Polyurethanes Advanced Materials Huntsman...

1

Huntsman CorporationMerrill LynchChemical ConferenceMarch 2005

Pigments

Polyurethanes

Base Chemicals

Performance Products

Polymers

Advanced Materials

2

Forward Looking Statements

This presentation includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements include statements concerning our plans, objectives, goals, strategies, future events, future revenue or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions, business trends and other information that is not historical information. When used in this presentation, the words “estimates,” “expects,”“anticipates,” “projects,” “plans,” “intends,” “believes,” “forecasts,” or future or conditional verbs, such as “will,” “should,” “could” or “may,”and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements, including, without limitation, management’s examination of historical operating trends and data 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. However, there can be no assurance that management’s expectations, beliefs and projections will be achieved.

There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements contained in this presentation. Important factors that could cause our actual results to differ materially from the forward-looking statements we make in this presentation. Such risks, uncertainties and other important factors include, among others: our history of losses; our substantial leverage; limitations on flexibility in operating our business contained in our debt agreements; we are a holding company with no independent operations; cyclical demand for our products; increases in interest rates as a result of our variable rate indebtedness; pricing pressure from our customers; technological change and innovation; risks associated with our non-U.S. operations; fluctuations in currency exchange rates; high competition in the markets in which we operate; adverse changes to environmental, health and safety regulations; operating hazards in our production facilities; our auditors have reported several material weaknesses in our internal controls; inability to achieve expected cost savings; difficulties in securing the raw materials we use; our ability to realize the full value of our intangible assets; our ability to attract and retain skilled employees, particularly research scientists, technical sales professionals and engineers; our ability to protect our intellectual property rights; and the possibility that our owners’ interests will conflict with ours. There may be other factors that may cause our actual results to differ materially from the forward-looking statements.

All forward-looking statements attributable to us or persons acting on our behalf apply only as of the date of this presentation and are expressly qualified in their entirety by the cautionary statements included in this presentation. We undertake no obligation to update or revise forward-looking statements which may be made to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events.

3

� Company OverviewPeter Huntsman

� Financial OverviewKimo Esplin

Huntsman Corporation

4

Huntsman Growth Story

Huntsman has been a leader in the consolidation of the global chemical industry

Compounded AnnualGrowth Rate: ~24%

Compounded AnnualGrowth Rate: ~24%

$0

$1

$2

$3

$4

$5

$6

$7

$8

$9

$10

$11

$12

19851986198719881989199019911992199319941995199619971998199920002001200220032004

Rev

enue

($ in

Bill

ions

)

Rexene

Packaging Spinoff

Nova Styrenics Sale

Shell PP

American Hoechst

MonsantoMAn/LAB

Texaco Chemical

TexacoPO/MTBE

Dow Ethyleneamines and Rhodia Surfactants

Vantico

ICI

5

A Diversified Chemical Company

Polyurethanes

MDI

TDI

Propylene Oxide

Polyols

Aniline

Nitrobenzene

AdvancedMaterials

Adhesives

Surface Technologies

Structural Composites

Electrical and Electronic Materials

Tooling and Modeling Materials

Pigments

Titanium Dioxide(TiO2)

Polymers

Polyethylene

Polypropylene

APAO

EPS

Base Chemicals

Ethylene

Propylene

Butadiene

Cyclohexane

Paraxylene

MTBE


Surfactants

LAB

Amines

Maleic Anhydride

Ethylene Oxide

Ethylene Glycol

6

Significant Vertical IntegrationPERFORMANCE PRODUCTS

PERFORMANCE CHEMICALS

1 BILLION LBS.

LINEAR ALKYLBENZENE400 MILLION LBS.

ETHYLENE OXIDE1.1 BILLION LBS.

ETHYLENE GLYCOLS875 MILLION LBS.

SURFACTANTS2.8 BILLION LBS.

GLYCOL ETHERS60 MILLION LBS.

BASE CHEMICALS

BUTADIENE1.1 BILLION LBS.

PARAXYLENE750 MILLION LBS.

MTBE29,000 BPD

CYCLOHEXANE1.3 BILLION LBS.

