Highlights
* Net sales increased to $1,095 million from $911 million over the
same period last year
-- Strong international growth continues to positively impact
results
* Adjusted EBITDA increased to $118 million from $84 million over
the same period last year, in spite of over $100 million of
increased raw materials and energy costs
* Adjusted EPS of $.28 for second quarter 2008
* Increasing Adjusted EBITDA guidance for the year to $400M - $425M
Note: Reconciliation tables below for adjustments made to GAAP
ST. LOUIS, July 28, 2008 (PRIME NEWSWIRE) -- Solutia Inc. (NYSE:SOA) today reported net sales of $1,095 million for the second quarter of 2008, a 20% increase over net sales of $911 million for the same period in 2007. Approximately 8% of this increase is attributable to the consolidation of Flexsys sales beginning on May 1, 2007, following Solutia's acquisition of the remaining 50% share of its former joint venture. On a pro forma basis, adjusting 2007 second quarter sales to include Flexsys, sales increased 14% over the prior year.
Solutia had a consolidated loss of $16 million for the second quarter 2008 compared to income from continuing operations of $27 million for the same period in 2007. Solutia's results were impacted by certain events affecting comparability totaling an after-tax loss of $33 million in 2008 and an after-tax gain of $10 million in 2007. After consideration of these special items in both periods, income held steady at $17 million in the second quarter of 2008 or $.28 per share, despite increased depreciation and amortization expense, higher interest cost and higher stock compensation expense.
"We are pleased to report solid second quarter growth, driven by strong volumes and price increases across our businesses," said Jeffry N. Quinn, chairman, president and chief executive officer of Solutia Inc. "Importantly, even though the escalation of raw materials accelerated in the second quarter compared to the first, our focused pricing actions and strong market positions allowed us to recover a significant percentage of this cost increase. We also continued to benefit from our geographically diverse business, as international growth -- particularly in China -- more than offset softening domestic markets."
Quinn added, "In addition to producing strong results during the second quarter, we announced two important strategic developments which will have the potential to further enhance our transformation to a high-margin pure play specialty chemical company. We retained HSBC to review strategic alternatives for the Nylon business, and laid the foundation for a key longer-term growth opportunity by establishing our Saflex Photovoltaic business."
Consolidated Results
The table below is provided to assist the reader with comparability between the second quarter 2008 and the second quarter 2007 by providing consolidated and segment sales, EBITDA(1) and Adjusted EBITDA (3).
------------------------------------------------------------------
Three Months Ended June 30
From Continuing Adjust- 2008 As
Operations (in millions) 2008 ments(2) Adjusted
------------------------------------------------------------------
Net Sales
Saflex 220 220
CPFilms 71 71
Technical Specialties 275 275
Integrated Nylon 518 518
Corporate/Other 11 11
------------------------------------
Total 1,095 1,095
====================================
EBITDA(1)
Saflex 19 24 43
CPFilms 16 6 22
Technical Specialties 39 19 58
Integrated Nylon (1) 5 4
Corporate/Other (6) (3) (9)
------------------------------------
Total 67 51 118
====================================
----------------------------------------------------------------------
Three Months Ended June 30
From Continuing 2007
Operations Adjust- 2007 As 2007 Adjusted %
(in millions) 2007 ments(2) Adjusted Flexsys Pro forma change
----------------------------------------------------------------------
Net Sales
Saflex 189 189 189 16%
CPFilms 66 66 66 8%
Technical
Specialties 157 157 50 207 33%
Integrated Nylon 489 489 489 6%
Corporate/Other 10 10 10 10%
---------------------------------------------------
Total 911 911 50 961 14%
===================================================
EBITDA(1)
Saflex 31 31 31 39%
CPFilms 20 20 20 10%
Technical
Specialties 20 2 22 13 35 66%
Integrated Nylon 38 (7) 31 31 -89%
Corporate/Other 1 (21) (20) (4) (24) 63%
---------------------------------------------------
Total 110 (26) 84 9 93 27%
===================================================
(1) EBITDA is defined as earning before interest expense, income
taxes, depreciation and amortization and reorganization items,
net
(2) Adjustments include unusual charges and (gains) and non-cash
stock compensation expense
(3) Adjusted EBITDA is EBITDA (as defined above), excluding unusual
charges, (gains) and non-cash stock compensation expense
Reported consolidated EBITDA for the second quarter decreased to $67 million from $110 million in 2007. After taking into consideration events affecting comparability and non-cash stock compensation expense (as detailed below in the summary of events affecting comparability) of net charges totaling $51 million and net gains totaling $26 million for 2008 and 2007, respectively, Adjusted EBITDA increased to $118 million from $84 million. On a pro forma basis, including Flexsys results for April 2007 on a 100% basis, Adjusted EBITDA in the second quarter 2008 increased $25 million from $93 million over the prior year.
