----

----

| DELAWARE                                                       | 43-1781797                           |
|----------------------------------------------------------------|--------------------------------------|
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |

| 575 MARYVILLE CENTRE DRIVE, P.O. BOX 66760, ST. LOUIS, MISSOURI | 63166-6760 |
|-----------------------------------------------------------------|------------|
| (Address of principal executive offices)                        | (Zip Code) |

|  Class                   |   | Outstanding atMarch 31, 2010 |   |
|-------------------------------|--------|------------------------------|--------|
| Common Stock, $0.01 par value |   |  121,353,399            |   |

----

|                                                                |   | Three Months EndedMarch 31, |   |
|---------------------------------------------------------------------|--------|-----------------------------|--------|
|                                                                |   | 2010                        |   |   | 2009 |   |
|                                                                |   |                        |   |   |   |   |
| Net Sales                                                           |   | $                           | 466    |   |   | $ | 339 |   |
| Cost of goods sold                                                  |   |                        | 320    |   |   |   | 258 |   |
| Gross Profit                                                        |   |                        | 146    |   |   |   | 81 |   |
| Selling, general and administrative expenses                        |   |                        | 66     |   |   |   | 50 |   |
| Research, development and other operating expenses, net             |   |                        | 4      |   |   |   | 4 |   |
| Operating Income                                                    |   |                        | 76     |   |   |   | 27 |   |
| Interest expense                                                    |   |                        | (38    | ) |   |   | (37 | ) |
| Other income (loss), net                                            |   |                        | 3      |   |   |   | (1 | ) |
| Loss on debt extinguishment                                         |   |                        | (89    | ) |   |   | -- |   |
| Loss from Continuing Operations Before Income Tax Expense (Benefit) |   |                        | (48    | ) |   |   | (11 | ) |
| Income tax expense (benefit)                                        |   |                        | 9      |   |   |   | (7 | ) |
| Loss from Continuing Operations                                     |   |                        | (57    | ) |   |   | (4 | ) |
| Loss from Discontinued Operations, net of tax                       |   |                        | --     |   |   |   | (155 | ) |
| Net Loss                                                            |   |                        | (57    | ) |   |   | (159 | ) |
| Net income attributable to noncontrolling interest                  |   |                        | 1      |   |   |   | -- |   |
| Net Loss attributable to Solutia                                    |   | $                           | (58    | ) |   | $ | (159 | ) |
|                                                                |   |                        |   |   |   |   |   |   |
| Basic and Diluted Loss per Share attributable to Solutia:           |   |                        |   |   |   |   |   |   |
| Loss from Continuing Operations attributable to Solutia             |   | $                           | (0.49  | ) |   | $ | (0.04 | ) |
| Loss from Discontinued Operations, net of tax                       |   |                        | --     |   |   |   | (1.66 | ) |
| Net Loss attributable to Solutia                                    |   | $                           | (0.49  | ) |   | $ | (1.70 | ) |

|                                                         |   | Three Months EndedMarch 31, |   |
|--------------------------------------------------------------|--------|-----------------------------|--------|
|                                                         |   | 2010                        |   |   | 2009 |   |
|                                                         |   |                        |   |   |   |   |
| Net Loss                                                     |   | $                           | (57    | ) |   | $ | (159 | ) |
| Other Comprehensive Income (Loss):                           |   |                        |   |   |   |   |   |   |
| Currency translation adjustments                             |   |                        | (35    | ) |   |   | (37 | ) |
| Unrealized gain on derivative instruments                    |   |                        | --     |   |   |   | 4 |   |
| Amortization of net actuarial loss                           |   |                        | 1      |   |   |   | 2 |   |
| Pension settlement charge                                    |   |                        | 1      |   |   |   | -- |   |
| Comprehensive Loss                                           |   |                        | (90    | ) |   |   | (190 | ) |
| Comprehensive Income attributable to noncontrolling interest |   |                        | 1      |   |   |   | -- |   |
| Comprehensive Loss attributable to Solutia                   |   | $                           | (91    | ) |   | $ | (190 | ) |

----

|                                                                                                              |   | March 31,2010 |   |   | December 31,2009 |   |
|-------------------------------------------------------------------------------------------------------------------|--------|---------------|--------|--------|------------------|--------|
|                                                                                                              |   |          |   |   |             |   |
| ASSETS                                                                                                            |   |          |   |   |             |   |
| Current Assets:                                                                                                   |   |          |   |   |             |   |
| Cash and cash equivalents                                                                                         |   | $             | 458    |   |             | $      | 243 |   |
| Trade receivables, net of allowances of $3 in 2010 and $2 in 2009                                                 |   |          | 283    |   |             |   | 268 |   |
| Miscellaneous receivables                                                                                         |   |          | 75     |   |             |   | 82 |   |
| Inventories                                                                                                       |   |          | 271    |   |             |   | 257 |   |
| Prepaid expenses and other assets                                                                                 |   |          | 21     |   |             |   | 37 |   |
| Assets of discontinued operations                                                                                 |   |          | 10     |   |             |   | 10 |   |
| Total Current Assets                                                                                              |   |          | 1,118  |   |             |   | 897 |   |
| Net Property, Plant and Equipment                                                                                 |   |          | 883    |   |             |   | 919 |   |
| Goodwill                                                                                                          |   |          | 511    |   |             |   | 511 |   |
| Identified Intangible Assets, net                                                                                 |   |          | 783    |   |             |   | 803 |   |
| Other Assets                                                                                                      |   |          | 91     |   |             |   | 136 |   |
| Total Assets                                                                                                      |   | $             | 3,386  |   |             | $      | 3,266 |   |
|                                                                                                              |   |          |   |   |             |   |   |   |
| LIABILITIES AND SHAREHOLDERS’ EQUITY                                                                        |   |          |   |   |             |   |   |   |
| Current Liabilities:                                                                                              |   |          |   |   |             |   |   |   |
| Accounts payable                                                                                                  |   | $             | 167    |   |             | $      | 169 |   |
| Accrued liabilities                                                                                               |   |          | 221    |   |             |   | 206 |   |
| Short-term debt, including current portion of long-term debt                                                      |   |          | 24     |   |             |   | 28 |   |
| Liabilities of discontinued operations                                                                            |   |          | 46     |   |             |   | 50 |   |
| Total Current Liabilities                                                                                         |   |          | 458    |   |             |   | 453 |   |
| Long-Term Debt                                                                                                    |   |          | 1,536  |   |             |   | 1,264 |   |
| Postretirement Liabilities                                                                                        |   |          | 353    |   |             |   | 411 |   |
| Environmental Remediation Liabilities                                                                             |   |          | 255    |   |             |   | 260 |   |
| Deferred Tax Liabilities                                                                                          |   |          | 169    |   |             |   | 179 |   |
| Other Liabilities                                                                                                 |   |          | 102    |   |             |   | 99 |   |
|                                                                                                              |   |          |   |   |             |   |   |   |
| Commitments and Contingencies (Note 8)                                                                            |   |          |   |   |             |   |   |   |
|                                                                                                              |   |          |   |   |             |   |   |   |
| Shareholders’ Equity:                                                                                       |   |          |   |   |             |   |   |   |
| Common stock at $0.01 par value; (500,000,000 shares authorized, 121,869,293 shares issued in both 2010 and 2009) |   |          | 1      |   |             |   |  1 |   |
| Additional contributed capital                                                                                    |   |          | 1,616  |   |             |   | 1,612 |   |
| Treasury shares, at cost (515,894 in 2010 and 430,203 in 2009)                                                    |   |          | (3     | )      |             |   | (2 | ) |
| Accumulated other comprehensive loss                                                                              |   |          | (270   | )      |             |   | (237 | ) |
| Accumulated deficit                                                                                               |   |          | (839   | )      |             |   | (781 | ) |
| Total Shareholders’ Equity attributable to Solutia                                                          |   |          | 505    |   |             |   | 593 |   |
| Equity attributable to noncontrolling interest                                                                    |   |          | 8      |   |             |   | 7 |   |
| Total Shareholders’ Equity                                                                                  |   |          | 513    |   |             |   | 600 |   |
| Total Liabilities and Shareholders’ Equity                                                                  |   | $             | 3,386  |   |             | $      | 3,266 |   |

----

|                                                                            |   | Three Months EndedMarch 31, |   |
|---------------------------------------------------------------------------------|--------|-----------------------------|--------|
|                                                                            |   | 2010                        |   |   | 2009 |   |
| INCREASE IN CASH AND CASH EQUIVALENTSOPERATING ACTIVITIES:                      |   |                        |   |   |   |   |
| Net loss                                                                        |   | $                           | (57    | ) |   | $ | (159 | ) |
| Adjustments to reconcile net loss to net cash provided by (used in) operations: |   |                        |   |   |   |   |   |   |
| Loss from discontinued operations, net of tax                                   |   |                        | --     |   |   |   | 155 |   |
| Depreciation and amortization                                                   |   |                        | 27     |   |   |   | 25 |   |
| Pension obligation related expense less than contributions                      |   |                        | (52    | ) |   |   | (5 | ) |
| Other postretirement benefit obligation related expense less than contributions |   |                        | --     |   |   |   | (2 | ) |
| Amortization of deferred debt issuance costs and debt discount                  |   |                        | 4      |   |   |   | 5 |   |
| Deferred income taxes                                                           |   |                        | (11    | ) |   |   | (14 | ) |
| Other charges (gains):                                                          |   |                        |   |   |   |   |   |   |
| Non-cash loss on deferred debt issuance cost write-off                          |   |                        | 80     |   |   |   | -- |   |
| Other charges (gains), including restructuring expenses                         |   |                        | 20     |   |   |   | (1 | ) |
| Changes in assets and liabilities:                                              |   |                        |   |   |   |   |   |   |
| Income taxes payable                                                            |   |                        | 5      |   |   |   | (9 | ) |
| Trade receivables                                                               |   |                        | (15    | ) |   |   | 33 |   |
| Inventories                                                                     |   |                        | (14    | ) |   |   | 31 |   |
| Accounts payable                                                                |   |                        | (7     | ) |   |   | (42 | ) |
| Environmental remediation liabilities                                           |   |                        | (5     | ) |   |   | (5 | ) |
| Restricted cash for environmental remediation and other legacy payments         |   |                        | --     |   |   |   | 5 |   |
| Other assets and liabilities                                                    |   |                        | 25     |   |   |   | 13 |   |
| Cash Provided by Operations – Continuing Operations                       |   |                        | --     |   |   |   | 30 |   |
| Cash Provided by (Used in) Operations – Discontinued Operations           |   |                        | (4     | ) |   |   | 40 |   |
| Cash Provided by (Used in) Operations                                           |   |                        | (4     | ) |   |   | 70 |   |
|                                                                            |   |                        |   |   |   |   |   |   |
| INVESTING ACTIVITIES:                                                           |   |                        |   |   |   |   |   |   |
| Property, plant and equipment purchases                                         |   |                        | (5     | ) |   |   | (15 | ) |
| Acquisition and investment payments                                             |   |                        | (1     | ) |   |   | (1 | ) |
| Investment proceeds and property disposals                                      |   |                        | --     |   |   |   | 1 |   |
| Cash Used in Investing Activities – Continuing Operations                 |   |                        | (6     | ) |   |   | (15 | ) |
| Cash Used in Investing Activities – Discontinued Operations               |   |                        | --     |   |   |   | (5 | ) |
| Cash Used in Investing Activities                                               |   |                        | (6     | ) |   |   | (20 | ) |
|                                                                            |   |                        |   |   |   |   |   |   |
| FINANCING ACTIVITIES:                                                           |   |                        |   |   |   |   |   |   |
| Net change in lines of credit                                                   |   |                        | --     |   |   |   | 2 |   |
| Proceeds from long-term debt obligations                                        |   |                        | 1,144  |   |   |   | -- |   |
| Net change in long-term revolving credit facilities                             |   |                        | --     |   |   |   | (43 | ) |
| Payment of long-term debt obligations                                           |   |                        | (876   | ) |   |   | (3 | ) |
| Debt issuance costs                                                             |   |                        | (25    | ) |   |   | -- |   |
| Purchase of treasury shares                                                     |   |                        | (1     | ) |   |   | (1 | ) |
| Other, net                                                                      |   |                        | (9     | ) |   |   | (2 | ) |
| Cash Provided by (Used in) Financing Activities                                 |   |                        | 233    |   |   |   | (47 | ) |
|                                                                            |   |                        |   |   |   |   |   |   |
| Effect of Exchange Rate Changes on Cash                                         |   |                        | (8     | ) |   |   | -- |   |
|                                                                            |   |                        |   |   |   |   |   |   |
| INCREASE IN CASH AND CASH EQUIVALENTS                                           |   |                        | 215    |   |   |   | 3 |   |
| CASH AND CASH EQUIVALENTS:                                                      |   |                        |   |   |   |   |   |   |
| Beginning of period                                                             |   |                        | 243    |   |   |   | 32 |   |
| End of period                                                                   |   | $                           | 458    |   |   | $ | 35 |   |
|                                                                            |   |                        |   |   |   |   |   |   |
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                               |   |                        |   |   |   |   |   |   |
| Cash payments for interest                                                      |   | $                           | 16     |   |   | $ | 19 |   |
| Cash payments for income taxes, net of refunds                                  |   | $                           | 7      |   |   | $ | 2 |   |
|                                                                            |   |                        |   |   |   |   |   |   |
| Non-Cash Investing Activities:                                                  |   |                        |   |   |   |   |   |   |
| Capital expenditures included in accounts payable                               |   | $                           | 3      |   |   | $ | 6 |   |
|                                                                            |   |                        |   |   |   |   |   |   |
| Non-Cash Financing Activities:                                                  |   |                        |   |   |   |   |   |   |
| Deferred debt issuance costs included in other liabilities                      |   | $                           | 2      |   |   | $ | -- |   |

| See accompanying Notes to the Consolidated Financial Statements. |
|------------------------------------------------------------------|

