ST LOUIS, April 27, 2012 /PRNewswire/ --
Note: See reconciliation tables below for adjustments made to
U.S. GAAP financial measures and discussion of items affecting
results.
(Logo:
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First Quarter 2012: Consolidated Results from Continuing
Operations
Solutia Inc. (NYSE: SOA) today reported net sales for the first
quarter 2012 of $498 million, down
$11 million or 2 percent from the
same period in 2011. Reported income from continuing operations
attributable to Solutia was $53
million in the first quarter 2012, down $12 million from the same period in 2011.
Both periods were impacted by certain events affecting
comparability (detailed below), which resulted in a net after-tax
charge of $15 million in 2012 and a
net after-tax gain of $5 million in
2011. Excluding these items, Adjusted Earnings increased
$8 million. Adjusted EBITDA
(defined below) in the first quarter of 2012 totaled $126 million, down $9
million from the same period in 2011. Higher average
selling prices and lower manufacturing costs were more than offset
by lower sales volumes, higher raw materials costs and increased
research and development expenditures. Adjusted EPS totaled
$.55, up $.05 or 10 percent from the same period in 2011
as lower interest expense and lower income taxes more than offset
the decline in Adjusted EBITDA. Interest expense was lower as
a result of the debt reduction achieved in 2011, and income taxes
were lower primarily due to the reversal of a deferred tax
liability related to the extension of the Company's tax holiday in
Malaysia.
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 tables
below.
Advanced Interlayers Segment
Advanced Interlayers' first quarter 2012 net sales totaled
$203 million, a decrease of
$10 million or 5 percent from the
same period in 2011. Adjusted EBITDA decreased $9 million to $40
million for the first quarter of 2012 compared to the prior
year period. This earnings decrease was primarily due to
lower sales volumes and selling prices in the photovoltaic
encapsulants operating segment and increased raw material costs,
partially offset by higher average selling prices as a result of
price increases on annual customer contracts in the Saflex®
interlayer business.
Performance Films Segment
Performance Films' first quarter 2012 net sales totaled
$85 million, an increase of
$9 million or 12 percent from the
same period in 2011. The increase in net sales was due to the
acquisition of Southwall and to strong window film sales in
Asia and North America.
Partially offsetting these gains were lower technical film sales
into a softer e-reader market in 2012. Adjusted EBITDA decreased
$3 million to $16 million for the first quarter of 2012
compared to the prior year period. This earnings decrease was
primarily due to increased raw material costs and higher
manufacturing costs, partially offset by higher sales volumes
within the automotive market.
Technical Specialties Segment
Technical Specialties' first quarter 2012 net sales totaled
$210 million, a decrease of
$10 million or 5 percent from the
same period in 2011. Adjusting for divested other rubber
chemicals businesses, sales were down $4
million or 2 percent. Adjusted EBITDA increased
$3 million to $84 million for the first quarter of 2012
compared to the prior year period. This increase in earnings
was primarily due to a favorable selling price/raw material cost
spread and lower manufacturing costs, partially offset by lower
sales volumes predominantly in the Europe and China markets, higher research and development
expenditures and the loss of earnings resulting from the
divestiture of certain other rubber chemicals businesses.
Unallocated and Other
Unallocated and other expenses reduced Adjusted EBITDA by
$14 million, and were flat compared
to the first quarter of 2011.
Leverage and Liquidity
The Company ended the quarter with net debt (gross debt less
cash) of $1.23 billion and liquidity
of $387 million. Cash used by
continuing operations less capital expenditures for the first
quarter of 2012 was $8 million
compared to cash generation of $32
million for the same period in 2011. The $40 million year-over-year decrease in cash flow
was primarily attributed to higher payments on postretirement
obligations and increased growth capital expenditures. The
seasonal net working capital build was lower in the first quarter
of 2012 as compared to the first quarter of 2011 due to a
significant improvement in accounts receivable which more than
offset a strategic increase in inventory levels in advance of
planned start-ups of the Saflex Suzhou China sheet expansion and
the Gent Belgium Saflex acoustic line in the second quarter of
2012. In addition, inventory levels of Therminol in Technical
Specialties were higher in preparation for delivery of large
concentrating solar projects starting early 2013. Also
negatively impacting cash from operating activities in the quarter
were payments of $9 million related
to the pending merger with Eastman Chemical Company. A cash
dividend of $.0375 per share on the
Company's common stock was paid on March 15,
2012 to shareholders of record at the close of business on
February 15.
