Exhibit 99.2
SOLUTIA INC. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL PROJECTIONS
INCOME STATEMENT
($M)
- ----
Q4, 2003 2004 2005 2006
PROJECTIONS PROJECTIONS PROJECTIONS PROJECTIONS
--------------- --------------- --------------- ---------------
NET SALES 561.9 2,374.2 2,390.1 2,387.0
COGS 491.6 1,996.1 1,989.7 1,941.6
--------------- --------------- --------------- ---------------
GROSS PROFIT 70.3 378.1 400.4 445.4
MAT EXPENSES 82.9 315.4 316.3 318.9
AMORTIZATION 0.6 2.5 2.5 2.5
--------------- --------------- --------------- ---------------
OPERATING INCOME (13.2) 60.1 81.6 124.0
EQUITY INCOME 0.1 17.5 23.4 23.9
OTHER INCOME/(EXPENSE) 2.2 1.3 0.8 0.9
INTEREST INCOME 0.2 0.1 0.1 0.2
--------------- --------------- --------------- ---------------
EBIT (10.7) 79.1 106.0 149.0
INTEREST EXPENSE 31.6 128.2 140.2 140.1
--------------- --------------- --------------- ---------------
INCOME BEFORE TAXES (42.3) (49.2) (34.2) 8.8
TAXES (19.9) (28.1) (26.6) (4.9)
--------------- --------------- --------------- ---------------
NET INCOME (LOSS) (22.4) (21.1) (7.6) 13.7
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<FN>
Note: Projected Income Statements do not reflect any impacts of a Chapter 11 bankruptcy filing.
BALANCE SHEET
($M)
- ----
DEC. '03 12/31/2004 12/31/2005 12/31/2006
FORECAST PROJECTIONS PROJECTIONS PROJECTIONS
------------ --------------- --------------- ---------------
Assets
------
Cash 56.5 15.0 15.0 15.0
Trade Receivables 263.6 263.5 268.7 268.9
Other Current Assets 292.6 280.3 282.7 282.7
Total LIFO Inventories 253.2 250.3 249.2 246.1
------------ --------------- --------------- ---------------
Total Current Assets 865.9 809.0 815.5 812.8
Net Property 934.7 878.9 852.8 844.2
Investment in Equity Affiliates 204.8 260.4 291.8 316.3
Other Long Term Assets 468.2 464.6 443.6 424.0
Non-Current Deferred Taxes 394.7 425.8 387.3 336.2
------------ --------------- --------------- ---------------
Total Assets 2,868.3 2,838.7 2,791.0 2,773.5
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Liabilities
-----------
Accounts Payable 176.7 170.1 165.5 162.1
Accruals 419.1 392.1 327.7 264.4
Short Term Debt 350.1 426.1 593.8 742.7
------------ --------------- --------------- ---------------
Total Current Liabilities 945.9 988.3 1,086.9 1,169.2
Long Term Debt 760.1 764.8 770.1 776.3
Postretirement Liabilities 1,143.3 1,170.1 1,063.9 950.3
Other Liabilities 444.2 423.1 396.1 359.9
------------ --------------- --------------- ---------------
Total Liabilities 3,293.4 3,346.3 3,317.0 3,255.7
Total Stockholder's Equity (Deficit) (425.1) (507.6) (526.0) (522.2)
------------ --------------- --------------- ---------------
Total Liabilities and Equity 2,868.3 2,838.7 2,791.0 2,773.5
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<FN>
Note: Projected Balance Sheets do not reflect any impacts of a Chapter 11 bankruptcy filing.
STATEMENT OF CONSOLIDATED CASH FLOW
($M)
- ----
Q4, 2003 2004 2005 2006
PROJECTIONS PROJECTIONS PROJECTIONS PROJECTIONS
--------------- --------------- --------------- ---------------
Operating Activities:
Net Income (Loss) (55.7) (82.5) (18.4) 3.8
Items that did not use (provide) cash:
Depreciation and Amortization 33.8 130.1 121.0 111.0
Amortization of Advance Payments (3.2) (11.7) (12.0) (11.7)
Amortization of Deferred Debt Issuance -
Costs & Debt Discount 4.7 16.1 16.9 16.2
Restructuring expenses & other items - net 48.1 - - -
Changes in Assets and Liabilities:
Income and Deferred Taxes (13.9) (44.5) (30.3) (7.9)
Trade Receivables 9.2 0.1 (5.2) (0.3)
Inventory (5.6) 2.9 1.1 3.0
Other Assets (16.4) (16.9) (37.3) (27.3)
Trade Payables 17.9 (6.6) (4.7) (3.4)
Other Liabilities (41.9) 8.0 (113.6) (142.4)
--------------- --------------- --------------- ---------------
Cash Used in Operations (23.1) (5.0) (82.4) (58.9)
Investing Activities:
Capital Expenditures (19.5) (60.6) (82.0) (90.0)
Acquisition and Investment Payments (18.9) (47.8) - -
Investment and Property Disposals (26.8) (0.8) - -
--------------- --------------- --------------- ---------------
Cash Used in Investing Activities (65.2) (109.2) (82.0) (90.0)
Financing Activities: -
Change in Debt, Debt Increase 113.0 76.0 167.7 148.9
Other Financing Activities (24.1) (3.3) (3.3) -
--------------- --------------- --------------- ---------------
Cash Provided by Financing Activities 89.0 72.7 164.4 148.9
Increase (Decrease) in Cash and
Cash Equivalents: 0.7 (41.6) 0.0 -
Cash - Beginning of Period 55.8 56.5 14.9 15.0
Cash - End of the Year 56.5 14.9 15.0 15.0
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<FN>
Note: Projected Cash Flow Statements do not reflect any impacts of a Chapter 11 bankruptcy filing.
The Cash Flow Statement utilizes a net income (loss) balance that differs from the projected
Income Statement due to the inclusion of certain expense items for the Cash Flow Statement which
are excluded from the Income Statement.
Q4, 2003 2004 2005 2006
($M) PROJECTIONS PROJECTIONS PROJECTIONS PROJECTIONS
--------------- --------------- --------------- ---------------
Total Projected Cash Flow, excluding debt changes (112.3) (117.6) (167.7) (148.9)
Projected Chapter 11 Cash Flow Impacts (35.1) 123.9 136.6 -
--------------- --------------- --------------- ---------------
Adjusted Total Projected Cash Flow (147.5) 6.4 (31.1) (148.9)
Other Projected Liquidity Changes:
Commitment Reduction - (7.5) (10.0) -
New Credit Facility 75.0 75.0 - -
--------------- --------------- --------------- ---------------
Total Other Projected Liquidity Changes 75.0 67.5 (10.0) -
<FN>
Note: The Company projections of the impact on cash flow from a Chapter 11 bankrupcty filing.