51      
 

Real estate/other

    52     34         18  
 

Cash

    8     8          
                   
   

Total U.S. pension plan assets

  $ 461   $ 273   $ 170   $ 18  
                   

Non-U.S. pension plans:

                         
 

Equities

  $ 804   $ 410   $ 394   $  
 

Fixed income

    844     218     626      
 

Real estate/other

    208     3     205      
 

Cash

    24     24          
                   
   

Total Non-U.S. pension plan assets

  $ 1,880   $ 655   $ 1,225   $  
                   

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

18. EMPLOYEE BENEFIT PLANS (Continued)

        The following table reconciles the beginning and ending balances of plan assets measured at fair value using unobservable inputs (Level 3) (dollars in millions):

 
  Real estate/other  
Fair Value Measurements of Plan Assets Using Level 3
  Year ended
December 31, 2010
  Year ended
December 31, 2009
 

Balance at beginning of period

  $ 18   $ 27  

Return on pension plan assets

    1     (9 )

Purchases, sales and settlements

         

Transfers in and/or out of Level 3

         
           

Balance at end of period

  $ 19   $ 18  
           

 

 
  Fixed Income  
Fair Value Measurements of Plan Assets Using Level 3
  Year ended
December 31, 2010
 

Balance at beginning of period

  $  

Return on pension plan assets

     

Purchases, sales and settlements

     

Transfers in and/or out of Level 3

    1  
       

Balance at end of period

  $ 1  
       

        Based upon historical returns, the expectations of our investment committee and outside advisors, the expected long term rate of return on the pension assets is estimated to be between 6.65% and 8.20%. The asset allocation for our pension plans at December 31, 2010 and 2009 and the target allocation for 2011, by asset category are as follows:

Asset category
  Target Allocation
2011
  Allocation at
December 31, 2010
  Allocation at
December 31, 2009
 

U.S. pension plans:

                   
 

Equities

    56 %   57 %   56 %
 

Fixed income

    30 %   30 %   31 %
 

Real estate/other

    14 %   12 %   11 %
 

Cash

    %   1 %   2 %
               
   

Total U.S. pension plans

    100 %   100 %   100 %
               

Non-U.S. pension plans:

                   
 

Equities

    41 %   43 %   43 %
 

Fixed income

    46 %   44 %   45 %
 

Real estate/other

    12 %   12 %   11 %
 

Cash

    1 %   1 %   1 %
               
   

Total non-U.S. pension plans

    100 %   100 %   100 %
               

        Equity securities in our pension plans did not include any equity securities of our parent or our affiliates at the end of 2010.

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18. EMPLOYEE BENEFIT PLANS (Continued)

DEFINED CONTRIBUTION PLANS

        We have a money purchase pension plan covering substantially all of our domestic employees who were hired prior to January 1, 2004. Employer contributions are made based on a percentage of employees' earnings (ranging up to 8%).

        We also have a salary deferral plan covering substantially all U.S. employees. Plan participants may elect to make voluntary contributions to this plan up to a specified amount of their compensation. We contribute an amount equal to one-half of the participant's contribution, not to exceed 2% of the participant's compensation.

        Along with the introduction of the cash balance formula within our defined benefit pension plan, the money purchase pension plan was closed to new hires. At the same time, the company match in the salary deferral plan was increased, for new hires, to a 100% match, not to exceed 4% of the participant's compensation, once the participant has achieved six years of service with the Company.

        Our total combined expense for the above defined contribution plans for the years ended December 31, 2010, 2009 and 2008 was $14 million, $12 million and $12 million,

SUPPLEMENTAL SALARY DEFERRAL PLAN AND SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

        The Huntsman Supplemental Savings Plan ("Huntsman SSP") is a non-qualified plan covering key management employees and allows participants to defer amounts that would otherwise be paid as compensation. The participant can defer up to 75% of their salary and bonus each year. This plan also provides benefits that would be provided under the Huntsman Salary Deferral Plan if that plan were not subject to legal limits on the amount of contributions that can be allocated to an individual in a single year. The Huntsman SSP was amended and restated effective as of January 1, 2005 to allow eligible executive employees to comply with Section 409A of the Internal Revenue Code of 1986 ("Section 409A").

        The Huntsman Supplemental Executive Retirement Plan (the "SERP") is an unfunded non-qualified pension plan established to provide certain executive employees with benefits that could not be provided, due to legal limitations, under the Huntsman Defined Benefit Pension Plan, a qualified defined benefit pension plan, and the Huntsman Money Purchase Pension Plan, a qualified money purchase pension plan.

        Assets of these plans are included in other noncurrent assets and as of December 31, 2010 and 2009 were $11 million and $10 million, respectively. During each of the years ended December 31, 2010, 2009 and 2008, we expensed a total of $1 million, nil, and $1 million, respectively, as contributions to the Huntsman SSP and the SERP.

STOCK-BASED INCENTIVE PLAN

        In connection with our parent's initial public offering of common and preferred stock on February 16, 2005, our parent adopted the Huntsman Stock Incentive Plan (the "Stock Incentive Plan"). The Stock Incentive Plan permits the grant of non-qualified stock options, incentive stock options, stock appreciation rights, nonvested stock, phantom stock, performance awards and other stock-based awards ("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

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employees. As of December 31, 2010, our parent was authorized to grant up to of 32.6 million shares under the Stock Incentive Plan. See "Note 23. Stock-Based Compensation Plans."

INTERNATIONAL PLANS

        International employees are covered by various post employment arrangements consistent with local practices and regulations. Such obligations are included in the consolidated financial statements in other long-term liabilities.

19. INCOME TAXES

        The following is a summary of U.S. and non-U.S. provisions for current and deferred income taxes (dollars in millions):

 
  Year ended December 31,  
 
  2010   2009   2008  

Income tax expense (benefit):

                   

U.S.

                   
 

Current

  $ (23 ) $ 67   $ 6  
 

Deferred

    45     (13 )   10  

Non-U.S.

                   
 

Current

    41     17     36  
 

Deferred

    (23 )   88     (54 )
               

Total

  $ 40   $ 159   $ (2 )
               

        The following schedule reconciles the differences between the U.S. federal income taxes at the U.S. statutory rate to our (provision) benefit for income taxes (dollars in millions):

 
  Year ended December 31,  
 
  2010   2009   2008  

Income (loss) from continuing operations before income taxes

  $ 184   $ (240 ) $ (61 )
               

Expected tax expense (benefit) at U.S. statutory rate of 35%

  $ 64   $ (84 ) $ (21 )

Change resulting from:

                   
 

State tax benefit (expense) net of federal benefit

    (4 )   (1 )   7  
 

Effects of non-U.S. operations and tax rate differential

    13     42     (2 )
 

U.K. exchange gains and losses

            (24 )
 

Tax authority dispute resolutions

    (21 )   (6 )   (68 )
 

Tax benefit of losses with valuation allowances as a result of other comprehensive income

    (4 )   (39 )    
 

Change in valuation allowance

    (22 )   230     103  
 

Other, net

    14     17     3  
               

Total income tax expense (benefit)

  $ 40   $ 159   $ (2 )
               

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19. INCOME TAXES (Continued)

        On September 8, 2009, we announced the closure of our Australian styrenics operations. U.S. tax law, under our relevant facts, provides for a deduction on investments that are "worthless" for U.S. tax purposes. Therefore, during 2009 and 2010, we recorded tax benefits of $73 million and $28 million, respectively, in discontinued operations related to the closure of and the cumulative U.S. investments in our Australian styrenics business.

        Included in our 2010 and 2009 non-U.S. deferred tax expense is $4 million and $38 million, respectively, of income tax benefit for losses from continuing operations for certain jurisdictions with valuation allowances to the extent income was recorded in other comprehensive income. An offsetting income tax expense was recognized in accumulated other comprehensive income.

        The components of income (loss) from continuing operations before income taxes were as follows (dollars in millions):

 
  Year ended December 31,  
 
  2010   2009   2008  

U.S. 

  $ 38   $ 92   $ 42  

Non-U.S. 

    146     (332 )   (103 )
               

Total

  $ 184   $ (240 ) $ (61 )
               

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19. INCOME TAXES (Continued)

        Components of deferred income tax assets and liabilities were as follows (dollars in millions):

 
  December 31,  
 
  2010   2009  

Deferred income tax assets:

             
 

Net operating loss and AMT credit carryforwards

  $ 970   $ 976  
 

Pension and other employee compensation

    216     218  
 

Property, plant and equipment

    97     107  
 

Intangible assets

    50     64  
 

Foreign tax credits

    75     75  
 

Other, net

    116     124  
           
 

Total

  $ 1,524   $ 1,564  
           

Deferred income tax liabilities:

             
 

Property, plant and equipment

  $ (520 ) $ (492 )
 

Pension and other employee compensation

    (19 )   (8 )
 

Other, net

    (110 )   (93 )
           
 

Total

  $ (649 ) $ (593 )
           

Net deferred tax asset before valuation allowance

  $ 875   $ 971  

Valuation allowance

    (813 )   (861 )
           

Net deferred tax asset

  $ 62   $ 110  
           

Current deferred tax asset

  $ 40   $ 33  

Current deferred tax liability

    (63 )   (2 )

Non-current deferred tax asset

    179     158  

Non-current deferred tax liability

    (94 )   (79 )
           

Net deferred tax asset

  $ 62   $ 110  
           

        We have net operating loss carryforwards ("NOLs") of $2,714 million in various non-U.S. jurisdictions. While the majority of the non-U.S. NOLs have no expiration date, $995 million have a limited life (of which $933 million are subject to a valuation allowance) and $48 million are scheduled to expire in 2011 (of which $48 million are subject to a valuation allowance). We had $142 million of NOLs expire unused in 2010 (of which $136 million had been subject to a full valuation allowance).

        Included in the $2,714 million of non-U.S. NOLs is $1,095 million attributable to our Luxembourg entities. As of December 31, 2010, there is a valuation allowance against substantially all of these net tax-effected NOLs of $307 million. Due to the uncertainty surrounding the realization of the benefits of these losses, we have reduced substantially all of the related deferred tax asset with a valuation allowance.

        Valuation allowances are reviewed each period on a tax jurisdiction by 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. During 2010, we released valuation allowances of $20 million on certain net deferred tax assets, principally in Australia and Luxembourg. During 2009, we established valuation allowances of $159 million on certain net deferred tax assets, principally in the

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19. INCOME TAXES (Continued)


U.K. During 2008, we established valuation allowances of $35 million on certain net deferred tax assets, principally in Switzerland. Uncertainties regarding expected future income in certain jurisdictions could affect the realization of deferred tax assets in those jurisdictions and result in additional valuation allowances in future periods.

        The following is a summary of changes in the valuation allowance (dollars in millions):

 
  2010   2009   2008  

Valuation allowance as of January 1

  $ 861   $ 681   $ 510  

Valuation allowance as of December 31

    813     861     681  
               

Net decrease (increase)

    48     (180 )   (171 )

Foreign currency movements

    1     14     (19 )

(Decrease) increase to deferred tax assets with an offsetting (decrease) increase to valuation allowances

    (27 )   (64 )   88  

Reversal of valuation allowances on deferred tax assets related to prior acquisitions, with a corresponding reduction to goodwill and intangible assets

            (1 )
               

Change in valuation allowance per rate reconciliation

  $ 22   $ (230 ) $ (103 )
               

Components of change in valuation allowance affecting tax expense:

                   
 

Pre-tax income and pre-tax losses in jurisdictions with valuation allowances resulting in no tax expense or benefit

  $ 2   $ (75 ) $ (68 )
 

Releases of valuation allowances in various jurisdictions

    20     4      
 

Establishments of valuation allowances in various jurisdictions

        (159 )   (35 )
               

Change in valuation allowance per rate reconciliation

  $ 22   $ (230 ) $ (103 )
               

        The following is a reconciliation of our unrecognized tax benefits (dollars in millions):

 
  2010   2009  

Unrecognized tax benefits as of January 1

  $ 74   $ 64  

Gross increases and decreases—tax positions taken during a prior period

    (27 )   (5 )

Gross increases and decreases—tax positions taken during the current period

    4     23  

Decreases related to settlement of amounts due to tax authorities

         

Reductions resulting from the lapse of statutes of limitation

    (10 )   (10 )

Foreign currency movements

    2     2  
           

Unrecognized tax benefits as of December 31

  $ 43   $ 74  
           

        As of December 31, 2010 and 2009, the amount of unrecognized tax benefits which, if recognized, would affect the effective tax rate was $32 million and $59 million, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

19. INCOME TAXES (Continued)

        In accordance with our accounting policy, we continue to recognize interest and penalties accrued related to unrecognized tax benefits in income tax expense.

 
  Year ended December 31,  
 
  2010   2009   2008  

Interest expense (benefit) included in tax expense

  $ 1   $ 3   $ (7 )

Penalties expense (benefit) included in tax expense

  $   $ 1   $ 1  

 

 
  December 31,  
 
  2010   2009  

Accrued liability for interest

  $ 8   $ 7  

Accrued liability for penalties

  $ 2   $ 2  

        We conduct business globally and, as a result, we file income tax returns in the U.S. federal, various U.S. state and various non-U.S. jurisdictions. The following table summarizes the tax years that remain subject to examination by major tax jurisdictions:

Tax Jurisdiction
  Open Tax Years

China

  2002 and later

Hong Kong

  2000 and later

India

  2004 and later

Italy

  2006 and later

Malaysia

  2003 and later

Switzerland

  2006 and later

The Netherlands

  2005 and later

United Kingdom

  2008 and later

United States federal

  2010 and later

        Certain of our U.S. and non-U.S. income tax returns are currently under various stages of audit by applicable tax authorities and the amounts ultimately agreed upon in resolution of the issues raised may differ materially from the amounts accrued.

        We estimate that it is reasonably possible that certain of our unrecognized tax benefits (both U.S. and non-U.S.) could change within 12 months of the reporting date with a resulting decrease in the unrecognized tax benefits within a reasonably possible range of $4 million to $17 million. For the 12-month period from the reporting date, we would expect that a substantial portion of the decrease in our unrecognized tax benefits would result in a corresponding benefit to our income tax expense.

        During 2010, we concluded and settled tax examinations in the U.S. (both Federal and various states) and various non-U.S. jurisdictions including, but not limited to, Belgium, Spain, Indonesia, Thailand and the U.K. During 2009, we concluded and settled tax examinations in the U.S. (both Federal and various states) and various non-U.S. jurisdictions including, but not limited to, Belgium and Italy. During 2008, we concluded and settled tax examinations in the U.S. (both Federal and various states) and various non-U.S. jurisdictions including, but not limited to, Germany, Italy and the U.K.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

19. INCOME TAXES (Continued)

        For non-U.S. entities that were not treated as branches for U.S. tax purposes, the Company does not provide for income taxes on the undistributed earnings of these subsidiaries as earnings are reinvested and, in the opinion of management, will continue to be reinvested indefinitely. The undistributed earnings of foreign subsidiaries that are deemed to be permanently invested were approximately $261 million at December 31, 2010. It is not practicable to determine the unrecognized deferred tax liability on those earnings.

20. COMMITMENTS AND CONTINGENCIES

PURCHASE COMMITMENTS

        We have various purchase commitments extending through 2023 for materials, supplies and services entered into in the ordinary course of business. Included in the purchase commitments table below are contracts which require minimum volume purchases that extend beyond one year or are renewable annually and have been renewed for 2011. Certain contracts allow for changes in minimum required purchase volumes in the event of a temporary or permanent shutdown of a facility. To the extent the contract requires a minimum notice period, such notice period has been included in the table below. The contractual purchase prices for substantially all of these contracts are variable based upon market prices, subject to annual negotiations. We have estimated our contractual obligations by using the terms of our 2010 pricing for each contract. We also have a limited number of contracts which require a minimum payment even if no volume is purchased. We believe that all of our purchase obligations will be utilized in our normal operations. During 2010, 2009 and 2008, we made minimum payments under such take or pay contracts without taking the product of nil, $6 million and nil, respectively.

        Total purchase commitments as of December 31, 2010 are as follows (dollars in millions):

Year ending December 31:
   
 

2011

  $ 810  

2012

    285  

2013

    149  

2014

    87  

2015

    65  

Thereafter

    57  
       

  $ 1,453  
       

OPERATING LEASES

        We lease certain railcars, aircraft, equipment and facilities under long-term lease agreements. The total net expense recorded under operating lease agreements in the accompanying consolidated statements of operations is approximately $58 million, $52 million and $48 million for 2010, 2009 and 2008.

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        Future minimum lease payments under operating leases as of December 31, 2010 are as follows (dollars in millions):

Year ending December 31:
   
 

2011

  $ 53  

2012

    48  

2013

    45  

2014

    38  

2015

    31  

Thereafter

    63  
       

  $ 278  
       

LEGAL MATTERS

Asbestos Litigation

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

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

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20. COMMITMENTS AND CONTINGENCIES (Continued)

        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.

 
  Year ended
December 31,
2010
  Year ended
December 31,
2009
  Year ended
December 31,
2008
 

Unresolved at beginning of period

    1,138     1,140     1,192  

Tendered during period

    24     18     21  

Resolved during period(1)

    46     20     73  

Unresolved at end of period

    1,116     1,138     1,140  

        We have never made any payments with respect to these cases. As of December 31, 2010, 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 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 December 31, 2010.

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

 
  Year ended
December 31,
2010
  Year ended
December 31,
2009
  Year ended
December 31,
2008
 

Unresolved at beginning of period

    39     43     39  

Filed during period

    5     3     8  

Resolved during period

    7     7     4  

Unresolved at end of period

    37     39     43  

        We paid gross settlement costs for asbestos exposure cases that are not subject to indemnification of $201,000 and nil during the years ended December 31, 2010 and 2009, respectively. As of December 31, 2010, we had an accrual of $225,000 relating to these cases. We cannot assure you that our liability will not exceed our accruals or that our liability associated with these cases would not be

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20. COMMITMENTS AND CONTINGENCIES (Continued)


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 December 31, 2010.

Antitrust Matters

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

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

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

        Two purported class action cases filed May 5 and 17, 2006 pending in the Superior Court of Justice, Ontario Canada and Superior Court, Province of Quebec, District of Quebec, by direct purchasers of MDI, TDI and polyether polyols and by indirect purchasers of these products remain largely dormant although the plaintiff in one case recently filed papers seeking class certification. 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 MDL No. 1616. Finally, we have been named in a proposed third amended complaint by indirect purchasers of MDI, TDI, polyether polyols and polyester polyols pending against Bayer and Chemtura in the U.S. District Court for the District of Massachusetts. The matter is currently stayed pending a settlement of previously asserted claims against Bayer and Chemtura. We opposed the motion for leave to file the proposed amended complaint adding us as a defendant in that action. The plaintiffs in each of these matters make similar claims against the defendants as the class plaintiffs in MDL No. 1616.

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

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        In all of the antitrust litigation currently pending against us, the plaintiffs generally are seeking injunctive relief, treble damages, costs of suit and attorneys fees. The plaintiffs' pleadings in these various antitrust suits provide few specifics about any alleged illegal conduct on our part, and we are not aware of any illegal conduct by us or any of our employees. Nevertheless, we could incur losses due to these claims in the future and those losses could be material.

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 IRIC, our captive insurer, and 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. For more information, see "Note 25. Casualty Losses and Insurance Recoveries—Port Arthur, Texas Plant Fire."

Other Proceedings

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

21. 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

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operations, or require us to modify our facilities or operations. Accordingly, environmental or regulatory matters may cause us to incur significant unanticipated losses, costs or liabilities.