Outlook
As previously announced, in February
2012, Solutia expects to generate full-year 2012
revenue between $2.125 billion and $2.275
billion and Adjusted EPS in the range of $2.00 to $2.30.
Status of Eastman Chemical Transaction
The completion of the Eastman Chemical transaction remains
subject to approval by Solutia's shareholders and receipt of
required regulatory approvals as well as other customary closing
conditions. The waiting period under the Hart-Scott-Rodino (HSR)
Act expired on March 28, 2012.
South Korea cleared the merger on
March 23, 2012. On April 16, 2012, the Anti-Monopoly Bureau of the
Ministry of Commerce of the People's
Republic of China and on April 25,
2012 the Ukrainian authorities granted clearance for this
transaction. The parties also received notification
from the European Commission that they formally accepted their
filing on April 16, 2012, which will
start the waiting period. The transaction is expected to
close in mid-2012.
First Quarter Conference Call
There will be no conference call for first quarter earnings due
to the pending acquisition by Eastman Chemical.
Important Information Regarding Outlook
There is no guarantee that Solutia will achieve its projected
financial expectation for 2012 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.
SOLUTIA
INC.
|
|
CONSOLIDATED STATEMENT OF
OPERATIONS
|
|
(Dollars in millions, except per share
amounts)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
March
31,
|
|
|
|
|
|
|
|
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
Net
Sales
|
$
|
498
|
|
$
|
509
|
|
Cost of
goods sold
|
|
340
|
|
|
347
|
|
Gross
Profit
|
|
158
|
|
|
162
|
|
Selling,
general and administrative expenses
|
|
75
|
|
|
62
|
|
Research
and development expenses
|
|
8
|
|
|
6
|
|
Other
operating income, net
|
|
(1)
|
|
|
(11)
|
|
Operating Income
|
|
76
|
|
|
105
|
|
Interest
expense
|
|
(23)
|
|
|
(28)
|
|
Other
loss, net
|
|
-
|
|
|
(1)
|
|
Loss on
debt modification
|
|
-
|
|
|
(2)
|
|
Income
from Continuing Operations Before Income Tax Expense
|
|
53
|
|
|
74
|
|
Income tax
expense (benefit)
|
|
(1)
|
|
|
8
|
|
Net
Income
|
|
54
|
|
|
66
|
|
Net income
attributable to noncontrolling interest
|
|
1
|
|
|
1
|
|
Net
Income attributable to Solutia
|
$
|
53
|
|
$
|
65
|
|
|
|
|
|
|
|
|
Basic
and Diluted Income per Share attributable to
Solutia:
|
|
|
|
|
|
|
Basic Net
Income
|
$
|
0.44
|
|
$
|
0.54
|
|
Diluted
Net Income
|
$
|
0.43
|
|
$
|
0.54
|
|
SOLUTIA
INC.
|
|
CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
|
|
(Dollars in millions, except per share
amounts)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
December 31,
|
|
|
|
|
2012
|
|
2011
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
|
|
Cash and
cash equivalents
|
$
|
108
|
|
$
|
113
|
|
|
Trade
receivables, net of allowances of $6 in 2012 and 2011
|
|
221
|
|
|
236
|
|
|
Miscellaneous receivables
|
|
74
|
|
|
75
|
|
|
Inventories
|
|
384
|
|
|
335
|
|
|
Prepaid
expenses and other assets
|
|
28
|
|
|
27
|
|
|
Current
assets of discontinued operations
|
|
1
|
|
|
1
|
|
|
Total
Current Assets
|
|
816
|
|
|
787
|
|
|
Net
Property, Plant and Equipment
|
|
953
|
|
|
945
|
|
|
Goodwill
|
|
789
|
|
|
783
|
|
|
Net
Identified Intangible Assets
|
|
916
|
|
|
916
|
|
|
Other
Assets
|
|
90
|
|
|
95
|
|
|
Total
Assets
|
$
|
3,564
|
|
$
|
3,526
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
$
|
181
|
|
$
|
186
|
|
|
Accrued
liabilities
|
|
210
|
|
|
227
|
|
|
Current
liabilities of discontinued operations
|
|
5
|
|
|
8
|
|
|
Total
Current Liabilities
|
|
396
|
|
|
421
|
|
|
Long-Term Debt
|
|
1,338
|
|
|
1,337
|
|
|
Postretirement Liabilities
|
|
287
|
|
|
308
|
|
|
Environmental Remediation
Liabilities
|
|
219
|
|
|
227
|
|
|
Deferred Tax Liabilities
|
|
183
|
|
|
190
|
|
|
Non-current Liabilities of Discontinued
Operations
|
|
18
|
|
|
18
|
|
|
Other
Liabilities
|
|
96
|
|
|
