EX-99.1 3 exhibit_99-1.htm EXHIBIT 99.1 exhibit_99-1.htm
 
 
Exhibit 99.1

ITEM 6.  SELECTED FINANCIAL DATA

Financial Summary

(Dollars and shares in millions, except per share amounts)
  
Ten Months Ended
 December 31,
    
Two Months Ended
 February 29,
    
Twelve Months Ended December 31,
  
   
2008
    
2008
    
2007
    
2006
    
2005
    
2004
  
Operating Results:
Net Sales
   $ 1,775     $ 335     $ 1,643     $ 1,064     $ 1,003     $ 941  
Gross Profit
     367       94       383       271       219       168  
As percent of net sales
     21 %     28 %     23 %     25 %     22 %     18 %
Operating Income (Loss)(1)
     115       49       141       69       19       (21 )
As percent of net sales
     6 %     15 %     9 %     6 %     2 %     (2 )%
Income (Loss) from Continuing Operations Before Income Tax Expense
     (2 )     1,464       (252 )     (58 )     (5 )     (244 )
Income (Loss) from Continuing
Operations (2)
     (15 )     1,250       (269 )     (76 )     (14 )     (237 )
Income (Loss) from Discontinued Operations, net of tax
     (648 )     204       64       80       26       (82 )
Cumulative Effect of Change in Accounting Principle, net of tax
     --       --       --       --       (3 )     --  
Net Income attributable to noncontrolling interest
     5       --       3       2       1       1  
Net Income (Loss) attributable to Solutia Inc.
     (668 )     1,454       (208 )     2       8       (320 )
                                                 
Per Share Data:
                                                
Basic and Diluted Earnings (Loss) per Share from Continuing Operations attributable to Solutia Inc. (2)
   $ (0.27 )   $ 11.96     $ (2.60 )   $ (0.75 )   $ (0.14 )   $ (2.28 )
Weighted Average Shares Outstanding -Basic and Diluted
     74.7       104.5       104.5       104.5       104.5       104.5  
Dividends per Share
     --       --       --       --       --       --  
                                                 
Financial Position – Continuing Operations:
                                                
Total Assets
   $ 3,244     $ 3,663     $ 1,832     $ 1,298     $ 1,217     $ 1,247  
Liabilities not Subject to Compromise
     2,903       3,315       2,013       1,350       926       1,019  
Liabilities Subject to Compromise
     --       --       1,922       1,849       2,176       2,187  
Long-Term Debt (3)
     1,359       1,796       359       210       247       285  
Shareholders’ Equity (Deficit)
     529       1,043       (1,589 )     (1,399 )     (1,429 )     (1,419 )
                                                 
Other Data from Continuing Operations:
                                                
Working Capital (4)
   $ 329     $ 492     $ (510 )   $ (393 )   $ (31 )   $ (63 )
Interest Expense (5)
     141       21       134       100       79       108  
Income Tax Expense (Benefit) (6)
     13       214       17       18       9       (7 )
Depreciation and Amortization
     89       11       59       46       40       42  
Capital Expenditures
     84       15       99       55       49       34  
Employees (Year-End)
     3,700       3,700       3,700       2,900       3,400       3,300  


(1) Operating income (loss) includes net restructuring (gains)/charges and other items of $102 million in the ten months ended December 31, 2008 and ($2) million in the two months ended February 29, 2008, $41 million in 2007, ($7) million in 2006, $14 million in 2005, and $32 million in 2004.

(2) Income (loss) from continuing operations includes net restructuring charges and other (gains)/charges of $79 million, or $1.06 per share in the ten months ended December 31, 2008, ($2) million, or ($0.02) per share in the two months ended February 29, 2008, $28 million, or $0.27 per share in 2007, $4 million, or $0.04 per share in 2006, ($37) million, or ($0.35) per share in 2005, and $115 million, or $1.10 per share in 2004.

(3) Long-term debt excludes $659 million as of December 31, 2007 and $668 million as of December 31, 2006, 2005 and 2004 of debt classified as subject to compromise in accordance with Statement of Position 90-7, Financial Reporting by Entities in Reorganization Under the Bankruptcy Code, as a result of our Chapter 11 bankruptcy filing in 2003.

(4) Working capital is defined as total current assets less total current liabilities.

(5) Interest expense includes the recognition of interest on allowed secured claims as approved by the Bankruptcy Court of $8 million in 2007 and the write-off of debt issuance costs of $1 million in the ten months ended December 31, 2008, $6 million in 2006 and $25 million in 2004 due to either the early repayment or early refinancing of the underlying debt facilities.  In addition, interest expense in all periods is affected by interest expense allocated to discontinued operations and in all Predecessor periods for unrecorded contractual interest expense on unsecured debt subject to compromise.

(6) Income tax expense (benefit) includes an increase (decrease) in valuation allowances of $8 million in the ten months ended December 31, 2008, $(259) million in the two months ended February 29, 2008, $82 million in 2007, $35 million in 2006, $18 million in 2005 and $88 million in 2004.

See Management’s Discussion and Analysis of Financial Condition and Results of Operations under Item 7 for more information.