Environmental, Health and Safety Systems

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

EHS Capital Expenditures

        We may incur future costs for capital improvements and general compliance under EHS laws, including costs to acquire, maintain and repair pollution control equipment. For the years ended December 31, 2010, 2009 and 2008, our capital expenditures for EHS matters totaled $85 million, $54 million and $58 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 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 PRP for the mine site involving selenium-contaminated surface water. Under a 2004

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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 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 UAO to conduct an RI/FS of the entire West Ridge 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 are unable to estimate the cost of the RI/FS or our ultimate liability in this matter, but we do not believe it will be material to our financial condition, results of operations or cash flow.

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

        In June of 2006, an agreement was reached between the local regulatory authorities and our Advanced Materials site in Pamplona, Spain to relocate our manufacturing operations in order to facilitate new urban development desired by the city. Subsequently, as required by the authorities, soil and groundwater sampling was performed and followed by a quantitative risk assessment. In October 2010, the local authorities approved our proposed two-phase remedial approach. The first phase, to be initiated in 2011, will involve groundwater extraction and treatment in one limited area of the site. The second phase, not yet defined, would proceed during site redevelopment. However, because of the current economic conditions in Spain, we believe that the urban development plans have been postponed for the immediate future. Therefore, we are unable to further assess the timing, likelihood or 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 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 of 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 demolition, which commenced in May 2010, is expected to be completed by mid-2011.

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        By letter of March 15, 2010, the DOJ notified us that 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 until March 31, 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 $48 million and $41 million for environmental liabilities as of December 31, 2010 and 2009, respectively. Of these amounts, $13 million and $5 million were classified as accrued liabilities in our consolidated balance sheets as of December 31, 2010 and 2009, respectively, and $35 million and $36 million were classified as other noncurrent liabilities in our consolidated balance sheets as of December 31, 2010 and 2009, respectively. In certain cases, our remediation liabilities may be payable over periods of up to 30 years. We may incur losses for environmental remediation in excess of the amounts accrued; however, we are not able to estimate the amount or range of such potential excess.

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REGULATORY DEVELOPMENTS

        In December 2006, the EU parliament and EU council approved a new EU regulatory framework for chemicals called 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 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 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 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.

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        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

        The U.S. DHS issued the final rule of their "Chemical Facility Anti-Terrorism Standard" in 2007. The initial phase of the rule required all chemical facilities in the U.S. to evaluate their facilities against the DHS Appendix A list of "Chemicals of Interest." Facilities which have specified chemicals in threshold quantities on the Appendix A list were required to submit a "Top Screen" questionnaire to DHS in 2008. In early 2008, we submitted Top Screens for all of our covered facilities. After reviewing the Top Screens, DHS determined that four of our sites were "High Risk" facilities. As a result, we were required to perform security vulnerability assessments at the High Risk sites. The security vulnerability assessments were completed and sent to DHS during the fourth quarter of 2008. Based on their assessment of the security vulnerability assessments, we received notice from DHS that one of our sites was elevated to a high security risk tier. The DHS determined the other three sites to be lower security risk tiers. The three lower-tiered sites have submitted SSPs to the DHS. The SSPs are based on a list of 18 risk-based performance standards, but security improvements recommended from the SSPs are not anticipated to be material. The high tiered site also submitted an SSP to the DHS, and security upgrades as a result of DHS requirements are estimated to cost $8 million to $10 million to be spent during 2011 and 2012.

MTBE DEVELOPMENTS

        We produce MTBE, an oxygenate that is blended with gasoline to reduce vehicle air emissions and to enhance the octane rating of gasoline. Litigation or legislative initiatives restricting the use of MTBE in gasoline may subject us or our products to environmental liability or materially adversely affect our sales and costs. Because MTBE has contaminated some water supplies, its use has become controversial in the U.S. and elsewhere, and its use has been effectively eliminated in the U.S. market. We currently market MTBE, either directly or through third parties, to gasoline additive customers located outside the U.S., although there are additional costs associated with such outside-U.S. sales which may result in decreased profitability compared to historical sales in the U.S. We may also elect to use all or a portion of our precursor 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.

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        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 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 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 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 early October to discuss this matter and 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 employees as appropriate. In November 2010, directions were received from TNPCB to submit a plan for the remediation of the off-site waste disposal areas.

        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 the PAPL's operations.

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22. [RESERVED]

23. STOCK-BASED COMPENSATION PLAN

        Under our parent's Stock Incentive Plan, a plan approved by the Huntsman Corporation stockholders, our parent may grant non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, phantom stock, performance awards and other stock-based awards to our employees, directors and consultants and to employees and consultants of our subsidiaries, provided that incentive stock options may be granted solely to employees. The terms of the grants are fixed at the grant date. As of December 31, 2010, our parent was authorized to grant up to 32.6 million shares under the Stock Incentive Plan. As of December 31, 2010, our parent had 12.1 million shares remaining under the Stock Incentive Plan available for grant. Option awards have a maximum contractual term of 10 years and generally must have an exercise price at least equal to the market price of our parent's 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 was as follows (dollars in millions):

 
  Year ended December 31,  
 
  2010   2009   2008  

Compensation cost

  $ 24   $ 16   $ 20  

        The total income tax benefit recognized in the statement of operations for stock-based compensation arrangements was $8 million, $6 million and $6 million for the years ended December 31, 2010, 2009 and 2008, respectively.

        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 parent's 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 averages of the assumptions utilized for all stock options granted during the year.

 
  Year ended December 31,
 
  2010   2009   2008

Dividend yield

    3.0 %   15.4 % NA

Expected volatility

    69.0 %   70.4 % NA

Risk-free interest rate

    3.1 %   2.5 % NA

Expected life of stock options granted during the period

    6.6 years     6.6 years   NA

        During 2008, no stock options were granted.

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STOCK OPTIONS

        A summary of stock option activity under the Stock Incentive Plan as of December 31, 2010 and changes during the year then ended is presented below:

Option Awards
  Shares   Weighted
Average
Exercise
Price
  Weighted
Average
Remaining
Contractual
Term
  Aggregate
Intrinsic
Value
 
 
  (in thousands)
   
  (years)
  (in millions)
 

Outstanding at January 1, 2010

    11,677   $ 11.30              

Granted

    654     13.50              

Exercised

    (1,209 )   2.62              

Forfeited

    (125 )   20.46              
                         

Outstanding at December 31, 2010

    10,997     12.28     6.8   $ 67  
                         

Exercisable at December 31, 2010

    6,468     18.07     5.7     15  
                         

        The weighted-average grant-date fair value of stock options granted during 2010 and 2009 was $6.97 and $0.51 per option, respectively. As of December 31, 2010, there was $4 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 1.3 years.

        During 2009 and 2008, no stock options were exercised. During the year ended December 31, 2010, the total intrinsic value of stock options exercised was $14 million.

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

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because it can be settled in either stock or cash. A summary of the status of nonvested shares as of December 31, 2010 and changes during the year then ended is presented below:

 
  Equity Awards   Liability Awards  
 
  Shares   Weighted
Average
Grant-Date
Fair Value
  Shares   Weighted
Average
Grant-Date
Fair Value
 
 
  (in thousands)
   
  (in thousands)
   
 

Nonvested at January 1, 2010

    3,428   $ 5.20     1,880   $ 3.61  

Granted

    1,015     12.96     472     13.50  

Vested

    (1,284 )(1)   7.12     (656 )   4.44  

Forfeited

    (33 )   3.32     (54 )   5.72  
                       

Nonvested at December 31, 2010

    3,126     6.95     1,642     6.05  
                       

(1)
As of December 31, 2010, a total of 329,132 restricted stock units were vested, of which 65,733 vested during 2010. Only 70,970 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 December 31, 2010, there was $26 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 years ended December 31, 2010, 2009 and 2008 was $18 million, $12 million and $13 million, respectively.

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24. OTHER COMPREHENSIVE INCOME (LOSS)

        Other comprehensive income (loss) consisted of the following (dollars in millions):

 
  December 31,  
 
  2010   2009   2008  
 
  Accumulated
income (loss)
  Income
(loss)
  Accumulated
income (loss)
  Income
(loss)
  Income
(loss)
 

Foreign currency translation adjustments, net of tax of $12 and $2 as of December 31, 2010 and 2009, respectively

  $ 296   $ 23   $ 273   $ 71   $ (176 )

Pension and other postretirement benefits adjustments, net of tax of $124 and $134 as of December 31, 2010 and 2009, respectively

    (663 )   (28 )   (635 )   136     (564 )

Other comprehensive income of unconsolidated affiliates

    7         7     (2 )    

Other, net

    (1 )   (2 )   1     2     (4 )
                       
 

Total

    (361 )   (7 )   (354 )   207     (744 )

Amounts attributable to noncontrolling interests

    7     1     6     (1 )   3  
                       

Amounts attributable to Huntsman International LLC

  $ (354 ) $ (6 ) $ (348 ) $ 206   $ (741 )
                       

        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.

25. CASUALTY LOSSES AND INSURANCE RECOVERIES

PORT ARTHUR, TEXAS PLANT FIRE

        On April 29, 2006, our former Port Arthur, Texas olefins manufacturing plant (which we sold to Flint Hills Resources in November 2007) experienced a major fire. The plant was covered by property damage and business interruption insurance through IRIC, and 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. Our claims were the subject of litigation and an arbitration proceeding with certain of the Reinsurers.

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

        As a result of this settlement, we recognized a pretax gain of $110 million in discontinued operations during the second quarter of 2010, the proceeds of which were used to repay secured debt in accordance with relevant provisions of the agreements governing our Senior Credit Facilities. Of the

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$110 million payment, $34 million was reflected within the statement of cash flows as cash flows from investing activities and the remaining $76 million was reflected as cash flows from operating activities.

2005 U.S. GULF COAST STORMS

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

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

26. [RESERVED]

27. DISCONTINUED OPERATIONS

Australian Styrenics Business Shutdown

        During the first quarter of 2010, we ceased operation of our former Australian styrenics business. During 2009, we recorded costs of approximately $63 million related to the closure of this business. U.S. tax law, under relevant facts, provides for a deduction on investments that are "worthless" for U.S. tax purposes. Therefore, during 2009, we recorded a tax benefit of $73 million in discontinued operations related to the closure of and the cumulative U.S. investments in our Australian Styrenics business. During 2010, we recorded additional closure costs of $6 million. Also during 2010, we recorded a $19 million loss from the recognition of cumulative currency translation losses upon the liquidation and substantial liquidation of foreign entities related to this business. Furthermore, we recorded an additional tax benefit of $28 million in 2010 related to the closure of this business. The following results of operations of our former Australian styrenics business have been presented as

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discontinued operations in the accompanying consolidated statements of operations (dollars in millions):

 
  Year ended
December 31,
 
 
  2010   2009   2008  

Revenues

  $ 52   $ 98   $ 159  

Operating costs and expenses

    (85 )   (182 )   (192 )

Non-operating expense

    (19 )        
               

Loss before income taxes

    (52 )   (84 )   (33 )

Income tax benefit

    28     74      
               

Loss from discontinued operations, net of tax

  $ (24 ) $ (10 ) $ (33 )
               

        The results of our former Australian styrenics business were previously included in our Corporate and other segment and have been presented as discontinued operations in the accompanying consolidated statements of operations for all periods presented.

U.S. BASE CHEMICALS BUSINESS

        On November 5, 2007, we completed a disposition of our U.S. base chemicals businesses, which included our former olefins manufacturing assets located at Port Arthur, Texas (the "U.S. Base Chemicals Disposition"). A captive ethylene unit at the retained Port Neches, Texas site of our Performance Products segment operations was not included in the sale. This asset, along with a long-term post-closing arrangement for the supply of ethylene and propylene from Flint Hills Resources to us, will continue to provide feedstock for our downstream derivative units.

        The following results of our former U.S base chemicals business have been presented as discontinued operations in the accompanying consolidated statements of operations (dollars in millions):

 
  Year ended December 31,  
 
  2010   2009   2008  

Other (expenses) income

  $ (6 ) $ 2   $ 8  

Gain (loss) on insurance settlements, net

    110     (17 )   175  
               

Income (loss) before income taxes

    104     (15 )   183  

Income tax expense (benefit)

    38     (6 )   68  
               

Income (loss) from discontinued operations, net of tax

  $ 66   $ (9 ) $ 115  
               

        In connection with the U.S. Base Chemicals Disposition, we recognized a pretax loss on disposal of $146 million in 2007. During 2008, we recognized an adjustment to the loss on disposal of $8 million related to a sales and use tax settlement, and post-closing adjustments. In addition, during 2008, we recognized a $175 million gain from the partial settlement of insurance claims related to the fire at our former Port Arthur, Texas facility. During 2009, we recorded legal fees of $17 million related to the ongoing arbitration of the fire insurance claim and recorded a gain of $2 million on the settlement of

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

27. DISCONTINUED OPERATIONS (Continued)


product exchange liabilities. During 2010, we recorded a $110 million pretax gain 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. These 2010 insurance settlement gains were offset in part by income taxes and legal fees related to the arbitration of the fire insurance claim. See "Note 25. Casualty Losses and Insurance Recoveries."

        The results of our former U.S. base chemicals business are included in discontinued operations for all periods presented.

NORTH AMERICAN POLYMERS BUSINESS

        On August 1, 2007 we completed the disposition of our former polymers manufacturing assets located at four U.S. sites: Odessa and Longview, Texas; Peru, Illinois; and Marysville, Michigan (the "North American Polymers Disposition"). In accordance with the amended and restated asset purchase agreement with Flint Hills Resources, we also shut down our Mansonville, Quebec expandable polystyrene manufacturing facility in June 2007.

        During 2008, we recorded an adjustment to the loss on disposal in connection with the North American Polymers Disposition of $3 million primarily related to property tax settlements and post-closing adjustments.

        The results of our former North American polymers business are included in discontinued operations for all periods presented.

        In connection with the U.S. Base Chemicals Disposition and the North American Polymers Disposition, we agreed to indemnify Flint Hills Resources with respect to any losses resulting from (i) the breach of representations and warranties contained in the amended and restated asset purchase agreement, (ii) any pre-sale liabilities related to certain assets not assumed by Flint Hills Resources, and (iii) any unknown environmental liability related to the pre-sale operations of the assets sold. We are not required to pay under these indemnification obligations until claims against us, on a cumulative basis, exceed $10 million. Upon exceeding this $10 million threshold, we generally are obligated to provide indemnification for any losses up to a limit of $150 million. We believe that the likelihood that we will be required to pay any significant amounts under the indemnity provision is remote.

28. RELATED PARTY TRANSACTIONS

        Our accompanying consolidated financial statements include the following transactions with our affiliates not otherwise disclosed (dollars in millions):

 
  Year ended December 31,  
 
  2010   2009   2008  

Sales to:

                   
 

Unconsolidated affiliates

  $ 201   $ 96   $ 164  

Inventory purchases from:

                   
 

Unconsolidated affiliates

    369     273     299  

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

28. RELATED PARTY TRANSACTIONS (Continued)

        An agreement was reached prior to the initial public offering of our parent's common stock in February 2005 with the Huntsman Foundation, a private charitable foundation established by Jon M. and Karen H. Huntsman to further the charitable interests of the Huntsman family, that we would donate our Salt Lake City office building and our option to acquire an adjacent undeveloped parcel of land to the foundation free of debt. On March 24, 2010, we completed this donation. At the time of the donation, the building had an appraised value of approximately $10.1 million. We continue to occupy and use a portion of the building under a lease pursuant to which we make annual lease payments of approximately $1.5 million to the Huntsman Foundation. During 2010, we made payments of approximately $1.1 million to the Huntsman Foundation under the lease. The lease expires on December 31, 2013, subject to two five-year extensions, at our option.

        Through May 2002, we paid the premiums on various life insurance policies for Jon M. Huntsman. These policies have been liquidated, and the cash values have been paid to Mr. Huntsman. Mr. Huntsman is indebted to us in the amount of approximately $2 million, which represents the insurance premiums paid on his behalf through May 2002. This amount is included in other noncurrent assets on the accompanying consolidated balance sheets.

        Wayne A. Reaud, a member of our parent's board of directors, is of counsel to the law firm of Reaud, Morgan & Quinn. We pay the firm $200,000 per year for legal services. Mr. Reaud has no interest in the firm or in the proceeds for current work done at the firm. As of counsel, the law firm provides Mr. Reaud with an office and certain secretarial services.

29. OPERATING SEGMENT INFORMATION

        We derive our revenues, earnings and cash flows from the manufacture and sale of a wide variety of differentiated and commodity chemical products. During the first quarter of 2010, we began reporting our LIFO inventory valuation reserves as part of Corporate and other; these reserves were previously reported in our Performance Products segment. During the third quarter of 2010, we began reporting the amounts outstanding under the A/R Programs as part of our Polyurethanes, Performance Products, Advanced Materials, Textile Effects and Pigments segments' assets. These amounts were previously reported as Corporate and other segment assets. In addition, we eliminated intercompany balances from the assets of each reportable segment. During the fourth quarter of 2010, we began reporting the (income) loss attributable to noncontrolling interests in the reporting segment to which the subsidiary relates. Previously, (income) loss attributable to noncontrolling interests was reported in our Corporate and other segment. All relevant information for prior periods has been reclassified to reflect these changes.

        We have reported our operations through five segments: Polyurethanes, Advanced Materials, Textile Effects, Performance Products and Pigments. We have organized our business and derived our operating segments around differences in product lines.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

29. 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):

 
  Year ended December 31,  
 
  2010   2009   2008  

Net Sales:

                   
 

Polyurethanes

  $ 3,605   $ 3,005   $ 4,055  
 

Performance Products

    2,659     2,090     2,703  
 

Advanced Materials

    1,244     1,059     1,492  
 

Textile Effects

    787     691     903  
 

Pigments

    1,213     960     1,072  
 

Eliminations

    (258 )   (140 )   (169 )
               
   

Total

  $ 9,250   $ 7,665   $ 10,056  
               

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

29. OPERATING SEGMENT INFORMATION (Continued)

 

 
  Year ended December 31,  
 
  2010   2009   2008  

Segment EBITDA(1):

                   
 

Polyurethanes

  $ 319   $ 388   $ 381  
 

Performance Products

    363     246     274  
 

Advanced Materials

    143     59     149  
 

Textile Effects

    1     (64 )   (33 )
 

Pigments

    205     (25 )   17  
 

Corporate and other(2)

    (224 )   (178 )   (201 )
               
   

Subtotal

    807     426     587  
     

Discontinued Operations(3)

    53     (97 )   156  
               
     

Total

    860     329     743  

Interest expense, net

    (248 )   (240 )   (263 )

Interest expense of discontinued operations, net

            (1 )

Income tax expense (benefit)—continuing operations

    40     159     (2 )

Income tax expense (benefit)—discontinued operations

    10     (80 )   69  

Depreciation and amortization

    (382 )   (420 )   (374 )
               
   

Net income (loss) attributable to Huntsman International LLC

  $ 180   $ (410 ) $ 38  
               

Depreciation and Amortization:

                   
 

Polyurethanes

  $ 155   $ 160   $ 153  
 

Performance Products

    92     78     69  
 

Advanced Materials

    33     38     39  
 

Textile Effects

    26     19     8  
 

Pigments

    67     104     91  
 

Corporate and other(2)

    8     19     12  
               
   

Subtotal

    381     418     372  
     

Discontinued Operations

    1     2     2  
               
     

Total

  $ 382   $ 420   $ 374  
               

 

 
  Year ended December 31,  
 
  2010   2009   2008  

Capital Expenditures:

                   
 

Polyurethanes

  $ 59   $ 55   $ 109  
 

Performance Products

    66     70     149  
 

Advanced Materials

    24     14     31  
 

Textile Effects

    23     19     50  
 

Pigments

    49     23     69  
 

Corporate and other(2)

    15     8     10  
               
   

Total

  $ 236   $ 189   $ 418  
               

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

29. OPERATING SEGMENT INFORMATION (Continued)

 

 
  December 31, 2010   December 31, 2009  

Total Assets:

             
 

Polyurethanes

  $ 3,024   $ 2,956  
 

Performance Products

    2,067     1,617  
 

Advanced Materials

    1,327     976  
 

Textile Effects

    776     689  
 

Pigments

    1,277     1,224  
 

Corporate and other(2)

    (164 )   231  
           
   

Total

  $ 8,307   $ 7,693  
           

(1)
Segment EBITDA is defined as net income (loss) attributable to Huntsman International LLC 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, unallocated restructuring, impairment and plant closing costs and non-operating income and expense.