98
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and Contingencies (Note
8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
Common
stock at $0.01 par value; (500,000,000 shares authorized,
124,245,832 and
|
|
|
|
|
|
|
|
|
123,316,852 shares issued in 2012 and 2011,
respectively)
|
|
1
|
|
|
1
|
|
|
Additional
contributed capital
|
|
1,672
|
|
|
1,651
|
|
|
Treasury
shares, at cost (1,511,054 in 2012 and 1,247,183 in
2011)
|
|
(20)
|
|
|
(13)
|
|
|
Accumulated other comprehensive loss
|
|
(248)
|
|
|
(279)
|
|
|
Accumulated deficit
|
|
(388)
|
|
|
(441)
|
|
|
Total
Shareholders' Equity attributable to Solutia
|
|
1,017
|
|
|
919
|
|
|
Equity
attributable to noncontrolling interest
|
|
10
|
|
|
8
|
|
|
Total
Equity
|
|
1,027
|
|
|
927
|
|
|
Total
Liabilities and Equity
|
$
|
3,564
|
|
$
|
3,526
|
|
|
|
|
|
|
|
|
|
|
See
accompanying Notes to Consolidated Financial Statements.
|
|
SOLUTIA
INC.
|
|
CONSOLIDATED STATEMENT OF CASH
FLOWS
|
|
(Dollars in millions)
|
|
(Unaudited)
|
|
|
|
|
|
Three
Months Ended
|
|
|
|
|
|
March
31,
|
|
|
|
|
|
2012
|
|
2011
|
|
|
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
|
|
|
|
|
|
|
|
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
Net
income
|
$
|
54
|
|
$
|
66
|
|
|
Adjustments to reconcile net income to net cash
provided by operations:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
30
|
|
|
32
|
|
|
|
Pension
contributions in excess of expense
|
|
(18)
|
|
|
-
|
|
|
|
Other
postretirement benefit contributions in excess of
expense
|
|
-
|
|
|
(4)
|
|
|
|
Amortization of debt issuance costs and
discount
|
|
1
|
|
|
1
|
|
|
|
Deferred
income taxes
|
|
(6)
|
|
|
6
|
|
|
|
Share-based compensation expense
|
|
6
|
|
|
5
|
|
|
|
Other
charges:
|
|
|
|
|
|
|
|
|
|
Other
(gains) charges, including restructuring expenses
|
|
15
|
|
|
(3)
|
|
|
Changes in
assets and liabilities:
|
|
|
|
|
|
|
|
|
Income
taxes payable
|
|
3
|
|
|
(3)
|
|
|
|
Trade
receivables
|
|
15
|
|
|
(37)
|
|
|
|
Inventories
|
|
(51)
|
|
|
(23)
|
|
|
|
Accounts
payable
|
|
6
|
|
|
16
|
|
|
|
Environmental remediation liabilities
|
|
(8)
|
|
|
(1)
|
|
|
|
Other
assets and liabilities
|
|
(28)
|
|
|
(6)
|
|
|
Cash
Provided by Operations – Continuing Operations
|
|
19
|
|
|
49
|
|
|
Cash
Provided by (Used in) Operations – Discontinued
Operations
|
|
(3)
|
|
|
3
|
|
|
Cash
Provided by Operations
|
|
16
|
|
|
52
|
|
|
|
|
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
Property,
plant and equipment purchases
|
|
(27)
|
|
|
(17)
|
|
|
Restricted
cash
|
|
-
|
|
|
(5)
|
|
|
Asset
disposals and investment sales
|
|
-
|
|
|
29
|
|
|
Other
|
|
-
|
|
|
1
|
|
|
Cash
Provided by (Used in) Investing Activities
|
|
(27)
|
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
Payment of
long-term debt obligations
|
|
-
|
|
|
(77)
|
|
|
Purchase
of treasury shares
|
|
(7)
|
|
|
(2)
|
|
|
Stock
option exercises
|
|
15
|
|
|
2
|
|
|
Other,
net
|
|
(4)
|
|
|
(3)
|
|
|
Cash
Provided by (Used in) Financing Activities
|
|
4
|
|
|
(80)
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect
of Exchange Rate Changes on Cash and Cash
Equivalents
|
|
2
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
DECREASE IN CASH AND CASH
EQUIVALENTS
|
|
(5)
|
|
|
(18)
|
|
|
CASH
AND CASH EQUIVALENTS:
|
|
|
|
|
|
|
|
Beginning of period
|
|
113
|
|
|
191
|
|
|
End of
period
|
$
|
108
|
|
$
|
173
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
|
|
|
|
|
|
|
|
Cash
payments for interest
|
$
|
21
|
|
$
|
26
|
|
|
Cash
payments for income taxes, net of refunds
|
$
|
9
|
|
$
|
14
|
|
|
Cash
payments related to the pending merger with Eastman Chemical
Company
|
$
|
9
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Cash Investing Activities:
|
|
|
|
|
|
|
|
Capital
expenditures included in accounts payable
|
$
|
8
|
|
$
|
7
|
|
|
|
|
|
|
|
|
|
|
|
See
accompanying Notes to Consolidated Financial Statements.
