Solutia Reports Third Quarter 2009 Results
More News related to SOA
- Solutia (SOA) To Discontinue Manufacturing at its Plant in Cologne, Germany
- Solutia to Discontinue Production at Cologne, Germany Site
- Solutia to Present at Citi Basic Materials Conference
- Solutia Selected as One of the Top 50 Businesses in St. Louis
- KeyBanc Initiates Coverage on Solutia (SOA) with a Hold; Turnaround Tires Have Heated Up, but a Catalyst Needed
More News related to Press Releases
- Radient Pharmaceuticals (RPC) Announces Direct Offering for $1 Million
- Human Genome (HGSI) Raises Money As It Gears Up for Benlysta Approval
- International Paper (IP) Prices $750M Senior Unsecured Note Offering
- Conolog (CNLG) Registers 635K Shares for Holders
- Arthur J. Gallagher & Co. (AJG) Completes $150M Senior Unsecured Note Private Placement
ST. LOUIS, Oct. 26 /PRNewswire-FirstCall/ --
2009 Third Quarter Highlights
-- Net sales of $448 million, a sequential improvement over second quarter
2009 of 9 percent
-- Basic and diluted earnings per share from continuing operations of
$0.24; Adjusted earnings per share of $0.37
-- Adjusted EBITDA of $119 million, a sequential improvement over second
quarter 2009 of 24 percent and a year-over-year improvement of 7
percent; Adjusted EBITDA margins of 27 percent compared to 19 percent
in the year ago period
-- Increased Adjusted EBITDA guidance to a range of $350 million to $365
million, up from previously stated target of $340 million to $360
million
Note: See reconciliation tables below for adjustments made to GAAP and discussion of items affecting results.
(Logo: http://www.newscom.com/cgi-bin/prnh/20081029/AQW096LOGO)
"Solutia's record quarterly earnings and margins in the third quarter were attributable to an underlying improvement in sales volumes and aggressive cost reduction actions taken early in the global recession," said Jeffry N. Quinn, chairman, president and chief executive officer of Solutia Inc. "We have now raised the full-year range of Adjusted EBITDA outlook to $350 million to $365 million. The high level of commitment of our organization to continue to meet the needs of our customers while aligning our cost structure to current market conditions has yielded strong results. With industry-leading businesses, Solutia is well positioned for profitable growth as global markets continue to recover."
Consolidated Results from Continuing Operations
Solutia Inc. (NYSE: SOA) today reported income from continuing operations attributable to Solutia of $29 million for the third quarter of 2009, compared to $21 million for the same period in 2008. These results were impacted by certain events affecting comparability (detailed below) totaling a net loss of $15 million in 2009. After adjusting for these items, income from continuing operations attributable to Solutia of $44 million in the third quarter of 2009 increased $23 million versus the third quarter of 2008. This improvement was primarily due to cost reductions, lower raw material and energy costs, and lower interest expense, partially offset by weakened demand and lower selling prices. For the quarter, Solutia posted basic and diluted earnings per share from continuing operations attributable to Solutia of $0.24, and, as adjusted, earnings per share of $0.37.
Consolidated EBITDA from continuing operations for the third quarter decreased to $99 million on net sales of $448 million from $108 million in the third quarter of 2008 on net sales of $587 million. After taking into consideration adjustments (as detailed below in the consolidated and segment EBITDA and Adjusted EBITDA table), Adjusted EBITDA increased to $119 million from $111 million.
Segment Data
In order to aid understanding of Solutia's business performance, the results of its business segments are presented on an adjusted basis and reconciled to the comparable GAAP measures in the below tables.
Saflex® Segment
Saflex's third quarter 2009 net sales were $182 million, down $39 million or 18 percent from the same period in 2008. Adjusted EBITDA increased to $47 million for the third quarter of 2009 compared to $36 million in the prior year period primarily due to lower raw material and SG&A costs, and improved manufacturing performance, partially offset by volume declines and lower selling prices. Adjusted EBITDA margins expanded to 26 percent in the third quarter of 2009 in comparison to 16 percent in the same period in 2008. Sales increased $22 million or 14 percent and Adjusted EBITDA increased $8 million or 20 percent compared to the second quarter in 2009. This was primarily due to improved volumes, lower raw material and manufacturing costs and improved manufacturing utilization rates.