(3)
The operating results of our former polymers, base chemicals and Australian styrenics businesses are classified as discontinued operations, and, accordingly, the revenues of these businesses are excluded for all periods presented. The EBITDA of our former polymers, base chemicals and Australian styrenics businesses are included in discontinued operations for all periods presented. For more information, see "Note 27. Discontinued Operations."

 
  Year ended December 31,  
 
  2010   2009   2008  

By Geographic Area

                   

Revenues(1):

                   
 

United States

  $ 2,777   $ 2,345   $ 3,071  
 

China

    881     561     648  
 

Germany

    519     433     599  
 

Mexico

    485     432     565  
 

Italy

    474     415     560  
 

Other nations

    4,114     3,479     4,613  
               
   

Total

  $ 9,250   $ 7,665   $ 10,056  
               

 

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

29. OPERATING SEGMENT INFORMATION (Continued)

 
  December 31,  
 
  2010   2009  

Long-lived assets(2):

             
 

United States

  $ 1,305   $ 1,365  
 

United Kingdom

    320     347  
 

Netherlands

    311     364  
 

Saud Arabia

    259     1  
 

Switzerland

    221     212  
 

Spain

    173     201  
 

Other nations

    880     867  
           
   

Total

  $ 3,469   $ 3,357  
           

(1)
Geographic information for revenues is based upon countries into which product is sold.

(2)
Long-lived assets are made up of property, plant and equipment.

30. CONDENSED CONSOLIDATING FINANCIAL INFORMATION

        The following condensed consolidating financial statements present, in separate columns, financial information for the following: Huntsman International LLC (on a parent only basis), with our investment in subsidiaries recorded under the equity method; the Guarantors on a combined, and where appropriate, consolidated basis; and the non-guarantors on a combined, and where appropriate, consolidated basis. Additional columns present eliminating adjustments and consolidated totals as of December 31, 2010 and 2009 and for the years ended December 31, 2010, 2009 and 2008. There are no contractual restrictions limiting transfers of cash from guarantor subsidiaries to our Company. Each of the guarantors is 100% owned by us and has fully and unconditionally guaranteed our outstanding notes on a joint and several basis.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

30. CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Continued)


HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEETS
AS OF DECEMBER 31, 2010
(Dollars in Millions)

 
  Parent
Company
  Guarantors   Non-guarantors   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     1,335         1,464  
 

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     109     (3 )   109  
                       
   

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) retained earnings

    (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  
                       

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

30. CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Continued)


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

 
  Parent
Company
  Guarantors   Non-guarantors   Eliminations   Consolidated
Huntsman
International LLC
 

ASSETS

                               

Current assets:

                               
 

Cash and cash equivalents

  $ 688   $ 24   $ 207   $   $ 919  
 

Restricted cash

            5         5  
 

Accounts and notes receivable, net

    17     85     916         1,018  
 

Accounts receivable from affiliates

    1,040     2,159     102     (3,269 )   32  
 

Inventories

    78     205     908     (7 )   1,184  
 

Prepaid expenses

    11     10     38     (17 )   42  
 

Deferred income taxes

    10         28     (5 )   33  
 

Other current assets

    8     1     100         109  
                       
   

Total current assets

    1,852     2,484     2,304     (3,298 )   3,342  

Property, plant and equipment, net

    439     913     2,003     2     3,357  

Investment in affiliates

    4,776     742     153     (5,421 )   250  

Intangible assets, net

    82     3     44         129  

Goodwill

    (19 )   84     33     (4 )   94  

Deferred income taxes

    5     156     118     (121 )   158  

Notes receivable from affiliates

    63     988     8     (1,051 )   8  

Other noncurrent assets

    40     129     186         355  
                       
   

Total assets

  $ 7,238   $ 5,499   $ 4,849   $ (9,893 ) $ 7,693  
                       

LIABILITIES AND EQUITY

                               

Current liabilities:

                               
 

Accounts payable

  $ 36   $ 177   $ 502   $   $ 715  
 

Accounts payable to affiliates

    1,702     752     855     (3,268 )   41  
 

Accrued liabilities

    86     80     465     (18 )   613  
 

Deferred income tax

        7     2     (7 )   2  
 

Note payable to affiliate

    25                 25  
 

Current portion of debt

    39         156         195  
                       
   

Total current liabilities

    1,888     1,016     1,980     (3,293 )   1,591  

Long-term debt

    3,675         106         3,781  

Notes payable to affiliates

    525         1,056     (1,051 )   530  

Deferred income taxes

    130         68     (119 )   79  

Other noncurrent liabilities

    194     144     527         865  
                       
   

Total liabilities

    6,412     1,160     3,737     (4,463 )   6,846  

Equity

                               

Huntsman International LLC members' equity:

                               
 

Members' equity

    3,021     4,415     2,035     (6,450 )   3,021  
 

Subsidiary preferred stock

            1     (1 )    
 

Accumulated deficit

    (1,847 )   (137 )   (624 )   761     (1,847 )
 

Accumulated other comprehensive (loss) income

    (348 )   61     (315 )   254     (348 )
                       
   

Total Huntsman International LLC members' equity

    826     4,339     1,097     (5,436 )   826  

Noncontrolling interests in subsidiaries

            15     6     21  
                       
   

Total equity

    826     4,339     1,112     (5,430 )   847  
                       
 

Total liabilities and equity

  $ 7,238   $ 5,499   $ 4,849   $ (9,893 ) $ 7,693  
                       

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

30. CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Continued)

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 2010
(Dollars in Millions)

 
  Parent
Company
  Guarantors   Non-guarantors   Eliminations   Consolidated
Huntsman
International LLC
 

Revenues:

                               
 

Trade sales, services and fees, net

  $ 790   $ 2,514   $ 5,745   $   $ 9,049  
 

Related party sales

    262     513     958     (1,532 )   201  
                       

Total revenues

    1,052     3,027     6,703     (1,532 )   9,250  

Cost of goods sold

    869     2,594     5,815     (1,506 )   7,772  
                       

Gross profit

    183     433     888     (26 )   1,478  

Operating expenses:

                               

Selling, general and administrative

    185     88     582         855  

Research and development

    52     30     69         151  

Other operating (income) expense

    (34 )   11     23          

Restructuring, impairment and plant closing costs

    1     3     25         29  
                       

Operating income

    (21 )   301     189     (26 )   443  

Interest (expense) income, net

    (215 )   38     (71 )       (248 )

Equity in (loss) income of investment in affiliates and subsidiaries

    (1,199 )   91     24     1,108     24  

Loss on early extinguishment of debt

    (37 )               (37 )

Dividends income (expense)

    1,569             (1,569 )    

Other income

    (25 )       2     25     2  
                       

Income from continuing operations before income taxes

    72     430     144     (462 )   184  

Income tax (benefit) expense

    (101 )   127     14         40  
                       

Income from continuing operations

    173     303     130     (462 )   144  

Income (loss) from discontinued operations, net of tax

    7     68     (33 )       42  
                       

Income before extraordinary loss

    180     371     97     (462 )   186  

Extraordinary loss on the acquisition of a business, net of tax of nil

            (1 )       (1 )
                       

Net income

    180     371     96     (462 )   185  

Net income attributable to noncontrolling interests

        (2 )   (4 )   1     (5 )
                       

Net income attributable to Huntsman International LLC

  $ 180   $ 369   $ 92   $ (461 ) $ 180  
                       

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

30. CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Continued)


HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 2009
(Dollars in Millions)

 
  Parent
Company
  Guarantors   Non-guarantors   Eliminations   Consolidated
Huntsman
International LLC
 

Revenues:

                               
 

Trade sales, services and fees

  $ 654   $ 2,106   $ 4,809   $   $ 7,569  
 

Related party sales

    178     373     644     (1,099 )   96  
                       

Total revenues

    832     2,479     5,453     (1,099 )   7,665  

Cost of goods sold

    676     1,983     4,977     (1,066 )   6,570  
                       

Gross profit

    156     496     476     (33 )   1,095  

Operating expenses:

                               

Selling, general and administrative

    154     123     562         839  

Research and development

    51     30     64         145  

Other operating (income) expense

    (24 )   (31 )   37         (18 )

Restructuring, impairment and plant closing costs

    9     2     77         88  
                       

Operating (loss) income

    (34 )   372     (264 )   (33 )   41  

Interest (expense) income, net

    (214 )   40     (66 )       (240 )

Loss on accounts receivable securitization program

    (15 )   (2 )   (6 )       (23 )

Equity in (loss) income of investment in affiliates and subsidiaries

    (317 )   (514 )   6     828     3  

Loss on early extinguishment of debt

    (21 )               (21 )

Other expense

    (33 )           33      
                       

Loss from continuing operations before income taxes

    (634 )   (104 )   (330 )   828     (240 )

Income tax benefit (expense)

    224     (148 )   (179 )   (56 )   (159 )
                       

Loss from continuing operations

    (410 )   (252 )   (509 )   772     (399 )

(Loss) income from discontinued operations, net of tax

        (11 )   (8 )       (19 )

Extraordinary gain on the acquisition of a business, net of tax of nil

            6         6  
                       

Net loss

    (410 )   (263 )   (511 )   772     (412 )

Net loss attributable to noncontrolling interests

        1     2     (1 )   2  
                       

Net loss attributable to Huntsman International LLC

  $ (410 ) $ (262 ) $ (509 ) $ 771   $ (410 )
                       

F-83


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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

30. CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Continued)


HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 2008
(Dollars in Millions)

 
  Parent
Company
  Guarantors   Non-guarantors   Eliminations   Consolidated
Huntsman
International LLC
 

Revenues:

                               
 

Trade sales, services and fees

  $ 869   $ 2,778   $ 6,245   $   $ 9,892  
 

Related party sales

    337     442     1,146     (1,761 )   164  
                       

Total revenues

    1,206     3,220     7,391     (1,761 )   10,056  

Cost of goods sold

    1,006     2,869     6,631     (1,747 )   8,759  
                       

Gross profit

    200     351     760     (14 )   1,297  

Operating expenses:

                               

Selling, general and administrative

    109     132     630     (1 )   870  

Research and development

    53     31     70         154  

Other operating (income) expense

    (15 )   55     (13 )       27  

Restructuring, impairment and plant closing costs

            31         31  
                       

Operating income

    53     133     42     (13 )   215  

Interest (expense) income, net

    (231 )   106     (138 )       (263 )

Gain (loss) on accounts receivable securitization program

    6     (10 )   (23 )       (27 )

Equity in income (loss) of investment in affiliates and subsidiaries

    106     (45 )   14     (61 )   14  

Other (expense) income

    (14 )       1     13      
                       

(Loss) income from continuing operations before income taxes

    (80 )   184     (104 )   (61 )   (61 )

Income tax benefit (expense)

    119     (77 )   16     (56 )   2  
                       

Income (loss) from continuing operations

    39     107     (88 )   (117 )   (59 )

(Loss) income from discontinued operations, net of tax

    (1 )   119     (34 )       84  

Extraordinary gain on the acquisition of a business, net of tax of nil

            14         14  
                       

Net income (loss)

    38     226     (108 )   (117 )   39  

Net income attributable to noncontrolling interests

            (1 )       (1 )
                       

Net income (loss) attributable to Huntsman International LLC

  $ 38   $ 226   $ (109 ) $ (117 ) $ 38  
                       

F-84


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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

30. CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Continued)

HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
YEAR ENDED DECEMBER 31, 2010
(Dollars in Millions)

 
  Parent
Company
  Guarantors   Non-
guarantors
  Eliminations   Consolidated
Huntsman
International LLC
 

Net cash (used in) provided by operating activities

  $ (241 ) $ 15   $ 182   $ (2 ) $ (46 )
                       

Investing activities:

                               

Capital expenditures

    (26 )   (51 )   (159 )       (236 )

Proceeds from insurance settlement treated as reimbursement of capital expenditures

        34             34  

Proceeds from sale of businesses/assets, net of adjustments

            2         2  

Cash assumed in connection with the initial consolidation of a variable interest entity

            14         14  

Increase in receivable from affiliate

    (57 )               (57 )

Investment in unconsolidated affiliates, net of cash received

        2     2         4  

Investment in affiliate

    (65 )   (13 )       78      

Change in restricted cash

            (2 )       (2 )

Other, net

            3         3  
                       

Net cash used in investing activities

    (148 )   (28 )   (140 )   78     (238 )

Financing activities:

                               

Net repayments under revolving loan facilities

            (6 )       (6 )

Revolving loan facility from A/R Programs

    254                 254  

Net borrowings on overdraft facilities

            (2 )       (2 )

Repayments of short-term debt

            (175 )       (175 )

Borrowings on short-term debt

            212         212  

Repayments of long-term debt

    (1,154 )       (53 )       (1,207 )

Proceeds from issuance of long-term debt

    894         29         923  

Repayments of note payable to affiliate

    (125 )               (125 )

Proceeds from notes payable to affiliate

    110                 110  

Intercompany repayments

            (5 )   5      

Repayments of notes payable

    (38 )       (15 )       (53 )

Borrowings on notes payable

    33         13         46  

Debt issuance costs paid

    (29 )               (29 )

Call premiums paid related to early extinguishment of debt

    (28 )               (28 )

Contribution from parent

            83     (83 )    

Dividends paid

        (2 )       2      

Excess tax benefit related to stock-based compensation

    4                 4  

Other, net

            (2 )       (2 )
                       

Net cash (used in) provided by financing activities

    (79 )   (2 )   79     (76 )   (78 )

Effect of exchange rate changes on cash

            4         4  
                       

(Decrease) increase in cash and cash equivalents

    (468 )   (15 )   125         (358 )

Cash and cash equivalents at beginning of period

    688     24     207         919  
                       

Cash and cash equivalents at end of period

  $ 220   $ 9   $ 332   $   $ 561  
                       

F-85


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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

30. CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Continued)


HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
YEAR ENDED DECEMBER 31, 2009
(Dollars in Millions)

 
  Parent
Company
  Guarantors   Non-
guarantors
  Eliminations   Consolidated
Huntsman
International LLC
 

Net cash provided by operating activities

  $ 288   $ 48   $ 84   $   $ 420  
                       

Investing activities:

                               

Capital expenditures

    (7 )   (70 )   (112 )       (189 )

Acquisition of business net of cash acquired and post-closing adjustments

            (31 )       (31 )

Proceeds from sale of assets, net of adjustments

        2     3         5  

Increase in receivable from affiliate

    (7 )               (7 )

Cash received from affiliate

    (258 )   (62 )   18     309     7  

Other, net

            3         3  
                       

Net cash used in investing activities

    (272 )   (130 )   (119 )   309     (212 )

Financing activities:

                               

Net repayments under revolving loan facilities

            (14 )       (14 )

Net repayments of overdraft facilities

            (12 )       (12 )

Net repayments of short-term debt

            (13 )       (13 )

Repayments of long-term debt

    (510 )       (32 )       (542 )

Proceeds from long-term debt

    864         16         880  

Repayments of notes payable to affiliate

    (403 )               (403 )

Proceeds from notes payable to affiliate

    529                 529  

Intercompany repayments

            (50 )   50      

Repayments of notes payable

    (43 )       (20 )       (63 )

Borrowings on notes payable

    42         22         64  

Debt issuance costs paid

    (5 )               (5 )

Call premiums related to early extinguishment of debt

    (14 )               (14 )

Contribution from parent, net

    236     103     256     (359 )   236  

Dividends paid to parent

    (23 )               (23 )

Other, net

    (1 )               (1 )
                       

Net cash provided by financing activities

    672     103     153     (309 )   619  

Effect of exchange rate changes on cash

            5         5  
                       

Increase in cash and cash equivalents

    688     21     123         832  

Cash and cash equivalents at beginning of period

        3     84         87  
                       

Cash and cash equivalents at end of period

  $ 688   $ 24   $ 207   $   $ 919  
                       

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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

30. CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Continued)


HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
YEAR ENDED DECEMBER 31, 2008
(Dollars in Millions)

 
  Parent
Company
  Guarantors   Non-
guarantors
  Eliminations   Consolidated
Huntsman
International LLC
 

Net cash (used in) provided by operating activities

  $ (320 ) $ 649   $ (290 ) $   $ 39  
                       

Investing activities:

                               

Capital expenditures

    (50 )   (154 )   (214 )       (418 )

Acquisition of business, net of cash acquired and post-closing adjustments

            (2 )       (2 )

Proceeds from sale of assets, net of adjustments

        (28 )   2         (26 )

Decrease in receivable from affiliate

    406     46         (273 )   179  

Investment in affiliate

    (164 )   (426 )       546     (44 )

Cash received from affiliate

        10             10  

Change in restricted cash

            (8 )       (8 )

Other, net

        (3 )   (2 )       (5 )
                       

Net cash provided by (used in) investing activities

    192     (555 )   (224 )   273     (314 )
                       

Financing activities:

                               

Net borrowings under revolving loan facilities

    8         3         11  

Net borrowings on overdraft facilities

            8         8  

Net borrowings on short-term debt

            73         73  

Repayments of long-term debt

    (1 )       (10 )       (11 )

Proceeds from long-term debt

    1     10     17         28  

Issuance of note payable to affiliate

    423                 423  

Intercompany repayments

        (227 )   (46 )   273      

Repayments of notes payable

    (44 )       (11 )       (55 )

Borrowings on notes payable

    41         7         48  

Debt issuance costs paid

    (5 )               (5 )

Contribution from parent, net

        120     426     (546 )    

Dividends paid to parent

    (306 )               (306 )

Other, net

            (1 )       (1 )
                       

Net cash provided by (used in) financing activities

    117     (97 )   466     (273 )   213  
                       

Effect of exchange rate changes on cash

            (5 )       (5 )
                       

Decrease in cash and cash equivalents

    (11 )   (3 )   (53 )       (67 )

Cash and cash equivalents at beginning of period

    11     6     137         154  
                       

Cash and cash equivalents at end of period

  $   $ 3   $ 84   $   $ 87  
                       

F-87


Table of Contents


HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

31. SELECTED UNAUDITED QUARTERLY FINANCIAL DATA

        A summary of selected unaudited quarterly financial data for the years ended December 31, 2010 and 2009 is as follows (dollars in millions):

 
  Three months ended  
 
  March 31,
2010
  June 30,
2010
  September 30,
2010
  December 31,
2010
 

Revenues

  $ 2,094   $ 2,343   $ 2,401   $ 2,412  

Gross profit

    286     388     420     384  

Restructuring, impairment and plant closing costs

    3     17     4     5  

(Loss) income from continuing operations

    (13 )   57     60     40  

(Loss) income before extraordinary gain

    (26 )   119     59     34  

Net (loss) income

    (26 )   119     59     33  

Net (loss) income attributable to Huntsman International LLC

    (26 )   117     58     31  

 

 
  Three months ended  
 
  March 31,
2009
  June 30,
2009
  September 30,
2009
  December 31,
2009
 

Revenues

  $ 1,680   $ 1,846   $ 2,075   $ 2,064  

Gross profit

    154     237     346     358  

Restructuring, impairment and plant closing costs

    14     63     7     4  

(Loss) income from continuing operations

    (281 )   (127 )   (47 )   56  

(Loss) income before extraordinary gain

    (285 )   (129 )   (41 )   37  

Net (loss) income

    (285 )   (129 )   (41 )   43  

Net (loss) income attributable to Huntsman International LLC

    (281 )   (129 )   (41 )   41  

* * * * * * * * * * * * * *

F-88


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HUNTSMAN INTERNATIONAL LLC AND SUBSIDIARIES
Schedule II—Valuation and Qualifying Accounts
(Dollars in Millions)

Column A
  Column B   Column C    
  Column D   Column E  
 
   
  Additions    
   
   
 
Description
  Balance at
Beginning
of Period
  Charged
to cost and
expenses
  Charged
to other
accounts
  Deductions   Balance at
End of
Period
 

Allowance for Doubtful Accounts:

                               

Year ended December 31, 2010

 
$

56
 
$

6
 
$

(10

)

$

 
$

52
 

Year ended December 31, 2009

   
47
   
9
   
   
   
56
 

Year ended December 31, 2008

   
43
   
6
   
(2

)
 
   
47
 

F-89


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        No dealer, sales representative or any other person has been authorized to give any information or to make any representations in connection with this exchange offer other than those contained in this prospectus and, if given or made, the information or representations must not be relied upon as having been authorized by Huntsman International LLC. This prospectus does not constitute an offer to sell or a solicitation of any offer to buy any securities other than the notes to which it relates or an offer to, or a solicitation of, any person in any jurisdiction where such an offer or solicitation would be unlawful. Neither the delivery of this prospectus nor any sale made under this prospectus shall, under any circumstances, create an implication that there has been no change in the affairs of Huntsman International LLC or that information contained herein is correct as of any time subsequent to the date hereof. Until                         , 2011, all dealers that effect transactions in these securities, whether or not participating in this exchange offer, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.