|
|
The table below is provided to assist the reader with
comparability between the three months ended March 31, 2012 and comparable period in 2011 by
providing consolidated and segment net sales, Segment Profit (1)
and Adjusted EBITDA (2).
|
Consolidated and segment Net Sales, Segment
Profit(1)and Adjusted EBITDA(2)three
months ended March 2012 and 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended March 31,
|
|
|
From
Continuing Operations (in millions)
|
2012
|
Adjust-
ments(3)
|
2012 As
Adjusted
|
2011
|
Adjust-
ments(3)
|
2011 As
Adjusted
|
%
change
|
|
|
Net
Sales
|
|
|
|
|
|
|
|
|
|
|
Advanced Interlayers
|
$
203
|
|
$
203
|
$
213
|
|
$
213
|
-5%
|
|
|
|
Performance Films
|
85
|
|
85
|
76
|
|
76
|
12%
|
|
|
|
Technical Specialties
|
210
|
|
210
|
220
|
|
220
|
-5%
|
|
|
|
Unallocated and Other
|
-
|
|
-
|
-
|
|
-
|
n/m
|
|
|
|
Total
|
$
498
|
|
$
498
|
$
509
|
|
$
509
|
-2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
Profit(1)and Adjusted EBITDA(2)
|
|
|
|
|
|
|
|
|
|
Advanced Interlayers
|
$
40
|
$
-
|
$
40
|
$
49
|
$
-
|
$
49
|
-18%
|
|
|
|
Performance Films
|
12
|
4
|
16
|
19
|
-
|
19
|
-16%
|
|
|
|
Technical Specialties
|
84
|
-
|
84
|
98
|
(17)
|
81
|
4%
|
|
|
|
Unallocated and Other
|
(31)
|
17
|
(14)
|
(31)
|
17
|
(14)
|
0%
|
|
|
|
Total
|
$
105
|
$
21
|
$
126
|
$
135
|
$
-
|
$
135
|
-7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Segment Profit is defined as income from continuing operations
attributable to Solutia before interest expense, loss on
debt modification, income taxes, depreciation and
amortization. Foreign currency gains/losses are included in
Unallocated and Other.
|
|
|
|
(2)
Adjusted EBITDA is Segment Profit (as defined above), excluding
Adjustments (as defined below).
|
|
|
|
(3)
Adjustments include Events Affecting Comparability (see separate
table) and non-cash share-based 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 Adjusted EBITDA, Adjusted
Earnings and Adjusted Earnings per Share that are considered
"non-GAAP financial measures." Generally, a non-GAAP
financial measure is a numerical measure of a company's financial
performance, financial position or cash flows that excludes (or
includes) amounts that are included in (or excluded from) the most
directly comparable measure calculated and presented in accordance
with GAAP. The presentation of Adjusted EBITDA, Adjusted
Earnings and Adjusted Earnings per Share are intended to supplement
investors' understanding of our operating performance. These
non-GAAP financial measures are not intended to be performance
measures that should be regarded as an alternative to or more
meaningful than other GAAP measures and may not be comparable to
similarly titled measures presented by other companies.