The most significant adjustment in the current quarter was a negative margin impact from the selling of inventory that was fair valued at the time of emergence as required by fresh start accounting. This impact was a non-cash charge of $49 million.
Segment Data
Saflex Segment
Saflex's second quarter 2008 net sales were $220 million, up $31 million or 16% from the same period of 2007.
EBITDA decreased $12 million to $19 million for the second quarter of 2008 compared to the prior year period. EBITDA for this business was adversely affected by a non-cash charge of $24 million associated with the fresh start accounting step-up in basis of inventory. Excluding this charge, Adjusted EBITDA increased by $12 million, or 39% primarily due to stronger revenues and improved manufacturing performance in comparison to the prior year.
CPFilms Segment
CPFilms' second quarter 2008 net sales were $71 million, up $5 million or 8% from the same period in 2007.
EBITDA decreased $4 million to $16 million for the second quarter of 2008, compared to the prior year period. Excluding a $6 million non-cash charge associated with the fresh start accounting step-up in basis of the segment's inventory, EBITDA increased by $2 million, or 10% primarily driven by strong international volume growth.
Technical Specialties Segment
Technical Specialties' net sales for second quarter 2008 of $275 million increased by $118 million compared to 2007. Including Flexsys results for April 2007, pro forma sales improved $68 million or 33% over the prior year.
EBITDA increased $19 million to $39 million during the second quarter 2008 compared to the prior year period. Including Flexsys results for April 2007 on a 100% basis and excluding events affecting comparability, pro forma Adjusted EBITDA increased $23 million, primarily due to stronger revenues and improved product mix versus the prior year. Events that impacted comparability include a $13 million non-cash charge associated with the fresh start accounting step-up in basis of the segment's inventory and $6 million of costs associated with the expected closure of the Company's Ruabon manufacturing facility in 2008 (as previously announced); and a $2 million charge associated with the step-up in basis of Flexsys' inventory in 2007.
Integrated Nylon Segment
Integrated Nylon net sales for the second quarter 2008 of $518 million increased $29 million or 6% compared to 2007.
Integrated Nylon EBITDA decreased $39 million to a $1 million loss during the second quarter 2008 compared to the prior year period. This segment was also impacted by fresh start accounting related to step-up in inventory basis in the amount of $5 million for 2008 and a $7 million gain from sale of land in Alvin, Texas in the second quarter of 2007. Excluding these unusual items, the $27 million decrease in year-over-year Adjusted EBITDA is primarily attributable to higher raw material and energy costs that were not fully recovered by selling prices.
Unallocated and Other
After taking into consideration unusual charges and gains and decreases in equity earnings as a result of the Flexsys acquisition, corporate and other expenses were down $15 million compared to the second quarter 2007 predominantly due to lower adjustments to the Company's LIFO inventory valuation allowance.
Cash Flow
Cash from operations before reorganization activities for six months ended June 2008 was a usage of $63 million. This included a $204 million increase in inventory and trade accounts receivable, of which approximately 60% is due to escalating raw material and energy costs and the Company's implementation of related price increases. This increase in working capital was partially offset by improved supplier payment terms.