PROSPECTUS



Huntsman International LLC

Exchange Offer for
$530,000,000 85/8% Senior Subordinated Notes due 2021

GRAPHIC

                        , 2011


Table of Contents


PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20.    INDEMNIFICATION OF OFFICERS AND DIRECTORS

        Huntsman International LLC is empowered by Section 18-108 of the Delaware Limited Liability Company Act, subject to the procedures and limitations therein, to indemnify and hold harmless any member or manager or other person from and against any and all claims and demands whatsoever, subject to such standards and restrictions, if any, as are set forth in its limited liability company agreement.

        Section 7.2 of the Limited Liability Company Agreement of Huntsman International LLC authorizes the company, subject in all respects to any requirements or limitations contained in the Delaware Limited Liability Company Act (the "DLLCA"), to indemnify and hold harmless its managers, officers and, if applicable, employees and other agents to the same extent, in the same manner and subject to the same rights, terms, conditions and procedures (including, without limitation, with respect to the advancement of expenses) as such categories of persons would be indemnified and held harmless by the parent company of the company pursuant to the Bylaws, Certificate of Incorporation or other relevant charter documents of its parent company; provided, that if at any time the company does not have a parent company with common stock listed on the New York Stock Exchange or traded through the Nasdaq national market, the company shall during such time provide indemnification and advancement of expenses to its managers, officers, employees and other agents to the maximum extent permitted by the DLLCA.

        Each of Huntsman Advanced Materials LLC, Huntsman Advanced Materials Americas LLC, Huntsman International Financial LLC and Huntsman Petrochemical LLC is empowered by Section 18-108 of the Delaware Limited Liability Company Act, subject to the procedures and limitations therein, to indemnify and hold harmless any member or manager or other person from and against any and all claims and demands whatsoever, subject to such standards and restrictions, if any, as are set forth in its respective limited liability company agreement.

        The limited liability company agreement of Huntsman International Financial LLC contains no indemnification provisions. Section 6.2 of the Third Amended and Restated Limited Liability Company Agreement of Huntsman Advanced Materials LLC and Section 8.2 of the limited liability company agreement of each of Huntsman Advanced Materials Americas LLC and Huntsman Petrochemical LLC authorizes each respective company, subject in all respects to any requirements or limitations contained in the DLLCA, to indemnify and hold harmless its managers, officers and, if applicable, employees and other agents to the same extent, in the same manner and subject to the same rights, terms, conditions and procedures (including, without limitation, with respect to the advancement of expenses) as such categories of persons would be indemnified and held harmless by the parent company of each respective company pursuant to the Bylaws, Certificate of Incorporation or other relevant charter documents of its parent company; provided, that if at any time the company does not have a parent company with common stock listed on the New York Stock Exchange or traded through The NASDAQ Stock Market, the company shall during such time provide indemnification and advancement of expenses to its managers, officers, employees and other agents to the maximum extent permitted by the DLLCA.

        Huntsman International Trading Corporation ("International Trading") is a Delaware corporation. Section 145 ("Section 145") of the Delaware General Corporation Law (the "DGCL") gives a corporation power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was

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serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person's conduct was unlawful.

        Section 145 also gives a corporation power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Delaware Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Delaware Court of Chancery or such other court shall deem proper. Section 145 further provides that, to the extent that a present or former director or officer of a corporation has been successful on the merits or otherwise in defense of any such action, suit or proceeding, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection therewith. Section 145 also provides that such expenses may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified.

        Section 145 also authorizes a corporation to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against any liability asserted against such person and incurred by such person in any such capacity, or arising out of his status as such, whether or not the corporation would otherwise have the power to indemnify the person under Section 145.

        The bylaws of International Trading, provide that, subject to appropriate authorization, the respective corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the respective corporation) by reason of the fact that the person is or was a director or officer of the respective corporation, or is or was a director or officer of the respective corporation serving at the request of the respective corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the respective corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person's conduct was unlawful.

        Such bylaws further provide that, subject to appropriate authorization, the respective corporation shall indemnify any person who was or is a party or is threatened to be made a party to any

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threatened, pending or completed action or suit by or in the right of the respective corporation to procure a judgment in its favor by reason of the fact that the person is or was a director or officer of the respective corporation, or is or was a director or officer of the respective corporation serving at the request of the respective corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the respective corporation; except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the respective corporation unless and only to the extent that the Delaware Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability and in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Delaware Court of Chancery or such other court shall deem proper.

        Such bylaws also provide that any indemnification thereunder (unless ordered by a court) shall be made by the respective corporation only as authorized in the specific case upon a determination that indemnification of the director or officer is proper in the circumstances because the person has met the applicable standard of conduct. Such determination shall be made (i) by a majority vote of the directors who were not parties to such action, suit, or proceeding, even though less than a quorum, or (ii) if there are not such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (iii) by the stockholders. To the extent, however, that a director or officer of the respective corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding described above, or in defense of any claim, issue or matter therein, the person shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by the person in connection therewith, without the necessity of authorization in the specific case. Notwithstanding any contrary determination in the specific case according to the procedures outlined above, and notwithstanding the absence of any determination thereunder, any director or officer may apply to any court of competent jurisdiction in the State of Delaware for indemnification to the extent otherwise permissible under the bylaws. The basis of such indemnification by a court shall be a determination by such court that indemnification of the director or officer is proper in the circumstances because the person has met the applicable standards of conduct. Neither a contrary determination in the specific case according to the procedures outlined above, nor the absence of any determination thereunder shall be a defense to such application or create a presumption that the director or officer seeking indemnification has not met any applicable standard of conduct. If successful, in whole or in part, the director or officer seeking indemnification shall also be entitled to be paid the expenses of prosecuting such application.

        Such bylaws also provide that expenses incurred by a director or officer in defending or investigating a threatened or pending action, suit or proceeding shall be paid by the respective corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified.

        Such bylaws further provide that the indemnification and advancement of expenses provided thereby shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, contract, vote of stockholders or disinterested directors or pursuant to the direction (howsoever embodied) of any court of competent jurisdiction or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, it being the policy of the respective corporation that indemnification of the persons specified in such bylaws shall be made to the fullest extent permitted by law. This provision of such bylaws shall not be deemed to preclude the indemnification of any person not specified in such

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bylaws but whom the respective corporation has the power or obligation to indemnify under the provisions of the DGCL, or otherwise.

        Such bylaws also authorize the respective corporation to purchase and maintain insurance on behalf of any person who is or was a director or officer of the respective corporation, or is or was a director or officer of the respective corporation serving at the request of the respective corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the respective corporation would have the power or obligation to indemnify him against such liability under the bylaws.

        In addition, such bylaws provide that the indemnification and advancement of expenses provided thereby shall continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such person. Also, notwithstanding anything contained in such bylaws to the contrary, except for proceedings to enforce rights to indemnification, the respective corporation shall not be obligated to indemnify any director or officer in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized or consented to by the board of directors of the respective corporation. Such bylaws also authorize the respective corporation, to the extent authorized from time to time by the board of directors of the respective corporation, to provide rights to indemnification and to the advancement of expenses to employees and agents of the respective corporation similar to those conferred in such bylaws to directors and officers of the respective corporation.

        Each of Airstar Corporation ("Airstar"), Huntsman Australia Inc. ("Australia"), Huntsman Chemical Purchasing Corporation ("Chemical Purchasing"), Huntsman Enterprises, Inc. ("Enterprises"), Huntsman MA Investment Corporation ("MA Investment"), Huntsman MA Services Corporation ("MA Services"), Huntsman Petrochemical Purchasing Corporation ("Petrochemical Purchasing"), Huntsman Procurement Corporation ("Procurement") and Polymer Materials, Inc. ("Polymer Materials") is a Utah corporation. Sections 901 through 909 of the Utah Revised Business Corporation Act (the "URBCA"), subject to the limitations and procedures contained therein, provide for mandatory and discretionary indemnification of a corporation's directors, officers and other personnel, and related matters.

        Section 902 of the URBCA provides that a corporation may indemnify an individual who was, is or is threatened to be made a named defendant or respondent (a "Party") in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative and whether formal or informal (a "Proceeding"), because the individual is or was a director of the corporation or, while a director of the corporation, is or was serving at its request as a director, officer, partner, trustee, employee, fiduciary, or agent of another corporation or other person or of an employee benefit plan (an "Indemnifiable Director"), against any obligation incurred with respect to a Proceeding, including any judgment, settlement, penalty, fine (including an excise tax assessed with respect to an employee benefit plan) or reasonable expenses (including attorneys' fees), incurred in the Proceeding if: (i) the conduct of the individual was in good faith; (ii) the individual reasonably believed that the individual's conduct was in, or not opposed to, the best interests of the corporation; and (iii) in the case of any criminal Proceeding, the individual had no reasonable cause to believe the individual's conduct was unlawful. Section 902 of the URBCA further provides, however, that the corporation may not indemnify an Indemnifiable Director thereunder: (i) in connection with a Proceeding by or in the right of the corporation in which the Indemnifiable Director was adjudged liable to the corporation; or (ii) in connection with any other Proceeding charging improper personal benefit to the Indemnifiable Director, whether or not involving action in his or her official capacity, in which he or she was adjudged liable on the basis that personal benefit was improperly received by the Indemnifiable Director. Section 902 further provides that indemnification thereunder in connection with a Proceeding

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by or in the right of the corporation is limited to reasonable expenses (including attorneys' fees) incurred in connection with the Proceeding.

        Section 903 of the URBCA provides that, unless limited by its articles of incorporation, a corporation shall indemnify an Indemnifiable Director who was successful, on the merits or otherwise, in the defense of any Proceeding, or in defense of any claim, issue, or matter in the Proceeding, to which the Indemnifiable Director was a Party because of being an Indemnifiable Director of the corporation against reasonable expenses (including attorneys' fees) incurred by the Indemnifiable Director in connection with the Proceeding or claim with respect to which the individual has been successful.

        In addition, Section 905 of the URBCA provides that, unless otherwise limited by a corporation's articles of incorporation, an Indemnifiable Director of the corporation who is a Party to a Proceeding may apply for indemnification to the court conducting the Proceeding or to another court of competent jurisdiction. The court may order indemnification if it determines that: (i) the Indemnifiable Director is entitled to mandatory indemnification under Section 903 of the URBCA, in which case the court shall also order the corporation to pay the Indemnifiable Director's reasonable expenses incurred to obtain court-ordered indemnification; or (ii) the Indemnifiable Director is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not the director met the standard of conduct set forth in Section 902 of the URBCA or was adjudged liable as described in Section 902, except that the indemnification with respect to any proceeding in which liability has been adjudged in the circumstances described in subsection (4) of Section 902 of the URBCA.

        Section 904 of the URBCA provides that a corporation may pay for or reimburse the reasonable expenses (including attorneys' fees) incurred by an Indemnifiable Director who is a Party to a Proceeding in advance of the final disposition of the Proceeding if the individual furnishes the corporation (i) a written affirmation of the individual's good faith belief that the individual has met the prescribed standard of conduct; and (ii) a written undertaking, executed personally or on the individual's behalf, to repay the advance if it is ultimately determined that the individual did not meet the standard of conduct, which undertaking must be an unlimited obligation of the individual but need not be secured and may be accepted without reference to financial ability to make repayment; and (iii) a determination is made that the facts then known to those making the determination would not preclude indemnification under Sections 901 through 909 of the URBCA.

        Section 907 of the URBCA provides that, unless a corporation's articles of incorporation provide otherwise, to the same extent as an Indemnifiable Director, (i) an officer of the corporation is entitled to mandatory indemnification under Section 903 thereof and is entitled to apply for court-ordered indemnification under Section 905 thereof; and (ii) that the corporation may indemnify and advance expenses to an officer, employee, fiduciary or agent of the corporation to the same extent as an Indemnifiable Director.

        Section 908 of the URBCA provides further that a corporation may purchase and maintain liability insurance on behalf of an individual who is or was a director, officer, employee, fiduciary, or agent of the corporation or who, while serving as a director, officer, employee, fiduciary, or agent of the corporation, is or was serving at the request of the corporation as a director, officer, partner, trustee, employee, fiduciary, or agent of another foreign or domestic corporation or other person, or of an employee benefit plan against liability asserted against or incurred by the individual in that capacity or arising from the individual's status as such, whether or not the corporation would have the power to indemnify the individual against the same liability under Sections 902, 903, and 907 of the URBCA.

        Section 909 of the URBCA provides that a provision relating to a corporation's indemnification of or advance for expenses that is contained in its articles of incorporation or bylaws, in a resolution of its shareholders or board of directors or in a contract, except an insurance policy, or otherwise, is valid only if and to the extent the provision is not inconsistent with Sections 901 through 909 of the

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URBCA. If the articles of incorporation limit indemnification or advancement of expenses, indemnification and advancement of expenses are valid only to the extent not inconsistent with the articles.

        The articles of incorporation of each of Chemical Purchasing, Enterprises, MA Investment, MA Services and Petrochemical Purchasing provide that the respective corporation shall indemnify and advance expenses to its directors, officers, employees, fiduciaries or agents and to any person who is or was serving at the respective corporation's request as a director, officer, partner, trustee, employee, fiduciary or agent of another domestic or foreign corporation or other person or of an employee benefit plan (and their respective estates or personal representatives) to the fullest extent as from time to time permitted by Utah law.

        The bylaws of each of Australia, Chemical Purchasing, Enterprises, MA Investment, MA Services, Petrochemical Purchasing and Procurement, provide that unless otherwise provided in the respective corporation's articles of incorporation, the respective corporation shall indemnify any individual made a party to a proceeding because the individual is or was a director of the respective corporation against liability incurred in the proceeding. Provided, however, the respective corporation shall only indemnify an individual if it has authorized the indemnification in accordance with the URBCA and a determination has been made in accordance with the procedures set forth in the URBCA that indemnification is in accordance with the following requirements: (i) The respective corporation shall determine that: (a) the individual's conduct was in good faith; (b) the individual reasonably believed that the individual's conduct was in, or not opposed to, the respective corporation's best interests; and (c) in the case of any criminal proceeding, the individual had no reasonable cause to believe the individual's conduct was unlawful. (ii) The respective corporation shall not indemnify an individual thereunder: (a) in connection with a proceeding by or in the right of the respective corporation in which the individual was adjudged liable to the respective corporation; or (b) in connection with any other proceeding charging that the individual derived an improper personal benefit, whether or not involving action in the individual's official capacity, in which proceeding he or she was adjudged liable on the basis that he or she derived an improper personal benefit. Such bylaws further provide that indemnification thereunder in connection with a proceeding by or in the right of the respective corporation is limited to reasonable expenses (including attorneys' fees) incurred in connection with the proceeding.

        Such bylaws provide further that, unless otherwise provided in the respective corporation's articles of incorporation, the respective corporation may pay for or reimburse in advance of final disposition of any proceeding the reasonable expenses incurred by an individual who is a party to a proceeding because he or she is or was a director of the respective corporation if (i) in accordance with the procedures and standards set forth in the URBCA, an authorization of payment is made; and (ii) in accordance with the procedures of the URBCA, a determination is made that the following has occurred: the individual has furnished to the respective corporation (a) a written affirmation of the individual's good faith belief that the individual has met the prescribed standard of conduct; and (b) a written undertaking, executed personally or on the individual's behalf, to repay the advance if it is ultimately determined that the individual did not meet the standard of conduct (which undertaking must be an unlimited obligation of the individual but need not be secured and may be accepted without reference to financial ability to make repayment); and (iii) a determination has been made that the facts then known to those making the determination would not preclude indemnification thereunder or under Sections 901 through 909 of the URBCA.

        Such bylaws further provide that unless otherwise provided in the respective corporation's articles of incorporation, the respective corporation shall indemnify and advance expenses to any individual made a party to a proceeding because the individual is or was an officer, employee, fiduciary, or agent of the respective corporation to the same extent as to an individual made a party to a proceeding because the individual is or was a director of the respective corporation, or to a greater extent, if not

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inconsistent with public policy, if provided for by general or specific action of the board of directors of the respective corporation.

        Such bylaws also provide further that the respective corporation may purchase and maintain liability insurance on behalf of a person who is or was a director, officer, employee, fiduciary, or agent of the respective corporation or who, while serving as a director, officer, employee, fiduciary, or agent of the respective corporation, is or was serving at the request of the respective corporation as a director, officer, partner, trustee, employee, fiduciary, or agent of another foreign or domestic corporation or other person, or of an employee benefit plan, against liability asserted against or incurred by the individual in that capacity or arising from his or her status as such, whether or not the respective corporation would have power to indemnify the individual against the same liability under Sections 902, 903, or 907 of the URBCA.

        The bylaws of each of Polymer Materials and Airstar provide that the respective corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the respective corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the respective corporation, or is or was serving at the request of the respective corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorney's fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the respective corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person's conduct was unlawful.

        Such bylaws provide further that the respective corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the respective corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the respective corporation, or is or was serving at the request of the respective corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorney's fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the respective corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of the person's duty to the respective corporation, unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability and in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper. Such bylaws further provide that, to the extent that a director, officer, employee, or agent of the respective corporation has been successful on the merits or otherwise in defense of any such action, suit or proceeding referred to above, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorney's fees) actually and reasonably incurred by such person in connection therewith. Any other indemnification under such bylaws shall be made by the respective corporation upon a determination that indemnification of the director, officer, employee, or agent is proper in the circumstances because the person has met the applicable standard of conduct. Such determination shall be made either (i) by the board of directors of the respective corporation by a majority vote of a quorum consisting of directors who were not parties to such action, suit, or proceeding, or (ii) by independent legal counsel in a written opinion, or (iii) by the shareholders of the respective

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corporation by a majority vote of a quorum of shareholders at any meeting duly called for such purpose.