Adjusted EBITDA is defined as income from continuing operations
attributable to Solutia before interest expense, loss on debt
modification, income taxes, depreciation and amortization, certain
gains and losses that affect comparability and non-cash share-based
compensation expense. Adjusted Earnings is defined as income
from continuing operations attributable to Solutia excluding
certain gains and losses, net of tax, that affect
comparability. Adjusted Earnings per Share is defined as
Adjusted Earnings divided by weighted average diluted shares
outstanding. We believe Adjusted EBITDA, Adjusted Earnings
and Adjusted Earnings per Share assist us in comparing our
performance over various reporting periods and against our peers on
a consistent basis because it removes from our operating results
the impact of items that do not reflect our core operating
performance. Further, we believe Adjusted EBITDA, Adjusted
Earnings and Adjusted Earnings per Share are useful to
investors. The compensation committee of our board of
directors determines the annual incentive compensation for certain
members of our management based, in part, using each of these
financial measures.
We are unable to reconcile our Adjusted EPS projections to
comparable GAAP numbers because of the difficulty in predicting
adjustments that would be required such as, but not limited to,
income taxes, depreciation, amortization and other items.
|
Reconciliation of Net Income attributable to
Solutia to Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months
|
|
Three
Months
|
|
|
|
Ended
|
|
Ended
|
|
|
|
March
31,
|
|
March
31,
|
|
|
(in
millions)
|
2012
|
|
2011
|
|
|
Net Income attributable to
Solutia
|
$
53
|
|
$
65
|
|
|
|
|
|
|
|
|
Plus:
|
|
|
|
|
|
Income tax
expense (benefit)
|
(1)
|
|
8
|
|
|
Interest
expense
|
23
|
|
28
|
|
|
Loss on
debt extinguishment or modification
|
-
|
|
2
|
|
|
Depreciation and amortization
|
30
|
|
32
|
|
|
|
|
|
|
|
|
Subtotal
|
$
105
|
|
$
135
|
|
|
|
|
|
|
|
|
Plus:
|
|
|
|
|
|
Events
affecting comparability (1)
|
15
|
|
(5)
|
|
|
Non-cash
share-based compensation expense
|
6
|
|
5
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
$
126
|
|
$
135
|
|
|
|
|
|
|
|
|
(1)See
table of Summary of Events Affecting Comparability
|
|
Reconciliation of Income from Continuing
Operations attributable to Solutia to Adjusted Earnings and
Calculation of Adjusted Earnings Per Share
|
|
|
|
|
|
|
|
|
Three
Months
|
|
Three
Months
|
|
|
|
Ended
|
|
Ended
|
|
|
|
March
31,
|
|
March
31,
|
|
|
(in
millions, except per share amounts)
|
2012
|
|
2011
|
|
|
Income from Continuing Operations
attributable to Solutia
|
$
53
|
|
$
65
|
|
|
|
|
|
|
|
|
Plus:
Events affecting comparability, net of tax (1)
|
15
|
|
(5)
|
|
|
|
|
|
|
|
|
Adjusted Earnings
|
$
68
|
|
$
60
|
|
|
|
|
|
|
|
|
Weighted average diluted shares
outstanding
|
122.6
|
|
121.2
|
|
|
Adjusted Earnings per
Share
|
$
0.55
|
|
$
0.50
|
|
|
|
|
|
|
|
|
(1)See
table of Summary of Events Affecting Comparability
|
|
|
|
|
|
|
|
|
|
|
|
Summary
of Events Affecting Comparability
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months
|
|
Three
Months
|
|
|
|
|
Ended
|
|
Ended
|
|
|
|
|
March
31,
|
|
March
31,
|
|
(in
millions)
|
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
Plant
closures, divestitures and other restructuring:
|
|
|
|
|
|
|
Severance
and other charges related to the relocation of our European
regional headquarters
|
|
|
$
-
|
|
$
12
|
|
Gain on
certain other rubber chemicals divestitures
|
|
|
-
|
|
(17)
|
|
Acquisition- and merger-related
costs:
|
|
|
|
|
|
|
Inventory
step-up related to the Southwall acquisition
|
|
|
2
|
|
-
|
|
Acquisition-related expenses on the Southwall
acquisition and the pending Eastman merger
|
|
|
13
|
|
-
|
|
Adjusted EBITDA Impact
|
|
|
$
15
|
|
$
(5)
|
|
Charges
related to the modification of our 2017 Term Loan
|
|
|
-
|
|
2
|
|
Pre-tax
Income Statement Impact
|
|
|
$
15
|
|
$
(3)
|
|
Income tax
impact
|
|
|
-
|
|
(2)
|
|
After-tax Income Statement Impact
|
|
|
$
15
|
|
$
(5)
|
|
|
|
|
|
|
|
Advanced Interlayers Highlights
$ Millions
|
Q1
2012
|
Q1
2011
|
Y-o-Y
Chg
|
Net
Sales
|
$203
|
$213
|
(5%)
|
Adj. EBITDA
(1)
|
$40
|
$49
|
(18%)
|
Adj. EBITDA
margin
|
20%
|
23%
|
(13%)
|
|
|
Qtr
Y-o-Y
|
Net
Sales change
|
Volume/Mix
|
(5%)
|
|
Selling
Price
|
1%
|
|
Currency
|
(1%)
|
|
Acquisitions
|
---
|
|
Total
|
(5%)
|
|
|
|
Adj.