----

|                                                             |   | Equity attributable to Solutia |   |   |                           |   |   |           |   |
|------------------------------------------------------------------|--------|--------------------------------|--------|--------|--------------------------------|--------|--------|----------------|--------|
|                                                             |   | CommonStock                    |   |   | Additional Contributed Capital |   |   | Treasury Stock |   |   | Accumulated Other Comprehensive Loss |   |   | Accumulated Deficit |   |   | Equity Attributable to Noncontrolling Interest |   |   | Total Shareholders’ Equity |   |
| Beginning Balance – January 1, 2009                        |   | $                              | 1      |   |                           | $      | 1,474  |           |   | $ | -- |   |   | $ | (286 | ) |   | $ | (668 | ) |   | $ | 8 |   |   | $ | 529 |   |
| Comprehensive income:                                            |   |                           |   |   |                           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                                         |   |                           | --     |   |                           |   | --     |           |   |   | -- |   |   |   | -- |   |   |   | (159 | ) |   |   | -- |   |   |   | (159 | ) |
| Accumulated currency adjustments                                 |   |                           | --     |   |                           |   | --     |           |   |   | -- |   |   |   | (37 | ) |   |   | -- |   |   |   | -- |   |   |   | (37 | ) |
| Unrealized gain on derivative instruments                        |   |                           | --     |   |                           |   | --     |           |   |   | -- |   |   |   | 4 |   |   |   | -- |   |   |   | -- |   |   |   | 4 |   |
| Amortization of net actuarial loss                               |   |                           | --     |   |                           |   | --     |           |   |   | -- |   |   |   | 2 |   |   |   | -- |   |   |   | -- |   |   |   | 2 |   |
| Dividends attributable to noncontrolling interest                |   |                           | --     |   |                           |   | --     |           |   |   | -- |   |   |   | -- |   |   |   | -- |   |   |   | (2 | ) |   |   | (2 | ) |
| Treasury stock purchases                                         |   |                           | --     |   |                           |   | --     |           |   |   | (1 | ) |   |   | -- |   |   |   | -- |   |   |   | -- |   |   |   | (1 | ) |
| Share-based compensation expense                                 |   |                           | --     |   |                           |   | 6      |           |   |   | -- |   |   |   | -- |   |   |   | -- |   |   |   | -- |   |   |   | 6 |   |
| Ending Balance – March 31, 2009                            |   | $                              | 1      |   |                           | $      | 1,480  |           |   | $ | (1 | ) |   | $ | (317 | ) |   | $ | (827 | ) |   | $ | 6 |   |   | $ | 342 |   |
|                                                             |   |                           |   |   |                           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                             |   |                           |   |   |                           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning Balance – January 1, 2010                        |   | $                              | 1      |   |                           | $      | 1,612  |           |   | $ | (2 | ) |   | $ | (237 | ) |   | $ | (781 | ) |   | $ | 7 |   |   | $ | 600 |   |
| Comprehensive income:                                            |   |                           |   |   |                           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Net loss                           |   |                           | --     |   |                           |   | --     |           |   |   | -- |   |   |   | -- |   |   |   | (58 | ) |   |   | 1 |   |   |   | (57 | ) |
|      Accumulated currency adjustments   |   |                           | --     |   |                           |   | --     |           |   |   | -- |   |   |   | (35 | ) |   |   | -- |   |   |   | -- |   |   |   | (35 | ) |
|      Amortization of net actuarial loss |   |                           | --     |   |                           |   | --     |           |   |   | -- |   |   |   | 1 |   |   |   | -- |   |   |   | -- |   |   |   | 1 |   |
|      Pension settlement charge          |   |                           | --     |   |                           |   | --     |           |   |   | -- |   |   |   | 1 |   |   |   | -- |   |   |   | -- |   |   |   | 1 |   |
| Treasury stock purchases                                         |   |                           | --     |   |                           |   | --     |           |   |   | (1 | ) |   |   | -- |   |   |   | -- |   |   |   | -- |   |   |   | (1 | ) |
| Share-based compensation expense                                 |   |                           | --     |   |                           |   | 4      |           |   |   | -- |   |   |   | -- |   |   |   | -- |   |   |   | -- |   |   |   | 4 |   |
| Ending Balance – March 31, 2010                            |   | $                              | 1      |   |                           | $      | 1,616  |           |   | $ | (3 | ) |   | $ | (270 | ) |   | $ | (839 | ) |   | $ | 8 |   |   | $ | 513 |   |
|                                                             |   |                           |   |   |                           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

----

|                                          |   | Three Months EndedMarch 31, |   |
|-----------------------------------------------|--------|-----------------------------|--------|
|                                          |   | 2010                        |   |   | 2009 |   |
| Integrated Nylon:                             |   |                        |   |   |   |   |
| Operating results:                            |   |                        |   |   |   |   |
| Net sales                                     |   | $                           | --     |   |   | $ | 208 |   |
| Loss before income taxes                      |   | $                           | --     |   |   | $ | (174 | ) |
| Income tax benefit                            |   |                        | --     |   |   |   | (17 | ) |
| Loss from discontinued operations, net of tax |   | $                           | --     |   |   | $ | (157 | ) |

|                                   |   | March 31,2010 |   |   | December 31,2009 |   |
|----------------------------------------|--------|---------------|--------|--------|------------------|--------|
|                                   |   |          |   |   |             |   |
| Assets:                                |   |          |   |   |             |   |
| Miscellaneous receivables              |   | $             | 10     |   |             | $      | 10 |   |
| Assets of discontinued operations      |   | $             | 10     |   |             | $      | 10 |   |
|                                   |   |          |   |   |             |   |   |   |
| Liabilities:                           |   |          |   |   |             |   |   |   |
| Accounts payable                       |   | $             | 29     |   |             | $      | 29 |   |
| Accrued liabilities                    |   |          | 17     |   |             |   | 21 |   |
| Liabilities of discontinued operations |   | $             | 46     |   |             | $      | 50 |   |

----

|                                   |   | March 31,2010 |   |
|----------------------------------------|--------|---------------|--------|
|                                   |   |          |   |
| Expected volatility                    |   |          | 35.13  | % |
| Expected term (in years)               |   |          | 6      |   |
| Risk-free rate                         |   |          | 2.44   | % |
| Weighted-average grant date fair value |   | $             | 4.98   |   |

|                                         |   | Options |      |   | Weighted-AverageExercise Price |   |   | Weighted-AverageRemainingContractual Life |   |   | AggregateIntrinsicValue (a) |   |
|----------------------------------------------|--------|---------|-----------|--------|--------------------------------|--------|--------|-------------------------------------------|--------|--------|-----------------------------|--------|
|                                         |   |    |      |   |                           |   |   |                                      |   |   |                        |   |
| Vested or Expected to Vest at March 31, 2010 |   |    | 1,863,741 |   |                           | $      | 17.22  |                                      |   |   | 7.9                         |   |   | $ | -- |   |
| Exercisable at March 31, 2010                |   |    | 1,240,857 |   |                           | $      | 17.30  |                                      |   |   | 7.9                         |   |   | $ | -- |   |

| (a) | Intrinsic value for stock options is calculated based on the difference between the exercise price of the underlying awards and the quoted market price of our common stock as of the reporting date. If the exercise price of the underlying awards is higher than the quoted market price of our common stock as of the reporting date, the intrinsic value of the award is $0. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                  |   | Balance |   |
|-----------------------|--------|---------|--------|
| Advanced Interlayers  |   | $       | 205    |   |
| Performance Films     |   |    | 159    |   |
| Technical Specialties |   |    | 147    |   |
| Total                 |   | $       | 511    |   |

|                               |   | March 31, 2010              |   |   | December 31, 2009  |   |
|------------------------------------|--------|-----------------------------|--------|--------|--------------------|--------|
|                               |   | EstimatedUsefulLife inYears |   |   | GrossCarryingValue |   |   | AccumulatedAmortization |   |   | NetCarryingValue |   |   | EstimatedUsefulLife inYears |   |   | GrossCarryingValue |   |   | AccumulatedAmortization |   |   | NetCarryingValue |   |
|                               |   |                        |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortizable intangible assets:     |   |                        |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Customer relationships             |   | 23 to 27                    |   |   | $                  | 486    |   |   | $ | (38 | ) |   | $ | 448 |   |   | 23 to 27 |   |   | $ | 491 |   |   | $ | (34 | ) |   | $ | 457 |   |
| Technology                         |   | 5 to 26                     |   |   |               | 197    |   |   |   | (21 | ) |   |   | 176 |   |   | 5 to 26 |   |   |   | 202 |   |   |   | (19 | ) |   |   | 183 |   |
| Trade names                        |   |  25                    |   |   |               | 13     |   |   |   | (1 | ) |   |   | 12 |   |   |  25 |   |   |   | 13 |   |   |   | (1 | ) |   |   | 12 |   |
| Patents                            |   |  13                    |   |   |               | 5      |   |   |   | (1 | ) |   |   | 4 |   |   |  13 |   |   |   | 5 |   |   |   | (1 | ) |   |   | 4 |   |
| Non amortizable intangible assets: |   |                        |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Trademarks                         |   |                        |   |   |               |   | 143 |   |   |   | -- |   |   |   | 143 |   |   |   |   |   |   |   | 147 |   |   |   | -- |   |   |   | 147 |   |
| Total Identified Intangible Assets |   |                        |   |   |               | $      | 844 |   |   | $ | (61 | ) |   | $ | 783 |   |   |   |   |   |   | $ | 858 |   |   | $ | (55 | ) |   | $ | 803 |   |

|                                         |   | Three Months EndedMarch 31, |   |
|----------------------------------------------|--------|-----------------------------|--------|
|                                         |   | 2010                        |   |   | 2009 |   |
|                                         |   |                        |   |   |   |   |
| Cost of goods sold                           |   | $                           | 2      |   |   | $ | 2 |   |
| Selling, general and administrative expenses |   | $                           | 5      |   |   | $ | 5 |   |

----

| Inventories                   |   | March 31,2010 |   |   | December 31,2009 |   |
|-------------------------------|--------|---------------|--------|--------|------------------|--------|
|                          |   |          |   |   |             |   |
| Finished goods                |   | $             | 150    |   |             | $      | 138 |   |
| Goods in process              |   |          | 46     |   |             |   | 47 |   |
| Raw materials and supplies    |   |          | 75     |   |             |   | 71 |   |
| Inventories, at FIFO cost     |   | $             | 271    |   |             |   | 256 |   |
| Excess of LIFO over FIFO cost |   |          |   |   |             |   | 1 |   |
| Total Inventories             |   |          |   |   |             | $      | 257 |   |

| Property, Plant and Equipment             |   | March 31,2010 |   |   | December 31,2009 |   |
|-------------------------------------------|--------|---------------|--------|--------|------------------|--------|
|                                      |   |          |   |   |             |   |
| Land                                      |   | $             | 33     |   |             | $      | 33 |   |
| Leasehold improvements                    |   |          | 10     |   |             |   | 10 |   |
| Buildings                                 |   |          | 204    |   |             |   | 211 |   |
| Machinery and equipment                   |   |          | 747    |   |             |   | 758 |   |
| Construction in progress                  |   |          | 33     |   |             |   | 35 |   |
| Total property, plant and equipment       |   |          | 1,027  |   |             |   | 1,047 |   |
| Less accumulated depreciation             |   |          | (144   | )      |             |   | (128 | ) |
| Total Property, Plant, and Equipment, Net |   | $             | 883    |   |             | $      | 919 |   |

| Accrued Liabilities                                 |   | March 31,2010 |   |   | December 31,2009 |   |
|-----------------------------------------------------|--------|---------------|--------|--------|------------------|--------|
|                                                |   |          |   |   |             |   |
| Wages and benefits                                  |   | $             | 37     |   |             | $      | 24 |   |
| Foreign currency and interest rate hedge agreements |   |          | 10     |   |             |   | 7 |   |
| Restructuring reserves                              |   |          | 10     |   |             |   | 13 |   |
| Environmental remediation liabilities               |   |          | 31     |   |             |   | 31 |   |
| Accrued income taxes payable                        |   |          | 21     |   |             |   | 19 |   |
| Accrued selling expenses                            |   |          | 14     |   |             |   | 20 |   |
| Accrued interest                                    |   |          | 20     |   |             |   | 8 |   |
| Other                                               |   |          | 78     |   |             |   | 84 |   |
| Total Accrued Liabilities                           |   | $             | 221    |   |             | $      | 206 |   |