CPFilms® Segment
CPFilms' third quarter 2009 net sales were $53 million, down $10 million or 16 percent from the same period in 2008. Adjusted EBITDA decreased to $12 million for the third quarter of 2009 compared to $15 million in the same period in 2008, primarily due to lower window films revenue and lower fixed cost absorption, partially offset by reduced SG&A costs. Adjusted EBITDA margins were at 23 percent for the third quarter of 2009 in comparison to 24 percent in the same period in 2008. Sales decreased $1 million or 2 percent and Adjusted EBITDA decreased $2 million or 14 percent compared to the second quarter in 2009. This was primarily due to seasonality in window film sales.
Technical Specialties Segment
Technical Specialties' third quarter 2009 net sales were $209 million, down $85 million or 29 percent compared to the same period in 2008. Adjusted EBITDA decreased to $72 million for the third quarter of 2009 compared $75 million in the prior year period primarily due to lower selling prices, volume declines and lower fixed cost absorption partially offset by lower raw material and SG&A costs. Adjusted EBITDA margins expanded to 34 percent in the third quarter of 2009 from 26 percent in the prior year period. Sales increased $19 million or 10 percent and Adjusted EBITDA increased $14 million or 24 percent compared to the second quarter in 2009. This was primarily due to improved volumes, and higher manufacturing utilization rates, partially offset by a decrease in selling prices.
Unallocated and Other
Unallocated and other losses decreased $3 million to $12 million compared to the third quarter 2008, primarily attributable to lower corporate expenses partially offset by currency transaction losses.
Leverage and Liquidity
For the third quarter of 2009, the Company reduced net debt by $21 million to $1,087 million and had liquidity of $225 million. Cash provided by continuing operations before reorganization activities less capital expenditures for the nine months ended September 2009 was $96 million compared to $42 million for the same period in 2008. The year over year improvement in cash flow was primarily attributed to lower payments on interest, taxes and post-retirement obligations, lower working capital levels and reduced payout on the company's annual cash incentive plan, partially offset by higher cash payments on restructuring activities.
"We continue to focus on cash generation, liquidity and the balance sheet to ensure we have a strong financial foundation upon which the Company can continue to grow and improve its operations," said James M. Sullivan, executive vice president and chief financial officer. "Of particular note, on October 15, we successfully completed a public offering of $400 million of senior unsecured notes due 2017, which, among other things, improves our capital structure and better aligns with our specialty chemical peers. The notes were issued at par and bear an annual rate of interest of 8.75 percent. Net proceeds to the Company after fees and expenses were $391 million, with $300 million used to prepay our senior secured term loan and the remaining balance retained for general corporate purposes. Importantly, in conjunction with this prepayment, Solutia received lender approval for amendments to its Term Loan and Revolving credit agreements which will improve the company's strategic, operational and financial flexibility going forward."
Outlook
Solutia experienced a sequential improvement in earnings in the third quarter of 2009 with overall demand trending up in a seasonally weaker quarter as compared to the second quarter. While a seasonal slowdown is expected in the fourth quarter, the company's current view is that there will continue to be a gradual increase in underlying demand with overall sales in the quarter approximating 2008 levels. Accordingly, Solutia is raising its full-year 2009 Adjusted EBITDA guidance from continuing operations to a range of $350 million to $365 million, and is maintaining its full-year 2009 cash from operations less capital expenditures outlook of approximately $125 million.
Third Quarter Conference Call
The Company will hold a conference call at 9 a.m. Central Time (10 a.m. Eastern Time) on Tuesday, October 27, 2009, during which Solutia executives will elaborate upon the Company's third quarter 2009 financial results.