EBITDA (1) change
|
Volume/Mix
(2)
|
($3)
|
|
Selling
Price
|
$2
|
|
Currency
|
---
|
|
Raw
Material Prices
|
($7)
|
|
Mfg.
Cost
|
($1)
|
|
SG&A/Other
|
---
|
|
Total
|
($9)
|
|
|
|
(1)
|
Non GAAP
measure, see reconciliations
|
(2)
|
Volume/Mix
includes impact of acquisitions
|
Performance Films Highlights
$ Millions
|
Q1
2012
|
Q1
2011
|
Y-o-Y
Chg
|
Net
Sales
|
$85
|
$76
|
12%
|
Adj. EBITDA
(1)
|
$16
|
$19
|
(16%)
|
Adj. EBITDA
margin
|
19%
|
25%
|
(24%)
|
|
|
Qtr
Y-o-Y
|
Net
Sales change
|
Volume/Mix
|
4%
|
|
Selling
Price
|
---
|
|
Currency
|
---
|
|
Acquisitions
|
8%
|
|
Total
|
12%
|
|
|
|
Adj.
EBITDA (1) change
|
Volume/Mix
(2)
|
$3
|
|
Selling
Price
|
---
|
|
Currency
|
---
|
|
Raw
Material Prices
|
($3)
|
|
Mfg.
Cost
|
($2)
|
|
SG&A/Other
|
($1)
|
|
Total
|
($3)
|
|
|
|
(1)
|
Non GAAP
measure, see reconciliations
|
(2)
|
Volume/Mix
includes impact of acquisitions
|
Technical Specialties Highlights
$ Millions
|
Q1
2012
|
Q1
2011
|
Y-o-Y
Chg
|
Net
Sales
|
$210
|
$220
|
(5%)
|
Adj. EBITDA
(1)
|
$84
|
$81
|
4%
|
Adj. EBITDA
margin
|
40%
|
37%
|
8%
|
|
|
Qtr
Y-o-Y
|
Net
Sales change
|
Volume/Mix
|
(7%)
|
|
Selling
Price
|
5%
|
|
Currency
|
---
|
|
Divestitures
|
(3%)
|
|
Total
|
(5%)
|
|
|
|
Adj.
EBITDA (1) change
|
Volume/Mix
|
($8)
|
|
Selling
Price
|
$12
|
|
Currency
|
$1
|
|
Raw
Material Prices
|
($10)
|
|
Mfg.
Cost
|
$10
|
|
SG&A/Other
|
($1)
|
|
Divestitures
|
($1)
|
|
Total
|
$3
|
|
|
|
(1)
|
Non GAAP
measure, see reconciliations
|
Notes to Editor: SOLUTIA and the Radiance Logo™ and
all other trademarks listed below are trademarks of Solutia Inc.
and/or its affiliates.