----

|                                                      |   | FutureContractualPayments |   |   | EmploymentReductions |   |   | Total  |   |
|-----------------------------------------------------------|--------|---------------------------|--------|--------|----------------------|--------|--------|--------|--------|
| Three Months Ended and Cumulative through March 31, 2010: |   |                      |   |   |                 |   |   |   |   |
| Cost of goods sold                                        |   | $                         | 1      |   |                 | $      | 1      |   |   | $ | 2 |   |
| Selling, general and administrative expenses              |   |                      | --     |   |                 |   | 1      |   |   |   | 1 |   |
| Total                                                     |   | $                         | 1      |   |                 | $      | 2      |   |   | $ | 3 |   |

----

|                                                   |   | Advanced Interlayers |   |   | Performance Films |   |   | Technical Specialties |   |   | Unallocated and Other |   |   | Total  |   |
|--------------------------------------------------------|--------|----------------------|--------|--------|-------------------|--------|--------|-----------------------|--------|--------|-----------------------|--------|--------|--------|--------|
| Three Months Ended March 31, 2010:                     |   |                 |   |   |              |   |   |                  |   |   |                  |   |   |   |   |
| Cost of goods sold                                     |   | $                    | --     |   |              | $      | 1      |                  |   | $      | --                    |   |   | $      | --     |   |   | $ | 1 |   |
| Selling, general and administrative expenses           |   |                 | --     |   |              |   | --     |                  |   |   | 1                     |   |   |   | --     |   |   |   | 1 |   |
| Total                                                  |   | $                    | --     |   |              | $      | 1      |                  |   | $      | 1                     |   |   | $      | --     |   |   | $ | 2 |   |
|                                                   |   |                 |   |   |              |   |   |                  |   |   |                  |   |   |   |   |   |   |   |   |   |
| Cumulative through March 31, 2010:                     |   |                 |   |   |              |   |   |                  |   |   |                  |   |   |   |   |   |   |   |   |   |
| Cost of goods sold                                     |   | $                    | 3      |   |              | $      | 2      |                  |   | $      | 1                     |   |   | $      | 1      |   |   | $ | 7 |   |
| Selling, general and administrative expenses           |   |                 | 12     |   |              |   | 3      |                  |   |   | 3                     |   |   |   | 13     |   |   |   | 31 |   |
| Research, development and other operatingexpenses, net |   |                 | 1      |   |              |   | --     |                  |   |   | --                    |   |   |   | --     |   |   |   | 1 |   |
| Total                                                  |   | $                    | 16     |   |              | $      | 5      |                  |   | $      | 4                     |   |   | $      | 14     |   |   | $ | 39 |   |

|                               |   | FutureContractualPayments |   |   | EmploymentReductions |   |   | Other Restructuring Costs |   |   | Total  |   |
|------------------------------------|--------|---------------------------|--------|--------|----------------------|--------|--------|---------------------------|--------|--------|--------|--------|
| Three Months Ended March 31, 2010: |   |                      |   |   |                 |   |   |                      |   |   |   |   |
| Charges taken                      |   | $                         | --     |   |                 | $      | --     |                      |   | $      | 1      |   |   | $ | 1 |   |
|                               |   |                      |   |   |                 |   |   |                      |   |   |   |   |   |   |   |   |
| Cumulative through March 31, 2010: |   |                      |   |   |                 |   |   |                      |   |   |   |   |   |   |   |   |
| Charges taken                      |   | $                         | 10     |   |                 | $      | 9      |                      |   | $      | 5      |   |   | $ | 24 |   |
| Changes in estimates (a)           |   |                      | (5     | )      |                 |   | --     |                      |   |   | --     |   |   |   | (5 | ) |
| Total                              |   | $                         | 5      |   |                 | $      | 9      |                      |   | $      | 5      |   |   | $ | 19 |   |

| (a) | We reduced the future contractual payment reserve by $5 due to a renegotiation of the lease and operating agreement with our third party operator.  The new lease and operating agreement, which is effective from September 1, 2009 through December 31, 2013, reduced the services to be provided and increased certain fees allowing the contract to provide an economic benefit. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                         |   | FutureContractualPayments |   |   | EmploymentReductions |   |   | Other Restructuring Costs |   |   | Total  |   |
|------------------------------|--------|---------------------------|--------|--------|----------------------|--------|--------|---------------------------|--------|--------|--------|--------|
|                         |   |                      |   |   |                 |   |   |                      |   |   |   |   |
| Balance at December 31, 2009 |   | $                         | 2      |   |                 | $      | 15     |                      |   | $      | --     |   |   | $ | 17 |   |
| Charges taken                |   |                      | 1      |   |                 |   | 4      |                      |   |   | 1      |   |   |   | 6 |   |
| Amounts utilized             |   |                      | (1     | )      |                 |   | (7     | )                         |   |   | (1     | )      |   |   | (9 | ) |
| Currency fluctuations        |   |                      | --     |   |                 |   | (1     | )                         |   |   | --     |   |   |   | (1 | ) |
| Balance at March 31, 2010    |   | $                         | 2      |   |                 | $      | 11     |                      |   | $      | --     |   |   | $ | 13 |   |

----

----

|                         |   | Total  |   |
|------------------------------|--------|--------|--------|
| Balance at December 31, 2009 |   | $      | 291    |   |
| Net charges taken            |   |   | 3      |   |
| Amounts utilized             |   |   | (7     | ) |
| Currency fluctuations        |   |   | (1     | ) |
| Balance at March 31, 2010    |   | $      | 286    |   |

|                                             |   | March 31, 2010 |   |   | December 31, 2009 |   |
|--------------------------------------------------|--------|----------------|--------|--------|-------------------|--------|
| Environmental Remediation Liabilities, current   |   | $              | 31     |   |              | $      | 31 |   |
| Environmental Remediation Liabilities, long-term |   |           | 255    |   |              |   | 260 |   |
| Total                                            |   | $              | 286    |   |              | $      | 291 |   |

----

----

----

|                                              | March 31, 2010                                            |   |
|---------------------------------------------------|-----------------------------------------------------------|--------|
|                                              | Asset Derivatives                                         |   | Liability Derivatives |   |
|                                              | Consolidated Statement of Financial Position Presentation |   | Fair Value |   | Consolidated Statement of Financial Position Presentation |   | Fair Value |   |
| Derivative not designated as hedging instruments: |                                                      |   |   |   |   |   |   |   |
| Interest rate contracts                           | Miscellaneous Receivables                                 |   | $ | -- |   | Accrued Liabilities |   | $ | 9 |   |
|                                              | Other Assets                                              |   |   | -- |   | Other Liabilities |   |   | 17 |   |
|    Total Interest rate contracts   |                                                      |   |   | -- |   |   |   |   | 26 |   |
| Foreign exchange contracts                        | Miscellaneous Receivables                                 |   |   | 3 |   | Accrued Liabilities |   |   | 1 |   |
| Total                                             |                                                      |   | $ | 3 |   |   |   | $ | 27 |   |

|                                              | December 31, 2009                                         |   |
|---------------------------------------------------|-----------------------------------------------------------|--------|
|                                              | Asset Derivatives                                         |   | Liability Derivatives |   |
|                                              | Consolidated Statement of Financial Position Presentation |   | Fair Value |   | Consolidated Statement of Financial Position Presentation |   | Fair Value |   |
| Derivative not designated as hedging instruments: |                                                      |   |   |   |   |   |   |   |
| Interest rate contracts                           | Miscellaneous Receivables                                 |   | $ | -- |   | Accrued Liabilities |   | $ | 6 |   |
|                                              | Other Assets                                              |   |   | -- |   | Other Liabilities |   |   | 14 |   |
|    Total Interest rate contracts   |                                                      |   |   | -- |   |   |   |   | 20 |   |
| Foreign exchange contracts                        | Miscellaneous Receivables                                 |   |   | 2 |   | Accrued Liabilities |   |   | 1 |   |
| Total                                             |                                                      |   | $ | 2 |   |   |   | $ | 21 |   |

----

|                                               |                                                                           |   | Amount of Gain (Loss) Recognized inConsolidated Statement of Operations |   |
|----------------------------------------------------|--------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------|--------|
|                                               |                                                                           |   | Three Months EndedMarch 31,                                             |   |
| Derivatives not designated as hedging instruments: | Presentation of Gain (Loss) Recognized in Consolidated Statement of Operations |   | 2010                                                                    |   |   | 2009 |   |
| Interest rate contracts                            | Interest expense                                                               |   | $                                                                       | (6     | ) |   | $ | (5 | ) |
| Foreign exchange contracts                         | Other income (loss), net                                                       |   |                                                                    | 2      |   |   |   | 2 |   |
| Commodity contracts                                | Loss from Discontinued Operations, net of tax                                  |   |                                                                    | --     |   |   |   | (1 | ) |
| Total                                              |                                                                           |   | $                                                                       | (4     | ) |   | $ | (4 | ) |

|                                     |   |   |   |   | Fair Value Measurements at March 31, 2010                           |   |
|------------------------------------------|--------|--------|--------|--------|---------------------------------------------------------------------|--------|
|                                     |   | Total  |   |   | Quoted Prices in Active Markets for Identical Assets (Level 1) |   |   | Significant Other Observable Inputs(Level 2) |   |   | Significant Unobservable Inputs(Level 3) |   |
| Assets:                                  |   |   |   |   |                                                                |   |   |   |   |   |   |   |
| Derivatives – Foreign Exchange (a) |   | $      | 3      |   |                                                                | $      | -- |   |   | $ | 3 |   |   | $ | -- |   |
| Total                                    |   | $      | 3      |   |                                                                | $      | -- |   |   | $ | 3 |   |   | $ | -- |   |
|                                     |   |   |   |   |                                                                |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities:                             |   |   |   |   |                                                                |   |   |   |   |   |   |   |   |   |   |   |
| Derivatives – Foreign Exchange (a) |   | $      | 1      |   |                                                                | $      | -- |   |   | $ | 1 |   |   | $ | -- |   |
| Derivatives – Interest Rates (b)   |   |   | 26     |   |                                                                |   | -- |   |   |   | 26 |   |   |   | -- |   |
| Total                                    |   | $      | 27     |   |                                                                | $      | -- |   |   | $ | 27 |   |   | $ | -- |   |

|                                     |   |   |   |   | Fair Value Measurements at December 31, 2009                        |   |
|------------------------------------------|--------|--------|--------|--------|---------------------------------------------------------------------|--------|
|                                     |   | Total  |   |   | Quoted Prices in Active Markets for Identical Assets (Level 1) |   |   | Significant Other Observable Inputs(Level 2) |   |   | Significant Unobservable Inputs(Level 3) |   |
| Assets:                                  |   |   |   |   |                                                                |   |   |   |   |   |   |   |
| Derivatives – Foreign Exchange (a) |   | $      | 2      |   |                                                                | $      | -- |   |   | $ | 2 |   |   | $ | -- |   |
| Total                                    |   | $      | 2      |   |                                                                | $      | -- |   |   | $ | 2 |   |   | $ | -- |   |
|                                     |   |   |   |   |                                                                |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities:                             |   |   |   |   |                                                                |   |   |   |   |   |   |   |   |   |   |   |
| Derivatives – Foreign Exchange (a) |   | $      | 1      |   |                                                                | $      | -- |   |   | $ | 1 |   |   | $ | -- |   |
| Derivatives – Interest Rates (b)   |   |   | 20     |   |                                                                |   | -- |   |   |   | 20 |   |   |   | -- |   |
| Total                                    |   | $      | 21     |   |                                                                | $      | -- |   |   | $ | 21 |   |   | $ | -- |   |

| (a) | Includes foreign currency forward and options contracts which are valued using an income approach based on the present value of the forward rate less the contract rate multiplied by the notional amount. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) | Includes interest rate swaps which are valued using counterparty quotes, which use discounted cash flows and the then-applicable forward interest rates.                                                   |

----

|                                      |   | Pension Benefits            |   |   | Healthcare and Other Benefits |   |
|-------------------------------------------|--------|-----------------------------|--------|--------|-------------------------------|--------|
|                                      |   | Three Months EndedMarch 31, |   |   | Three Months EndedMarch 31,   |   |
|                                      |   | 2010                        |   |   | 2009                          |   |   | 2010 |   |   | 2009 |   |
| Service costs for benefits earned         |   | $                           | 1      |   |                          | $      | 1 |   |   | $ | 1 |   |   | $ | 1 |   |
| Interest costs on benefit obligation      |   |                        | 12     |   |                          |   | 15 |   |   |   | 2 |   |   |   | 4 |   |
| Assumed return on plan assets             |   |                        | (13    | )      |                          |   | (14 | ) |   |   | (1 | ) |   |   | (1 | ) |
| Amortization of actuarial net loss (gain) |   |                        | 2      |   |                          |   | -- |   |   |   | (1 | ) |   |   | (2 | ) |
| Settlement Charges                        |   |                        | 1      |   |                          |   | -- |   |   |   | -- |   |   |   | -- |   |
| Total                                     |   | $                           | 3      |   |                          | $      | 2 |   |   | $ | 1 |   |   | $ | 2 |   |

----

|                                    |   | March 31,2010 |   |   | December 31,2009 |   |
|-----------------------------------------|--------|---------------|--------|--------|------------------|--------|
|                                    |   |          |   |   |             |   |
| 2017 Term Loan                          |   | $             | 850    |   |             | $      | -- |   |
| 2014 Term Loan                          |   |          | --     |   |             |   | 876 |   |
| 2017 Notes                              |   |          | 400    |   |             |   | 400 |   |
| 2020 Notes                              |   |          | 300    |   |             |   | -- |   |
| Total principal amount                  |   |          | 1,550  |   |             |   | 1,276 |   |
| Less: Unamortized debt discount         |   |          | (6     | )      |             |   | -- |   |
| Less: Current portion of long-term debt |   |          | (8     | )      |             |   | (12 | ) |
| Total                                   |   | $             | 1,536  |   |             | $      | 1,264 |   |