        Such bylaws also provide that expenses incurred in defending a civil or criminal action, suit, or proceeding as contemplated in such bylaws shall be paid by the respective corporation in advance of the final disposition of such action, suit or proceeding upon a majority vote of a quorum of the board of directors of the respective corporation and upon receipt of an undertaking by or on behalf of the director, officer, employee, or agent to repay such amount unless it ultimately be determined that such person is entitled to be indemnified by the respective corporation as authorized by such bylaws.

        Such bylaws further provide that the indemnification provided thereby shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any provision in the respective corporation's articles of incorporation, bylaws, agreement, vote of shareholders or disinterested directors, or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of the heirs and legal representatives of such a person.

        Such bylaws also authorize the respective corporation to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the respective corporation, or is or was serving at the request of the respective corporation as a director, officer, employee or agent, of another corporation, partnership, joint venture, trust or other enterprise, against any liability asserted against him and incurred by him in any such capacity or arising out of his status as such, whether or not the respective corporation would otherwise have the power to indemnify him against such liability under the laws of the State of Utah, as the same may hereafter be amended or modified.

        Huntsman Purchasing, LTD., a Utah limited partnership ("Purchasing"), is empowered by Section 1006 of the Utah Revised Uniform Limited Partnership Act ("URULPA") to indemnify, to the extent that a general partner has been successful on the merits or otherwise in defense of any action, suit, or proceeding brought against the general partner under Section 1001 of the URULPA (relating to derivative actions), or in defense of any claim, issue, or matter therein, the general partner against expenses, including attorneys' fees, which the general partner actually and reasonably incurred.

        Purchasing's agreement of limited partnership provides that it shall indemnify and hold harmless its general partner and its employees, agents, and representatives, and the respective agents and employees of any of the foregoing persons or entities, from and against any loss, expense, damage or injury suffered by it, or them, by reason of any acts, omissions or alleged acts or omissions arising out of its or their activities on behalf of Purchasing or in furtherance of the interests of Purchasing, including specifically, but not limited to any judgment, award, settlement, reasonable attorneys' fees and other costs or expenses incurred in connection with the defense of any actual or threatened action, proceeding or claim; provided that the acts, omissions or alleged acts or omissions upon which such actual or threatened action, proceeding or claims are based were in good faith and were not performed or omitted fraudulently or in bad faith or did not constitute willful misconduct on the part of Purchasing's general partner or such other person or entity.

        Each of Huntsman Ethyleneamines LLC, Huntsman Fuels LLC, Huntsman International Fuels LLC and Huntsman Propylene Oxide LLC is empowered by Section 402 of the Texas Limited Liability Company Act (the "TLLCA") to indemnify any of its members, managers or officers or any assignee of a membership interest in the company, pay in advance or reimburse expenses incurred by such persons, and maintain liability insurance for such persons, subject to such standards and restrictions, if any, as are set forth in its respective limited liability company agreement. Further, Section 401 of the TLLCA provides that a limited liability company may expand or restrict duties (including fiduciary duties) and related liabilities of such persons at law or in equity.

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        Section 8.2 of the limited liability company agreement of each of Huntsman Ethyleneamines LLC, Huntsman Fuels LLC, Huntsman International Fuels LLC and Huntsman Propylene Oxide LLC authorizes each respective company, subject in all respects to any requirements or limitations contained in the Texas Business Operations Code (the "TBOC"), to indemnify and hold harmless its managers, officers and, if applicable, employees and other agents to the same extent, in the same manner and subject to the same rights, terms, conditions and procedures (including, without limitation, with respect to the advancement of expenses) as such categories of persons would be indemnified and held harmless by the parent company of each respective company pursuant to the Bylaws, Certificate of Incorporation or other relevant charter documents of its parent company; provided, that if at any time the company does not have a parent company with common stock listed on the New York Stock Exchange or traded through The NASDAQ Stock Market, the company shall during such time provide indemnification and advancement of expenses to its managers, officers, employees and other agents to the maximum extent permitted by the TBOC.

        Tioxide Group is an unlimited company having share capital registered in England and Wales. Section 232(1) of the U.K. Companies Act 2006 (the "Companies Act") voids any provision contained in a company's articles or in any contract with the company or otherwise which exempts any director of the company (to any extent) from any liability that would otherwise attach to him in connection with any negligence, default, breach of duty or breach of trust in relation to the company. Section 232(2) of the Companies Act voids any provision contained in a company's articles or in any contract with the company or otherwise which indemnifies any director of the company, or of an associated company, against any liability attaching to him in connection with any negligence, default, breach of duty or breach of trust in relation to the company of which he is a director, except as permitted by Section 233 of the Companies Act (provision of insurance), section 234 of the Companies Act (qualifying third party indemnity provision) or section 235 of the Companies Act (qualifying pension scheme indemnity provision).

        Nothing in Section 232 of the Companies Act prevents a company's articles from making such provision as has previously been lawful for dealing with conflicts of interests.

        Article 22(a) of the Articles of Association of Tioxide Group indemnifies every director, officer and auditor of Tioxide Group out of the assets of Tioxide Group against all losses and liabilities that such person may sustain in the performance of the duties of his office to the extent permitted by Section 310 of the Companies Act 1985. Furthermore, Article 22(b) empowers the directors of Tioxide Group to purchase insurance for any director, officer or auditor of Tioxide Group as permitted by the Companies Act 1985.

        In the Articles of Association of Tioxide Group any provision of the Companies Act 1985 is deemed to include a reference to any statutory modification or re-enactment of that provision for that time being in force, therefore references to Section 310 of the Companies Act 1985 are deemed to include references to Section 232 of the Companies Act and references to the Companies Act 1985 generally are deemed to include references to the Companies Act generally.

        Tioxide Americas LLC is organized in the Cayman Islands. Cayman Islands law does not specifically limit the extent to which a company's articles of association may provide for the indemnification of officers and directors, except to the extent that such provision may be held by the Cayman Islands courts to be contrary to public policy (e.g., for purporting to provide indemnification against the consequences of committing a crime). In addition, an officer or director may not be able to enforce indemnification for his own dishonesty or willful neglect or default.

        Articles 136 and 137 of the Amended and Restated Articles of Association of Tioxide Americas LLC, which is filed as an exhibit to this registration statement, contain provisions providing for the indemnification by Tioxide Americas LLC of an officer, director or trustee of Tioxide Americas LLC for all actions, proceedings, costs, charges, losses, damages or liabilities which they incur

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or sustain by reason of any act done or omitted in or about the execution of their duty in their respective offices or trusts, except such (if any) as they shall incur or sustain by or through their own respective willful default or fraud.

ITEM 21.    EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(A)
Exhibits

Number   Description
  3.1   Certificate of Formation of Huntsman International LLC (incorporated by reference to Exhibit 3.1 to our registration statement on Form S-4 (File No. 333-167611))

 

3.2

 

Limited Liability Company Agreement of Huntsman International LLC dated November 5, 2008 LLC (incorporated by reference to Exhibit 3.2 to our registration statement on Form S-4 (File No. 333-167611))

 

3.3

 

Articles of Incorporation of Airstar Corporation (incorporated by reference to Exhibit 3.9 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.4

 

Bylaws of Airstar Corporation (incorporated by reference to Exhibit 3.10 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.5

 

Certificate of Formation of Huntsman Advanced Materials Americas LLC (incorporated by reference to Exhibit 3.5 to our registration statement on Form S-4 (File No. 333-167611))

 

3.6

 

Limited Liability Company Agreement of Huntsman Advanced Materials Americas LLC (incorporated by reference to Exhibit 3.6 to our registration statement on Form S-4 (File No. 333-167611))

 

3.7

 

Certificate of Formation of Volcano Holdco 2 LLC (now known as Huntsman Advanced Materials LLC) (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-4 of Huntsman Advanced Materials LLC (File No. 333-115344))

 

3.8

 

Certificate of Amendment to Certificate of Formation of Volcano Holdco 2 LLC (now known as Huntsman Advanced Materials LLC (incorporated by reference to Exhibit 3.2 to the Registration Statement on Form S-4 of Huntsman Advanced Materials LLC (File No. 333-115344))

 

3.9

 

Certificate of Amendment to Certificate of Formation of Huntsman Advanced Materials LLC (incorporated by reference to Exhibit 3.14 to our Registration Statement on Form S-4 (File No. 333-142207))

 

3.10

 

Third Amended and Restated Limited Liability Company Agreement of Huntsman Advanced Materials LLC (incorporated by reference to Exhibit 3.13 to our registration statement on Form S-4 (File No. 333-142207))

 

3.11

 

Articles of Incorporation of Huntsman Australia, Inc. (incorporated by reference to Exhibit 3.11 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.12

 

Bylaws of Huntsman Australia, Inc. (incorporated by reference to Exhibit 3.12 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.13

 

Articles of Incorporation of Huntsman Chemical Purchasing Corporation (incorporated by reference to Exhibit 3.19 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

II-10


Table of Contents

Number   Description
  3.14   Bylaws of Huntsman Chemical Purchasing Corporation (incorporated by reference to Exhibit 3.20 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.15

 

Articles of Restatement of the Articles of Incorporation of Huntsman Centennial Corporation (including the Amended and Restated Articles of Incorporation of Huntsman Enterprises, Inc.) (incorporated by reference to Exhibit 3.21 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.16

 

Bylaws of Huntsman Centennial Corporation (now known as Huntsman Enterprises, Inc.) (incorporated by reference to Exhibit 3.22 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.17

 

Certificate of Formation of Huntsman Ethyleneamines LLC (incorporated by reference to Exhibit 3.17 to our registration statement on Form S-4 (File No. 333-167611))

 

3.18

 

Limited Liability Company Agreement of Huntsman Ethyleneamines LLC (incorporated by reference to Exhibit 3.18 to our registration statement on Form S-4 (File No. 333-167611))

 

3.19

 

Certificate of Formation of Huntsman Fuels LLC (incorporated by reference to Exhibit 3.19 to our registration statement on Form S-4 (File No. 333-167611))

 

3.20

 

Limited Liability Company Agreement of Huntsman Fuels LLC (incorporated by reference to Exhibit 3.20 to our registration statement on Form S-4 (File No. 333-167611))

 

3.21

 

Certificate of Formation of Huntsman International Financial LLC (incorporated by reference to Exhibit 3.3 to our registration statement on Form S-4 (File No. 333-85141))

 

3.22

 

Certificate of Amendment to Certificate of Formation of Huntsman International Financial LLC (incorporated by reference to Exhibit 3.10 to our annual report on Form 10-K for the year ended December 31, 2000)

 

3.23

 

Limited Liability Company Agreement of Huntsman International Financial LLC dated June 18, 1999, as amended by the First Amendment dated June 19, 1999 (incorporated by reference to Exhibit 3.4 to our registration statement on Form S-4 (File No. 333-85141))

 

3.24

 

Certificate of Formation of Huntsman International Fuels LLC (incorporated by reference to Exhibit 3.24 to our registration statement on Form S-4 (File No. 333-167611))

 

3.25

 

Limited Liability Company Agreement of Huntsman International Fuels LLC (incorporated by reference to Exhibit 3.25 to our registration statement on Form S-4 (File No. 333-167611))

 

3.26

 

Certificate of Incorporation of Huntsman International Trading Corporation (incorporated by reference to Exhibit 3.46 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.27

 

Bylaws of Huntsman International Trading Corporation (incorporated by reference to Exhibit 3.47 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.28

 

Articles of Incorporation of Huntsman Ethylene Corporation (now known as Huntsman MA Investment Corporation) (incorporated by reference to Exhibit 3.48 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

II-11


Table of Contents

Number   Description
  3.29   Articles of Amendment to the Articles of Incorporation of Huntsman Ethylene Corporation (now known as Huntsman MA Investment Corporation) (incorporated by reference to Exhibit 3.49 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.30

 

Bylaws of Huntsman Ethylene Corporation (now known as Huntsman MA Investment Corporation) (incorporated by reference to Exhibit 3.50 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.31

 

Articles of Incorporation of Huntsman MA Services Corporation (incorporated by reference to Exhibit 3.51 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.32

 

Bylaws of Huntsman MA Services Corporation (incorporated by reference to Exhibit 3.52 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.33

 

Certificate of Formation of Huntsman Petrochemical LLC (incorporated by reference to Exhibit 3.33 to our registration statement on Form S-4 (File No. 333-167611))

 

3.34

 

Limited Liability Company Agreement of Huntsman Petrochemical LLC (incorporated by reference to Exhibit 3.34 to our registration statement on Form S-4 (File No. 333-167611))

 

3.35

 

Articles of Incorporation of Huntsman Petrochemical Purchasing Corporation (incorporated by reference to Exhibit 3.61 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.36

 

Bylaws of Huntsman Petrochemical Purchasing Corporation (incorporated by reference to Exhibit 3.62 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.37

 

Articles of Incorporation of Huntsman Procurement Corporation (incorporated by reference to Exhibit 3.68 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.38

 

Bylaws of Huntsman Procurement Corporation (incorporated by reference to Exhibit 3.69 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.39

 

Certificate of Formation of Huntsman Propylene Oxide LLC (incorporated by reference to Exhibit 3.39 to our registration statement on Form S-4 (File No. 333-167611))

 

3.40

 

Limited Liability Company Agreement of Huntsman Propylene Oxide LLC (incorporated by reference to Exhibit 3.40 to our registration statement on Form S-4 (File No. 333-167611))

 

3.41

 

Certificate of Limited Partnership of Huntsman Purchasing, Ltd. (incorporated by reference to Exhibit 3.70 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.42

 

Amended Certificate of Limited Partnership of Huntsman Purchasing, Ltd. (incorporated by reference to Exhibit 3.71 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.43

 

Amended Agreement of Limited Partnership of Huntsman Purchasing, Ltd., dated January 1, 1999 (incorporated by reference to Exhibit 3.72 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

II-12


Table of Contents

Number   Description
  3.44   First Amendment to Amended Agreement of Limited Partnership of Huntsman Purchasing, Ltd., dated January 1, 2000 (incorporated by reference to Exhibit 3.73 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.45

 

Articles of Incorporation of Polymer Materials, Inc. (incorporated by reference to Exhibit 3.87 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.46

 

Bylaws of Polymer Materials, Inc. (incorporated by reference to Exhibit 3.88 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.47

*

Amended and Restated Memorandum and Articles of Association of Tioxide Americas LLC

 

3.48

 

Memorandum of Association of Tioxide Group (incorporated by reference to Exhibit 3.5 to our registration statement on Form S-4 (File No. 333-85141))

 

3.49

 

Articles of Association of Tioxide Group (incorporated by reference to Exhibit 3.6 to our registration statement on Form S-4 (File No. 333-85141))

 

4.1

 

Indenture, dated as of December 17, 2004, among Huntsman International LLC, as Issuer, the Guarantors named therein and Wells Fargo Bank, National Association, as Trustee, relating to the 73/8% Senior Subordinated Notes due 2015 and the 71/2% Senior Subordinated Notes due 2015 (incorporated by reference to Exhibit 4.1 to our current report on Form 8-K filed on December 23, 2004)

 

4.2

 

Form of Restricted 73/8% Senior Subordinated Note denominated in dollars due 2015 (included as Exhibit A-1 to Exhibit 4.1)

 

4.3

 

Form of Restricted 71/2% Senior Subordinated Note denominated in euros due 2015 (included as Exhibit A-2 to Exhibit 4.1)

 

4.4

 

Form of Unrestricted 73/8% Senior Subordinated Note denominated in dollars due 2015 (included as Exhibit A-3 to Exhibit 4.1)

 

4.5

 

Form of Unrestricted 71/2% Senior Subordinated Note denominated in euros due 2015 (included as Exhibit A-4 to Exhibit 4.1)

 

4.6

 

Form of Guarantee (included as Exhibit E to Exhibit 4.1)

 

4.7

 

Registration Rights Agreement dated as of February 10, 2005, by and among the Company and the stockholders signatory thereto (incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed on February 16, 2005)

 

4.8

 

Form of stock certificate of Huntsman Corporation (incorporated by reference to Exhibit 4.68 to amendment No. 3 to our registration statement on Form S-1 (File No. 333-120749))

 

4.9

 

Supplemental Indenture dated August 16, 2005 to Indenture dated as December 17, 2004 by and among Huntsman International LLC, the guarantors named therein, and Wells Fargo Bank, National Association (as successor by consolidation to Wells Fargo Bank Minnesota, National Association), as trustee, relating to Huntsman International LLC's dollar denominated 73/8% Senior Subordinated Notes due 2015 and euro denominated 71/2% Senior Subordinated Notes due 2015 (incorporated by reference to Exhibit 4.4 to our current report on Form 8-K filed on August 22, 2005)

 

4.10

 

Form of Restricted Stock Agreement for Outside Directors, effective for grants prior to February 6, 2008 (incorporated by reference to Exhibit 4.7 to our registration statement on Form S-8 (File No. 333-131729))

II-13


Table of Contents

Number   Description
  4.11   Form of Restricted Stock Unit Agreement for Outside Directors, effective for grants prior to February 6, 2008 (incorporated by reference to Exhibit 4.8 of our registration statement on Form S-8 (File No. 333-131729))

 

4.12

 

Indenture, dated as of November 13, 2006, among Huntsman International LLC, as Issuer, the Guarantors party thereto, and Wells Fargo Bank, National Association, as Trustee, relating to the $200,000,000 77/8% Senior Subordinated Notes due 2014 and the €400,000,000 67/8% Senior Subordinated Notes due 2013 (incorporated by reference to Exhibit 4.1 to our quarterly report on Form 10-Q for the quarter ended September 30, 2006)

 

4.13

 

Form of Restricted 67/8% Senior Subordinated Note denominated in euros due 2013 (included as Exhibit A-2 to Exhibit 4.12)

 

4.14

 

Form of Unrestricted 67/8% Senior Subordinated Note denominated in euros due 2013 (included as Exhibit A-4 to Exhibit 4.12)

 

4.15

 

Form of Restricted Stock Agreement for Outside Directors (incorporated by reference to Exhibit 4.31 to our annual report on Form 10-K for the year ended December 31, 2007)

 

4.16

 

Form of Restricted Stock Unit Agreement for Outside Directors, effective for grants from February 6, 2008 to September 21, 2010 (incorporated by reference to Exhibit 4.32 to our annual report on Form 10-K for the year ended December 31, 2007)

 

4.17

 

Indenture, dated as of July 6, 2009, by and among Huntsman International LLC, the subsidiary guarantors named therein and Wilmington Trust FSB, a federal savings bank, as trustee (incorporated by reference to Exhibit 4.1 to our current report on Form 8-K filed on July 8, 2009)

 

4.18

 

Form of 51/2% Senior Note due 2016 (incorporated by reference to Exhibit 4.2 to our current report on Form 8-K filed on July 8, 2009)

 

4.19

 

Form of Guarantee (incorporated by reference to Exhibit 4.3 to our current report on Form 8-K filed on July 8, 2009)

 

4.20

 

Amended and Restated Indenture, dated as of September 10, 2009, by and among Huntsman International LLC, the subsidiary guarantors named therein and Wilmington Trust FSB, a federal savings bank, as trustee (incorporated by reference to Exhibit 4.1 to our current report on Form 8-K filed on September 14, 2009)

 

4.21

 

Indenture, dated as of March 17, 2010, by and among Huntsman International LLC, the subsidiary guarantors therein and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to our current report on Form 8-K filed on March 19, 2010)

 

4.22

 

Form of 85/8% Senior Subordinated Note (incorporated by reference to Exhibit 4.2 to our current report on Form 8-K filed on March 19, 2010)

 

4.23

 