Outlook
The Company is raising its full-year 2008 adjusted EBITDA guidance to a range of $400 million - $425 million from its previous estimate of $375 million - $400 million.
Second Quarter Conference Call
The company will hold a conference call at 9 a.m. Central Time (10 a.m. Eastern Time) on Tuesday, July 29, 2008, during which Solutia executives will elaborate upon the company's second quarter 2008 financial results.
A live webcast of the conference call will be available through the Investors section of www.solutia.com. The phone number for the call is 888-713-4213 (U.S.) or 617-213-4865 (International), and the pass code is 58143606. Participants are encouraged to dial in 10 minutes early, and also may pre-register for the event at https://www.theconferencingservice.com/prereg/key.process?key=PLDXTGRWX. A replay of the event will be available through www.solutia.com for two weeks or by calling 888-286-8010 (U.S.) or 617-801-6888 (International) and entering the pass code 26606279.
Summary of Events Affecting Comparability
Three Three Six Six
Months Months Months Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2008 2007 2008 2007
(dollars in millions) --------------------------------------
Impact on Increase (Decrease):
Cost of Goods Sold(a) 55 2 78 2
Research, Development and
Other Operating Expenses(b) (3) (7) (3) (7)
--------------------------------------
Operating Income (52) 5 (75) 5
Other Income, net(c) 4 21 4 21
Loss on Debt Modification(d) -- -- -- (7)
--------------------------------------
EBITDA $ (48) $ 26 $ (71) $ 19
======================================
(a) In 2008, charges resulting from (i) the step-up in basis of our
inventory in accordance with fresh-start accounting of $49 million
and $74 million in the three and six months ended June 30, 2008,
respectively, (ii) charges of $6 million related to the announced
closure of the Ruabon Facility, (iii) $3 million gain resulting
from settlements of legacy insurance policies with insolvent
insurance carriers in the six months ended June 30, 2008 and (iv)
$1 million of severance and retraining costs in the six months
ended June 30, 2008. In 2007, charge resulting from the step-up
in basis of Flexsys' inventory in accordance with purchase
accounting in both the three and six months ended June 30, 2007.
(b) In 2008 and 2007, surplus land sales resulted in gains of
$3 million and $7 million, respectively.
(c) In 2008 a $4 million gain resulted from the settlement of
emergence related incentive accruals. In 2007, gain resulting from
the settlement of a litigation matter, net of legal expenses.
(d) In 2007, charge to record the write-off of debt issuance costs and
to record the DIP facility modification.
Use of Non-U.S. GAAP Financial Information and Reconciliation to Comparable GAAP Number
For the purpose of this press release, the company has used certain pro forma and other financial measures such as EBITDA (defined as earning before interest expense, income taxes, depreciation and amortization and reorganization items, net) and Adjusted EBITDA (to include EBITDA and exclude gains and losses and non-cash stock compensation expense) that are not determined in accordance with generally accepted accounting principles in the United States (GAAP). The company believes that these non-GAAP financial measures are useful to investors because they facilitate period-to-period comparisons of Solutia's performance and enable investors to assess the company's performance in the way that management and lenders do. Our debt covenants and certain management reporting and incentive plans are measured against certain of these non-GAAP financial measures. Reconciliations of these measures to GAAP measures are included immediately below.