AROMATICS

BENZENETOLUENEXYLENE

HYDROGEN

OLEFINSLBS/YR

ETHYLENE 4.5 BILLION

PROPYLENE 2.3 BILLION

CRUDE BUTADIENE400 MILLION

MALEIC ANHYDRIDE300 MILLION LBS.

1994 –1996 Texaco and Monsanto

Acquisitions

1994 –1996 Texaco and Monsanto

Acquisitions

1997 Rexene Acquisition

1997 Rexene Acquisition

POLYMERS

POLYPROPYLENE1.0 BILLION LBS.

APAO110 MILLION LBS.

LDPE430 MILLION LBS.

OCTENE LLDPE250 MILLION LBS.

EPS/PS340 MILLION LBS.

STYRENE250 MILLION LBS.

SURFACTANTS2.8 BILLION LBS.

AROMATICS


HYDROGEN

OLEFINSLBS/YR

ETHYLENE 4.5 BILLION

PROPYLENE 2.3 BILLION

CRUDE BUTADIENE400 MILLION

1999 ICI Acquisitions, 2001 AandWSurfactants

1999 ICI Acquisitions, 2001 AandWSurfactants

PIGMENTS

TITANIUM DIOXIDE591 KT

WATER TREATMENT CHEMICALS

POLYURETHANES

POLYOLS300 MILLION LBS.

TDI90 MILLION LBS.

POLYURETHANE SYSTEMS

500 MILLION LBS.

PROPYLENE OXIDE525 MILLION LBS.

MDI1.5 BILLION LBS.

ANILINE1.3 BILLION LBS.

NITRO BENZENE1.8 BILLION LBS.

PROPYLENE GLYCOLS

130 MILLION LBS.

TPU50 MILLION LBS.

2003 Vantico Acquisition

2003 Vantico Acquisition

Advanced Materials

EPOXY FORMULATIONS

LIQUID EPOXY RESINS

275 MILLION LBS.

N-Butane

N-Paraffin

Purchased CrudeButadiene

C4s

Purchased bisphenol-AEpichlorohydorin

PERFORMANCE PRODUCTS

AMINES960 MM Lbs.

LINEAR ALKYLBENZENE

400 MM Lbs.

ETHYLENE OXIDE1.1 Bn Lbs.

ETHYLENE GLYCOLS945 MM Lbs.

SURFACTANTS2.75 Bn Lbs.

BASE CHEMICALS

BUTADIENE1.1 Bn Lbs.

PARAXYLENE800 MM Lbs.

CYCLOHEXANE1.4 Bn. Lbs

AROMATICS


HYDROGEN

OLEFINS ETHYLENE:

4.5 BnPROPYLENE:

2.4 Bn

MALEIC ANHYDRIDE365 MM LBS.

POLYMERS

POLYPROPYLENE1.0 Bn Lbs.

APAO95 MM Lbs.

LDPE430 MM Lbs.

OCTENE LLDPE270 MM Lbs.

EPS250 MM Lbs.

STYRENE250 MM Lbs.

PIGMENTS

TITANIUM DIOXIDE550 KT

WATER TREATMENT CHEMICALS

POLYURETHANES

POLYOLS300 MM Lbs.

TDI90 MM Lbs.

POLYURETHANE SYSTEMS

PROPYLENE OXIDE525 MM Lbs.

MDI1.5 Bn Lbs.

ANILINE1.4 Bn Lbs.

NITROBENZENE1.8 Bn Lbs.

PROPYLENE GLYCOLS

145 MM Lbs.

TPU50 MM Lbs.

ADVANCED MATERIALS

EPOXY FORMULATIONS

LIQUID EPOXY RESINS

Natural GasNatural Gas Liquids (NGLS)NapthasFractionation

MTBE420 MM Gallons

7

Financial Snapshot

Non-petrochemical commodity

Commodity

Differentiated

2004 Revenue(1): $11.5 billion 2004 Adjusted EBITDA(2): $1.2 billion

Polyurethanes25%

Base Chemicals

26%

Polymers13%

Pigments9%

Advanced Materials

10%


17%

Polyurethanes32%

Base Chemicals

23%

Polymers7%

Pigments8%

Advanced Materials

15%Performance

Products15%

(1) Percentage allocations in the segment revenues chart reflect the allocation of all intersegment revenue eliminations in our Base Chemicals segment.