----

| Reportable Segment    |   | Products                                                                                                                                                                                                                                                                                                                   |
|-----------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Advanced Interlayers  |   | · SAFLEX® plastic interlayer· Specialty intermediate Polyvinyl Butyral resin and plasticizer                                                                                                                                                                                                      |
| Performance Films     |   | · LLUMAR®, VISTA®, GILA® and FORMULA ONE PERFORMANCE AUTOMOTIVE FILMS® professional and retail window films· Other enhanced polymer films for industrial customers                                                                                                                 |
| Technical Specialties |   | · CRYSTEX® insoluble sulphur· SANTOFLEX® antidegradants· SANTOCURE® and PERKACIT® primary and ultra accelerators· THERMINOL® heat transfer fluids· SKYDROL® aviation hydraulic fluids· SKYKLEEN® brand of aviation solvents |

|                                                |   | Three MonthsEndedMarch 31, 2010 |   |   | Three MonthsEndedMarch 31, 2009 |   |
|-----------------------------------------------------|--------|---------------------------------|--------|--------|---------------------------------|--------|
|                                                |   | NetSales                        |   |   | Profit(Loss)                    |   |   | NetSales |   |   | Profit(Loss) |   |
|                                                |   |                            |   |   |                            |   |   |   |   |   |   |   |
| Reportable Segments:                                |   |                            |   |   |                            |   |   |   |   |   |   |   |
| Advanced Interlayers                                |   | $                               | 186    |   |                            | $      | 48 |   |   | $ | 133 |   |   | $ | 19 |   |
| Performance Films                                   |   |                            | 52     |   |                            |   | 9 |   |   |   | 34 |   |   |   | 1 |   |
| Technical Specialties                               |   |                            | 224    |   |                            |   | 74 |   |   |   | 167 |   |   |   | 56 |   |
| Reportable Segment Totals                           |   |                            | 462    |   |                            |   | 131 |   |   |   | 334 |   |   |   | 76 |   |
| Unallocated and Other                               |   |                            | 4      |   |                            |   | (26 | ) |   |   | 5 |   |   |   | (25 | ) |
| Total                                               |   |                            | 466    |   |                            |   | 105 |   |   |   | 339 |   |   |   | 51 |   |
|                                                |   |                            |   |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| Reconciliation to Consolidated Totals:              |   |                            |   |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation and amortization                       |   |                            |   |   |                            |   | (27 | ) |   |   |   |   |   |   | (25 | ) |
| Interest expense                                    |   |                            |   |   |                            |   | (38 | ) |   |   |   |   |   |   | (37 | ) |
| Loss on debt extinguishment                         |   |                            |   |   |                            |   | (89 | ) |   |   |   |   |   |   | -- |   |
| Net income attributable to noncontrolling interest  |   |                            |   |   |                            |   | 1 |   |   |   |   |   |   |   | -- |   |
| Consolidated Totals:                                |   |                            |   |   |                            |   |   |   |   |   |   |   |   |   |
| Net Sales                                           |   | $                               | 466    |   |                            |   |   |   | $ | 339 |   |   |   |   |
| Loss from Continuing Operations Before Income Taxes |   |                            |   |   |                            | $      | (48 | ) |   |   |   |   |   | $ | (11 | ) |

----

| (Shares in millions)                                                                                                  |   | Three Months EndedMarch 31, |   |
|-----------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|--------|
|                                                                                                                  |   | 2010                        |   |   | 2009 |   |
|                                                                                                                  |   |                        |   |   |   |   |
| Consolidated Statement of Operations:                                                                                 |   |                        |   |   |   |   |
| Loss from continuing operations                                                                                       |   | $                           | (57    | ) |   | $ | (4 | ) |
| Less:   Net Income attributable to noncontrolling interest                                                  |   |                        | 1      |   |   |   | -- |   |
| Loss from continuing operations attributable to Solutia                                                               |   |                        | (58    | ) |   |   | (4 | ) |
| Loss from discontinued operations, net of tax                                                                         |   |                        | --     |   |   |   | (155 | ) |
| Net Loss attributable to Solutia                                                                                      |   | $                           | (58    | ) |   | $ | (159 | ) |
|                                                                                                                  |   |                        |   |   |   |   |   |   |
| Weighted-average number of shares outstanding used for basic earnings (loss) per share                                |   |                        | 118.5  |   |   |   | 93.3 |   |
| Non-vested restricted shares(a)                                                                                       |   |                        | --     |   |   |   | -- |   |
| Stock options                                                                                                         |   |                        | --     |   |   |   | -- |   |
| Warrants                                                                                                              |   |                        | --     |   |   |   | -- |   |
| Weighted-average number of shares outstanding and common equivalent shares used for diluted earnings (loss) per share |   |                        | 118.5  |   |   |   | 93.3 |   |

| (a) | 1.5 million and 0.1 million shares of non-vested restricted stock for the three months ended March 31, 2010 and 2009, respectively, would have been considered dilutive for purposes of the earnings per share calculation in the event that operations resulted in income. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                         | Three Months EndedMarch 31, |
|------------------------------|-----------------------------|
| (Shares in millions)         | 2010                        |   | 2009 |
| Non-vested restricted shares | 0.3                         |   | 0.8 |
| Stock options                | 1.9                         |   | 2.7 |
| Warrants                     | 4.5                         |   | 4.5 |

----

|                                                               |   | Parent-OnlySolutia |       |    | Guarantors |   |     | Non-Guarantors |   |   | Eliminations |    |   | Consolidated Solutia |     |
|--------------------------------------------------------------------|--------|--------------------|------------|---------|------------|--------|----------|----------------|--------|--------|--------------|---------|--------|----------------------|----------|
|                                                               |   |               |       |    |       |   |     |           |   |   |         |    |   |                 |     |
| Net Sales                                                          |   | $                  | 112        |    |       | $      | 101      |           |   | $      | 424          |    |   | $                    | (171     | ) |   | $ | 466 |   |
| Cost of goods sold                                                 |   |               | 95         |    |       |   | 68       |           |   |   | 333          |    |   |                 | (176     | ) |   |   | 320 |   |
| Gross Profit                                                       |   |               | 17         |    |       |   | 33       |           |   |   | 91           |    |   |                 | 5        |   |   |   | 146 |   |
|                                                               |   |               |       |    |       |   |     |           |   |   |         |    |   |                 |     |   |   |   |   |   |
| Selling, general, and administrative expenses                      |   |               | 28         |    |       |   | 14       |           |   |   | 24           |    |   |                 | --       |   |   |   | 66 |   |
| Research, development and other operating expenses, net            |   |               | 2          |    |       |   | 1        |           |   |   | 1            |    |   |                 | --       |   |   |   | 4 |   |
|                                                               |   |               |       |    |       |   |     |           |   |   |         |    |   |                 |     |   |   |   |   |   |
| Operating Income (Loss)                                            |   |               | (13        | )       |       |   | 18       |           |   |   | 66           |    |   |                 | 5        |   |   |   | 76 |   |
|                                                               |   |               |       |    |       |   |     |           |   |   |         |    |   |                 |     |   |   |   |   |   |
| Equity earnings from affiliates                                    |   |               | 70         |    |       |   | 39       |           |   |   | --           |    |   |                 | (109     | ) |   |   | -- |   |
| Interest expense                                                   |   |               | (38        | )       |       |   | --       |           |   |   | (34          | )       |   |                 | 34       |   |   |   | (38 | ) |
| Other income, net                                                  |   |               | 11         |    |       |   | 13       |           |   |   | 21           |    |   |                 | (42      | ) |   |   | 3 |   |
| Loss on debt extinguishment                                        |   |               |  ( 88 | )  |       |   |  -- |           |   |   |  (1     | )  |   |                 |  -- |   |   |   |  (89 | )  |
|                                                               |   |               |       |    |       |   |     |           |   |   |         |    |   |                 |     |   |   |   |   |   |
| Income (Loss) from Continuing Operations Before Income Tax Expense |   |               | (58        | )       |       |   | 70       |           |   |   | 52           |    |   |                 | (112     | ) |   |   | (48 | ) |
| Income tax expense                                                 |   |               | --         |    |       |   | --       |           |   |   | 11           |    |   |                 | (2       | ) |   |   | 9 |   |
| Income (Loss) from Continuing Operations                           |   |               | (58        | )       |       |   | 70       |           |   |   | 41           |    |   |                 | (110     | ) |   |   | (57 | ) |
| Loss from discontinued operations, net of tax                      |   |               | --         |    |       |   | --       |           |   |   | --           |    |   |                 | --       |   |   |   | -- |   |
| Net Income (Loss)                                                  |   |               | (58        | )       |       |   | 70       |           |   |   | 41           |    |   |                 | (110     | ) |   |   | (57 | ) |
| Net Income attributable to noncontrolling interest                 |   |               | --         |    |       |   | --       |           |   |   | 1            |    |   |                 | --       |   |   |   | 1 |   |
| Net Income (Loss) attributable to Solutia                          |   | $                  | (58        | )       |       | $      | 70       |           |   | $      | 40           |    |   | $                    | (110     | ) |   | $ | (58 | ) |

----

|                                                               |   | Parent-OnlySolutia |   |   | Guarantors |   |   | Non-Guarantors |   |   | Eliminations |   |   | Consolidated Solutia |   |
|--------------------------------------------------------------------|--------|--------------------|--------|--------|------------|--------|--------|----------------|--------|--------|--------------|--------|--------|----------------------|--------|
|                                                               |   |               |   |   |       |   |   |           |   |   |         |   |   |                 |   |
| Net Sales                                                          |   | $                  | 82     |   |       | $      | 77     |           |   | $      | 293          |   |   | $                    | (113   | ) |   | $ | 339 |   |
| Cost of goods sold                                                 |   |               | 71     |   |       |   | 50     |           |   |   | 249          |   |   |                 | (112   | ) |   |   | 258 |   |
| Gross Profit                                                       |   |               | 11     |   |       |   | 27     |           |   |   | 44           |   |   |                 | (1     | ) |   |   | 81 |   |
|                                                               |   |               |   |   |       |   |   |           |   |   |         |   |   |                 |   |   |   |   |   |   |
| Selling, general, and administrative expenses                      |   |               | 16     |   |       |   | 11     |           |   |   | 23           |   |   |                 | --     |   |   |   | 50 |   |
| Research, development and other operating expenses, net            |   |               | 2      |   |       |   | 1      |           |   |   | 1            |   |   |                 | --     |   |   |   | 4 |   |
|                                                               |   |               |   |   |       |   |   |           |   |   |         |   |   |                 |   |   |   |   |   |   |
| Operating Income (Loss)                                            |   |               | (7     | )      |       |   | 15     |           |   |   | 20           |   |   |                 | (1     | ) |   |   | 27 |   |
|                                                               |   |               |   |   |       |   |   |           |   |   |         |   |   |                 |   |   |   |   |   |   |
| Equity earnings (loss) from affiliates                             |   |               | 29     |   |       |   | (3     | )              |   |   | --           |   |   |                 | (26    | ) |   |   | -- |   |
| Interest expense                                                   |   |               | (36    | )      |       |   | --     |           |   |   | (42          | )      |   |                 | 41     |   |   |   | (37 | ) |
| Other income, net                                                  |   |               | 8      |   |       |   | 16     |           |   |   | 15           |   |   |                 | (40    | ) |   |   | (1 | ) |
|                                                               |   |               |   |   |       |   |   |           |   |   |         |   |   |                 |   |   |   |   |   |   |
| Income (Loss) from Continuing Operations Before Income Tax Benefit |   |               | (6     | )      |       |   | 28     |           |   |   | (7           | )      |   |                 | (26    | ) |   |   | (11 | ) |
| Income tax benefit                                                 |   |               | --     |   |       |   | --     |           |   |   | (7           | )      |   |                 | --     |   |   |   | (7 | ) |
| Income (Loss) from Continuing Operations                           |   |               | (6     | )      |       |   | 28     |           |   |   | --           |   |   |                 | (26    | ) |   |   | (4 | ) |
| Loss from discontinued operations, net of tax                      |   |               | (153   | )      |       |   | --     |           |   |   | (2           | )      |   |                 | --     |   |   |   | (155 | ) |
| Net Income (Loss)                                                  |   |               | (159   | )      |       |   | 28     |           |   |   | (2           | )      |   |                 | (26    | ) |   |   | (159 | ) |
| Net Income attributable to noncontrolling interest                 |   |               | --     |   |       |   | --     |           |   |   | --           |   |   |                 | --     |   |   |   | -- |   |
| Net Income (Loss) attributable to Solutia                          |   | $                  | (159   | )      |       | $      | 28     |           |   | $      | (2           | )      |   | $                    | (26    | ) |   | $ | (159 | ) |