A live webcast of the conference call and slides will be available through the Investors section of www.solutia.com . The phone number for the call is 888-713-4218 (U.S.) or 617-213-4870 (International), and the pass code is 63976970. 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=PKB6CQUXQ . Pre-registrants will be issued a pin number to use when dialing into the live call that will provide quick access to the conference by bypassing the operator upon connection. 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 12506617.
The table below is provided to assist the reader with comparability between the third quarter 2009 and the third quarter 2008 by providing consolidated and segment sales, EBITDA(1) and Adjusted EBITDA (2).
Consolidated and segment sales, EBITDA(1) and Adjusted EBITDA(2) three
months ended September 2009 and 2008
Three Months Ended September 30
From Continuing Adjust- 2009 Adjust- 2008
Operations ments As ments As %
(in millions) 2009 (3) Adjusted 2008 (3) Adjusted change
---- ----- -------- ---- ------ -------- ------
Net Sales
Saflex $182 $182 $221 $221 -18%
CPFilms 53 53 63 63 -16%
Technical
Specialties 209 209 294 294 -29%
Unallocated
and Other 4 4 9 9 -56%
--- --- --- --- ---
Total $448 $448 $587 $587 -24%
=== === === === ===
EBITDA(1)
Saflex $45 $2 $47 $36 $- $36 31%
CPFilms 11 1 12 15 - 15 -20%
Technical
Specialties 72 - 72 74 1 75 -4%
Unallocated
and Other (29) 17 (12) (17) 2 (15) 20%
--- --- --- --- --- --- ---
Total $99 $20 $119 $108 $3 $111 7%
=== === === === === === ===
(1) EBITDA is defined as earnings from continuing operations before
interest expense, income taxes, depreciation and amortization,
less net income attributable to non-controlling interests, and
reorganization items, net. Foreign currency gains/losses are
included in Unallocated and Other.
(2) Adjusted EBITDA is EBITDA (as defined above), excluding Adjustments
(as defined below)
(3) Adjustments include Events Affecting Comparability (see separate
table), cost overhang associated with the sale of the Integrated
Nylon business, and non-cash stock compensation expense
Consolidated and segment sales, EBITDA(1) and Adjusted EBITDA(3) nine
months ended September 2009 and 2008
Nine Months Ended September 30
From Continuing Adjust- 2009 Adjust- 2008
Operations ments As ments As %
(in millions) 2009 (3) Adjusted 2008 (3) Adjusted change
---- ----- -------- ---- ------ -------- ------
Net Sales
Saflex $475 $475 $634 $634 -25%
CPFilms 141 141 196 196 -28%
Technical
Specialties 566 566 821 821 -31%
Unallocated
and Other 15 15 30 30 -50%
--- --- --- --- ---
Total $1,197 $1,197 $1,681 $1,681 -29%
===== ===== ===== ===== ===
EBITDA(1)
Saflex $99 $11 $110 $71 $37 $108 2%
CPFilms 24 4 28 43 10 53 -47%
Technical
Specialties 190 (14) 176 165 27 192 -8%
Unallocated
and Other (73) 30 (43) (29) (4) (33) 30%
--- --- --- --- --- --- ---
Total $240 $31 $271 $250 $70 $320 -15%
=== === === === === === ===
(1) EBITDA is defined as earnings from continuing operations before
interest expense, income taxes, depreciation and amortization,
less net income attributable to non-controlling interests, and
reorganization items, net. Foreign currency gains/losses are
included in Unallocated and Other.