(2) Adjusted EBITDA excludes restructuring and plant closing costs, loss on the sale of accounts receivables and other unusual items; segment allocation is before corporate and other unallocated items, for a reconciliation of Adjusted EBTIDA to net income/(loss) see the appendix at the end of this presentation.

Huntsman is one of the largest publicly traded chemical companies in the US

8

North America42%

Europe36%

ROW22%

North America52%

Europe38%

ROW10%

Huntsman’s Profile Similar to Dow

(1) Source: Wall Street ResearchNote: PF EBIT before unallocated corporate charges

10 Y

ear

Ave

rage

Seg

men

t P

rofit

abili

ty

Geo

grap

hic

Dis

trib

utio

n

Performance ProductsAdvanced Materials

PolyurethanesPerformance

Plastics

Agricultural Sciences

Performance Chemicals

66%DifferentiatedBusinesses




Average 1995 – 2004 PF EBIT Average 1995 – 2004 PF EBIT (1)

2004 Sales 2004 Sales

9

Leading Market Positions

#4 in EuropeParaxylene

#2 in North America, #2 in EuropeCyclohexane#4 GloballyOctene LLDPE#2 in North AmericaExpandable Polystyrene#2 GloballyAPAO#4 Globally, #1 in EuropeTitanium Dioxide#3 in North AmericaEthylene Oxide#3 in North America, #3 in EuropeEthoxylated Surfactants#2 in North AmericaLinear Alkylbenzene (LAB)#2 in North AmericaEthanolamines#2 in EuropeSulfonated Surfactants#2 GloballyEthyleneamines#2 Globally, #1 in North AmericaMaleic Anhydride (MAn)#1 GloballyEthylene and Propylene Carbonates#1 GloballyMorpholines/DGA and Gas Treating#1 GloballyPolyetheramines#1 GloballyElectrical Insulating Materials#1 GloballyAerospace Composites#1 GloballyEpoxy Powder Coating Systems#1 GloballyAraldite® Adhesive#3 in North AmericaPropylene Oxide (PO)#2 GloballyPolyurethane Catalysts#2 Globally, #1 in North AmericaMDI

Product Market Position(1)

Polyurethanes

Advanced Materials

PerformanceProducts

Pigments

Polymers

Base Chemicals

(1) Source: Nexant, CMAI, IBMA and Company Estimates

10

Extensive Global Reach

PolyurethanesAdvanced Materials

Pigments

Base Chemicals and PolymersPerformance Products

Manufacturing Facilities

11

$0

$100

$200

$300

$400

$500

0 5 10 15 20 25Cumulative Capacity (MT/Year)

$ / M

T of

Eth

ylen

e

Base Chemicals2004 Revenue: $3.0 Billion; 23% of 2004 Adjusted EBITDA

Ethylene30%

Propylene14%

Cyclohexane14%

Butadiene7%

Benzene6%

Paraxylene7%

Other22%

U.S. Ethylene Cash Margin and Utilization Rate

0

4

8

12

16

20

24

1990199119921993199419951996199719981999200020012002200320042005E

75%

80%

85%

90%

95%

100%

Cash Margin (Cents / Lb) Utilization Rate

Cas

h M

argi

n (C

ents

/ Lb

)

Utilization R

ate

$17mm1.7 Bn LbsBenzene

$8mm800 MM LbsParaxylene

1.1 Bn Lbs

1.4 Bn Lbs

2.4 Bn Lbs

4.5 Bn Lbs

Capacity

$11mm

$14mm

$24mm

$45mm

Potential Upside(1)Product

Butadiene

Cyclohexane

Propylene

Ethylene

73% Flexible Capacity for Ethylene

(1) 1 cent / lb leverage

Huntsman European Competitive Position

Source: CMAI

Source: Nexant 2003

Eth

ylen

e ($

/ M

T)

