Exhibit 99.1
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SOLUTIA INC. LOGO NEWS
SOLUTIA INC.
575 Maryville Centre Drive
St. Louis, Missouri 63141
P.O. Box 66760
FOR IMMEDIATE RELEASE St. Louis, Missouri 63166-6760
Tel 314-674-1000
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Contact: Liesl M. Livingston (314)674-7777
SOLUTIA ANNOUNCES SPECIAL CHARGES;
CONFIRMS 4TH QUARTER FORECAST
o SPECIAL CHARGES IN THE RANGE OF $90 TO $100 MILLION AFTER-TAX TO BE
TAKEN IN THE FOURTH QUARTER, INCLUDING THE PREVIOUSLY ANNOUNCED
RESTRUCTURING CHARGE TO CEASE PRODUCTION AT THE ASTARIS POCATELLO
FACILITY.
o EXCLUDING SPECIAL CHARGES, THE COMPANY EXPECTS TO REPORT A MODEST LOSS
IN THE FOURTH QUARTER OF 2001 IN THE RANGE OF $0.05 TO $0.08 PER SHARE.
ST. LOUIS, December 19, 2001 - Solutia Inc. (NYSE:SOI) announced
today that it will record after-tax charges in the range of $90 to $100
million in the fourth quarter of 2001 principally to cover its share of
restructuring costs at its Astaris and Flexsys joint ventures, to increase
environmental and self-insurance reserves, to cover additional severance
costs associated with its $100 million cost reduction initiative in 2001 and
to write off certain non-performing assets.
Approximately $50 million of the after-tax charges represent
Solutia's share of the costs associated with restructuring actions at
Astaris, LLC, a 50/50 joint venture between Solutia and FMC Corporation,
and at Flexsys, L. P., a 50/50 joint venture between Solutia and Akzo Nobel
N. V. The restructuring charges at Astaris include the previously announced
costs to cease production at its elemental phosphorus production facility in
Pocatello, Idaho.
Approximately $30 million of the after-tax charges will cover
estimated costs for remedial environmental work arising from recently
completed agreements with the U.S. Environmental Protection Agency and to
increase the company's self-insurance reserves. The company's annual cash
spend for environmental remediation and litigation activities is not
expected to change.
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Approximately $5 million of the after-tax charges are for
additional severance costs associated with the company's $100 million cost
reduction initiative in 2001. Solutia's Chairman and CEO, John Hunter said,
"In anticipation of a prolonged economic downturn, we have aggressively
reduced our permanent and contract workforce through a combination of
involuntary severance actions and normal attrition. These actions provide a
sustainable and improved cost structure which will make Solutia a stronger
company in the future."
The remainder of the after-tax charges primarily represents the
costs to write-off certain non-performing and non-strategic assets.
FOURTH QUARTER OUTLOOK
The company continues to be negatively affected by the global
economic slowdown. As expected, weak North American demand and deterioration
of economic activity in Europe and Asia are having a significant impact on
Solutia's fourth quarter earnings. Consistent with previous guidance, the
company anticipates a modest earnings per share loss in the fourth quarter,
in the range of $0.05 to $0.08, excluding special charges.
FORWARD LOOKING STATEMENT
This press release contains forward-looking statements regarding
Solutia's future revenue and earnings capability. Those statements are based
on current expectations, but actual results may differ materially, depending
on such important factors as world economic conditions, competitive
pressures, exposure to the costs of environmental remediation and
litigation, changes in U.S. and foreign laws and regulations, raw material
and energy pricing, currency fluctuations and other factors identified in
Solutia's Annual Report on Form 10-K for the period ended December 31, 2000,
and the Quarterly Report, Form 10-Q, for the period ended September 30,
2001. These reports are filed with the U.S. Securities and Exchange
Commission and can be accessed through Solutia's Internet site at
http://solutia.com in the Investors section.
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CORPORATE PROFILE
Solutia (http://www.Solutia.com) uses world-class skills in applied
chemistry to create value-added solutions for customers, whose products
improve the lives of consumers every day. Solutia is a world leader in
performance films for laminated safety glass and after-market
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applications; resins and additives for high-value coatings; process
development and scale-up services for pharmaceutical fine chemicals;
specialties such as water treatment chemicals, heat transfer fluids and
aviation hydraulic fluid and an integrated family of nylon products
including high-performance polymers and fibers.
Solutia ... Solutions For A Better life.
-oOo-
Source: Solutia Inc.
St. Louis
121901