Form of Guarantee (incorporated by reference to Exhibit 4.3 to our current report on Form 8-K filed on March 19, 2010)

 

4.24

 

Indenture, dated as of September 24, 2010, by and among Huntsman International LLC, the subsidiary guarantors named therein and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to our current report on Form 8-K filed on September 30, 2010)

 

4.25

 

Form of 85/8% Senior Subordinated Note (included as Exhibit A to Exhibit 4.24) (incorporated by reference to Exhibit 4.2 to our current report on Form 8-K filed on September 30, 2010)

II-14


Table of Contents

Number   Description
  4.26   Form of Guarantee (included as Exhibit E to Exhibit 4.24) (incorporated by reference to Exhibit 4.3 to our current report on Form 8-K filed on September 30, 2010)

 

5.1

**

Opinion and consent of Stoel Rives LLP as to the legality of the notes to be issued by Huntsman International LLC, and the guarantees to be issued by Airstar Corporation, Huntsman Advanced Materials Americas LLC, Huntsman Advanced Materials LLC, Huntsman Australia Inc., Huntsman Chemical Purchasing Corporation, Huntsman Enterprises, Inc., Huntsman International Financial LLC, Huntsman International Trading Corporation, Huntsman MA Investment Corporation, Huntsman MA Services Corporation, Huntsman Petrochemical LLC, Huntsman Petrochemical Purchasing Corporation, Huntsman Procurement Corporation, Huntsman Purchasing Ltd. and Polymer Materials Inc. in the exchange offer

 

5.2

**

Opinion and consent of Vinson & Elkins L.L.P. as to the legality of the guarantees to be issued by Huntsman Ethyleneamines LLC, Huntsman Fuels LLC., Huntsman International Fuels LLC and Huntsman Propylene Oxide LLC in the exchange offer

 

5.3

**

Opinion and consent of Walkers, Cayman Islands as to the legality of the guarantees to be issued by Tioxide Americas LLC in the exchange offer

 

5.4

**

Opinion and consent of Dickinson Dees LLP as to the legality of the guarantees to be issued by Tioxide Group in the exchange offer

 

10.1

 

Aircraft Dry Lease, dated as of September 14, 2001, between Jstar Corporation and Airstar Corporation (incorporated by reference to Exhibit 10.10 to amendment No. 1 to the registration statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

10.2

 

Employment Agreement with Anthony Hankins (incorporated by reference to Exhibit 10.27 to amendment No. 2 to our registration statement on Form S-1 (File No. 333-120749))

 

10.3

 

Huntsman Corporation Stock Incentive Plan (incorporated by reference to Exhibit 10.19 to amendment No. 4 to our registration statement on Form S-1 (File No. 333-120749))

 

10.4

 

Form of Nonqualified Stock Option Agreement, effective for grants prior to February 21, 2011 (incorporated by reference to Exhibit 10.20 to amendment No. 4 to our registration statement on Form S-1 (File No. 333-120749))

 

10.5

 

Form of Restricted Stock Agreement, effective for grants prior to February 6, 2008 (incorporated by reference to Exhibit 10.21 to amendment No. 4 to our registration statement on Form S-1 (File No. 333-120749))

 

10.6

 

Form of Stock Appreciation Rights Agreement (incorporated by reference to Exhibit 10.22 to amendment No. 4 to our registration statement on Form S-1 (File No. 333-120749))

 

10.7

 

Form of Phantom Share Agreement, effective for grants prior to February 6, 2008 (incorporated by reference to Exhibit 10.23 to amendment No. 4 to our registration statement on Form S-1 (File No. 333-120749))

 

10.8

 

Form of Executive Severance Plan (as amended and restated) (incorporated by reference to Exhibit 10.24 to amendment No. 4 to our registration statement on Form S-1 (File No. 333-120749))

 

10.9

 

Form of Indemnification Agreement (incorporated by reference to Exhibit 10.25 to amendment No. 4 to our registration statement on Form S-1 (File No. 333-120749))

II-15


Table of Contents

Number   Description
  10.10   Credit Agreement dated August 16, 2005 among Huntsman International LLC, Deutsche Bank AG New York Branch as Administrative Agent and the other financial institutions named therein (incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed August 22, 2005)

 

10.11

 

Form of Non-qualified Stock Option Agreement for Outside Directors (incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed November 8, 2005)

 

10.12

 

Consent and First Amendment to Credit Agreement dated December 20, 2005 among the Company, Deutsche Bank AG New York Branch as Administrative Agent and the other financial institutions named therein (incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed December 27, 2005)

 

10.13

 

Amended and Restated Huntsman Supplemental Executive Retirement Plan (incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed December 30, 2005)

 

10.14

 

Huntsman Supplemental Executive MPP Plan (incorporated by reference to Exhibit 10.2 to our current report on Form 8-K filed December 30, 2005)

 

10.15

 

Amended and Restated Huntsman Supplemental Savings Plan (incorporated by reference to Exhibit 10.3 to our current report on Form 8-K filed December 30, 2005)

 

10.16

 

Huntsman Outside Directors Elective Deferral Plan (incorporated by reference to Exhibit 10.4 to our current report on Form 8-K filed December 30, 2005)

 

10.17

 

Consent and Second Amendment to Credit Agreement and Amendment to Security Documents, dated June 30, 2006, by and among Huntsman International LLC, as Borrower, Deutsche Bank AG New York Branch, as Administrative Agent and Collateral Agent, and the other financial institutions party thereto (incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed on July 7, 2006)

 

10.18

 

Third Amendment to Credit Agreement dated April 19, 2007 by and among Huntsman International LLC, as Borrower, Deutsche Bank AG New York Branch, as Administrative Agent and Collateral Agent, and the other financial institutions party thereto (incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed on April 23, 2007)

 

10.19

 

First Amendment to Huntsman Supplemental Executive Retirement Plan (incorporated by reference to Exhibit 10.32 to our annual report on Form 10-K for the year ended December 31, 2007)

 

10.20

 

First Amendment to Huntsman Supplemental Executive MPP Plan (incorporated by reference to Exhibit 10.33 to our annual report on Form 10-K for the year ended December 31, 2007)

 

10.21

 

First Amendment to Huntsman Supplemental Savings Plan (incorporated by reference to Exhibit 10.34 to our annual report on Form 10-K for the year ended December 31, 2007)

 

10.22

 

Second Amendment to Huntsman Supplemental Savings Plan (incorporated by reference to Exhibit 10.35 to our annual report on Form 10-K for the year ended December 31, 2007)

 

10.23

 

First Amendment to Huntsman Outside Directors Elective Deferral Plan (incorporated by reference to Exhibit 10.36 to our annual report on Form 10-K for the year ended December 31, 2007)

 

10.24

 

Form of Restricted Stock Agreement effective for grants from February 6, 2008 to September 21, 2010 (incorporated by reference to Exhibit 10.37 to our annual report on Form 10-K for the year ended December 31, 2007)

II-16


Table of Contents

Number   Description
  10.25   Form of Phantom Share Agreement effective for grants from February 6, 2008 to February 23, 2010 (incorporated by reference to Exhibit 10.38 to our annual report on Form 10-K for the year ended December 31, 2007)

 

10.26

 

Letter Agreement, dated June 15, 2009, among Huntsman Polyurethanes (UK) Ltd. and Paul G. Hulme (incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed on June 17, 2009)

 

10.27

 

Fourth Amendment to Credit Agreement, dated as of June 22, 2009, by and among Huntsman International LLC and Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc. (incorporated by reference to Exhibit 10.3 to our current report on Form 8-K filed on June 23, 2009)

 

10.28

 

Form of Registration Rights Agreement dated as of June 23, 2009, by and among Huntsman International LLC, the subsidiary guarantors party thereto and Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc. (incorporated by reference to Exhibit 10.4 to our current report on Form 8-K filed on June 23, 2009)

 

10.29

 

Voting Agreement, dated as of June 22, 2009, by and among Huntsman International LLC, Deutsche Bank AG New York Branch and Credit Suisse, Cayman Islands Branch (incorporated by reference to Exhibit 10.5 to our current report on Form 8-K filed on June 23, 2009)

 

10.30

 

U.S. Receivables Loan Agreement dated as of October 16, 2009 among Huntsman Receivables Finance II LLC, Huntsman (Europe) BVBA, the several entities party thereto as lenders, the several financial institutions party thereto as funding agents, the several commercial paper conduits party thereto as conduit lenders, the several financial institutions party thereto as committed lenders, Wachovia Bank National Association, as administrative agent, and Wachovia Bank National Association, as collateral Agent (incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed on October 22, 2009)

 

10.31

 

U.S. Contribution Agreement dated as of October 16, 2009 between Huntsman International LLC and Huntsman Receivables Finance II LLC (incorporated by reference to Exhibit 10.2 to our current report on Form 8-K filed on October 22, 2009)

 

10.32

 

European Receivables Loan Agreement dated as of October 16, 2009 between Huntsman Receivables Finance LLC, Huntsman (Europe) BVBA, the several entities party thereto as lenders, the several financial institutions party thereto as funding agents, Barclays Bank Plc, as administrative agent, and Barclays Bank Plc, as collateral agent (incorporated by reference to Exhibit 10.3 to our current report on Form 8-K filed on October 22, 2009)

 

10.33

 

European Contribution Agreement dated as of October 16, 2009 between Huntsman International LLC and Huntsman Receivables Finance LLC (incorporated by reference to Exhibit 10.4 to our current report on Form 8-K filed on October 22, 2009)

 

10.34

 

Fifth Amendment to Credit Agreement, dated as of March 9, 2010, by and among Huntsman International LLC, JPMorgan Chase Bank, N.A. and the other financial institutions party thereto (incorporated by reference to Exhibit 10.1 to our quarterly report on Form 10-Q for the quarter ended March 31, 2010)

 

10.35

 

Registration Rights Agreement, dated as of March 17, 2010, by and among Huntsman International LLC, the subsidiary guarantors named therein and Goldman, Sachs & Co., J.P. Morgan Securities Inc., Barclays Capital Inc., Banc of America Securities LLC, Citigroup Global Markets Inc. and Credit Suisse Securities (USA) LLC (incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed on March 19, 2010)

II-17


Table of Contents

Number   Description
  10.36   Registration Rights Agreement, dated as of September 24, 2010, by and among Huntsman International LLC, the subsidiary guarantors named therein and Goldman, Sachs & Co., J.P. Morgan Securities LLC, Barclays Capital Inc., Banc of America Securities LLC, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC and HSBC Securities (USA) Inc. (incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed on September 30, 2010)

 

10.37

 

Certain exhibits and schedules to Exhibit A to the Fifth Amendment to Credit Agreement, dated as of March 9, 2010, which was previously filed as Exhibit 10.1 to our quarterly report on Form 10-Q filed May 7, 2010 (incorporated by reference to Exhibit 10.2 to our quarterly report on Form 10-Q for the quarter ended September 30, 2010)

 

10.38

 

Registration Rights Agreement, dated as of November 12, 2010, by and among Huntsman International LLC, the subsidiary guarantors named therein and Citigroup Global Markets Inc. (incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed on November 15, 2010)

 

10.39

 

Second Amendment to Huntsman Supplemental Executive Retirement Plan (incorporated by reference to Exhibit 10.38 to our annual report on Form 10-K for the year ended December 31, 2010)

 

10.40

 

Third Amendment to Huntsman Supplemental Executive Retirement Plan (incorporated by reference to Exhibit 10.39 to our annual report on Form 10-K for the year ended December 31, 2010)

 

10.41

 

Form of Restricted Stock Agreement (incorporated by reference to Exhibit 10.40 to our annual report on Form 10-K for the year ended December 31, 2010)

 

10.42

 

Form of Phantom Share Agreement (incorporated by reference to Exhibit 10.41 to our annual report on Form 10-K for the year ended December 31, 2010)

 

10.43

 

Form of Nonqualified Stock Option Agreement (incorporated by reference to Exhibit 10.42 to our annual report on Form 10-K for the year ended December 31, 2010)

 

10.44

 

Form of Restricted Stock Unit Agreement for Outside Directors (incorporated by reference to Exhibit 10.43 to our annual report on Form 10-K for the year ended December 31, 2010)

 

10.45

 

Sixth Amendment, dated as of March 7, 2011, to the Credit Agreement, dated as of August 16, 2005, among Huntsman International LLC, the lenders from time to time party thereto, and JPMorgan Chase Bank,  N.A., as administrative agent (incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed on March 9, 2011)

 

12.1

*

Statement re Computation of Ratio of Earnings to Fixed Charges

 

21.1

 

Subsidiaries of Huntsman International LLC (incorporated by reference to Exhibit 21.1 to our annual report on Form 10-K for the year ended December 31, 2010)

 

23.1

*

Consent of Deloitte & Touche LLP

 

23.2

**

Consent of Stoel Rives LLP (included in Exhibit 5.1)

 

23.3

**

Consent of Vinson & Elkins L.L.P. (included in Exhibit 5.2)

 

23.4

**

Consent of Walkers, Cayman Islands (included in Exhibit 5.3)

 

23.5

**

Consent of Dickinson Dees LLP (included in Exhibit 5.4)

II-18


Table of Contents

Number   Description
  25.1 * Form T-1 Statement of Eligibility of Wells Fargo Bank, N.A. to act as Trustee under the Indenture

 

99.1

**

Form of Letter of Transmittal for the notes

 

99.2

**

Letter to Brokers for the notes

 

99.3

**

Letter to Clients for the notes

 

99.4

**

Notice of Guaranteed Delivery for the notes

*
Filed herewith.

**
To be filed by amendment.

(B)
Financial Statement Schedules

ITEM 22.    UNDERTAKINGS

        The undersigned registrants hereby undertake:

(1)
To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i)
To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

(ii)
To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement;

(iii)
To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

(2)
That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3)
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4)
That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement

II-19


Table of Contents

(5)
That, for the purpose of determining liability of the registrants under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The undersigned registrants undertake that in a primary offering of securities of the undersigned registrants pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrants will each be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i)
any preliminary prospectus or prospectus of the undersigned registrants relating to the offering required to be filed pursuant to Rule 424;

(ii)
any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrants;

(iii)
the portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrants; and

(iv)
any other communication that is an offer in the offering made by the undersigned registrants to the purchaser.

(6)
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions described in Item 20 above, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

(7)
The undersigned registrants hereby undertake to respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11 or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.

(8)
The undersigned registrants hereby undertake to supply by means of post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.

II-20



SIGNATURES

        Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Salt Lake City, State of Utah, on the 25th day of March, 2011.

    HUNTSMAN INTERNATIONAL LLC

 

 

By:

 

/s/ JON M. HUNTSMAN

Jon M. Huntsman
Executive Chairman of the Board of Managers and Manager

        Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 25th day of March 2011:

Name
 
Capacities

 

 

 
/s/ JON M. HUNTSMAN

Jon M. Huntsman
  Executive Chairman of the Board of Managers and Manager

/s/ PETER R. HUNTSMAN

Peter R. Huntsman

 

President, Chief Executive Officer and Manager (Principal Executive Officer)

/s/ J. KIMO ESPLIN

J. Kimo Esplin

 

Executive Vice President, Chief Financial Officer and Manager (Principal Financial Officer)

/s/ JAMES R. MOORE

James R. Moore

 

Executive Vice President, General Counsel, Corporate Compliance Officer, Secretary and Manager

/s/ L. RUSSELL HEALY

L. Russell Healy

 

Vice President and Controller (Principal Accounting Officer)

        Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Salt Lake City, State of Utah, on the 25th day of March, 2011.

    AIRSTAR CORPORATION

 

 

By:

 

/s/ PETER R. HUNTSMAN

Peter R. Huntsman
President, Chief Executive Officer and Director

        Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 25th day of March 2011:

Name
 
Capacities

 

 

 
/s/ JON M. HUNTSMAN

Jon M. Huntsman
  Executive Chairman of the Board of Directors and Director

/s/ PETER R. HUNTSMAN

Peter R. Huntsman

 

President, Chief Executive Officer and Director (Principal Executive Officer)

/s/ J. KIMO ESPLIN

J. Kimo Esplin

 

Executive Vice President, Chief Financial Officer and Director (Principal Financial and Accounting Officer)

        Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Salt Lake City, State of Utah, on the 25th day of March, 2011.

    HUNTSMAN ADVANCED MATERIALS
AMERICAS LLC

 

 

By:

 

/s/ PETER R. HUNTSMAN

Peter R. Huntsman
President, Chief Executive Officer and Manager

        Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 25th day of March 2011:

Name
 
Capacities

 

 

 
/s/ JON M. HUNTSMAN

Jon M. Huntsman
  Executive Chairman of the Board of Managers and Manager

/s/ PETER R. HUNTSMAN

Peter R. Huntsman

 

President, Chief Executive Officer and Manager (Principal Executive Officer)

/s/ J. KIMO ESPLIN

J. Kimo Esplin

 

Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

Table of Contents

        Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Salt Lake City, State of Utah, on the 25th day of March, 2011.

    HUNTSMAN ADVANCED MATERIALS LLC

 

 

By:

 

/s/ PETER R. HUNTSMAN

Peter R. Huntsman
President, Chief Executive Officer and Manager

        Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 25th day of March 2011:

Name
 
Capacities

 

 

 

 

 
/s/ JON M. HUNTSMAN

Jon M. Huntsman
  Executive Chairman of the Board of Managers and Manager

/s/ PETER R. HUNTSMAN

Peter R. Huntsman

 

President, Chief Executive Officer and Manager (Principal Executive Officer)

/s/ J. KIMO ESPLIN

J. Kimo Esplin

 

Executive Vice President, Chief Financial Officer and Manager (Principal Financial Officer)

/s/ JAMES R. MOORE

James R. Moore

 

Executive Vice President, General Counsel, Secretary and Manager

/s/ L. RUSSELL HEALY

L. Russell Healy

 

Vice President and Controller (Principal Accounting Officer)

Table of Contents

        Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Salt Lake City, State of Utah, on the 25th day of March, 2011.

    HUNTSMAN AUSTRALIA INC.

 

 

By:

 

/s/ PETER R. HUNTSMAN

Peter R. Huntsman
President, Chief Executive Officer and Director

        Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 25th day of March 2011:

 
Name
 
Capacities

 

 

 

 
  /s/ JON M. HUNTSMAN

Jon M. Huntsman
  Executive Chairman of the Board of Directors and Director

 

/s/ PETER R. HUNTSMAN

Peter R. Huntsman

 

President, Chief Executive Officer and Director (Principal Executive Officer)

 

/s/ J. KIMO ESPLIN

J. Kimo Esplin

 

Executive Vice President, Chief Financial Officer and Director (Principal Financial and Accounting Officer)

Table of Contents

        Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Salt Lake City, State of Utah, on the 25th day of March, 2011.

    HUNTSMAN CHEMICAL PURCHASING CORPORATION

 

 

By:

 

/s/ PETER R. HUNTSMAN

Peter R. Huntsman
President, Chief Executive Officer and Director

        Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 25th day of March 2011:

 
Name
 
Capacities

 

 

 

 
  /s/ JON M. HUNTSMAN

Jon M. Huntsman
  Director

 

/s/ PETER R. HUNTSMAN

Peter R. Huntsman

 

President, Chief Executive Officer and Director (Principal Executive Officer)

 

/s/ J. KIMO ESPLIN

J. Kimo Esplin

 

Executive Vice President and Chief Financial Officer (Principal Financial Officer)

 

/s/ L. RUSSELL HEALY

L. Russell Healy

 

Vice President and Controller (Principal Accounting Officer)

Table of Contents

        Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Salt Lake City, State of Utah, on the 25th day of March, 2011.

    HUNTSMAN ENTERPRISES, INC.