Capacity & Operating LeverageProducts

12

$800

$850

$900

$950

$1,000

$1,050

$1,100

$1,150

0 1 2 3 4 5

Cumulative Capacity in MT

2002

Cas

h C

ost $

/ MT

Source: Nexant 2002 and Company estimates

Polymers2004 Revenue: $1.5 Billion; 7% of 2004 Adjusted EBITDA

N.A. LDPE Cash Margin

ProductsOlefins

14%

Polyethylene23%

APAO3%

EPS11%

Polypropylene34%

Styrenics15%

Polyethylene and Polypropylene Margins

15

25

35

Rel

ativ

e M

argi

n (C

ents

/ Lb

)

Huntsman Industry

Polypropylene

1st Quartile Margin

Polyethylene

2nd Quartile MarginSource: Townsend Associates 2002-2003

0

3

6

9

12

15

1990199119921993199419951996199719981999200020012002200320042005E2006E

Cash Margin (Cents / Lb)

Cas

h M

argi

n (C

ents

/ Lb

)

Source: CMAI

W.E. LDPE Cost Curve

2002

Cas

h C

ost (

$ / M

T)

Proposed Wilton PlantProposed

Wilton Plant

13

$1,000

$1,500

$2,000

$2,500

199119921993199419951996199719981999200020012002200320042005E2006E2007E

US

Pri

ce ($

/ M

T)

75%

79%

83%

87%

91%

95%

99%

Global O

perating Rate

US Price ($/MT) Global Operating Rate

Pigments2004 Revenue: $1.0 Billion; 8% of 2004 Adjusted EBITDA

End Markets

Global Market Participants

Coatings59%

Plastics31%

Inks 6%

Others3%

Paper 1%

Lyondell14%Huntsman

12%

Kronos11%

Other29%

DuPont23%

KerrMcGee

12%

TiO2 U.S. Price and Global Utilization Rate

Source: CMAI and Wall Street Research Source: IBMA 2003#1 in Europe

14

Performance Products2004 Revenue: $1.9 Billion; 15% of 2004 Adjusted EBITDA

Revenue Split by Business Units Performance Specialties End MarketsMaleic & Licensing

6%

Performance Specialties

33%

Other5%

Chemical Intermediates

17%

Solvents4%

Construction6%

Metal, Mining & Oilfield 7%

Fuels & Lubes7%

Agrochemical14%

Epoxy Curatives 13%

Paper & Water 9%

Emulsion Polymers

4%

PU Foams7%

Ceramics & Electronics 3%

Gas Treating 4%

HuntsmanBase

ChemicalsEO

Performance Specialties

Ethanolamines

Surfactants

Ethylene Glycol

Linear Alkyl BenzeneBenzene

Ethylene

External Sales via Pipeline

Performance Intermediates Value Chain

Performance Intermediates

61%

15

Amine Chemistry Huntsman BASF DOW AKZO

Air Products

Ethyleneamines

Akylalkanolamines

Polyetheramines

Sub. Propylamines

Morpholine / DGA

Alkylamines

Ethanolamines

Performance ProductsStrong Specialty Position

Polyetheramines Growth

10

20

30

40

50

60

70

80

90

199319941995199619971998199920002001200220032004

Mill

ion

Lbs

CAGR = 12.2%CAGR = 12.2%

Source: Company Estimates

Maleic Anhydride NA Cost Position

Performance Specialties Competitive Landscape

0 60 121 182 244 305 366 425 486 547

Total Cumulative Capacity (MM Lbs)

Cas

h C

ost

Average

88% 95% 107% 110%

Source: Company Estimates and Nexant

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�

�

�

�

�

�

�

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Competitor

A

Competitor

B

Competitor

C

16

Advanced Materials2004 Revenue: $1.2 Billion; 15% of 2004 Adjusted EBITDA

CoatingsTooling andModeling Materials

ElectricalInsulation Materials

AdhesivesElectronics StructuralComposites

Base Resins CoatingsTooling andModeling Materials

ElectricalInsulation Materials

AdhesivesElectronics StructuralComposites

Base Resins

Business Overview

RPP

Commodity The Epoxy Resin Value Chain Specialty

Base Raw Material Commodity Intermediates Production Formulations

Chlorine

Propylene

Phenol

Acetone

Epichlorohydrin

Liquid Epoxy Resins

Multi-functional resins; cross-linking agents;

