EX-12 11 c81157exv12.htm EXHIBIT 12 Filed by Bowne Pure Compliance
Exhibit 12
SOLUTIA INC.
COMPUTATION OF THE RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in Millions)
                                                 
    Successor     Predecessor  
    Ten Months     Two Months     Twelve Months     Twelve Months     Twelve Months     Twelve Months  
    Ended     Ended     Ended     Ended     Ended     Ended  
    December 31,     February 29,     December 31,     December 31,     December 31,     December 31,  
    2008     2008     2007     2006     2005     2004  
 
Income (loss) from continuing operations, before income taxes and equity earnings (loss) from affiliates (1)
     (1 )     1,466       (251 )     (80 )     (85 )     (231 )
 
                                                
Add:
                                                
Fixed charges
     141       19       121       85       64       95  
Amortization of capitalized interest
     —       —       2       1       2       4  
Dividends from affiliated companies
     —       —       —       25       —       —  
 
                                                
Less:
                                                
Interest capitalized
     (3 )     (1 )     (5 )     (4 )     (3 )     (3 )
 
                                    
Income as adjusted
     137       1,484       (133 )     27       (22 )     (135 )
 
                                    
 
                                                
Fixed charges
                                                
Interest expensed and capitalized
     135       18       117       81       60       90  
Estimate of interest within rental expense
     6       1       4       4       4       5  
 
                                    
Fixed charges
     141       19       121       85       64       95  
 
                                    
 
                                                
Ratio of Earnings to Fixed Charges (2)
     0.97       78.11       (1.10 )     0.32       (0.34 )     (1.42 )
     
(1)  
Income (loss) from continuing operations includes net restructuring charges and other (gains)/charges of $96 million for the ten months ended December 31, 2008, ($2) million for the two months ended February 29, 2008, $35 million for the year ended December 31, 2007, $5 million for the year ended December 31, 2006, 14 million for the year ended December 31, 2005, and $97 million for the year ended December 31, 2004.
 
(2)  
Earnings for the ten months ended December 31, 2008 and the years ended December 31, 2007, 2006, 2005, and 2004, would have to be $4 million, $254 million, $58 million, $86 million, and $230 million more, respectively, in order to achieve a one-to-one ratio.