Reconciliation of Adjusted EBITDA to Income (loss) from Continuing
Operations
Succe- Predece- Succe- Predece-
ssor ssor Predece- ssor Combined ssor
Three Three ssor Four Six Six
Months Months Two Months Months Months
Ended Ended Months Ended Ended Ended
June June Ended June June June
(dollars in 30, 30, Feb. 29 30, 30, 30,
millions) 2008 2007 2008 2008 2008 2007
-----------------------------------------------------
Adjusted EBITDA $ 118 $ 84 $ 62 $ 144 $ 206 $ 159
Add:
Income Tax
Expense -- (7) (215) -- (215) (14)
Reversing tax
effect of
reorganization
and unusual
gains/losses (15) (1) 203 (15) 188 (1)
-----------------------------------------------------
Income Tax
Expense (net) (15) (8) (12) (15) (27) (15)
Interest
Expense (48) (31) (21) (66) (87) (59)
Depreciation
and
Amortization (35) (28) (20) (47) (67) (53)
Non-cash Stock
Compensation
Expense (3) -- -- (4) (4) --
-----------------------------------------------------
Income from
Continuing
Operations
before events
affecting
comparability
& reorg 17 17 9 12 21 32
Reorganization
Items(a) -- (17) 1,439 -- 1,439 (33)
Gains &
Losses(b) (33) 27 2 (58) (56) 20
-----------------------------------------------------
Income (Loss)
from Continuing
Operations $ (16) $ 27 $ 1,450 $ (46) $1,404 $ 19
=====================================================
(a) Reorganization items for 2008 were gross $1,642 million for the
six months ended. Reorganization items for 2007 were gross and
net ($17) million and ($33) million for the three and six months
ended, respectively.
(b) Gains and Losses for 2008 were gross ($48) million and ($71)
million for the three and six months ended, respectively. Gains
and Losses for 2007 were gross $26 million and $19 million for
the three and six months ended, respectively.
Adjusted Earnings Per Share - Reconciliation of Non-US GAAP Measure
Three
Months
Ended
June 30,
(in $ millions, except per share data) 2008
---------------------------------------------------------------------
Income from continuing operations before tax ($16)
Non-GAAP Adjustments - Other charges and adjustments(1) 48
---------------------------------------------------------------------
Adjusted earnings from continuing operations before tax 32
Income tax provision on adjusted earnings (15)
---------------------------------------------------------------------
Adjusted earnings for adjusted EPS $17
---------------------------------------------------------------------
Diluted Shares (millions)
---------------------------------------------------------------------
Weighted average shares outstanding 59.81
Assumed conversion of Preferred Shares 0.00
Assumed conversion of Restricted Stock 0.00
Assumed conversion of Stock Options 0.00
---------------------------------------------------------------------
Total Diluted Shares 59.81
---------------------------------------------------------------------
Adjusted EPS 0.28
---------------------------------------------------------------------
(1) See Reconciliation table of Other charges and Adjustments
Reconciliation of Proforma Sales and Adjusted EBITDA Including Flexsys
Proforma Proforma
Proforma Technical Proforma Technical
Solutia Specialties Solutia Specialties
Three Three Six Six
Months Months Months Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2007 2007 2007 2007
---------------------------------------------------------------------
Net Sales $ 911 $ 157 $ 1,613 $ 195
Add:
Flexsys net sales for
the one month ended
April 30, 2007 50 50 214 214
--------------------------------------------
Proforma Net Sales with
Flexsys on 100% basis 961 207 1,827 409
Adjusted EBITDA $ 84 $ 22 $ 159 $ 30
Flexsys EBITDA for the
one month ended
April 30, 2007 13 13 49 49
Back out Equity Income
from Flexsys JV and
other (4) -- (13) --
--------------------------------------------
Proforma Adjusted
EBITDA with Flexsys on
100% basis $ 93 $ 35 $ 195 $ 79
--------------------------------------------
Consolidated and segment sales, EBITDA(1) and Adjusted EBITDA(3) six
months ended June 2008 and 2007
------------------------------------------------------------------
Six Months Ended June 30
From Continuing Adjust- 2008 As
Operations (in millions) 2008 ments(2) Adjusted
------------------------------------------------------------------