----

|                                                         |   | Parent-OnlySolutia |   |   | Guarantors |   |   | Non-Guarantors |   |   | Eliminations |   |   | ConsolidatedSolutia |   |
|--------------------------------------------------------------|--------|--------------------|--------|--------|------------|--------|--------|----------------|--------|--------|--------------|--------|--------|---------------------|--------|
| ASSETS                                                       |   |               |   |   |       |   |   |           |   |   |         |   |   |                |   |
| Current Assets:                                              |   |               |   |   |       |   |   |           |   |   |         |   |   |                |   |
| Cash and cash equivalents                                    |   | $                  | 248    |   |       | $      | 1      |           |   | $      | 209          |   |   | $                   | --     |   |   | $ | 458 |   |
| Trade receivables, net                                       |   |               | 35     |   |       |   | 55     |           |   |   | 193          |   |   |                | --     |   |   |   | 283 |   |
| Intercompany receivables                                     |   |               | 158    |   |       |   | 369    |           |   |   | 322          |   |   |                | (849   | ) |   |   | -- |   |
| Miscellaneous receivables                                    |   |               | 11     |   |       |   | 2      |           |   |   | 62           |   |   |                | --     |   |   |   | 75 |   |
| Inventories                                                  |   |               | 73     |   |       |   | 45     |           |   |   | 187          |   |   |                | (34    | ) |   |   | 271 |   |
| Prepaid expenses and other assets                            |   |               | 3      |   |       |   | 3      |           |   |   | 8            |   |   |                | 7      |   |   |   | 21 |   |
| Assets of discontinued operations                            |   |               | 10     |   |       |   | --     |           |   |   | --           |   |   |                | --     |   |   |   | 10 |   |
| Total Current Assets                                         |   |               | 538    |   |       |   | 475    |           |   |   | 981          |   |   |                | (876   | ) |   |   | 1,118 |   |
|                                                         |   |               |   |   |       |   |   |           |   |   |         |   |   |                |   |   |   |   |   |   |
| Net Property, Plant and Equipment                            |   |               | 178    |   |       |   | 141    |           |   |   | 564          |   |   |                | --     |   |   |   | 883 |   |
| Investments in Affiliates                                    |   |               | 2,103  |   |       |   | 475    |           |   |   | 92           |   |   |                | (2,670 | ) |   |   | -- |   |
| Goodwill                                                     |   |               | 150    |   |       |   | 191    |           |   |   | 170          |   |   |                | --     |   |   |   | 511 |   |
| Identified Intangible Assets, net                            |   |               | 193    |   |       |   | 318    |           |   |   | 272          |   |   |                | --     |   |   |   | 783 |   |
| Intercompany Advances                                        |   |               | 178    |   |       |   | 518    |           |   |   | 1,064        |   |   |                | (1,760 | ) |   |   | -- |   |
| Other Assets                                                 |   |               | 53     |   |       |   | 4      |           |   |   | 34           |   |   |                | --     |   |   |   | 91 |   |
| Total Assets                                                 |   | $                  | 3,393  |   |       | $      | 2,122  |           |   | $      | 3,177        |   |   | $                   | (5,306 | ) |   | $ | 3,386 |   |
|                                                         |   |               |   |   |       |   |   |           |   |   |         |   |   |                |   |   |   |   |   |   |
| LIABILITIES AND SHAREHOLDERS’ EQUITY                   |   |               |   |   |       |   |   |           |   |   |         |   |   |                |   |   |   |   |   |   |
| Current Liabilities:                                         |   |               |   |   |       |   |   |           |   |   |         |   |   |                |   |   |   |   |   |   |
| Accounts payable                                             |   | $                  | 45     |   |       | $      | 21     |           |   | $      | 101          |   |   | $                   | --     |   |   | $ | 167 |   |
| Intercompany payables                                        |   |               | 577    |   |       |   | --     |           |   |   | 272          |   |   |                | (849   | ) |   |   | -- |   |
| Accrued liabilities                                          |   |               | 104    |   |       |   | 13     |           |   |   | 105          |   |   |                | (1     | ) |   |   | 221 |   |
| Short-term debt, including current portion of long-term debt |   |               | 8      |   |       |   | --     |           |   |   | 16           |   |   |                | --     |   |   |   | 24 |   |
| Intercompany short-term debt                                 |   |               | --     |   |       |   | --     |           |   |   | 548          |   |   |                | (548   | ) |   |   | -- |   |
| Liabilities of discontinued operations                       |   |               | 46     |   |       |   | --     |           |   |   | --           |   |   |                | --     |   |   |   | 46 |   |
| Total Current Liabilities                                    |   |               | 780    |   |       |   | 34     |           |   |   | 1,042        |   |   |                | (1,398 | ) |   |   | 458 |   |
|                                                         |   |               |   |   |       |   |   |           |   |   |         |   |   |                |   |   |   |   |   |   |
| Long-Term Debt                                               |   |               | 1,536  |   |       |   | --     |           |   |   | --           |   |   |                | --     |   |   |   | 1,536 |   |
| Intercompany Long-Term Debt                                  |   |               | 10     |   |       |   | 23     |           |   |   | 1,179        |   |   |                | (1,212 | ) |   |   | -- |   |
| Postretirement Liabilities                                   |   |               | 252    |   |       |   | 3      |           |   |   | 98           |   |   |                | --     |   |   |   | 353 |   |
| Environmental Remediation Liabilities                        |   |               | 237    |   |       |   | 2      |           |   |   | 16           |   |   |                | --     |   |   |   | 255 |   |
| Deferred Tax Liabilities                                     |   |               | 21     |   |       |   | 10     |           |   |   | 138          |   |   |                | --     |   |   |   | 169 |   |
| Other Liabilities                                            |   |               | 52     |   |       |   | 6      |           |   |   | 44           |   |   |                | --     |   |   |   | 102 |   |
|                                                         |   |               |   |   |       |   |   |           |   |   |         |   |   |                |   |   |   |   |   |   |
| Shareholders’ Equity:                                  |   |               |   |   |       |   |   |           |   |   |         |   |   |                |   |   |   |   |   |   |
| Common stock                                                 |   |               | 1      |   |       |   | --     |           |   |   | --           |   |   |                | --     |   |   |   | 1 |   |
| Additional contributed capital                               |   |               | 1,616  |   |       |   | 2,044  |           |   |   | 652          |   |   |                | (2,696 | ) |   |   | 1,616 |   |
| Treasury stock                                               |   |               | (3     | )      |       |   | --     |           |   |   | --           |   |   |                | --     |   |   |   | (3 | ) |
| Accumulated other comprehensive loss                         |   |               | (270   | )      |       |   | --     |           |   |   | --           |   |   |                | --     |   |   |   | (270 | ) |
| Accumulated deficit                                          |   |               | (839   | )      |       |   | --     |           |   |   | --           |   |   |                | --     |   |   |   | (839 | ) |
| Total Shareholders’ Equity attributable to Solutia     |   |               | 505    |   |       |   | 2,044  |           |   |   | 652          |   |   |                | (2,696 | ) |   |   | 505 |   |
| Equity attributable to noncontrolling interest               |   |               | --     |   |       |   | --     |           |   |   | 8            |   |   |                | --     |   |   |   | 8 |   |
| Total Shareholders’ Equity                             |   |               | 505    |   |       |   | 2,044  |           |   |   | 660          |   |   |                | (2,696 | ) |   |   | 513 |   |
| Total Liabilities and Shareholders’ Equity             |   | $                  | 3,393  |   |       | $      | 2,122  |           |   | $      | 3,177        |   |   | $                   | (5,306 | ) |   | $ | 3,386 |   |

----

|                                                         |   | Parent-OnlySolutia |   |   | Guarantors |   |   | Non-Guarantors |   |   | Eliminations |   |   | ConsolidatedSolutia |   |
|--------------------------------------------------------------|--------|--------------------|--------|--------|------------|--------|--------|----------------|--------|--------|--------------|--------|--------|---------------------|--------|
| ASSETS                                                       |   |               |   |   |       |   |   |           |   |   |         |   |   |                |   |
| Current Assets:                                              |   |               |   |   |       |   |   |           |   |   |         |   |   |                |   |
| Cash and cash equivalents                                    |   | $                  | 104    |   |       | $      | 1      |           |   | $      | 138          |   |   | $                   | --     |   |   | $ | 243 |   |
| Trade receivables, net                                       |   |               | 27     |   |       |   | 44     |           |   |   | 197          |   |   |                | --     |   |   |   | 268 |   |
| Intercompany receivables                                     |   |               | 188    |   |       |   | 357    |           |   |   | 326          |   |   |                | (871   | ) |   |   | -- |   |
| Miscellaneous receivables                                    |   |               | 7      |   |       |   | 2      |           |   |   | 73           |   |   |                | --     |   |   |   | 82 |   |
| Inventories                                                  |   |               | 65     |   |       |   | 39     |           |   |   | 184          |   |   |                | (31    | ) |   |   | 257 |   |
| Prepaid expenses and other current assets                    |   |               | 24     |   |       |   | 1      |           |   |   | 7            |   |   |                | 5      |   |   |   | 37 |   |
| Assets of discontinued operations                            |   |               | 10     |   |       |   | --     |           |   |   | --           |   |   |                | --     |   |   |   | 10 |   |
| Total Current Assets                                         |   |               | 425    |   |       |   | 444    |           |   |   | 925          |   |   |                | (897   | ) |   |   | 897 |   |
|                                                         |   |               |   |   |       |   |   |           |   |   |         |   |   |                |   |   |   |   |   |   |
| Net Property, Plant and Equipment                            |   |               | 182    |   |       |   | 142    |           |   |   | 595          |   |   |                | --     |   |   |   | 919 |   |
| Investments in Affiliates                                    |   |               | 2,064  |   |       |   | 421    |           |   |   | 52           |   |   |                | (2,537 | ) |   |   | -- |   |
| Goodwill                                                     |   |               | 150    |   |       |   | 191    |           |   |   | 170          |   |   |                | --     |   |   |   | 511 |   |
| Identified Intangible Assets, net                            |   |               | 194    |   |       |   | 320    |           |   |   | 289          |   |   |                | --     |   |   |   | 803 |   |
| Intercompany Advances                                        |   |               | 153    |   |       |   | 552    |           |   |   | 1,259        |   |   |                | (1,964 | ) |   |   | -- |   |
| Other Assets                                                 |   |               | 92     |   |       |   | 4      |           |   |   | 40           |   |   |                | --     |   |   |   | 136 |   |
| Total Assets                                                 |   | $                  | 3,260  |   |       | $      | 2,074  |           |   | $      | 3,330        |   |   | $                   | (5,398 | ) |   | $ | 3,266 |   |
|                                                         |   |               |   |   |       |   |   |           |   |   |         |   |   |                |   |   |   |   |   |   |
| LIABILITIES AND SHAREHOLDERS’ EQUITY                   |   |               |   |   |       |   |   |           |   |   |         |   |   |                |   |   |   |   |   |   |
| Current Liabilities:                                         |   |               |   |   |       |   |   |           |   |   |         |   |   |                |   |   |   |   |   |   |
| Accounts payable                                             |   | $                  | 48     |   |       | $      | 13     |           |   | $      | 108          |   |   | $                   | --     |   |   | $ | 169 |   |
| Intercompany payables                                        |   |               | 578    |   |       |   | 18     |           |   |   | 275          |   |   |                | (871   | ) |   |   | -- |   |
| Accrued liabilities                                          |   |               | 85     |   |       |   | 9      |           |   |   | 121          |   |   |                | (9     | ) |   |   | 206 |   |
| Short-term debt, including current portion of long-term debt |   |               | 12     |   |       |   | --     |           |   |   | 16           |   |   |                | --     |   |   |   | 28 |   |
| Intercompany short-term debt                                 |   |               | --     |   |       |   | --     |           |   |   | 778          |   |   |                | (778   | ) |   |   | -- |   |
| Liabilities of discontinued operations                       |   |               | 50     |   |       |   | --     |           |   |   | --           |   |   |                | --     |   |   |   | 50 |   |
| Total Current Liabilities                                    |   |               | 773    |   |       |   | 40     |           |   |   | 1,298        |   |   |                | (1,658 | ) |   |   | 453 |   |
|                                                         |   |               |   |   |       |   |   |           |   |   |         |   |   |                |   |   |   |   |   |   |
| Long-Term Debt                                               |   |               | 1,264  |   |       |   | --     |           |   |   | --           |   |   |                | --     |   |   |   | 1,264 |   |
| Intercompany Long-Term Debt                                  |   |               | 19     |   |       |   | 23     |           |   |   | 1,144        |   |   |                | (1,186 | ) |   |   | -- |   |
| Postretirement Liabilities                                   |   |               | 304    |   |       |   | 3      |           |   |   | 104          |   |   |                | --     |   |   |   | 411 |   |
| Environmental Remediation Liabilities                        |   |               | 242    |   |       |   | 1      |           |   |   | 17           |   |   |                | --     |   |   |   | 260 |   |
| Deferred Tax Liabilities                                     |   |               | 20     |   |       |   | 10     |           |   |   | 149          |   |   |                | --     |   |   |   | 179 |   |
| Other Liabilities                                            |   |               | 45     |   |       |   | 7      |           |   |   | 47           |   |   |                | --     |   |   |   | 99 |   |
|                                                         |   |               |   |   |       |   |   |           |   |   |         |   |   |                |   |   |   |   |   |   |
| Shareholders’ Equity:                                  |   |               |   |   |       |   |   |           |   |   |         |   |   |                |   |   |   |   |   |   |
| Common stock                                                 |   |               | 1      |   |       |   | --     |           |   |   | --           |   |   |                | --     |   |   |   | 1 |   |
| Additional contributed capital                               |   |               | 1,612  |   |       |   | 1,990  |           |   |   | 564          |   |   |                | (2,554 | ) |   |   | 1,612 |   |
| Treasury stock                                               |   |               | (2     | )      |       |   | --     |           |   |   | --           |   |   |                | --     |   |   |   | (2 | ) |
| Accumulated other comprehensive loss                         |   |               | (237   | )      |       |   | --     |           |   |   | --           |   |   |                | --     |   |   |   | (237 | ) |
| Accumulated deficit                                          |   |               | (781   | )      |       |   | --     |           |   |   | --           |   |   |                | --     |   |   |   | (781 | ) |
| Total Shareholders’ Equity attributable to Solutia     |   |               | 593    |   |       |   | 1,990  |           |   |   | 564          |   |   |                | (2,554 | ) |   |   | 593 |   |
| Equity attributable to noncontrolling interest               |   |               | --     |   |       |   | --     |           |   |   | 7            |   |   |                | --     |   |   |   | 7 |   |
| Total Shareholders’ Equity                             |   |               | 593    |   |       |   | 1,990  |           |   |   | 571          |   |   |                | (2,554 | ) |   |   | 600 |   |
| Total Liabilities and Shareholders’ Equity             |   | $                  | 3,260  |   |       | $      | 2,074  |           |   | $      | 3,330        |   |   | $                   | (5,398 | ) |   | $ | 3,266 |   |