 

 

By:

 

/s/ PETER R. HUNTSMAN

Peter R. Huntsman
President, Chief Executive Officer and Director

        Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 25th day of March 2011:

Name
 
Capacities

 

 

 

 

 
/s/ JON M. HUNTSMAN

Jon M. Huntsman
  Executive Chairman of the Board of Directors and Director

/s/ PETER R. HUNTSMAN

Peter R. Huntsman

 

President, Chief Executive Officer and Director (Principal Executive Officer)

/s/ J. KIMO ESPLIN

J. Kimo Esplin

 

Executive Vice President, Chief Financial Officer and Director (Principal Financial Officer)

/s/ JAMES R. MOORE

James R. Moore

 

Executive Vice President, General Counsel, Secretary and Director

/s/ L. RUSSELL HEALY

L. Russell Healy

 

Vice President and Controller (Principal Accounting Officer)

Table of Contents

        Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Salt Lake City, State of Utah, on the 25th day of March, 2011.

    HUNTSMAN ETHYLENEAMINES LLC

 

 

By:

 

/s/ J. KIMO ESPLIN

J. Kimo Esplin
Executive Vice President and Chief Financial Officer

        Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 25th day of March 2011:

Name
 
Capacities

 

 

 

 

 
/s/ DUNCAN EMERSON

Duncan Emerson
  Manager

/s/ STEPHEN E. MILKOWSKI

Stephen E. Milkowski

 

Manager

/s/ J. KIMO ESPLIN

J. Kimo Esplin

 

Executive Vice President and Chief Financial Officer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

Table of Contents

        Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Salt Lake City, State of Utah, on the 25th day of March, 2011.

    HUNTSMAN FUELS LLC

 

 

By:

 

/s/ JAMES R. MOORE

James R. Moore
Executive Vice President, General Counsel and Secretary

        Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 25th day of March 2011:

Name
 
Capacities

 

 

 

 

 
/s/ ANTHONY P. HANKINS

Anthony P. Hankins
  Manager

/s/ STEVE HOSTETTER

Steve Hostetter

 

Manager

/s/ JAMES R. MOORE

James R. Moore

 

Executive Vice President, General Counsel and Secretary (Principal Executive Officer)

/s/ JOHN R. HESKETT

John R. Heskett

 

Vice President, Planning and Treasurer (Principal Financial and Accounting Officer)

Table of Contents

        Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Salt Lake City, State of Utah, on the 25th day of March, 2011.

    HUNTSMAN INTERNATIONAL FINANCIAL LLC

 

 

By:

 

/s/ PETER R. HUNTSMAN

Peter R. Huntsman
President, Chief Executive Officer and Manager

        Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 25th day of March 2011:

Name
 
Capacities

 

 

 

 

 
/s/ JON M. HUNTSMAN

Jon M. Huntsman
  Executive Chairman of the Board of Managers
and Manager

/s/ PETER R. HUNTSMAN

Peter R. Huntsman

 

President, Chief Executive Officer and
Manager (Principal Executive Officer)

/s/ J. KIMO ESPLIN

J. Kimo Esplin

 

Executive Vice President and Chief Financial
Officer (Principal Financial Officer)

/s/ L. RUSSELL HEALY

L. Russell Healy

 

Vice President and Controller (Principal
Accounting Officer)

Table of Contents

        Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Salt Lake City, State of Utah, on the 25th day of March, 2011.

    HUNTSMAN INTERNATIONAL FUELS LLC

 

 

By:

 

/s/ ANTHONY P. HANKINS

Anthony P. Hankins
President and Manager

        Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 25th day of March 2011:

Name
 
Capacities

 

 

 

 

 
/s/ ANTHONY P. HANKINS

Anthony P. Hankins
  President and Manager (Principal Executive
Officer)

/s/ STEVE HOSTETTER

Steve Hostetter

 

Manager

/s/ J. KIMO ESPLIN

J. Kimo Esplin

 

Executive Vice President and Chief Financial
Officer (Principal Financial and Accounting Officer)

Table of Contents

        Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Salt Lake City, State of Utah, on the 25th day of March, 2011.

    HUNTSMAN INTERNATIONAL TRADING CORPORATION

 

 

By:

 

/s/ PETER R. HUNTSMAN

Peter R. Huntsman
President, Chief Executive Officer and Director

        Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 25th day of March 2011:

Name
 
Capacities

 

 

 

 

 
/s/ JON M. HUNTSMAN

Jon M. Huntsman
  Executive Chairman of the Board of Directors
and Director

/s/ PETER R. HUNTSMAN

Peter R. Huntsman

 

President, Chief Executive Officer and Director
(Principal Executive Officer)

/s/ J. KIMO ESPLIN

J. Kimo Esplin

 

Executive Vice President and Chief Financial
Officer (Principal Financial and Accounting Officer)

Table of Contents

        Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Salt Lake City, State of Utah, on the 25th day of March, 2011.

    HUNTSMAN MA INVESTMENT CORPORATION

 

 

By:

 

/s/ PETER R. HUNTSMAN

Peter R. Huntsman
President, Chief Executive Officer and Director

        Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 25th day of March 2011:

Name
 
Capacities

 

 

 

 

 
/s/ JON M. HUNTSMAN

Jon M. Huntsman
  Executive Chairman of the Board of Directors
and Director

/s/ PETER R. HUNTSMAN

Peter R. Huntsman

 

President, Chief Executive Officer and Director
(Principal Executive Officer)

/s/ J. KIMO ESPLIN

J. Kimo Esplin

 

Executive Vice President and Chief Financial
Officer (Principal Financial and Accounting Officer)

Table of Contents

        Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Salt Lake City, State of Utah, on the 25th day of March, 2011.

    HUNTSMAN MA SERVICES CORPORATION

 

 

By:

 

/s/ PETER R. HUNTSMAN

Peter R. Huntsman
President, Chief Executive Officer and Director

        Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 25th day of March 2011:

Name
 
Capacities

 

 

 

 

 
/s/ JON M. HUNTSMAN

Jon M. Huntsman
  Executive Chairman of the Board of Directors
and Director

/s/ PETER R. HUNTSMAN

Peter R. Huntsman

 

President, Chief Executive Officer and Director
(Principal Executive Officer)

/s/ J. KIMO ESPLIN

J. Kimo Esplin

 

Executive Vice President and Chief Financial
Officer (Principal Financial and Accounting Officer)

Table of Contents

        Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Salt Lake City, State of Utah, on the 25th day of March, 2011.

    HUNTSMAN PETROCHEMICAL LLC

 

 

By:

 

/s/ PETER R. HUNTSMAN

Peter R. Huntsman
President, Chief Executive Officer and Manager

        Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 25th day of March 2011:

Name
 
Capacities

 

 

 

 

 
/s/ JON M. HUNTSMAN

Jon M. Huntsman
  Executive Chairman of the Board of Managers
and Manager

/s/ PETER R. HUNTSMAN

Peter R. Huntsman

 

President, Chief Executive Officer and
Manager (Principal Executive Officer)

/s/ J. KIMO ESPLIN

J. Kimo Esplin

 

Executive Vice President and Chief Financial
Officer (Principal Financial Officer)

/s/ L. RUSSELL HEALY

L. Russell Healy

 

Vice President and Controller (Principal
Accounting Officer)

        Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Salt Lake City, State of Utah, on the 25th day of March, 2011.

    HUNTSMAN PETROCHEMICAL
PURCHASING CORPORATION

 

 

By:

 

/s/ PETER R. HUNTSMAN

Peter R. Huntsman
President, Chief Executive Officer and Director

        Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 25th day of March 2011:

Name
 
Capacities

 

 

 
/s/ JON M. HUNTSMAN

Jon M. Huntsman
  Executive Chairman of the Board of Directors and Director

/s/ PETER R. HUNTSMAN

Peter R. Huntsman

 

President, Chief Executive Officer and Director (Principal Executive Officer)

/s/ J. KIMO ESPLIN

J. Kimo Esplin

 

Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

        Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Salt Lake City, State of Utah, on the 25th day of March, 2011.

    HUNTSMAN PROCUREMENT CORPORATION

 

 

By:

 

/s/ PETER R. HUNTSMAN

Peter R. Huntsman
President, Chief Executive Officer and Director

        Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 25th day of March 2011:

Name
 
Capacities

 

 

 
/s/ JON M. HUNTSMAN

Jon M. Huntsman
  Executive Chairman of the Board of Directors and Director

/s/ PETER R. HUNTSMAN

Peter R. Huntsman

 

President, Chief Executive Officer and Director (Principal Executive Officer)

/s/ J. KIMO ESPLIN

J. Kimo Esplin

 

Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

        Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Salt Lake City, State of Utah, on the 25th day of March, 2011.

    HUNTSMAN PROPYLENE OXIDE LLC

 

 

By:

 

/s/ PETER R. HUNTSMAN

Peter R. Huntsman
President and Chief Executive Officer

        Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 25th day of March 2011:

Name
 
Capacities

 

 

 
/s/ PETER R. HUNTSMAN

Peter R. Huntsman
  President and Chief Executive Officer (Principal Executive Officer)

/s/ J. KIMO ESPLIN

J. Kimo Esplin

 

Executive Vice President and Chief Financial Officer (Principal Financial Officer)

/s/ ANTHONY P. HANKINS

Anthony P. Hankins

 

Division President, Polyurethanes and Manager

/s/ STEVE HOSTETTER

Steve Hostetter

 

Manager

/s/ L. RUSSELL HEALY

L. Russell Healy

 

Vice President and Controller (Principal Accounting Officer)

        Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Salt Lake City, State of Utah, on the 25th day of March, 2011.

    HUNTSMAN PURCHASING, LTD.

 

 

By:

 

HUNTSMAN PROCUREMENT
CORPORATION, its General Partner

 

 

By:

 

/s/ PETER R. HUNTSMAN

Peter R. Huntsman
President, Chief Executive Officer and Director

        Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 25th day of March 2011:

Name
 
Capacities

 

 

 
/s/ JON M. HUNTSMAN

Jon M. Huntsman
  Executive Chairman of the Board of Directors and Director of General Partner

/s/ PETER R. HUNTSMAN

Peter R. Huntsman

 

President, Chief Executive Officer and Director of General Partner (Principal Executive Officer)

/s/ J. KIMO ESPLIN

J. Kimo Esplin

 

Executive Vice President and Chief Financial Officer of General Partner (Principal Financial and Accounting Officer)

        Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Salt Lake City, State of Utah, on the 25th day of March, 2011.

    POLYMER MATERIALS INC.

 

 

By:

 

/s/ PETER R. HUNTSMAN

Peter R. Huntsman
President, Chief Executive Officer and Director

        Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 25th day of March 2011:

Name
 
Capacities

 

 

 
/s/ JON M. HUNTSMAN

Jon M. Huntsman
  Executive Chairman of the Board of Directors and Director

/s/ PETER R. HUNTSMAN

Peter R. Huntsman

 

President, Chief Executive Officer and Director (Principal Executive Officer)

/s/ J. KIMO ESPLIN

J. Kimo Esplin

 

Executive Vice President, Chief Financial Officer and Director (Principal Financial Officer)

/s/ JAMES R. MOORE

James R. Moore

 

Executive Vice President, General Counsel, Secretary and Director

/s/ L. RUSSELL HEALY

L. Russell Healy

 

Vice President and Controller (Principal Accounting Officer)

        Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Salt Lake City, State of Utah, on the 25th day of March, 2011.

    TIOXIDE AMERICAS LLC

 

 

By:

 

/s/ PETER R. HUNTSMAN

Peter R. Huntsman
President, Chief Executive Officer and Director

        Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 25th day of March 2011:

Name
 
Capacities

 

 

 
/s/ PETER R. HUNTSMAN

Peter R. Huntsman
  President, Chief Executive Officer and Director (Principal Executive Officer)

/s/ J. KIMO ESPLIN

J. Kimo Esplin

 

Director

/s/ L. RUSSELL HEALY

L. Russell Healy

 

Vice President, Controller and Manager (Principal Financial Officer and Principal Accounting Officer)

        Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Salt Lake City, State of Utah, on the 25th day of March, 2011.

    TIOXIDE GROUP

 

 

By:

 

/s/ PETER R. HUNTSMAN

Peter R. Huntsman
Director

        Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 25th day of March 2011:

Name
 
Capacities

 

 

 
/s/ PETER R. HUNTSMAN

Peter R. Huntsman
  Director (Principal Executive Officer)

/s/ J. KIMO ESPLIN

J. Kimo Esplin

 

Director

/s/ THOMAS G. FISHER

Thomas G. Fisher

 

Director

/s/ MICHAEL C. DIXON

Michael C. Dixon

 

The Controller and Director (Principal Financial and Accounting Officer)

/s/ L. RUSSELL HEALY

L. Russell Healy

 

Director

Table of Contents


EXHIBIT INDEX

Number   Description
  3.1   Certificate of Formation of Huntsman International LLC (incorporated by reference to Exhibit 3.1 to our registration statement on Form S-4 (File No. 333-167611))

 

3.2

 

Limited Liability Company Agreement of Huntsman International LLC dated November 5, 2008 LLC (incorporated by reference to Exhibit 3.2 to our registration statement on Form S-4 (File No. 333-167611))

 

3.3

 

Articles of Incorporation of Airstar Corporation (incorporated by reference to Exhibit 3.9 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.4

 

Bylaws of Airstar Corporation (incorporated by reference to Exhibit 3.10 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.5

 

Certificate of Formation of Huntsman Advanced Materials Americas LLC (incorporated by reference to Exhibit 3.5 to our registration statement on Form S-4 (File No. 333-167611))

 

3.6

 

Limited Liability Company Agreement of Huntsman Advanced Materials Americas LLC (incorporated by reference to Exhibit 3.6 to our registration statement on Form S-4 (File No. 333-167611))

 

3.7

 

Certificate of Formation of Volcano Holdco 2 LLC (now known as Huntsman Advanced Materials LLC) (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-4 of Huntsman Advanced Materials LLC (File No. 333-115344))

 

3.8

 

Certificate of Amendment to Certificate of Formation of Volcano Holdco 2 LLC (now known as Huntsman Advanced Materials LLC (incorporated by reference to Exhibit 3.2 to the Registration Statement on Form S-4 of Huntsman Advanced Materials LLC (File No. 333-115344))

 

3.9

 

Certificate of Amendment to Certificate of Formation of Huntsman Advanced Materials LLC (incorporated by reference to Exhibit 3.14 to our Registration Statement on Form S-4 (File No. 333-142207))

 

3.10

 

Third Amended and Restated Limited Liability Company Agreement of Huntsman Advanced Materials LLC (incorporated by reference to Exhibit 3.13 to our registration statement on Form S-4 (File No. 333-142207))

 

3.11

 

Articles of Incorporation of Huntsman Australia, Inc. (incorporated by reference to Exhibit 3.11 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.12

 

Bylaws of Huntsman Australia, Inc. (incorporated by reference to Exhibit 3.12 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.13

 

Articles of Incorporation of Huntsman Chemical Purchasing Corporation (incorporated by reference to Exhibit 3.19 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.14

 

Bylaws of Huntsman Chemical Purchasing Corporation (incorporated by reference to Exhibit 3.20 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

E-1


Table of Contents

Number   Description
  3.15   Articles of Restatement of the Articles of Incorporation of Huntsman Centennial Corporation (including the Amended and Restated Articles of Incorporation of Huntsman Enterprises, Inc.) (incorporated by reference to Exhibit 3.21 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.16

 

Bylaws of Huntsman Centennial Corporation (now known as Huntsman Enterprises, Inc.) (incorporated by reference to Exhibit 3.22 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.17

 

Certificate of Formation of Huntsman Ethyleneamines LLC (incorporated by reference to Exhibit 3.17 to our registration statement on Form S-4 (File No. 333-167611))

 

3.18

 

Limited Liability Company Agreement of Huntsman Ethyleneamines LLC (incorporated by reference to Exhibit 3.18 to our registration statement on Form S-4 (File No. 333-167611))

 

3.19

 

Certificate of Formation of Huntsman Fuels LLC (incorporated by reference to Exhibit 3.19 to our registration statement on Form S-4 (File No. 333-167611))

 

3.20

 

Limited Liability Company Agreement of Huntsman Fuels LLC (incorporated by reference to Exhibit 3.20 to our registration statement on Form S-4 (File No. 333-167611))

 

3.21

 

Certificate of Formation of Huntsman International Financial LLC (incorporated by reference to Exhibit 3.3 to our registration statement on Form S-4 (File No. 333-85141))

 

3.22

 

Certificate of Amendment to Certificate of Formation of Huntsman International Financial LLC (incorporated by reference to Exhibit 3.10 to our annual report on Form 10-K for the year ended December 31, 2000)

 

3.23

 

Limited Liability Company Agreement of Huntsman International Financial LLC dated June 18, 1999, as amended by the First Amendment dated June 19, 1999 (incorporated by reference to Exhibit 3.4 to our registration statement on Form S-4 (File No. 333-85141))

 

3.24

 

Certificate of Formation of Huntsman International Fuels LLC (incorporated by reference to Exhibit 3.24 to our registration statement on Form S-4 (File No. 333-167611))

 

3.25

 

Limited Liability Company Agreement of Huntsman International Fuels LLC (incorporated by reference to Exhibit 3.25 to our registration statement on Form S-4 (File No. 333-167611))

 

3.26

 

Certificate of Incorporation of Huntsman International Trading Corporation (incorporated by reference to Exhibit 3.46 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.27

 

Bylaws of Huntsman International Trading Corporation (incorporated by reference to Exhibit 3.47 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.28

 

Articles of Incorporation of Huntsman Ethylene Corporation (now known as Huntsman MA Investment Corporation) (incorporated by reference to Exhibit 3.48 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.29

 

Articles of Amendment to the Articles of Incorporation of Huntsman Ethylene Corporation (now known as Huntsman MA Investment Corporation) (incorporated by reference to Exhibit 3.49 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

E-2


Table of Contents

Number   Description
  3.30   Bylaws of Huntsman Ethylene Corporation (now known as Huntsman MA Investment Corporation) (incorporated by reference to Exhibit 3.50 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.31

 

Articles of Incorporation of Huntsman MA Services Corporation (incorporated by reference to Exhibit 3.51 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.32

 

Bylaws of Huntsman MA Services Corporation (incorporated by reference to Exhibit 3.52 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.33

 

Certificate of Formation of Huntsman Petrochemical LLC (incorporated by reference to Exhibit 3.33 to our registration statement on Form S-4 (File No. 333-167611))

 

3.34

 

Limited Liability Company Agreement of Huntsman Petrochemical LLC (incorporated by reference to Exhibit 3.34 to our registration statement on Form S-4 (File No. 333-167611))

 

3.35

 

Articles of Incorporation of Huntsman Petrochemical Purchasing Corporation (incorporated by reference to Exhibit 3.61 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.36

 

Bylaws of Huntsman Petrochemical Purchasing Corporation (incorporated by reference to Exhibit 3.62 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.37

 

Articles of Incorporation of Huntsman Procurement Corporation (incorporated by reference to Exhibit 3.68 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.38

 

Bylaws of Huntsman Procurement Corporation (incorporated by reference to Exhibit 3.69 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.39

 

Certificate of Formation of Huntsman Propylene Oxide LLC (incorporated by reference to Exhibit 3.39 to our registration statement on Form S-4 (File No. 333-167611))

 

3.40

 

Limited Liability Company Agreement of Huntsman Propylene Oxide LLC (incorporated by reference to Exhibit 3.40 to our registration statement on Form S-4 (File No. 333-167611))

 

3.41

 

Certificate of Limited Partnership of Huntsman Purchasing, Ltd. (incorporated by reference to Exhibit 3.70 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.42

 

Amended Certificate of Limited Partnership of Huntsman Purchasing, Ltd. (incorporated by reference to Exhibit 3.71 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.43