Net Sales
Saflex 413 413
CPFilms 133 133
Technical Specialties 527 527
Integrated Nylon 986 986
Corporate/Other 21 21
------------------------------------
Total 2,080 2,080
====================================
EBITDA(1)
Saflex 39 37 76
CPFilms 28 10 38
Technical Specialties 91 26 117
Integrated Nylon (10) 7 (3)
Corporate/Other (17) (5) (22)
------------------------------------
Total 131 75 206
====================================
----------------------------------------------------------------------
Six Months Ended June 30
From Continuing 2007
Operations Adjust- 2007 As 2007 Adjusted %
(in millions) 2007 ments(2) Adjusted Flexsys Pro forma change
----------------------------------------------------------------------
Net Sales
Saflex 358 358 358 15%
CPFilms 125 125 125 6%
Technical
Specialties 195 195 214 409 29%
Integrated Nylon 916 916 916 8%
Corporate/Other 19 19 19 12%
----------------------------------------------------
Total 1,613 1,613 214 1,827 14%
====================================================
EBITDA(1)
Saflex 59 59 59 30%
CPFilms 36 36 36 6%
Technical
Specialties 28 2 30 49 79 48%
Integrated Nylon 66 (7) 59 0 59 -105%
Corporate/Other (11) (14) (25) (13) (38) 42%
----------------------------------------------------
Total 178 (19) 159 36 195 6%
====================================================
(1) EBITDA is defined as earning before interest expense, income
taxes, depreciation and amortization and reorganization items,
net
(2) Adjustments include unusual charges, (gains) and non-cash stock
compensation expense
(3) Adjusted EBITDA is EBITDA (as defined above), excluding unusual
charges, (gains) and non-cash stock compensation expense
SOLUTIA INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars and shares in millions, except per share amounts)
(Unaudited)
Successor Predecessor
--------- -----------
Three Months Three Months
Ended Ended
June 30, June 30,
2008 2007
---- ----
Net Sales $1,095 $911
Cost of goods sold 986 787
--- ---
Gross Profit 109 124
Selling, general and administrative
expenses 80 67
Research, development and other operating
expenses, net 3 3
- -
Operating Income 26 54
Equity earnings from affiliates -- 3
Interest expense(a) (48) (31)
Other income, net 6 25
Loss on debt modification -- --
Reorganization items, net -- (17)
-- ----
Income (Loss) from Continuing Operations
Before Income Tax Expense (16) 34
Income tax expense -- 7
-- -
Income (Loss) from Continuing Operations (16) 27
Income from Discontinued Operations, net
of tax -- 29
-- --
Net Income (Loss) $(16) $56
===== ===
Basic and Diluted Income (Loss) per Share:
Income (Loss) from Continuing Operations $(0.27) $0.26
Income from Discontinued Operations -- 0.28
-- ----
Net Income (Loss) $(0.27) $0.54
======= =====
(a) Excludes Predecessor unrecorded contractual interest expense of $8
in the three months ended June 30, 2007.
SOLUTIA INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars and shares in millions, except per share amounts)
(Unaudited)
Successor Predecessor
--------- -----------
Four Months Two Months Six Months
Ended Ended Ended
June 30, Feb. 29, June 30,
2008 2008 2007
---- ---- ----
Net Sales $1,427 $653 $1,613
Cost of goods sold 1,302 555 1,386
----- --- -----
Gross Profit 125 98 227
Selling, general and
administrative expenses 106 51 125
Research, development and other
operating expenses, net 5 5 11
- - --
Operating Income 14 42 91
Equity earnings from affiliates -- -- 12
Interest expense (a) (66) (21) (59)
Other income, net 6 2 29
Loss on debt modification -- -- (7)
Reorganization items, net -- 1,642 (33)
-- ----- ----
Income (Loss) from Continuing
Operations Before Income Tax
Expense (46) 1,665 33
Income tax expense -- 215 14
-- --- --
Income (Loss) from Continuing
Operations (46) 1,450 19
Income from Discontinued
Operations, net of tax -- -- 29
-- -- --
Net Income (Loss) $(46) $1,450 $48
===== ====== ===
Basic and Diluted Income (Loss)
per Share:
Income (Loss) from Continuing
Operations $(0.77) $13.88 $0.18
Income from Discontinued
Operations -- -- 0.28
-- -- ----
Net Income (Loss) $(0.77) $13.88 $0.46
======= ====== =====
(a) Excludes Predecessor unrecorded contractual interest expense of
$5 in the two months ended February 29, 2008 and $16 in the six
months ended June 30, 2007.