----

|                                                     |   | Parent-OnlySolutia |   |   | Guarantors |   |   | Non-Guarantors |   |   | Eliminations |   |   | Consolidated Solutia |   |
|----------------------------------------------------------|--------|--------------------|--------|--------|------------|--------|--------|----------------|--------|--------|--------------|--------|--------|----------------------|--------|
|                                                     |   |               |   |   |       |   |   |           |   |   |         |   |   |                 |   |
| Cash Provided by (Used in) Operations                    |   | $                  | (72    | )      |       | $      | 30     |           |   | $      | 38           |   |   | $                    | --     |   |   | $ | (4 | ) |
|                                                     |   |               |   |   |       |   |   |           |   |   |         |   |   |                 |   |   |   |   |   |   |
| INVESTING ACTIVITIES:                                    |   |               |   |   |       |   |   |           |   |   |         |   |   |                 |   |   |   |   |   |   |
| Property, plant and equipment purchases                  |   |               | (2     | )      |       |   | (1     | )              |   |   | (2           | )      |   |                 | --     |   |   |   | (5 | ) |
| Acquisition and investment payments                      |   |               | --     |   |       |   | (1     | )              |   |   | --           |   |   |                 | --     |   |   |   | (1 | ) |
| Cash Used in Investing Activities                        |   |               | (2     | )      |       |   | (2     | )              |   |   | (2           | )      |   |                 | --     |   |   |   | (6 | ) |
|                                                     |   |               |   |   |       |   |   |           |   |   |         |   |   |                 |   |   |   |   |   |   |
| FINANCING ACTIVITIES:                                    |   |               |   |   |       |   |   |           |   |   |         |   |   |                 |   |   |   |   |   |   |
| Proceeds from long-term debt obligations                 |   |               | 1,144  |   |       |   | --     |           |   |   | --           |   |   |                 | --     |   |   |   | 1,144 |   |
| Payments of long-term debt obligations                   |   |               | (876   | )      |       |   | --     |           |   |   | --           |   |   |                 | --     |   |   |   | (876 | ) |
| Debt issuance costs                                      |   |               | (25    | )      |       |   | --     |           |   |   | --           |   |   |                 | --     |   |   |   | (25 | ) |
| Purchase of treasury shares                              |   |               | (1     | )      |       |   | --     |           |   |   | --           |   |   |                 | --     |   |   |   | (1 | ) |
| Other, net                                               |   |               | (9     | )      |       |   | --     |           |   |   | --           |   |   |                 | --     |   |   |   | (9 | ) |
| Changes in investments and advances from (to) affiliates |   |               | (15    | )      |       |   | (28    | )              |   |   | 43           |   |   |                 | --     |   |   |   | -- |   |
| Cash Provided by (Used in) Financing Activities          |   |               | 218    |   |       |   | (28    | )              |   |   | 43           |   |   |                 | --     |   |   |   | 233 |   |
|                                                     |   |               |   |   |       |   |   |           |   |   |         |   |   |                 |   |   |   |   |   |   |
| Effect of Exchange Rate Changes on Cash                  |   |               | --     |   |       |   | --     |           |   |   | (8           | )      |   |                 | --     |   |   |   | (8 | ) |
|                                                     |   |               |   |   |       |   |   |           |   |   |         |   |   |                 |   |   |   |   |   |   |
| Increase in Cash and Cash Equivalents                    |   |               | 144    |   |       |   | --     |           |   |   | 71           |   |   |                 | --     |   |   |   | 215 |   |
|                                                     |   |               |   |   |       |   |   |           |   |   |         |   |   |                 |   |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS:                               |   |               |   |   |       |   |   |           |   |   |         |   |   |                 |   |   |   |   |   |   |
| Beginning of year                                        |   |               | 104    |   |       |   | 1      |           |   |   | 138          |   |   |                 | --     |   |   |   | 243 |   |
| End of year                                              |   | $                  | 248    |   |       | $      | 1      |           |   | $      | 209          |   |   | $                    | --     |   |   | $ | 458 |   |

----

|                                                     |   | Parent-OnlySolutia |   |   | Guarantors |   |   | Non-Guarantors |   |   | Eliminations |   |   | Consolidated Solutia |   |
|----------------------------------------------------------|--------|--------------------|--------|--------|------------|--------|--------|----------------|--------|--------|--------------|--------|--------|----------------------|--------|
|                                                     |   |               |   |   |       |   |   |           |   |   |         |   |   |                 |   |
| Cash Provided by (Used in) Operations                    |   | $                  | (20    | )      |       | $      | 40     |           |   | $      | 50           |   |   | $                    | --     |   |   | $ | 70 |   |
|                                                     |   |               |   |   |       |   |   |           |   |   |         |   |   |                 |   |   |   |   |   |   |
| INVESTING ACTIVITIES:                                    |   |               |   |   |       |   |   |           |   |   |         |   |   |                 |   |   |   |   |   |   |
| Property, plant and equipment purchases                  |   |               | (10    | )      |       |   | (1     | )              |   |   | (9           | )      |   |                 | --     |   |   |   | (20 | ) |
| Acquisition and investment payments                      |   |               | --     |   |       |   | (1     | )              |   |   | --           |   |   |                 | --     |   |   |   | (1 | ) |
| Investment proceeds and property disposals               |   |               | --     |   |       |   | --     |           |   |   | 1            |   |   |                 | --     |   |   |   | 1 |   |
| Cash Used in Investing Activities                        |   |               | (10    | )      |       |   | (2     | )              |   |   | (8           | )      |   |                 | --     |   |   |   | (20 | ) |
|                                                     |   |               |   |   |       |   |   |           |   |   |         |   |   |                 |   |   |   |   |   |   |
| FINANCING ACTIVITIES:                                    |   |               |   |   |       |   |   |           |   |   |         |   |   |                 |   |   |   |   |   |   |
| Net change in lines of credit                            |   |               | (2     | )      |       |   | --     |           |   |   | 4            |   |   |                 | --     |   |   |   | 2 |   |
| Net change in long-term revolving credit facilities      |   |               | (78    | )      |       |   | --     |           |   |   | 35           |   |   |                 | --     |   |   |   | (43 | ) |
| Payment of long-term debt obligations                    |   |               | (3     | )      |       |   | --     |           |   |   | --           |   |   |                 | --     |   |   |   | (3 | ) |
| Purchase of treasury shares                              |   |               | (1     | )      |       |   | --     |           |   |   | --           |   |   |                 | --     |   |   |   | (1 | ) |
| Other, net                                               |   |               | --     |   |       |   | --     |           |   |   | (2           | )      |   |                 | --     |   |   |   | (2 | ) |
| Changes in investments and advances from (to) affiliates |   |               | 123    |   |       |   | (39    | )              |   |   | (84          | )      |   |                 | --     |   |   |   | -- |   |
| Cash Provided by (Used in) Financing Activities          |   |               | 39     |   |       |   | (39    | )              |   |   | (47          | )      |   |                 | --     |   |   |   | (47 | ) |
|                                                     |   |               |   |   |       |   |   |           |   |   |         |   |   |                 |   |   |   |   |   |   |
| Increase (Decrease) in Cash and Cash Equivalents         |   |               | 9      |   |       |   | (1     | )              |   |   | (5           | )      |   |                 | --     |   |   |   | 3 |   |
|                                                     |   |               |   |   |       |   |   |           |   |   |         |   |   |                 |   |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS:                               |   |               |   |   |       |   |   |           |   |   |         |   |   |                 |   |   |   |   |   |   |
| Beginning of period                                      |   |               | --     |   |       |   | 1      |           |   |   | 31           |   |   |                 | --     |   |   |   | 32 |   |
| End of period                                            |   | $                  | 9      |   |       | $      | --     |           |   | $      | 26           |   |   | $                    | --     |   |   | $ | 35 |   |

----

| Reportable Segment    |   | Products                                                                                                                                                                                                                                                                                                                   |
|-----------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Advanced Interlayers  |   | · SAFLEX® plastic interlayer· Specialty intermediate Polyvinyl Butyral resin and plasticizer                                                                                                                                                                                                      |
| Performance Films     |   | · LLUMAR®, VISTA®, GILA® and FORMULA ONE PERFORMANCE AUTOMOTIVE FILMS® professional and retail window films· Other enhanced polymer films for industrial customers                                                                                                                 |
| Technical Specialties |   | · CRYSTEX® insoluble sulphur· SANTOFLEX® antidegradants· SANTOCURE® and PERKACIT® primary and ultra accelerators· THERMINOL® heat transfer fluids· SKYDROL® aviation hydraulic fluids· SKYKLEEN® brand of aviation solvents |

----

----

| (dollars in millions)                                                                                                                                  |   | Three MonthsEndedMarch 31, 2010 |   |   | Three MonthsEndedMarch 31, 2009 |   |   | Increase(Decrease) |   |   | %Increase(Decrease) |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|--------|--------|---------------------------------|--------|--------|--------------------|--------|--------|---------------------|--------|
|                                                                                                                                                   |   |                            |   |   |                            |   |   |               |   |   |                |   |
| Net Sales                                                                                                                                              |   | $                               | 466    |   |                            | $      | 339    |               |   | $      | 127                 |   |   |   | 37 | % |
|                                                                                                                                                   |   |                            |   |   |                            |   |   |               |   |   |                |   |   |   |   |   |
| Operating Income:                                                                                                                                      |   |                            |   |   |                            |   |   |               |   |   |                |   |   |   |   |   |
| Reportable Segment Profit                                                                                                                              |   | $                               | 131    |   |                            | $      | 76     |               |   | $      | 55                  |   |   |   | 72 | % |
| Unallocated and Other                                                                                                                                  |   |                            | (26    | )      |                            |   | (25    | )                  |   |   | (1                  | )      |   |   | (4 | )% |
| Less:   Depreciation and Amortization                                                                                                   |   |                            | (27    | )      |                            |   | (25    | )                  |   |   |                |   |   |   |   |   |
| Less:   Other (Income) Loss and Net Income attributable to Noncontrolling interest included in Segment Profit and Unallocated and Other |   |                            | (2     | )      |                            |   | 1      |               |   |   |                |   |   |   |   |   |
|                                                                                                                                                   |   |                            |   |   |                            |   |   |               |   |   |                |   |   |   |   |   |
| Operating Income                                                                                                                                       |   | $                               | 76     |   |                            | $      | 27     |               |   | $      | 49                  |   |   |   | 181 | % |
| Net Gains (Charges) included in Operating Income                                                                                                       |   | $                               | (11    | )      |                            | $      | 1      |               |   |   |                |   |   |   |   |   |