matting and curing agents; reactive diluentsBis-Phenol A

17

Advanced MaterialsProducts and End Markets

Base Resins19%

Adhesives12%

Coatings22%

Electronics5%

Structural Composites

20%

Tooling & Modeling Materials

9%

Electrical Insulation Materials

14%

Revenue Split - Product Mix Adhesives: A Track Record for Growth

50

75

100

125

150

2001 2002 2003 2004

Sal

es ($

in m

illio

ns) CAGR = 14%CAGR = 14%

Annual Global Wind Power Development

PredictionOffshore (Forecast)ForecastExisting capacity

0

7,000

14,000

21,000

28,000


MW

Source: BTM Consult ApS - March 2004

1990 2003 2008 2013





0

7,000

14,000

21,000

28,000

0

7,000

14,000

21,000

28,000



MW


1990 2003 2008 2013





0

7,000

14,000

21,000

28,000


MW


1990 2003 2008 2013





0

7,000

14,000

21,000

28,000

0

7,000

14,000

21,000

28,000



MW


1990 2003 2008 2013



18

Polyurethanes2004 Revenue: $2.9 Billion; 32% of 2004 Adjusted EBITDA

End Markets

Global MDI Market Share

Source: Nexant 2004

Huntsman24%

Bayer24%

Others16%

Dow16%

BASF20%

Automotive10%

Appliances9%

Adhesives & Coatings

7%Furniture

7%

Others31%

CWP7%

Construction24%

Footwear & Elastomers

5%

19

PolyurethanesFocus is on the Highest Growth MDI Segment

Global MDI DemandGlobal Polyurethanes Demand by Product

TDI3.1 bn lbs

Polyols9.9 bn lbs

PO11.3 bn lbs

3% 4% 5% 6% 7% 8% 9%Volume Growth Rate % (1996 – 2003)

MDI6.6 bn lbs

More Attractive

Less Attractive

Note: Size of bubble represents 2003 Global VolumeSource: Source: Nexant; Market Size & Pricing Index based on Internal MDI ASP

2% 3% 4% 5% 6% 7% 8% 9%

More Attractive

Less Attractive

PO11.3 Bn Lbs.

MDI6.6 Bn Lbs.

100

40

50

60

70

80

90

60

70

80

90

110

AS

P In

dex

(200

3)

100

0

500

1,000

1,500

2,000

2,500

3,000

3,500

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

Thou

sand

s of

Met

ric

Tons

US W. Europe Asia ROW

CAGR = 7.4%CAGR = 7.4%

Polyols9.9 Bn Lbs.

TDI3.1 Bn Lbs.

Source: Nexant 2004

The “Right” Mix in Urethanes

0% 20% 40% 60% 80% 100%

Lyondell

Bayer

BASF

Dow

Huntsman

MDI TDI Polyols PONote: Bayer has fixed captive PO supply through take or pay purchase agreements with LyondellSource: Nexant 2003

Global MDI Cash Cost Curve

Source: Nexant 2003 and company estimates with regard to the proposed China plant.

Proposed China Plant

Proposed China PlantC

ost I

ndex

Total Nameplate Capacity (MM Lbs)

0 1,000 2,0000 3,000 4,000 5,000 6,0000.0

0.2

0.8

1.0

0.60.4

1.2

1.8

2.0

1.61.4

20

Current Capacity

'05 - '06 Additions

2007 Capacity

Geismar, Louisiana 860 130 990 15%Rozenburg, Netherlands 660 220 880 33%Caojing, China - 265 265 N/A

Total 1,520 615 2,135 40%

2004E Global MDI Demand(1) 6.8 Bn lbs

Total Estimated Industry MDI Capacity(2) 6.9 Bn lbs= 98% Global Capacity Utilization

PolyurethanesGlobal MDI Production

Pounds in Millions % Change

(1) Nexant 2005(2) Company estimate

Growing at 7-8% per annum (‘04E growth at 11%)