 

Amended Agreement of Limited Partnership of Huntsman Purchasing, Ltd., dated January 1, 1999 (incorporated by reference to Exhibit 3.72 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.44

 

First Amendment to Amended Agreement of Limited Partnership of Huntsman Purchasing, Ltd., dated January 1, 2000 (incorporated by reference to Exhibit 3.73 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.45

 

Articles of Incorporation of Polymer Materials, Inc. (incorporated by reference to Exhibit 3.87 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

E-3


Table of Contents

Number   Description
  3.46   Bylaws of Polymer Materials, Inc. (incorporated by reference to Exhibit 3.88 to the Registration Statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

3.47

*

Amended and Restated Memorandum and Articles of Association of Tioxide Americas LLC

 

3.48

 

Memorandum of Association of Tioxide Group (incorporated by reference to Exhibit 3.5 to our registration statement on Form S-4 (File No. 333-85141))

 

3.49

 

Articles of Association of Tioxide Group (incorporated by reference to Exhibit 3.6 to our registration statement on Form S-4 (File No. 333-85141))

 

4.1

 

Indenture, dated as of December 17, 2004, among Huntsman International LLC, as Issuer, the Guarantors named therein and Wells Fargo Bank, National Association, as Trustee, relating to the 73/8% Senior Subordinated Notes due 2015 and the 71/2% Senior Subordinated Notes due 2015 (incorporated by reference to Exhibit 4.1 to our current report on Form 8-K filed on December 23, 2004)

 

4.2

 

Form of Restricted 73/8% Senior Subordinated Note denominated in dollars due 2015 (included as Exhibit A-1 to Exhibit 4.1)

 

4.3

 

Form of Restricted 71/2% Senior Subordinated Note denominated in euros due 2015 (included as Exhibit A-2 to Exhibit 4.1)

 

4.4

 

Form of Unrestricted 73/8% Senior Subordinated Note denominated in dollars due 2015 (included as Exhibit A-3 to Exhibit 4.1)

 

4.5

 

Form of Unrestricted 71/2% Senior Subordinated Note denominated in euros due 2015 (included as Exhibit A-4 to Exhibit 4.1)

 

4.6

 

Form of Guarantee (included as Exhibit E to Exhibit 4.1)

 

4.7

 

Registration Rights Agreement dated as of February 10, 2005, by and among the Company and the stockholders signatory thereto (incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed on February 16, 2005)

 

4.8

 

Form of stock certificate of Huntsman Corporation (incorporated by reference to Exhibit 4.68 to amendment No. 3 to our registration statement on Form S-1 (File No. 333-120749)

 

4.9

 

Supplemental Indenture dated August 16, 2005 to Indenture dated as December 17, 2004 by and among Huntsman International LLC, the guarantors named therein, and Wells Fargo Bank, National Association (as successor by consolidation to Wells Fargo Bank Minnesota, National Association), as trustee, relating to Huntsman International LLC's dollar denominated 73/8% Senior Subordinated Notes due 2015 and euro denominated 71/2% Senior Subordinated Notes due 2015 (incorporated by reference to Exhibit 4.4 to our current report on Form 8-K filed on August 22, 2005)

 

4.10

 

Form of Restricted Stock Agreement for Outside Directors, effective for grants prior to February 6, 2008 (incorporated by reference to Exhibit 4.7 to our registration statement on Form S-8 (File No. 333-131729)

 

4.11

 

Form of Restricted Stock Unit Agreement for Outside Directors, effective for grants prior to February 6, 2008 (incorporated by reference to Exhibit 4.8 of our registration statement on Form S-8 (File No. 333-131729)

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Table of Contents

Number   Description
  4.12   Indenture, dated as of November 13, 2006, among Huntsman International LLC, as Issuer, the Guarantors party thereto, and Wells Fargo Bank, National Association, as Trustee, relating to the $200,000,000 77/8% Senior Subordinated Notes due 2014 and the €400,000,000 67/8% Senior Subordinated Notes due 2013 (incorporated by reference to Exhibit 4.1 to our quarterly report on Form 10-Q for the quarter ended September 30, 2006)

 

4.13

 

Form of Restricted 67/8% Senior Subordinated Note denominated in euros due 2013 (included as Exhibit A-2 to Exhibit 4.12)

 

4.14

 

Form of Unrestricted 67/8% Senior Subordinated Note denominated in euros due 2013 (included as Exhibit A-4 to Exhibit 4.12)

 

4.15

 

Form of Restricted Stock Agreement for Outside Directors (incorporated by reference to Exhibit 4.31 to our annual report on Form 10-K for the year ended December 31, 2007)

 

4.16

 

Form of Restricted Stock Unit Agreement for Outside Directors, effective for grants from February 6, 2008 to September 21, 2010 (incorporated by reference to Exhibit 4.32 to our annual report on Form 10-K for the year ended December 31, 2007)

 

4.17

 

Indenture, dated as of July 6, 2009, by and among Huntsman International LLC, the subsidiary guarantors named therein and Wilmington Trust FSB, a federal savings bank, as trustee (incorporated by reference to Exhibit 4.1 to our current report on Form 8-K filed on July 8, 2009)

 

4.18

 

Form of 51/2% Senior Note due 2016 (incorporated by reference to Exhibit 4.2 to our current report on Form 8-K filed on July 8, 2009)

 

4.19

 

Form of Guarantee (incorporated by reference to Exhibit 4.3 to our current report on Form 8-K filed on July 8, 2009)

 

4.20

 

Amended and Restated Indenture, dated as of September 10, 2009, by and among Huntsman International LLC, the subsidiary guarantors named therein and Wilmington Trust FSB, a federal savings bank, as trustee (incorporated by reference to Exhibit 4.1 to our current report on Form 8-K filed on September 14, 2009)

 

4.21

 

Indenture, dated as of March 17, 2010, by and among Huntsman International LLC, the subsidiary guarantors therein and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to our current report on Form 8-K filed on March 19, 2010)

 

4.22

 

Form of 85/8% Senior Subordinated Note (incorporated by reference to Exhibit 4.2 to our current report on Form 8-K filed on March 19, 2010)

 

4.23

 

Form of Guarantee (incorporated by reference to Exhibit 4.3 to our current report on Form 8-K filed on March 19, 2010)

 

4.24

 

Indenture, dated as of September 24, 2010, by and among Huntsman International LLC, the subsidiary guarantors named therein and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to our current report on Form 8-K filed on September 30, 2010)

 

4.25

 

Form of 85/8% Senior Subordinated Note (included as Exhibit A to Exhibit 4.24) (incorporated by reference to Exhibit 4.2 to our current report on Form 8-K filed on September 30, 2010)

 

4.26

 

Form of Guarantee (included as Exhibit E to Exhibit 4.24) (incorporated by reference to Exhibit 4.3 to our current report on Form 8-K filed on September 30, 2010)

E-5


Table of Contents

Number   Description
  5.1 ** Opinion and consent of Stoel Rives LLP as to the legality of the notes to be issued by Huntsman International LLC, and the guarantees to be issued by Airstar Corporation, Huntsman Advanced Materials Americas LLC, Huntsman Advanced Materials LLC, Huntsman Australia Inc., Huntsman Chemical Purchasing Corporation, Huntsman Enterprises, Inc., Huntsman International Financial LLC, Huntsman International Trading Corporation, Huntsman MA Investment Corporation, Huntsman MA Services Corporation, Huntsman Petrochemical LLC, Huntsman Petrochemical Purchasing Corporation, Huntsman Procurement Corporation, Huntsman Purchasing Ltd. and Polymer Materials Inc. in the exchange offer

 

5.2

**

Opinion and consent of Vinson & Elkins L.L.P. as to the legality of the guarantees to be issued by Huntsman Ethyleneamines LLC, Huntsman Fuels LLC., Huntsman International Fuels LLC and Huntsman Propylene Oxide LLC in the exchange offer

 

5.3

**

Opinion and consent of Walkers, Cayman Islands as to the legality of the guarantees to be issued by Tioxide Americas LLC in the exchange offer

 

5.4

**

Opinion and consent of Dickinson Dees LLP as to the legality of the guarantees to be issued by Tioxide Group in the exchange offer

 

10.1

 

Aircraft Dry Lease, dated as of September 14, 2001, between Jstar Corporation and Airstar Corporation (incorporated by reference to Exhibit 10.10 to amendment No. 1 to the registration statement on Form S-4 of Huntsman LLC (File No. 333-112279))

 

10.2

 

Employment Agreement with Anthony Hankins (incorporated by reference to Exhibit 10.27 to amendment No. 2 to our registration statement on Form S-1 (File No. 333-120749))

 

10.3

 

Huntsman Corporation Stock Incentive Plan (incorporated by reference to Exhibit 10.19 to amendment No. 4 to our registration statement on Form S-1 (File No. 333-120749))

 

10.4

 

Form of Nonqualified Stock Option Agreement, effective for grants prior to February 21, 2011 (incorporated by reference to Exhibit 10.20 to amendment No. 4 to our registration statement on Form S-1 (File No. 333-120749))

 

10.5

 

Form of Restricted Stock Agreement, effective for grants prior to February 6, 2008 (incorporated by reference to Exhibit 10.21 to amendment No. 4 to our registration statement on Form S-1 (File No. 333-120749))

 

10.6

 

Form of Stock Appreciation Rights Agreement (incorporated by reference to Exhibit 10.22 to amendment No. 4 to our registration statement on Form S-1 (File No. 333-120749))

 

10.7

 

Form of Phantom Share Agreement, effective for grants prior to February 6, 2008 (incorporated by reference to Exhibit 10.23 to amendment No. 4 to our registration statement on Form S-1 (File No. 333-120749))

 

10.8

 

Form of Executive Severance Plan (as amended and restated) (incorporated by reference to Exhibit 10.24 to amendment No. 4 to our registration statement on Form S-1 (File No. 333-120749))

 

10.9

 

Form of Indemnification Agreement (incorporated by reference to Exhibit 10.25 to amendment No. 4 to our registration statement on Form S-1 (File No. 333-120749))

 

10.10

 

Credit Agreement dated August 16, 2005 among Huntsman International LLC, Deutsche Bank AG New York Branch as Administrative Agent and the other financial institutions named therein (incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed August 22, 2005)

E-6


Table of Contents

Number   Description
  10.11   Form of Non-qualified Stock Option Agreement for Outside Directors (incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed November 8, 2005)

 

10.12

 

Consent and First Amendment to Credit Agreement dated December 20, 2005 among the Company, Deutsche Bank AG New York Branch as Administrative Agent and the other financial institutions named therein (incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed December 27, 2005)

 

10.13

 

Amended and Restated Huntsman Supplemental Executive Retirement Plan (incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed December 30, 2005)

 

10.14

 

Huntsman Supplemental Executive MPP Plan (incorporated by reference to Exhibit 10.2 to our current report on Form 8-K filed December 30, 2005)

 

10.15

 

Amended and Restated Huntsman Supplemental Savings Plan (incorporated by reference to Exhibit 10.3 to our current report on Form 8-K filed December 30, 2005)

 

10.16

 

Huntsman Outside Directors Elective Deferral Plan (incorporated by reference to Exhibit 10.4 to our current report on Form 8-K filed December 30, 2005)

 

10.17

 

Consent and Second Amendment to Credit Agreement and Amendment to Security Documents, dated June 30, 2006, by and among Huntsman International LLC, as Borrower, Deutsche Bank AG New York Branch, as Administrative Agent and Collateral Agent, and the other financial institutions party thereto (incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed on July 7, 2006)

 

10.18

 

Third Amendment to Credit Agreement dated April 19, 2007 by and among Huntsman International LLC, as Borrower, Deutsche Bank AG New York Branch, as Administrative Agent and Collateral Agent, and the other financial institutions party thereto (incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed on April 23, 2007)

 

10.19

 

First Amendment to Huntsman Supplemental Executive Retirement Plan (incorporated by reference to Exhibit 10.32 to our annual report on Form 10-K for the year ended December 31, 2007)

 

10.20

 

First Amendment to Huntsman Supplemental Executive MPP Plan (incorporated by reference to Exhibit 10.33 to our annual report on Form 10-K for the year ended December 31, 2007)

 

10.21

 

First Amendment to Huntsman Supplemental Savings Plan (incorporated by reference to Exhibit 10.34 to our annual report on Form 10-K for the year ended December 31, 2007)

 

10.22

 

Second Amendment to Huntsman Supplemental Savings Plan (incorporated by reference to Exhibit 10.35 to our annual report on Form 10-K for the year ended December 31, 2007)

 

10.23

 

First Amendment to Huntsman Outside Directors Elective Deferral Plan (incorporated by reference to Exhibit 10.36 to our annual report on Form 10-K for the year ended December 31, 2007)

 

10.24

 

Form of Restricted Stock Agreement effective for grants from February 6, 2008 to September 21, 2010 (incorporated by reference to Exhibit 10.37 to our annual report on Form 10-K for the year ended December 31, 2007)

 

10.25

 

Form of Phantom Share Agreement effective for grants from February 6, 2008 to February 23, 2010 (incorporated by reference to Exhibit 10.38 to our annual report on Form 10-K for the year ended December 31, 2007)

E-7


Table of Contents

Number   Description
  10.26   Letter Agreement, dated June 15, 2009, among Huntsman Polyurethanes (UK) Ltd. and Paul G. Hulme (incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed on June 17, 2009)

 

10.27

 

Fourth Amendment to Credit Agreement, dated as of June 22, 2009, by and among Huntsman International LLC and Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc. (incorporated by reference to Exhibit 10.3 to our current report on Form 8-K filed on June 23, 2009)

 

10.28

 

Form of Registration Rights Agreement dated as of June 23, 2009, by and among Huntsman International LLC, the subsidiary guarantors party thereto and Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc. (incorporated by reference to Exhibit 10.4 to our current report on Form 8-K filed on June 23, 2009)

 

10.29

 

Voting Agreement, dated as of June 22, 2009, by and among Huntsman International LLC, Deutsche Bank AG New York Branch and Credit Suisse, Cayman Islands Branch (incorporated by reference to Exhibit 10.5 to our current report on Form 8-K filed on June 23, 2009)

 

10.30

 

U.S. Receivables Loan Agreement dated as of October 16, 2009 among Huntsman Receivables Finance II LLC, Huntsman (Europe) BVBA, the several entities party thereto as lenders, the several financial institutions party thereto as funding agents, the several commercial paper conduits party thereto as conduit lenders, the several financial institutions party thereto as committed lenders, Wachovia Bank National Association, as administrative agent, and Wachovia Bank National Association, as collateral Agent (incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed on October 22, 2009)

 

10.31

 

U.S. Contribution Agreement dated as of October 16, 2009 between Huntsman International LLC and Huntsman Receivables Finance II LLC (incorporated by reference to Exhibit 10.2 to our current report on Form 8-K filed on October 22, 2009)

 

10.32

 

European Receivables Loan Agreement dated as of October 16, 2009 between Huntsman Receivables Finance LLC, Huntsman (Europe) BVBA, the several entities party thereto as lenders, the several financial institutions party thereto as funding agents, Barclays Bank Plc, as administrative agent, and Barclays Bank Plc, as collateral agent (incorporated by reference to Exhibit 10.3 to our current report on Form 8-K filed on October 22, 2009)

 

10.33

 

European Contribution Agreement dated as of October 16, 2009 between Huntsman International LLC and Huntsman Receivables Finance LLC (incorporated by reference to Exhibit 10.4 to our current report on Form 8-K filed on October 22, 2009)

 

10.34

 

Fifth Amendment to Credit Agreement, dated as of March 9, 2010, by and among Huntsman International LLC, JPMorgan Chase Bank, N.A. and the other financial institutions party thereto (incorporated by reference to Exhibit 10.1 to our quarterly report on Form 10-Q for the quarter ended March 31, 2010)

 

10.35

 

Registration Rights Agreement, dated as of March 17, 2010, by and among Huntsman International LLC, the subsidiary guarantors named therein and Goldman, Sachs & Co., J.P. Morgan Securities Inc., Barclays Capital Inc., Banc of America Securities LLC, Citigroup Global Markets Inc. and Credit Suisse Securities (USA) LLC (incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed on March 19, 2010)

E-8


Table of Contents

Number   Description
  10.36   Registration Rights Agreement, dated as of September 24, 2010, by and among Huntsman International LLC, the subsidiary guarantors named therein and Goldman, Sachs & Co., J.P. Morgan Securities LLC, Barclays Capital Inc., Banc of America Securities LLC, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC and HSBC Securities (USA) Inc. (incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed on September 30, 2010)

 

10.37

 

Certain exhibits and schedules to Exhibit A to the Fifth Amendment to Credit Agreement, dated as of March 9, 2010, which was previously filed as Exhibit 10.1 to our quarterly report on Form 10-Q filed May 7, 2010 (incorporated by reference to Exhibit 10.2 to our quarterly report on Form 10-Q for the quarter ended September 30, 2010)

 

10.38

 

Registration Rights Agreement, dated as of November 12, 2010, by and among Huntsman International LLC, the subsidiary guarantors named therein and Citigroup Global Markets Inc. (incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed on November 15, 2010)

 

10.39

 

Second Amendment to Huntsman Supplemental Executive Retirement Plan (incorporated by reference to Exhibit 10.38 to our annual report on Form 10-K for the year ended December 31, 2010)

 

10.40

 

Third Amendment to Huntsman Supplemental Executive Retirement Plan (incorporated by reference to Exhibit 10.39 to our annual report on Form 10-K for the year ended December 31, 2010)

 

10.41

 

Form of Restricted Stock Agreement (incorporated by reference to Exhibit 10.40 to our annual report on Form 10-K for the year ended December 31, 2010)

 

10.42

 

Form of Phantom Share Agreement (incorporated by reference to Exhibit 10.41 to our annual report on Form 10-K for the year ended December 31, 2010)

 

10.43

 

Form of Nonqualified Stock Option Agreement (incorporated by reference to Exhibit 10.42 to our annual report on Form 10-K for the year ended December 31, 2010)

 

10.44

 

Form of Restricted Stock Unit Agreement for Outside Directors (incorporated by reference to Exhibit 10.43 to our annual report on Form 10-K for the year ended December 31, 2010)

 

10.45

 

Sixth Amendment, dated as of March 7, 2011, to the Credit Agreement, dated as of August 16, 2005, among Huntsman International LLC, the lenders from time to time party thereto, and JPMorgan Chase Bank,  N.A., as administrative agent (incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed on March 9, 2011)

 

12.1

*

Statement re Computation of Ratio of Earnings to Fixed Charges

 

21.1

 

Subsidiaries of Huntsman International LLC (incorporated by reference to Exhibit 21.1 to our annual report on Form 10-K for the year ended December 31, 2010)

 

23.1

*

Consent of Deloitte & Touche LLP

 

23.2

**

Consent of Stoel Rives LLP (included in Exhibit 5.1)

 

23.3

**

Consent of Vinson & Elkins L.L.P. (included in Exhibit 5.2)

 

23.4

**

Consent of Walkers, Cayman Islands (included in Exhibit 5.3)

E-9


Table of Contents

Number   Description
  23.5 ** Consent of Dickinson Dees LLP (included in Exhibit 5.4)

 

25.1

*

Form T-1 Statement of Eligibility of Wells Fargo Bank, N.A. to act as Trustee under the Indenture

 

99.1

**

Form of Letter of Transmittal for the notes

 

99.2

**

Letter to Brokers for the notes

 

99.3

**

Letter to Clients for the notes

 

99.4

**

Notice of Guaranteed Delivery for the notes

*
Filed herewith.

**
To be filed by amendment.

E-10