(2) Adjusted EBITDA is EBITDA (as defined above), excluding Adjustments
(as defined below)
(3) Adjustments include Events Affecting Comparability (see separate
table), cost overhang associated with the sale of the Integrated
Nylon business, and non-cash stock compensation expense
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
financial measures such as EBITDA (defined as earnings from continuing
operations before interest expense, income taxes, depreciation and
amortization, less net income attributable to non-controlling interest
and reorganization items, net) and Adjusted EBITDA (to include EBITDA and
exclude gains and losses, cost overhang associated with the expected sale
of our Integrated Nylon business, 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 Income (Loss) Attributable to Solutia to Adjusted EBITDA
from Continuing Operations
Successor Successor
--------- ---------
Three Months Three Months
Ended Ended
September 30, September 30,
(dollars in millions) 2009 2008
---- ----
Net Income (Loss) Attributable to Solutia $29 $(7)
Plus:
Income Tax Expense 12 17
Interest Expense 31 42
Depreciation and Amortization 27 28
(Income) Loss from Discontinued Operations,
net of tax - 28
Events affecting comparability, pre-tax:
Reorganization items - -
Other items (see below) 16 (1)
Non-cash Stock Compensation Expense 4 3
Nylon Cost Overhang - 1
--- ---
Adjusted EBITDA from Continuing Operations $119 $111
--- ---
Successor Predecessor Successor Combined
--------- ----------- --------- --------
Nine Months Two Months Seven Months Nine Months
Ended Ended Ended Ended
September 30, February 29, September 30, September 30,
(dollars in millions) 2009 2008 2008 2008
---- ---- ---- ----
Net Income (Loss)
Attributable
to Solutia $(120) $1,454 $(53) $1,401
Plus:
Income Tax Expense 15 214 17 231
Interest Expense 98 21 107 128
Depreciation and
Amortization 78 11 64 75
(Income) Loss from
Discontinued Operations,
net of tax 169 (204) 52 (152)
Events affecting
comparability, pre-tax:
Reorganization items - (1,433) - (1,433)
Other items (see
below) 17 (2) 65 63
Non-cash Stock
Compensation
Expense 13 - 6 6
Nylon Cost Overhang 1 (1) 2 1
--- --- --- ---
Adjusted EBITDA from
Continuing Operations $271 $60 $260 $320
--- --- --- ---
Reconciliation of Income (Loss) from Continuing Operations to Income from
Continuing Operations Attributable to Solutia before Events Affecting
Comparability
Successor Successor
--------- ---------
Three Months Three Months
Ended Ended
September 30, September 30,
(dollars in millions) 2009 2008
---- ----
Income (Loss) from Continuing Operations $31 $23
Net Income attributable to noncontrolling
interest (2) (2)
--- ---
Income (Loss) from Continuing Operations
attributable to Solutia 29 21
Plus:
Events affecting comparability, pre-tax:
Reorganization items - -
Interest expense items - 1
Other items (see below) 16 (1)
Events affecting comparability, income
tax impact (1) -
--- ---
Income from Continuing Operations attributable
to Solutia before events affecting
comparability $44 $21
--- ---
Successor Predecessor Successor Combined
--------- ----------- --------- --------
Nine Months Two Months Seven Months Nine Months
Ended Ended Ended Ended
September 30, February 29, September 30, September 30,
(dollars in millions) 2009 2008 2008 2008
---- ---- ---- ----
Income (Loss) from
Continuing Operations $52 $1,250 $4 $1,254
Net Income attributable
to noncontrolling
interest (3) - (5) (5)
--- --- --- ---
Income (Loss) from
Continuing Operations
attributable to Solutia 49 1,250 (1) 1,249
Plus:
Events affecting
comparability, pre-tax:
Reorganization items - (1,433) - (1,433)
Interest expense items 8 - 1 1
Other items (see
below) 17 (2) 65 63
Events affecting
comparability, income
tax impact (3) 202 (15) 187
--- --- --- ---
Income from Continuing
Operations attributable
to Solutia before events
affecting comparability $71 $17 $50 $67
--- --- --- ---
Summary of Events Affecting Comparability
In 2009, (Gains) and Charges affecting comparability, pre-tax other