21

* Fixed Currency Basis 2002

$1,300

$1,500

$1,700

$1,900

$2,100

$2,300

2002 2H ’04 Run-Rate Objective for 2005

$ in

Mill

ions

$200

Track Record of Cost Reduction

$500

$600

$700

$800

1999 2000 2001 2002

$ in

Mill

ion

s

23% Overall Decrease 1999 – 2002

North America Cost Reduction (‘99 –’02)North America Cost Reduction (‘99 –’02)

� Eliminated 800+ full-time and 300 contract positions

� Closed Odessa, TX styrene (330 million lbs) and polypropylene (65 million lbs) facilities

� Consolidated Austin, TX R&D

� Eliminated 800+ full-time and 300 contract positions

� Closed Odessa, TX styrene (330 million lbs) and polypropylene (65 million lbs) facilities

� Consolidated Austin, TX R&D

Project Coronado 2002 – 2005 Project Coronado 2002 – 2005

� Over $200mm in annual cash costs to be eliminated by beginning of 2006

� Approximately 50% complete� Closure / consolidation of manufacturing,

technical and administration sites

� Over $200mm in annual cash costs to be eliminated by beginning of 2006

� Approximately 50% complete� Closure / consolidation of manufacturing,

technical and administration sites

3% p.a. Inflation

Huntsman Corporation Cash Fixed CostsHuntsman LLC (North America) Cash Fixed Costs

22

� Company OverviewPeter Huntsman

� Financial OverviewKimo Esplin

Huntsman CorporationKimo EsplinEVP and Chief Financial Officer

23

Financial Strategy

� Pay down $2 billion of debt with free cash flow

� Maintain approximately $1 billion of liquidity

� Evaluate common dividend when leverage targets achieved

� Simplify financial and legal structure

24

Financial Performance

$8,012

$9,252

$11,486

$4,500

$6,000

$7,500

$9,000

$10,500

$12,000

($ in Millions)

Annual Revenue Annual Adjusted EBITDA (1)

$794 $792

$1,240

$0

$300

$600

$900

$1,200

$1,500($ in Millions)

(1) Adjusted EBITDA excludes restructuring and plant closing costs, loss on the sale of accounts receivables and other unusual items(2) Pro forma as if Huntsman had acquired the remaining interest in HIH as of January 1, 2002 and 2003 and its interest in Advanced Materials as of January 1, 2002 and 2003

Quarterly Revenue Quarterly Adjusted EBITDA (1)

$178$222 $223

$288$327

$402

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

$500

Q3 '03 Q4 '03 Q1 '04 Q2 '04 Q3 '04 Q4 '04

$2,302 $2,370

$2,639$2,772

$2,947$3,128

$1,500

$2,000

$2,500

$3,000

$3,500

Q3 '03 Q4 '03 Q1 '04 Q2 '04 Q3 '04 Q4 '04

($ in Millions) ($ in Millions)

PF(2) 2002 PF(2) 2003 2004 PF(2) 2002 2004PF(2) 2003

25

Capital Investments Will Be Focused

$0

$100

$200

$300

$400

$500

$600

$700

$800

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005E

Advanced Materials Plants in India and

China

EO / EG Modernization / Rozenberg MDI

Expansion

Odessa Modernization and Expansion

Geismar MDI Expansion

Greatham TiO2Expansion

TiO2 SAP

NA SAP

Chinese MDI JV UK LDPE

(1) Includes Maintenance, EH&S and capital required to sustain competitive position

Note: Pro forma capital expenditures

($ in Millions)

European Aromatics Upgrade

Estimated Sustenance

Level of CapEx1 = $200

million

26

$0

$500

$1,000

$1,500

$2,000

$2,500

Commodity Cycle Upside

(1) Polymers, Base Chemicals, Pigments(2) CMAI Ethylene incremental (’95 vs. ’88/’89) cpp x Huntsman Capacity

Coronado Cost Savings

‘88-’89 Additional Ethylene Margin vs.

