Included in underlying earnings is the previously reported $5 million, or 5 cents per share loss associated with the severe storms and flooding of our Integrated Nylon facility in Texas.
"We continue to be encouraged by the year over year improvements we are seeing in sales and margins. However, the industry continues to be affected by uncertainty in global economies and higher raw material costs," said chairman and chief executive officer John C. Hunter.
The third quarter charges resulted from two events. Solutia has reached agreement for the resolution of a complex construction dispute with Fluor Corporation. The company has agreed to pay Fluor $20 million over a three-year period. The impact to the quarter's earnings will be $3 million, or 3 cents per share. The remaining settlement amount will be realized over the remaining useful life of the plant. Additionally, as required by FASB Statement No. 88, Solutia recorded a pension settlement loss of $8 million, or 8 cents per share in the third quarter.
Solutia plans to discuss its earnings in greater detail at its third quarter earnings conference call on Friday, Oct. 25, 2002, at 9 a.m. central time. The teleconference will be webcast on our website at: http://www.solutia.com/pages/corporate/investors/investor_relations.asp , under the presentations and speeches tab.
Solutia Updates Third Quarter Outlook
Solutia Inc. indicated that third quarter underlying earnings are expected to be approximately 11 cents per share, excluding net charges of $11 million, or 11 cents per share.