items including interest are as follows:
Three Three Three Nine
Months Months Months Months
Ended Ended Ended Ended
March 31, June 30, Sept 30, Sept 30,
2009 2009 2009 2009 (dollars in millions)
---- ---- ---- ----
Gain related to the
reduction in the 2008
$(23) $- $- $(23) annual incentive plan
Severance and retraining
costs related to the
general corporate
17 5 4 26 restructuring
Charges related to the
closure of the SAFLEX(R)
production line at the
4 1 - 5 Trenton, Michigan Facility
Net charges (gains)
related to the closure of
1 (4) - (3) the Ruabon, Wales Facility
Net pension plan
- - 6 6 settlements
Loss related to the sale
of the North America
- - 6 6 Plastic Products business
--- --- --- ---
$(1) $2 $16 $17
Interest expense related
charges from repayment of
German term loan to
writeoff unamortized debt
issuance and debt
- 8 - 8 discount
--- --- --- ---
$(1) $10 $16 $25
=== === === ===
In 2008, (Gains) and Charges affecting comparability, pre-tax other
items including interest are as follows:
Three Nine
Months Months
Ended Ended
Sept 30, Sept 30,
2008 2008 (dollars in millions)
---- ----
Charge resulting from the
expensing of the step-up in
basis of our inventory in
accordance with fresh-start
$- $67 accounting
Charges related to the closure
of the Ruabon, Wales Facility
net of related gain for
termination of a natural gas
1 7 purchase contract
Gain resulting from
settlements of legacy
insurance policies with
- (3) insolvent insurance carriers
Restructuring costs related
principally to severance and
1 2 retraining costs
Gain resulting from a surplus
(3) (6) land sale
Gain resulting from settlement
of emergence related
- (4) incentive accruals
--- ---
$(1) $63
Unamortized debt issuance
costs associated with the
1 1 repayment of the Bridge
--- ---
$- $64
--- ---
Adjusted Earning Per Share - Reconciliation of Non-US GAAP Measure
Three Three Three
Months Months Months
Ended Ended Ended
March 31, June 30, September 30,
(in $millions, except per share data) 2009 2009 2009
---- ---- ----
Income (Loss) from continuing
operations before tax $(11) $35 $43
Net Income attributable
to noncontrolling interest - 1 2
--------------------------- --- --- ---
Income (Loss) from continuing
operations before tax attributable
to Solutia (11) 34 41
Non-GAAP Adjustments (1) (1) 10 16
------------------------ --- --- ---
Adjusted earnings from continuing
operations before tax (12) 44 57
Income tax (expense) benefit on
adjusted earnings 7 (12) (13)
------------------------------- --- --- ---
Adjusted earnings for
adjusted EPS $(5) $32 $44
--------------------- --- --- ---
Diluted Shares (millions)
-------------------------
Weighted average shares
outstanding 93.27 95.46 118.42
Assumed conversion of Restricted
Stock 0.00 0.14 0.15
-------------------------------- ---- ---- ----
Total Diluted Shares 93.27 95.60 118.57
-------------------- ----- ----- ------
Adjusted EPS (0.05) 0.33 0.37
------------ ----- ---- ----
(1) See table of Summary of Events Affecting Comparability
SOLUTIA INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars and shares in millions, except per share amounts)
(Unaudited)
Successor
---------
Three Months Three Months
Ended Ended
September 30, September 30,
2009 2008
------------- -------------
Net Sales $448 $587
Cost of goods sold 312 431
--- ---
Gross Profit 136 156
Selling, general and administrative
expenses 53 75
Research, development and other
operating expenses, net 8 3
--- ---
Operating Income 75 78
Interest expense (31) (42)
Other income (loss), net (1) 4
--- ---
Income from Continuing Operations
Before Income Tax Expense 40
43
Income tax expense 12 17
--- ---
Income from Continuing Operations 31 23
Loss from Discontinued Operations, net
of tax -- (28)
--- ----
Net Income (Loss) 31 (5)
Net Income attributable to
noncontrolling interest 2 2
--- ---
Net Income (Loss) attributable to
Solutia $29 $(7)
=== ====
Basic and Diluted Income (Loss) per Share:
Income from Continuing Operations
attributable to Solutia $0.24 $0.28
Loss from Discontinued Operations -- (0.37)