SOLUTIA INC.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(Dollars in millions, except per share amounts)
(Unaudited)
Successor Predecessor
--------- -----------
June 30, December 31,
2008 2007
---- ----
ASSETS
Current Assets:
Cash and cash equivalents $47 $173
Trade receivables, net of allowances of $0 in
2008 and $4 in 2007 508 448
Miscellaneous receivables 117 133
Inventories 798 417
Prepaid expenses and other assets 118 53
Assets of discontinued operations -- 7
-- -
Total Current Assets 1,588 1,231
Property, Plant and Equipment, net of
accumulated depreciation of $34 in 2008 and
$2,699 in 2007 1,472 1,052
Goodwill 524 149
Identified Intangible Assets, net 880 58
Other Assets 259 150
--- ---
Total Assets $4,723 $2,640
====== ======
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts payable $421 $343
Accrued liabilities 302 296
Short-term debt, including current portion of
long-term debt 35 982
Liabilities of discontinued operations -- 6
-- -
Total Current Liabilities 758 1,627
Long-Term Debt 1,768 359
Postretirement Liabilities 448 80
Environmental Remediation Liabilities 296 61
Deferred Tax Liabilities 242 45
Other Liabilities 187 141
Liabilities Subject to Compromise -- 1,922
Commitments and Contingencies (Note 10)
Shareholders' Equity (Deficit):
Successor common stock at $0.01 par value;
(500,000,000 shares authorized, 61,369,996
shares issued and outstanding in 2008) 1 --
Predecessor common stock at $0.01 par value;
(600,000,000 shares authorized, 118,400,635
shares issued and outstanding in 2007) -- 1
Additional contributed capital 1,043 56
Predecessor stock held in treasury, at cost,
13,941,057 shares in 2007 -- (251)
Predecessor net deficiency of assets at
spin-off -- (113)
Accumulated other comprehensive income (loss) 26 (46)
Accumulated deficit (46) (1,242)
---- -------
Total Shareholders' Equity (Deficit) 1,024 (1,595)
----- -------
Total Liabilities and Shareholders' Equity
(Deficit) $4,723 $2,640
====== ======
SOLUTIA INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in millions)
(Unaudited)
Successor Predecessor
--------- -----------
Four Months Two Months Six Months
Ended Ended Ended
June 30, Feb. 29, June 30,
2008 2008 2007
---- ---- ----
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS
OPERATING ACTIVITIES:
Net income (loss) $(46) $1,450 $48
Adjustments to reconcile net
income (loss) to net cash used
in operations:
Income from discontinued
operations, net of tax -- -- (29)
Depreciation and amortization 47 20 53
Revaluation of assets and
liabilities, net of tax -- (1,591) --
Discharge of claims and
liabilities, net of tax -- 100 --
Other reorganization items, net -- 52 32
Pension expense less than
contributions (10) (18) (46)
Other postretirement benefits
expense less than contributions (1) (6) (21)
Amortization of deferred credits (2) (1) (5)
Amortization of deferred debt
issuance costs 6 -- 1
Deferred income taxes (10) 4 2
Equity earnings from affiliates -- -- (12)
Restructuring expenses and
other (gains) charges 72 (2) (11)
Gain on sale of assets (5) -- (7)
Changes in assets and liabilities:
Income taxes payable 8 5 6
Trade receivables (25) (34) (98)
Inventories (79) (66) (21)
Accounts payable 44 41 23
Environmental remediation
liabilities -- (1) (1)
Other assets and liabilities 3 (18) 13
- ---- --
Cash Provided by (Used in)
Continuing Operations before
Reorganization Activities 2 (65) (73)
Reorganization Activities:
Establishment of VEBA retiree
trust -- (175) --
Establishment of restricted cash
for environmental remediation
and other legacy payments -- (46) --
Payment for allowed secured and
administrative claims -- (79) --
Professional service fees (27) (31) (37)
Other reorganization and
emergence related payments -- (17) (4)
-- ---- ---
Cash Used in Reorganization
Activities (27) (348) (41)
---- ----- ----
Cash Used in Operations -
Continuing Operations (25) (413) (114)
Cash Provided by (Used in)
Operations - Discontinued
Operations -- 1 (1)
-- - ---
Cash Used in Operations (25) (412) (115)
---- ----- -----
INVESTING ACTIVITIES:
Property, plant and equipment