Forward Looking Statements
This communication may contain forward-looking statements,
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. All statements other than
statements of historical fact are statements that could be deemed
forward-looking statements, including, without limitation,
statements regarding the proposed merger; prospective performance
and opportunities of Solutia and Eastman and the outlook for their
businesses; the development and delivery of new products; the
anticipated timing and success in obtaining filings and approvals
relating to the merger; the expected timing of the completion of
the merger; the ability to complete the merger considering the
various closing conditions; and any assumptions underlying any of
the foregoing. These statements are based on Solutia's management's
current expectations and assumptions, including assumptions about
the industries in which Solutia operates. 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. For example, (1) Solutia may be unable to obtain
stockholder approval required for the merger; (2) the
companies may be unable to obtain regulatory approvals required for
the merger; (3) the conditions to the closing of the merger
may not be satisfied or satisfaction of the conditions may delay or
prevent the closing of the merger; (4) an unsolicited offer of
another company to acquire assets or capital stock of Solutia could
interfere with the merger; (5) problems may arise in
successfully integrating the businesses of the companies, which may
result in the combined company not operating as effectively and
efficiently as expected; (6) the combined company may be
unable to achieve synergies or other benefits of the merger or it
may take longer than expected to achieve those synergies or
benefits; (7) the merger may involve unexpected costs,
unexpected liabilities or unexpected delays or other adverse
effects on the companies; (8) the credit ratings of the
combined company or its subsidiaries may be different from what the
companies expect; (9) the businesses of the companies may
suffer as a result of uncertainty surrounding the merger;
(10) the industry may be subject to future regulatory or
legislative actions that could adversely affect the companies; and
(11) the companies may be adversely affected by other
economic, business, and/or competitive factors. Discussions of some
of these other important factors and assumptions are described in
Solutia's most recent Annual Report on Form 10-K, including under
"Risk Factors", and Solutia's quarterly reports on Form 10-Q and
those risks and uncertainties described in Eastman's most recent
Annual Report on Form 10-K, including under "Risk Factors", and
Eastman's quarterly reports on Form 10-Q. These reports can be
accessed through the "Investors" section of Solutia's website at
www.solutia.com and the "Investor Relations" section of Eastman's
website at www.eastman.com, respectively. The Company and Eastman
disclaim 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
except as required by law.
Additional Information about the Merger and Where to Find
It
Eastman has filed with the SEC an amended registration
statement on Form S-4 that includes a proxy statement of Solutia
and a prospectus of Eastman, each subject to completion, relating
to the merger. Investors and stockholders of Solutia and Eastman
are urged to read the final proxy statement/prospectus when it
becomes available and any other relevant documents filed with the
SEC because they will contain important information about the
merger. These documents (and all other materials filed by Solutia
or Eastman with the SEC) will be available at no charge on the
SEC's website at www.sec.gov. The final proxy statement/prospectus
will be mailed to stockholders of Solutia when it becomes
available. Investors and security holders are urged to read the
proxy statement and the other relevant materials when they become
available before making any voting or investment decision with
respect to the merger because they will contain important
information about the merger and the parties to the merger.
Participants in the Merger Solicitation
Solutia, Eastman and certain of their directors, executive
officers and certain other employees may be deemed to be
participants in the solicitation of proxies of Solutia's
stockholders in connection with the merger. Information regarding
Eastman's directors and executive officers is available in
Eastman's proxy statement filed with the SEC on March 24, 2011
in connection with its 2011 annual meeting of stockholders, and
information regarding Solutia's directors and executive officers is
available in Solutia's proxy statement filed with the SEC on
March 4, 2011 in connection with its 2011 annual meeting of
stockholders. Additional information about the interests of
potential participants will be included in the final proxy
statement and other relevant materials which may be filed with the
SEC in connection with the merger when and if they become
available.
This communication shall not constitute an offer to sell or the
solicitation of an offer to buy securities, no shall there be any
sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of such jurisdiction.
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® polyvinyl butyral interlayers for glass lamination and
for photovoltaic module encapsulation and VISTASOLAR® ethylene
vinyl acetate films for photovoltaic module encapsulation;
LLumar®, Vista™, EnerLogic®, FormulaOne®, Gila®, V-KOOL®, Huper
Optik®, IQue™, Sun-X™ and Nanolux™ aftermarket performance films
for automotive and architectural applications; XIR® and Heat
Mirror® performance films that are incorporated into aftermarket
window films, laminated glass products and suspended insulated
glass units for use in automotive and architectural applications.
Flexvue™ advanced film component solutions for solar and
electronic technologies; and technical specialties products
including Crystex® insoluble sulfur, Santoflex® PPD
antidegradants, Therminol® heat transfer fluids and Skydrol®
aviation hydraulic fluids. 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 3,400 employees in
more than 50 worldwide locations. More information is available at
www.Solutia.com.
SOURCE Solutia Inc.