--- ------
Net Income (Loss) attributable to
Solutia $0.24 $(0.09)
===== =======
Successor Successor Predecessor
--------- --------- -----------
Nine Seven Two
Months Months Months
Ended Ended Ended
September 30, September 30, February 29,
2009 2008 2008
---- ---- ----
Net Sales $1,197 $1,346 $335
Cost of goods sold 858 1,063 241
--- ----- ---
Gross Profit 339 283 94
Selling, general and administrative
expenses 157 164 42
Research, development and other
operating expenses, net 14 4 3
--- --- ---
Operating Income 168 115 49
Interest expense (a) (98) (107) (21)
Other income (loss), net (3) 13 3
Reorganization items, net -- -- 1,433
--- --- -----
Income from Continuing Operations
Before Income Tax Expense 67 21 1,464
Income tax expense 15 17 214
--- --- ---
Income from Continuing Operations 52 4 1,250
Income (Loss) from Discontinued
Operations, net of tax (169) (52) 204
----- ---- ---
Net Income (Loss) (117) (48) 1,454
Net Income attributable to
noncontrolling interest 3 5 --
--- --- ---
Net Income (Loss) attributable to
Solutia $(120) $(53) $1,454
====== ===== ======
Basic and Diluted Income (Loss) per
Share:
Income (Loss) from Continuing
Operations attributable to Solutia $0.48 $(0.01) $11.96
Income (Loss) from Discontinued
Operations (1.65) (0.78) 1.95
------ ------ ----
Net Income (Loss) attributable to
Solutia $(1.17) $(0.79) $13.91
======= ======= ======
SOLUTIA INC.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(Dollars in millions, except per share amounts)
(Unaudited)
Successor
---------
September 30, December 31,
2009 2008
---- ----
ASSETS
Current Assets:
Cash and cash equivalents $111 $32
Trade receivables, net of allowances of $1
in 2009 and $0 in 2008 268 227
Miscellaneous receivables 88 110
Inventories 273 341
Prepaid expenses and other assets 55 85
Assets of discontinued operations 6 490
--- ---
Total Current Assets 801 1,285
Property, Plant and Equipment, net of
accumulated depreciation of $111 in 2009
and $56 in 2008
931 952
Goodwill 511 511
Identified Intangible Assets, net 814 823
Other Assets 151 163
--- ---
Total Assets $3,208 $3,734
====== ======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $139 $170
Accrued liabilities 203 259
Short-term debt, including current portion
of long-term debt 31 37
Liabilities of discontinued operations 58 302
--- ---
Total Current Liabilities 431 768
Long-Term Debt 1,167 1,359
Postretirement Liabilities 443 465
Environmental Remediation Liabilities 262 279
Deferred Tax Liabilities 189 202
Other Liabilities 107 132
Commitments and Contingencies (Note 9)
Shareholders' Equity :
Common stock at $0.01 par value;
(500,000,000 shares authorized,
121,864,293 and 94,392,772 shares issued
in 2009 and 2008, respectively)
1 1
Additional contributed capital 1,608 1,474
Treasury shares, at cost (417,517 in 2009
and 77,132 in 2008) (2) --
Accumulated other comprehensive loss (216) (286)
Accumulated deficit (788) (668)
----- -----
Total Shareholders' Equity attributable to
Solutia 603 521
Equity attributable to non-controlling
interest 6 8
--- ---
Total Shareholders' Equity 609 529
--- ---
Total Liabilities and Shareholders' Equity $3,208 $3,734
====== ======
SOLUTIA INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in millions)
Successor Successor Predecessor
--------- --------- -----------
Nine Months Seven Months Two Months
Ended Ended Ended
September 30, September 30, February 29,
2009 2008 2008
------------- ------------- ------------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS
OPERATING ACTIVITIES:
Net income (loss) $(117) $(48) $1,454
Adjustments to reconcile net
income (loss) to net cash
provided by (used in)
operations:
Net income attributable to
noncontrolling interest (3) (5) ---
(Income) Loss from
discontinued operations,
net of tax 169 52 (204)
Depreciation and
amortization 78 64 11
Revaluation of assets and
liabilities, net of tax --- --- (1,383)
Discharge of claims and
liabilities, net of tax --- --- 100
Other reorganization items,
net --- --- 52
Pension obligation related
