UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): JANUARY 7, 2005
SOLUTIA INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
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(STATE OF INCORPORATION)
001-13255 43-1781797
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(COMMISSION (IRS EMPLOYER
FILE NUMBER) IDENTIFICATION NO.)
575 MARYVILLE CENTRE DRIVE, P.O. BOX 66760, ST. LOUIS, MISSOURI 63166-6760
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(314) 674-1000
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REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE
Check the appropriate box below if the Form 8-K filing is
intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions.
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 2.05 COSTS ASSOCIATED WITH EXIT OR DISPOSAL ACTIVITIES
On January 25, 2005, Solutia announced to employees, and issued a
press release, that it intends to exit the acrylic fibers business, pending
bankruptcy court approval. Solutia's plant in Decatur, Alabama will continue
to operate as a producer of chemical intermediates for use in nylon
products, but will close its acrylic fibers operation in early-to-mid April.
This action will impact approximately 250 Solutia employees and 200
contractors, most of whom work at the Decatur plant. Solutia's commitment to
exit the acrylic fibers business occurred on January 7, 2005 as part of its
on-going reorganization strategy to re-shape its asset portfolio so that it
consists of high-potential businesses leveraged on Solutia's core
competencies that can consistently deliver returns in excess of their cost
of capital.
As a result of the decision to exit the acrylic fibers business and
after obtaining appropriate approvals through the bankruptcy court process,
Solutia expects to record charges and to incur cash expenditures that are
currently estimated at approximately $10 million during the remainder of
2005. These charges relate to approximately $5 million for severance and
other employee costs, expected to occur in the first half of 2005. Solutia
also expects to incur approximately $5 million of other exit costs, such as
decommissioning related activities, which will be expensed as incurred
primarily during the second and third quarters of 2005. Additionally,
Solutia previously impaired a majority of the acrylic fibers' property,
plant and equipment and accordingly does not expect to record material
charges with respect to property, plant and equipment.
A copy of the press release announcing Solutia's exit from its
acrylic fibers business is attached to this report and incorporated herein
by reference.
FORWARD LOOKING STATEMENTS
This report contains forward-looking statements. Forward-looking
statements are subject to known and unknown risks, uncertainties and other
factors that may cause actual results, performance or achievements to be
materially different from the future results, performance or achievements
expressed or implied by the forward looking statements. Assumptions and
other important factors that could cause our actual results to differ
materially from those anticipated in our forward-looking statements include,
among other things: failure to receive bankruptcy court approval, and
potential delays in completing the shutdown in order to transition projects
for our customers.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(c) The following exhibit is included in this Report:
Exhibit Number Description
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99 Press Release dated January 25, 2005, issued by
Solutia Inc. announcing that Solutia will exit the
acrylic fibers business
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SOLUTIA INC.
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(Registrant)
/s/ Rosemary L. Klein
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Secretary
DATE: January 25, 2005