1995 (2)

1995 PF vs. 2004

Commodity EBITDA (1)

Adjusted EBITDA

($ in Millions)

2004 Adjusted EBITDA

2004 Adjusted EBITDA

27

Significant Deleveraging

Pro Forma Net Debt and Interest Reduction

$4,855

$6,048$424

$613

$2,000

$4,000

$6,000

$8,000

Net

Deb

t ($

in M

illio

ns)

$0

$150

$300

$450

$600

$750

Interest E

xpen

se ($ in

Millio

ns)

31%20%

$3.1 billion in gross deferred tax

assets

$3.1 billion in gross deferred tax

assets

Tax Assets

Year ended 2004 2004

(1) Annualized run-rate beginning 2Q05 given current debt levels and market interest rates(2) Amounts reflect as adjusted after giving effect to the application of the net proceeds from the initial public offering

Actual ActualAs Adjusted(2) PF(1)

28

IPO Sources and Uses

35Available Cash

312Gross Selling Shareholder Proceeds(13.6 million shares)

$1,916Total Sources

288Convertible Preferred Proceeds (5.8 million shares)

$1,281Gross Primary IPO Proceeds (55.6 million shares)

312Gross Selling Shareholder Proceeds

42Repay Loan Due Affiliate

$1,916Total Uses

8811

Fees and ExpensesCash

41Collateral Deposit for Convertible Preferred Dividends

178

114

Redeem 11 5/8 % HLLC Sr. Secured Notes due 2010

Redeem HLLC Sr. Notes due 2012

539Redeem 13 3/8 % HIH Notes due 2009$591Redeem 15% HMP Notes due 2008

($ in millions)

Sources Uses

29

Capitalization as of December 31, 2004

As of December 31, 2004

Cumulative Multiple of Adj.

EBITDA

Actual As Adjusted(1) 2004

Cash & Cash Equivalents $252 $227 Debt

Senior Secured Credit Facilities 2,154 2,154 1.7x Secured Notes 800 642 2.3 Unsecured Notes 856 754 2.9 Subordinated Notes 1,402 1,402 4.0 Discount Notes 958 — — Other Debt 130 130 4.1

Total Debt $6,300 $5,082 4.1x Total Net Debt $6,048 $4,855 3.9x

Note: 2004 Adjusted EBITDA of $1,240 million(1) Amounts reflect as adjusted after giving effect to the application of the net proceeds from the initial public offering

30

Huntsman CorporationQuestions and Answers

Pigments

Polyurethanes

Base Chemicals


Polymers

Advanced Materials

31

Appendix

32

Adjusted EBITDA Reconciliation

$ in millionsQ3 '03 Q4 '03 Q1 '04 Q2 '04 Q3 '04 Q4 '04

Net (loss) / income (91)$ (106)$ (85)$ (186)$ 44$ (1)$ Interest expense - net 139 148 160 145 155 153 Income tax expense / (benefit) 2 35 5 6 (36) (3) Depreciation and amortization 117 123 128 152 131 127

EBITDA 167 200 208 116 293 275 Early extinguishment of debt - - 2 3 (2) 24 Legal and contract settlement expense, net - 2 1 16 (11) 1 Loss on sale of accounts receivable 3 9 4 3 4 5 Asset write down 3 - - - - - Restructuring and plant closing costs 5 11 9 151 43 97

Adjusted EBITDA 178$ 222$ 223$ 288$ 327$ 402$

Pro Forma(1) Pro Forma(1)

2002 2003 2004

Net (loss) (167)$ (426)$ (228)$ Interest expense - net 544 578 613 Income tax (benefit) / expense (10) 32 (29) Depreciation and amortization 488 480 537

EBITDA 854 664 893 Cumulative effect of accounting change (167) - - Early extinguishment of debt 7 - 26 Legal and contract settlement expense, net (9) 8 7 Loss on sale of accounts receivable 6 32 16 Asset impairment, write down 56 6 - Restructuring and plant closing costs 7 55 299 Reorganization costs 41 28 -

Adjusted EBITDA 794$ 792$ 1,240$

(1) Pro forma as if Huntsman had acquired the remaining interest in HIH as of January 1, 2002 and 2003 and its interest in Advanced Materials as of January 1, 2002 and 2003

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