----

| (dollars in millions)                                                |   | Three MonthsEndedMarch 31, 2010 |   |   | Three MonthsEndedMarch 31, 2009 |   |   | Increase(Decrease) |   |   | %Increase(Decrease) |   |
|----------------------------------------------------------------------|--------|---------------------------------|--------|--------|---------------------------------|--------|--------|--------------------|--------|--------|---------------------|--------|
|                                                                 |   |                            |   |   |                            |   |   |               |   |   |                |   |
| Net Sales                                                            |   | $                               | 186    |   |                            | $      | 133    |               |   | $      | 53                  |   |   |   | 40 | % |
|                                                                 |   |                            |   |   |                            |   |   |               |   |   |                |   |   |   |   |   |
| Segment Profit                                                       |   | $                               | 48     |   |                            | $      | 19     |               |   | $      | 29                  |   |   |   | 153 | % |
|      Net Charges included in Segment Profit |   | $                               | --     |   |                            | $      | (5     | )                  |   |   |                |   |   |   |   |   |

| (dollars in millions)                                            |   | Three MonthsEndedMarch 31, 2010 |   |   | Three MonthsEndedMarch 31, 2009 |   |   | Increase(Decrease) |   |   | %Increase(Decrease) |   |
|------------------------------------------------------------------|--------|---------------------------------|--------|--------|---------------------------------|--------|--------|--------------------|--------|--------|---------------------|--------|
|                                                             |   |                            |   |   |                            |   |   |               |   |   |                |   |
| Net Sales                                                        |   | $                               | 52     |   |                            | $      | 34     |               |   | $      | 18                  |   |   |   | 53 | % |
|                                                             |   |                            |   |   |                            |   |   |               |   |   |                |   |   |   |   |   |
| Segment Profit                                                   |   | $                               | 9      |   |                            | $      | 1      |               |   | $      | 8                   |   |   | N.M. |   |
|      Charges included in Segment Profit |   | $                               | (1     | )      |                            | $      | (1     | )                  |   |   |                |   |   |   |   |   |

| (dollars in millions)                                                        |   | Three MonthsEndedMarch 31, 2010 |   |   | Three MonthsEndedMarch 31, 2009 |   |   | Increase(Decrease) |   |   | %Increase(Decrease) |   |
|------------------------------------------------------------------------------|--------|---------------------------------|--------|--------|---------------------------------|--------|--------|--------------------|--------|--------|---------------------|--------|
|                                                                         |   |                            |   |   |                            |   |   |               |   |   |                |   |
| Net Sales                                                                    |   | $                               | 224    |   |                            | $      | 167    |               |   | $      | 57                  |   |   |   | 34 | % |
|                                                                         |   |                            |   |   |                            |   |   |               |   |   |                |   |   |   |   |   |
| Segment Profit                                                               |   | $                               | 74     |   |                            | $      | 56     |               |   | $      | 18                  |   |   |   | 32 | % |
|      Net Gains (Charges) included in Segment Profit |   | $                               | (5     | )      |                            | $      | 10     |               |   |   |                |   |   |   |   |   |

----

| (dollars in millions)                         |   | Three MonthsEndedMarch 31, 2010 |   |   | Three MonthsEndedMarch 31, 2009 |   |   | Increase(Decrease) |   |   | %Increase(Decrease) |   |
|-----------------------------------------------|--------|---------------------------------|--------|--------|---------------------------------|--------|--------|--------------------|--------|--------|---------------------|--------|
|                                          |   |                            |   |   |                            |   |   |               |   |   |                |   |
| Components of Unallocated and Other           |   |                            |   |   |                            |   |   |               |   |   |                |   |
| Other Operations Segment Profit (Loss)        |   | $                               | 1      |   |                            | $      | (4     | )                  |   |   |                |   |   |   |
| Corporate Expenses                            |   |                            | (15    | )      |                            |   | (13    | )                  |   |   |                |   |   |   |
| Share-Based Compensation Expense              |   |                            | (4     | )      |                            |   | (5     | )                  |   |   |                |   |   |   |
| Other Unallocated Expense, net                |   |                            | (8     | )      |                            |   | (3     | )                  |   |   |                |   |   |   |
| Unallocated and Other results                 |   | $                               | (26    | )      |                            | $      | (25    | )                  |   | $      | (1                  | )      |   |   | (4 | )% |
| Net Charges included in Unallocated and Other |   | $                               | (5     | )      |                            | $      | (3     | )                  |   |   |                |   |   |   |   |   |

| (dollars in millions) |   | Three MonthsEndedMarch 31, 2010 |   |   | Three MonthsEndedMarch 31, 2009 |   |   | Increase(Decrease) |   |   | %Increase(Decrease) |   |
|-----------------------|--------|---------------------------------|--------|--------|---------------------------------|--------|--------|--------------------|--------|--------|---------------------|--------|
|                  |   |                            |   |   |                            |   |   |               |   |   |                |   |
| Interest Expense      |   | $                               | 38     |   |                            | $      | 37     |               |   | $      | 1                   |   |   |  3 | % |

| (dollars in millions)       |   | Three MonthsEndedMarch 31, 2010 |   |   | Three MonthsEndedMarch 31, 2009 |   |   | Increase(Decrease) |   |   | %Increase(Decrease) |   |
|-----------------------------|--------|---------------------------------|--------|--------|---------------------------------|--------|--------|--------------------|--------|--------|---------------------|--------|
|                        |   |                            |   |   |                            |   |   |               |   |   |                |   |
| Loss on Debt Extinguishment |   | $                               | 89     |   |                            | $      | --     |               |   | $      | 89                  |   |   | N.M. |   |

| (dollars in millions)        |   | Three MonthsEndedMarch 31, 2010 |   |   | Three MonthsEndedMarch 31, 2009 |   |   | Increase(Decrease) |   |   | %Increase(Decrease) |   |
|------------------------------|--------|---------------------------------|--------|--------|---------------------------------|--------|--------|--------------------|--------|--------|---------------------|--------|
|                         |   |                            |   |   |                            |   |   |               |   |   |                |   |
| Income Tax Expense (Benefit) |   | $                               | 9      |   |                            | $      | (7     | )                  |   | $      |                | 16     |   |   | N.M. |   |

----

| (dollars in millions)                         |   | Three MonthsEndedMarch 31, 2010 |   |   | Three MonthsEndedMarch 31, 2009 |   |   | Increase(Decrease) |   |   | %Increase(Decrease) |   |
|-----------------------------------------------|--------|---------------------------------|--------|--------|---------------------------------|--------|--------|--------------------|--------|--------|---------------------|--------|
|                                          |   |                            |   |   |                            |   |   |               |   |   |                |   |
| Integrated Nylon business                     |   | $                               | --     |   |                            | $      | (157   | )                  |   |   |                |   |   |   |
| Other                                         |   |                            | --     |   |                            |   | 2      |               |   |   |                |   |   |   |
| Loss from Discontinued Operations, net of tax |   | $                               | --     |   |                            | $      | (155   | )                  |   | $      | 155                 |   |   |   | 100 | % |

| Increase/(Decrease)                          |   | Advanced Interlayers |   |   | Performance Films |   |   | TechnicalSpecialties |   |   | Unallocated/Other |   |   | Consolidated |   |   |
|----------------------------------------------|--------|----------------------|--------|--------|-------------------|--------|--------|----------------------|--------|--------|-------------------|--------|--------|--------------|--------|--------|
|                                         |   |                 |   |   |              |   |   |                 |   |   |              |   |   |         |   |   |
| Impact on:                                   |   |                 |   |   |              |   |   |                 |   |   |              |   |   |         |   |   |
| Cost of goods sold                           |   | $                    | --     |   |              | $      | 1      |                 |   | $      | --                |   |   | $            | --     |   |   | $ | 1 |   | (a) |
|                                         |   |                 | --     |   |              |   | --     |                 |   |   | 1                 |   |   |         | --     |   |   |   | 1 |   | (b) |
|                                         |   |                 | --     |   |              |   | --     |                 |   |   | 2                 |   |   |         | --     |   |   |   | 2 |   | (c) |
| Selling, general and administrative expenses |   |                 | --     |   |              |   | --     |                 |   |   | 1                 |   |   |         | 1      |   |   |   | 2 |   | (a) |
|                                         |   |                 | --     |   |              |   | --     |                 |   |   | 1                 |   |   |         | --     |   |   |   | 1 |   | (c) |
|                                         |   |                 | --     |   |              |   | --     |                 |   |   | --                |   |   |         | 4      |   |   |   | 4 |   | (d) |
| Operating Income Impact                      |   |                 | --     |   |              |   | (1     | )                    |   |   | (5                | )      |   |         | (5     | )      |   |   | (11 | ) |   |
| Loss on debt extinguishment                  |   |                 | --     |   |              |   | --     |                 |   |   | --                |   |   |         | (89    | )      |   |   | (89 | ) | (e) |
| Pre-tax Income Statement Impact              |   | $                    | --     |   |              | $      | (1     | )                    |   | $      | (5                | )      |   | $            | (94    | )      |   |   | (100 | ) |   |
| Income tax impact                            |   |                 |   |   |              |   |   |                 |   |   |              |   |   |         |   |   |   |   | 2 |   | (f) |
| After-tax Income Statement Impact            |   |                 |   |   |              |   |   |                 |   |   |              |   |   |         |   |   |   | $ | (98 | ) |   |

| (a) | Severance, pension settlement and retraining costs related to the general corporate restructuring ($3 million pre-tax and after-tax).      |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------|
| (b) | Restructuring costs related to the closure of our Ruabon facility ($1 million pre-tax and after-tax).                                      |
| (c) | Restructuring costs related to the closure of our Cologne facility ($3 million pre-tax and $2 million after-tax).                          |
| (d) | Acquisition costs related to our agreement to purchase Etimex Solar ($4 million pre-tax and after-tax).                                    |
| (e) | Charges related to the early extinguishment of our 2014 Term Loan and 2013 Revolver ($89 million pre-tax and $88 million after-tax).       |
| (f) | Income tax expense has been provided on gains and charges at the tax rate in the jurisdiction in which they have been or will be realized. |

----

| Increase/(Decrease)                                     |   | Advanced Interlayers |   |   | Performance Films |   |   | Technical Specialties |   |   | Unallocated/Other |   |   | Consolidated |     |   |
|---------------------------------------------------------|--------|----------------------|--------|--------|-------------------|--------|--------|-----------------------|--------|--------|-------------------|--------|--------|--------------|----------|--------|
|                                                    |   |                 |   |   |              |   |   |                  |   |   |              |   |   |         |     |   |
| Impact on:                                              |   |                 |   |   |              |   |   |                  |   |   |              |   |   |         |     |   |
| Cost of goods sold                                      |   | $                    | (2     | )      |              | $      | --     |                  |   | $      | (3                | )      |   | $            | (1       | )      |   | $ | (6 | ) | (a) |
|                                                    |   |                 | 1      |   |              |   | 1      |                  |   |   | --                |   |   |         | 1        |   |   |   | 3 |   | (b) |
|                                                    |   |                 | 4      |   |              |   | --     |                  |   |   | --                |   |   |         | --       |   |   |   | 4 |   | (c) |
|                                                    |   |                 | --     |   |              |   | --     |                  |   |   | 1                 |   |   |         | --       |   |   |   | 1 |   | (d) |
| Selling, general and administrative expenses            |   |                 | (4     | )      |              |   | --     |                  |   |   | (9                | )      |   |         | (3       | )      |   |   | (16 | ) | (a) |
|                                                    |   |                 | 6      |   |              |   | --     |                  |   |   | 1                 |   |   |         | 6        |   |   |   | 13 |   | (b) |
| Research, development and other operating expenses, net |   |                 | (1     | )      |              |   | --     |                  |   |   | --                |   |   |         | --  |   |   |   | (1 | ) | (a) |
|                                                    |   |                 | 1      |   |              |   | --     |                  |   |   | --                |   |   |         | --       |   |   |   | 1 |   | (b) |
| Operating Income Impact                                 |   |                 | (5     | )      |              |   | (1     | )                     |   |   | 10                |   |   |         | (3       | )      |   |   | 1 |   |   |
|                                                    |   |                 |   |   |              |   |   |                  |   |   |              |   |   |         |     |   |   |   |   |   |   |
| Pre-tax Income Statement Impact                         |   | $                    | (5     | )      |              | $      | (1     | )                     |   | $      | 10                |   |   | $            | (3       | )      |   |   | 1 |   |   |
| Income tax impact                                       |   |                 |   |   |              |   |   |                  |   |   |              |   |   |         |     |   |   |   | -- |   | (e) |
| After-tax Income Statement Impact                       |   |                 |   |   |              |   |   |                  |   |   |              |   |   |         |     |   |   | $ | 1 |   |   |

| (a) | Gain related to the reduction in the 2008 annual incentive plan ($23 million pre-tax and $20 million after-tax).                                            |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) | Severance and retraining costs related to the general corporate restructuring ($17 million pre-tax and $14 million after-tax).                              |
| (c) | Charges related to the announced closure of the SAFLEX® plastic interlayer production line at our Trenton facility ($4 million pre-tax and after-tax). |
| (d) | Charges related to the announced closure of our Ruabon facility ($1 million pre-tax and after-tax).                                                         |
| (e) | Income tax expense has been provided on gains and charges at the tax rate in the jurisdiction in which they have been or will be realized.                  |

----

|                   | March 31, 2010 |     | June 30, 2010 |     | September 30, 2010 |     | December 31, 2010 |
|------------------------|----------------|----------|---------------|----------|--------------------|----------|-------------------|
|                   | Actual         | Covenant |          | Covenant |               | Covenant |              | Covenant |
|                   |           |     |          |     |               |     |              |   |
| Max Leverage Ratio     | 3.49           | 4.50     |          | 4.50     |               | 4.50     |              | 4.50 |
| Min Fixed Charge Ratio | 2.94           | 1.35     |          | 1.35     |               | 1.35     |              | 1.35 |

| Cash Flow Summary – Continuing Operations(dollars in millions) |   | Three MonthsEndedMarch 31, 2010 |   |   | Three MonthsEndedMarch 31, 2009 |   |   | Increase (Decrease) |   |
|----------------------------------------------------------------------|--------|--------------------------------------|--------|--------|--------------------------------------|--------|--------|---------------------|--------|
|                                                                 |   |                                 |   |   |                                 |   |   |                |   |
| Cash provided by operating activities                                |   | $                                    | -      |   |                                 | $      | 30     |                |   | $ | (30 | ) |
| Cash used in investing activities                                    |   |                                 | (6     | )      |                                 |   | (15    | )                   |   |   | 9 |   |
| Cash provided by (used in) financing activities                      |   |                                 | 233    |   |                                 |   | (47    | )                   |   |   | 280 |   |
| Effect of exchange rate changes on cash                              |   |                                 | (8     | )      |                                 |   | --     |                |   |   | (8 | ) |
| Net change in cash for period attributable to continuing operations  |   | $                                    | 219    |   |                                 | $      | (32    | )                   |   | $ | 251 |   |

