Solutia Income Up in 2008 Despite Slow 4Q

St. Louis, MO, Feb. 18, 2009--Solutia Inc. reported a 14% increase in net sales and a 29% increase in adjusted EBITDA from continuing operations for 2008, as compared to 2007 on a pro forma basis.

Net sales for the full year 2008 were $2.1 billion, an improvement of 14% over 2007 on a pro forma basis. Average selling prices increased 10%, and were positive across all business segments for the year.

Volumes in total were basically flat, with Saflex reporting a gain of 3%, and CPFilms and Technical Specialties both down 2%.

Solutia had consolidated net income from continuing operations of $1.23 billion for 2008 compared to a loss of $256 million for 2007.

"Our achievements in 2008 were just the beginning of building Solutia into a performance material and specialty chemical company that creates value for our shareholders," said Jeffry N. Quinn, chairman, president and chief executive officer.

"We have transformed our portfolio to be focused on specialty materials and chemicals, improved our balance sheet and delivered strong financial results, with a 29% adjusted EBITDA improvement over pro forma 2007. Notwithstanding these strong full-year results, we did experience a significant decline in volumes during the fourth quarter as a result of the broader downturn in the global markets."

Solutia reported a 13% decrease in net sales and a 4% increase in adjusted EBITDA from continuing operations for the fourth quarter compared to the same period in 2007.

Solutia had a consolidated loss from continuing operations of $17 million for the quarter compared to a loss of $126 million for the same period in 2007.

Consolidated EBITDA for the fourth quarter increased to $35 million from $34 million in 2007.

"The sharp downturn in the global markets in the fourth quarter led to a dramatic reduction in demand," Quinn said.

Solutia reported results from its nylon segment as discontinued operations. In the fourth quarter, the loss from discontinued operations increased $579 million to a net loss of $598 million, in comparison to the same period in 2007.