expense less than
contributions (24) (39) (18)
Other postretirement benefit
obligation related expense
less than contributions (8) --- (6)
Deferred income taxes 3 (22) 5
Amortization of deferred
debt issuance costs 15 10 --
Loss (gain) on sale of
assets 5 (8) --
Other charges (gains)
including restructuring
expenses 19 67 (2)
Changes in assets and
liabilities:
Income taxes payable 4 14 5
Trade receivables (42) 14 (24)
Inventories 66 (19) (34)
Accounts payable (18) 21 31
Environmental remediation
liabilities (14) (7) (1)
Restricted cash for
environmental remediation
and other legacy payments 24 12 --
Other assets and liabilities (34) 19 (2)
--- --- ---
Cash Provided by (Used in)
Continuing Operations
before Reorganization
Activities 123 125 (16)
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 -- (30) (31)
Other reorganization and
emergence related payments --- --- (17)
----
Cash Used in Reorganization
Activities -- (30) (348)
--- ---- -----
Cash Provided by (Used in)
Operations - Continuing
Operations 123 95 (364)
Cash Provided by (Used in)
Operations - Discontinued
Operations 58 (122) (48)
--- ----- ----
Cash Provided by (Used in)
Operations 181 (27) (412)
--- ---- -----
INVESTING ACTIVITIES:
Property, plant and
equipment purchases (27) (52) (15)
Acquisition and investment
payments (2) (2) --
Investment proceeds and
property disposals 3 53 --
--- --- ---
Cash Used in Investing
Activities - Continuing
Operations (26) (1) (15)
Cash Provided by (Used in)
Investing Activities -
Discontinued Operations 16 (27) (14)
--- ---- ----
Cash Used in Investing
Activities (10) (28) (29)
---- ---- ----
FINANCING ACTIVITIES:
Net change in lines of
credit (13) 28 --
Proceeds from long-term debt
obligations 70 -- 1,600
Net change in long-term
revolving credit facilities (181) (3) 190
Proceeds from stock
issuances 119 422 250
Proceeds from short-term
debt obligations 22 -- --
Payment of short-term debt
obligations (15) -- (966)
Payment of long-term debt
obligations (83) (434) (366)
Payment of debt obligations
subject to compromise -- -- (221)
Debt issuance costs (4) (1) (136)
Purchase of treasury shares (2) -- --
Other, net (5) (2) --
--- ---
Cash Provided by (Used in)
Financing Activities (92) 10 351
---- -- ---
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 79 (45) (90)
CASH AND CASH EQUIVALENTS:
Beginning of period 32 83 173
--- --- ---
End of period $111 $38 $83
==== === ===
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION:
Cash payments for interest $83 $85 $43
Cash payments for income
taxes, net of refunds 9 15 4
Notes to Editor: Saflex and CPFilms 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 2009 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 contains forward-looking statements, including, but not limited to statements about projected financial performance, 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 and Solutia's ability to raise additional funds which is subject to market conditions. 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, the accuracy of our assumptions, the ability of third parties to finance an acquisition, and 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.
Discontinued Operations
Solutia announced on June 1, 2009, that it sold its Nylon business to an affiliate of SK Capital Partners II, L.P. Effective with the third quarter of 2008, the company began reporting results from its Nylon segment as discontinued operations.
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® interlayer for laminated glass; CPFilms® aftermarket window films sold under the LLumar® brand and others; and technical specialties including the Flexsys® family of chemicals for the rubber industry, Skydrol® aviation hydraulic fluid and Therminol® 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 3,100 employees in more than 60 locations. More information is available at www.Solutia.com
SOURCE Solutia Inc.
Related Categories
Press ReleasesStocks Mentioned
+0.09Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