----

| Working Capital – Continuing Operations(dollars in millions) |   | March 31,2010 |   |   | December 31,2009 |   |   | Increase(Decrease) |   |
|--------------------------------------------------------------------|--------|---------------|--------|--------|------------------|--------|--------|--------------------|--------|
|                                                               |   |          |   |   |             |   |   |               |   |
| Cash and cash equivalents                                          |   | $             | 458    |   |             | $      | 243    |               |   |   |   |
| Trade receivables, net                                             |   |          | 283    |   |             |   | 268    |               |   |   |   |
| Inventories                                                        |   |          | 271    |   |             |   | 257    |               |   |   |   |
| Other current assets                                               |   |          | 96     |   |             |   | 119    |               |   |   |   |
|   Total current assets                                   |   | $             | 1,108  |   |             | $      | 887    |               |   |   |   |
|                                                               |   |          |   |   |             |   |   |               |   |   |   |
| Accounts payable                                                   |   | $             | 167    |   |             | $      | 169    |               |   |   |   |
| Accrued liabilities                                                |   |          | 221    |   |             |   | 206    |               |   |   |   |
| Short-term debt, including current maturities of long-term debt    |   |          | 24     |   |             |   | 28     |               |   |   |   |
|   Total current liabilities                              |   | $             | 412    |   |             | $      | 403    |               |   |   |   |
|                                                               |   |          |   |   |             |   |   |               |   |   |   |
| Working Capital                                                    |   | $             | 696    |   |             | $      | 484    |               |   | $212 |   |

| Cash Flow Summary – Discontinued Operations(dollars in millions) |   | Three MonthsEndedMarch 31, 2010 |   |   | Three MonthsEndedMarch 31, 2009 |   | Increase (Decrease) |   |
|------------------------------------------------------------------------|--------|--------------------------------------|--------|--------|--------------------------------------|--------|---------------------|--------|
|                                                                   |   |                                 |   |   |                                 |   |                |   |
| Cash provided by (used in) operating activities                        |   | $                                    | (4     | )      |                                 | $      | 40                  |   | $ | (44 | ) |
| Cash used in investing activities                                      |   |                                 | --     |   |                                 |   | (5                  | )      |   | 5 |   |
| Net change in cash for period attributable to discontinued operations  |   | $                                    | (4     | )      |                                 | $      | 35                  |   | $ | (39 | ) |

----

----

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|      Period |   |   Total Number of Shares Purchased (1) |   |   |    Average Price Paid Per Share (2) |   |   | Total Number of Shares Purchased as Part of PubliclyAnnounced Plans or Programs |   |   | Approximate Dollar Value (in millions) that May Yet Be Purchased Under the Plans or Programs |   |
|--------------------------------------|--------|--------------------------------------------------|--------|--------|----------------------------------------------------|--------|--------|---------------------------------------------------------------------------------|--------|--------|----------------------------------------------------------------------------------------------|--------|
| January 1-31, 2010                   |   |                                             | 256    |   |                                               | $      | 13.75  |                                                                            |   |   | 0                                                                                            |   |   | $ | 0 |   |
| February 1-28, 2010                  |   |                                             | 0      |   |                                               | $      | 0.00   |                                                                            |   |   | 0                                                                                            |   |   | $ | 0 |   |
| March 1-31, 2010                     |   |                                             | 67,933 |   |                                               | $      | 14.13  |                                                                            |   |   | 0                                                                                            |   |   | $ | 0 |   |
| Total                                |   |                                             | 68,189 |   |                                               | $      | 14.13  |                                                                            |   |   | 0                                                                                            |   |   | $ | 0 |   |

| (1)   | Shares surrendered to the Company by an employee to satisfy individual tax withholding obligations upon vesting of previously issued shares of restricted common stock. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Average price paid per share reflects the closing price of Solutia common stock on the business date the shares were surrendered by the employee stockholder to satisfy individual tax withholding obligations upon vesting of restricted common stock. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Named Executive Officer |   | Stock Options |    |   | Restricted Stock |   |   | Performance Shares |   |
|-------------------------|--------|---------------|---------|--------|------------------|--------|--------|--------------------|--------|
| Jeffry N. Quinn         |   |          | 190,302 |   |             |   | 59,250 |               |   |   | 59,250 |   |
| James M. Sullivan       |   |          | 70,949  |   |             |   | 22,090 |               |   |   | 22,090 |   |
| James R. Voss           |   |          | 74,710  |   |             |   | 23,260 |               |   |   | 23,260 |   |
| Robert T. DeBolt        |   |          | 33,315  |   |             |   | 10,372 |               |   |   | 10,372 |   |
| Paul J. Berra, III      |   |          | 29,969  |   |             |   | 9,332  |               |   |   | 9,331 |   |

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|               |   | 2010 AIP |    |
|--------------------|--------|----------|---------|
| Name               |   | Minimum  |    |   | Target |   |   | Maximum |   |
| Jeffry N. Quinn    |   | $        | 687,750 |   |   | $ | 1,375,500 |   |   | $ | 4,126,500 |   |
| James M. Sullivan  |   | $        | 233,200 |   |   | $ | 466,400 |   |   | $ | 1,399,200 |   |
| James R. Voss      |   | $        | 270,000 |   |   | $ | 540,000 |   |   | $ | 1,620,000 |   |
| Robert T. DeBolt   |   | $        | 127,598 |   |   | $ | 255,195 |   |   | $ | 765,585 |   |
| Paul J. Berra, III |   | $        | 120,000 |   |   | $ | 240,000 |   |   | $ | 720,000 |   |

| NAME                 |   | FOR    |       |   | WITHHELD |   |      | BROKERNON-VOTES |   |
|----------------------|--------|--------|------------|--------|----------|--------|-----------|-----------------|--------|
| James P. Heffernan   |   |   | 97,324,674 |   |     |   | 1,453,361 |            |   |   | 12,381,379 |   |
| W. Thomas Jagodinski |   |   | 97,199,901 |   |     |   | 1,578,134 |            |   |   | 12,381,379 |   |
| William C. Rusnack   |   |   | 97,595,547 |   |     |   | 1,182,488 |            |   |   | 12,381,379 |   |

| FOR    |        |   | AGAINST |   |      | ABSTAIN |   |
|--------|-------------|--------|---------|--------|-----------|---------|--------|
|   | 108,649,209 |   |    |   | 2,484,330 |    |   |   | 25,875 |   |

----

| FOR    |       |   | AGAINST |   |      | ABSTAIN |   |   | BROKERNON-VOTES |   |
|--------|------------|--------|---------|--------|-----------|---------|--------|--------|-----------------|--------|
|   | 93,026,165 |   |    |   | 5,709,945 |    |   |   | 41,925          |   |   |   | 12,381,379 |   |

| FOR    |       |   | AGAINST |   |      | ABSTAIN |   |   | BROKERNON-VOTES |   |
|--------|------------|--------|---------|--------|-----------|---------|--------|--------|-----------------|--------|
|   | 94,547,604 |   |    |   | 4,184,381 |    |   |   | 46,050          |   |   |   | 12,381,379 |   |

| FOR    |       |   | AGAINST |   |       | ABSTAIN |   |   | BROKERNON-VOTES |   |
|--------|------------|--------|---------|--------|------------|---------|--------|--------|-----------------|--------|
|   | 72,927,113 |   |    |   | 25,806,921 |    |   |   | 44,001          |   |   |   | 12,381,379 |   |

----

|   | See the Exhibit Index at page 46 of this report. |
|--------|--------------------------------------------------|

----

|   | SOLUTIA INC. |                                                             |
|--------|--------------|------------------------------------------------------------------|
|   | (Registrant) |                                                             |
|   |         |                                                             |   |
|   | By:          | /s/ TIMOTHY J. SPIHLMAN                                     |   |
|   |         | Timothy J. Spihlman                                              |   |
|   |         | (Vice President and Controller)                                  |   |
|   |         | (On behalf of the Registrant and asPrincipal Accounting Officer) |   |

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| EXHIBITNUMBER |   |  DESCRIPTION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|---------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1           |   | Second Amended and Restated Certificate of Incorporation of Solutia Inc. (incorporated by reference to Exhibit 3.1 to Solutia's Form 8-K filed on March 4, 2008)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 3.2           |   | Certificate of Designation, Preferences and Rights of Series A Preferred Stock. (incorporated by reference to Exhibit 3.1 to Solutia’s Current Report on Form 8-K filed on July 27, 2009)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 3.3           |   | Amended and Restated Bylaws of Solutia Inc. (incorporated by reference to Exhibit 3.2 to Solutia's Form 8-K filed on March 4, 2008)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 4.1           |   | 382 Rights Agreement, dated as of July 27, 2009, between Solutia Inc. and American Stock Transfer & Trust Company, LLC, which included the Form of Certificate of Designation, Preferences and Rights of Series A Participating Preferred Stock as Exhibit A and the Summary of Rights as Exhibit C (incorporated by reference to Exhibit 3.1 to Solutia’s Current Report on Form 8-K filed on July 27, 2009)                                                                                                                                                                                                                                                        |
| 4.2           |   | Indenture dated October 15, 2009 by and between the Company, the subsidiary guarantors party thereto and the Trustee (incorporated by reference to Exhibit 4.1 to Solutia’s Current Report on Form 8-K filed October 16, 2009)                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 4.3           |   | First Supplemental Indenture to the Indenture dated October 15, 2009, by and between Solutia, the subsidiary guarantors parties thereto and the Trustee (incorporated by reference to Exhibit 4.2 to Solutia’s Form 8-K filed on October 16, 2009)                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 4.4           |   | Second Supplemental Indenture to the Indenture dated March 9, 2010, by and between the Company, the subsidiary guarantors party thereto and the Trustee (incorporated by reference to Exhibit 4.2 to Solutia’s Form 8-K filed on March 10, 2010)                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.1          |   | Credit Agreement dated March 17, 2010, by and among Solutia Inc., the lender parties thereto, Deutsche Bank Trust Company Americas, as Administrative Agent, Collateral Agent, Swing Line Lender and Issuer, Citibank, N.A., HSBC Securities (USA) Inc. and JPMorgan Chase Bank, N.A., as Co-Syndication Agents, Jefferies Finance LLC, as Documentation Agent and Deutsche Bank Securities Inc., Jefferies Finance LLC, HSBC Securities (USA) Inc., Citigroup Global Markets Inc. and J.P. Morgan Securities Inc., as Joint Lead Arrangers and as Joint Bookrunners (incorporated by reference to Exhibit 10.1 to Solutia’s Form 8-K filed on March 23, 2010) |
| 10.2          |   | Guarantee Agreement, dated as of March 17, 2010, by and among certain subsidiaries of Solutia Inc. party hereto, as Guarantors, and Deutsche Bank Trust Company Americas, as Collateral Agent (incorporated by reference to Exhibit 10.1 to Solutia’s Form 8-K filed on March 23, 2010)                                                                                                                                                                                                                                                                                                                                                                             |
| 10.3          |   | Security Agreement, dated as of March 17, 2010, by and among Solutia Inc., the subsidiaries party thereto, as Grantors, and Deutsche Bank Trust Company Americas, as Collateral Agent. (incorporated by reference to Exhibit 10.1 to Solutia’s Form 8-K filed on March 23, 2010)                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.4          |   | Pledge Agreement, dated as of March 17, 2010, by and among Solutia Inc., the subsidiaries party thereto, as Pledgors, and Deutsche Bank Trust Company Americas, as Collateral Agent (incorporated by reference to Exhibit 10.1 to Solutia’s Form 8-K filed on March 23, 2010)                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.5          |   | Share Purchase Agreement Between Etimex Holding GmbH, Etimex Primary Packaging GmbH, Solutia Inc. and Flexsys Verwaltungs- und Beteiligungsgesellschaft mbH dated as of February 28, 2010                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.6          |   | Solutia Inc. Annual Incentive Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.7          |   | Solutia Inc. 2007 Management Long-Term Incentive Plan  as Amended and Restated (incorporated by reference to Exhibit 99.1 to Solutia’s Registration Statement on Form S-8 filed April 23, 2010)                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.8          |   | Form of Stock Option Award Agreement Pursuant to the Solutia Inc. 2007 Management Long-Term Incentive Plan as Amended and Restated                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.9          |   | Form of Restricted Stock Award Agreement Pursuant to the Solutia Inc. 2007 Management Long-Term Incentive Plan as Amended and Restated                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.10         |   | Form of Performance Stock Award Agreement Pursuant to the Solutia Inc. 2007 Management Long-Term Incentive Plan as Amended and Restated                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.11         |   | Form of Restricted Stock Award Agreement Pursuant to the Solutia Inc. Non-Employee Director Stock Compensation Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.12         |   | Form of Restricted Stock Unit Agreement Pursuant to the Solutia Inc. Non-Employee Director Stock Compensation Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 18.1          |   | Letter from Deloitte & Touche LLP dated April 23, 2010                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 31.1          |   | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 31.2          |   | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 32.1          |   | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 32.2          |   | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 99.1          |   | Press Release dated April 22, 2010                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |

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