purchases (45) (29) (71)
Acquisition and investment
payments (1) -- (115)
Restricted cash -- -- (7)
Investment proceeds and property
disposals 47 -- 13
-- -- --
Cash Provided by (Used in)
Investing Activities-Continuing
Operations 1 (29) (180)
Cash Provided by Investing
Activities-Discontinued
Operations -- -- 54
-- -- --
Cash Provided by (Used in)
Investing Activities 1 (29) (126)
- ---- -----
FINANCING ACTIVITIES:
Net change in lines of credit 23 -- 19
Proceeds from long-term debt
obligations -- 1,600 75
Net change in long-term revolving
credit facilities (8) 190 (53)
Proceeds from stock issuance -- 250 --
Proceeds from short-term debt
obligations -- -- 325
Payment of short-term debt
obligations -- (966) (53)
Payment of long-term debt
obligations (26) (366) --
Payment of debt obligations
subject to compromise -- (221) --
Debt issuance costs (1) (136) (9)
--- ----- ---
Cash Provided by Financing
Activities (12) 351 304
---- --- ---
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (36) (90) 63
CASH AND CASH EQUIVALENTS:
Beginning of period 83 173 150
-- --- ---
End of period $47 $83 $213
=== === ====
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:
Cash payments for interest $48 $43 $60
Cash payments for income taxes 6 4 10
Notes to Editor: Saflex, CPFilms, Flexsys, Crystex, Therminol, Ascend and Vydyne are registered trademarks of Solutia Inc. and/or its subsidiaries.
Important Information Regarding Outlook
There is no guarantee that Solutia will achieve its projected financial expectation for 2008 which is based on management estimates, currently available information and assumptions which management believes to be reasonable. Such forward-looking statements are inherently subject to significant economic, competitive and other uncertainties and contingencies, many of which are beyond the control of management. See "Forward-Looking Statements" below.
Forward Looking Statements
This press release may contain forward-looking statements, which can be identified by the use of words such as "believes," "expects," "may," "will," "intends," "plans," "estimates" or "anticipates," or other comparable terminology, or by discussions of strategy, plans or intentions. These statements are based on management's current expectations and assumptions about the industries in which Solutia operates. Forward-looking statements are not guarantees of future performance and are subject to significant risks and uncertainties that may cause actual results or achievements to be materially different from the future results or achievements expressed or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to, those risk and uncertainties described in Solutia's most recent Annual Report on Form 10-K, including under "Cautionary Statement About Forward Looking Statements" and "Risk Factors", and Solutia's quarterly reports on Form 10-Q. These reports can be accessed through the "Investors" section of Solutia's website at www.solutia.com. Solutia disclaims any intent or obligation to update or revise any forward-looking statements in response to new information, unforeseen events, changed circumstances or any other occurrence.
Corporate Profile
Solutia is a market-leading performance materials and specialty chemicals company. The company focuses on providing solutions for a better life through a range of products, including: Saflex(r) interlayer for laminated glass; CPFilms(r) aftermarket window films sold under the LLumar(r) brand and others; high-performance nylon polymers and fibers sold under brands such as Vydyne(r) and Wear-Dated(r); and technical specialties including the Flexsys(r) family of chemicals for the rubber industry, Skydrol(r) aviation hydraulic fluid and Therminol(r) heat transfer fluid. Solutia's businesses are world leaders in each of their market segments. With its headquarters in St. Louis, Missouri, USA, the company operates globally with approximately 6,000 employees in more than 60 locations. More information is available at www.Solutia.com.
The Solutia Inc. logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=2620