The charges cover Solutia's share of restructuring costs at its Astaris and Flexsys joint ventures, increases to environmental and self-insurance reserves, additional severance costs and the write-down of certain non-performing assets. Net income for the fourth quarter of 2000 was $12 million, or 12 cents per share, on sales of $731 million, excluding $96 million, or 93 cents per share, of after-tax charges associated with the $100 million cost reduction initiative and the write-down of certain non-performing, non-strategic assets. Including previously announced charges, Solutia reported a net loss for the fourth quarter 2001 of $101 million, or 97 cents per share, compared to a net loss of $84 million, or 81 cents per share, for the fourth quarter of 2000.
Solutia's results for the quarter versus the year ago period were positively impacted by the effects of significantly lower raw material costs and the implementation of its $100 million cost reduction program. However, these benefits were more than offset by the effects of lower average selling prices and lower sales volumes associated with recession-like demand and aggressive competitor actions in many of Solutia's global markets. In addition, unfavorable manufacturing volume variances from significantly reduced capacity utilization rates continue to adversely impact the company's profitability.
"Solutia's businesses have weathered a very challenging year by aggressively implementing our cost reduction program, which delivered more than $50 million to Solutia's bottom line in 2001. We are focusing on our straight-forward portfolio strategy and delivering on the opportunities in the portfolio that can provide shorter-term appreciation in cash flow and earnings growth," John Hunter, chairman and chief executive officer said.
"In these uncertain economic times, we remain committed to prudently managing our costs, focusing our growth and capital spending on those opportunities that can deliver the most immediate return to our shareholders and positioning our businesses to take advantage of a future global economic recovery," said Hunter.