UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED SEPTEMBER 30, 1994 COMMISSION FILE NUMBER 1-3507
R O H M A N D H A A S C O M P A N Y
(Exact name of registrant as specified in its charter)
DELAWARE 23-1028370
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.
100 INDEPENDENCE MALL WEST, PHILADELPHIA, PENNSYLVANIA 19106
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (215) 592-3000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act
of 1934 during the preceding 12 months, and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
Common stock outstanding at October 31, 1994: 67,697,818 SHARES
<PAGE>
ROHM AND HAAS COMPANY AND SUBSIDIARIES
FORM 10-Q
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The following are incorporated herein by reference to pages 9 through
12 of the company's Quarterly Report to Stockholders for the third quarter
of 1994, a complete copy of which is attached as Exhibit 20.
1. Statements of Consolidated Earnings
2. Statements of Consolidated Cash Flows
3. Consolidated Balance Sheets
4. Notes to Consolidated Financial Statements
ITEM 2. - MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The management discussion and analysis is incorporated herein by
reference to pages 2 through 5 of the company's Quarterly Report to
Stockholders for the third quarter of 1994, a complete copy of which is
attached as Exhibit 20.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
A discussion of legal proceedings is incorporated herein by reference
to page 12 of the company's Quarterly Report to Stockholders for the third
quarter of 1994, a complete copy of which is attached as Exhibit 20.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit (12) - Computation of Ratio of Earnings to Fixed Charges for
the company and subsidiaries.
Exhibit (20) - Copy of the company's Quarterly Report to Stockholders
for the quarter ended September 30, 1994.
Exhibit (27) - Financial Data Schedule
(b) No reports on Form 8-K were filed during the quarter ended
September 30, 1994.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DATE: November 9, 1994 ROHM AND HAAS COMPANY
---------------- (Registrant)
FRED W. SHAFFER
VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
<PAGE>
EXHIBIT INDEX
(Pursuant to Part 232.102(d) of Regulation S-T)
Exhibit
No. Description
- ------- -----------------------------------------------------
(12) Computation of Ratio of Earnings to Fixed Charges
(20) Copy of Quarterly Report to Stockholders
(27) Financial Data Schedule
<PAGE>
EXHIBIT 12
ROHM AND HAAS COMPANY
AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(MILLIONS OF DOLLARS)
NINE MONTHS
ENDED YEAR ENDED DECEMBER 31,
SEPT. 30, -------------------------------------------
1994 1993 1992 1991 1990 1989
------------ ------ ------ ------ ------ ------
Earnings before
income taxes $ 334 $ 194 $ 261 $ 240 $ 313 $ 251
Fixed charges 59 79 83 79 77 70
Capitalized interest
adjustment -- (7) (3) (6) (17) (12)
Undistributed earnings
adjustment -- 6 2 (2) (5) 2
------------ ------ ------ ------ ------ ------
Earnings $ 393 $ 272 $ 343 $ 311 $ 368 $ 311
------------ ------ ------ ------ ------ ------
Ratio of earnings
to fixed charges 6.7 3.4 4.1 3.9 4.8 4.4
------------ ------ ------ ------ ------ ------
Note: Earnings consist of earnings before income taxes and fixed charges after
eliminating undistributed earnings (losses) of affiliates and capitalized
interest net of amortization of previously capitalized interest. Fixed
charges consist of interest expense, including capitalized interest, and
amortization of debt discount and expense on all indebtedness, plus
one-third of rent expense deemed to represent an interest factor.
<PAGE>
EXHIBIT 20
COPY OF QUARTERLY REPORT TO STOCKHOLDERS
<PAGE>
ROHM AND HAAS COMPANY
THIRD QUARTER REPORT 1994
ID: COVER GRAPHIC
<PAGE>
Financial Highlights (Millions of dollars, except earnings per share)
- ------------------------------------------------------------------------------
Third Quarter Nine Months
------------------------ ------------------------
Percent Percent
1994 1993 Change 1994 1993* Change
------------------------ ------------------------
Net sales $ 874 $ 799 9 $2,674 $2,509 7
Net earnings before
special charges 55 29 90 217 155 40
Net earnings (loss) 55 (21) -- 217 100 117
Net earnings (loss) per
common share $ .78 $ (.34) -- $ 3.12 $ 1.39 124
- ------------------------------------------------------------------------------
*Net earnings are before a charge of $19 million for the cumulative
effect of adopting a new accounting standard for postemployment benefits,
effective January 1, 1993.
SALES BY BUSINESS GROUP
Millions of Dollars
Agricultural Chemicals $70
Plastics $165
Performance Chemicals $206
Polymers, Resins and Monomers $433
ID: GRAPHIC (BAR CHART)
SALES BY CUSTOMER LOCATION
Millions of Dollars
Latin America $59
Pacific $128
Europe $191
North America $496
ID: GRAPHIC (BAR CHART)
<PAGE>
CHAIRMAN'S LETTER
Rohm and Haas earnings have come far since this time last year--from a
reported loss of $21 million for the third quarter of 1993 to earnings of $55
million for the third quarter of 1994.
Much of the swing is due to the absence of unusual charges this year, but
external factors also have changed dramatically: European economies have
picked up quite a bit, and currency comparisons currently are in our favor.
Unit volume growth remained very good, though the rate of growth has slowed
somewhat from the pace of earlier quarters in 1994.
Internal costs are under much better control than they were last year
at this time, thanks to the persistent ongoing efforts of employees around
the world. Selling and administrative expenses are down $4 million from
the third quarter of 1993; research costs also are $4 million lower for
that period, $11 million for the year to date. Capital spending for the
year will be substantially below the $350 million mark we anticipated
earlier in the year.
We have seen an improvement in our safety record, with overall injuries down
one-third from 1993. However, a recent contractor fatality and a subsequent
incident at the Houston plant reaffirm that we cannot rest until we achieve an
injury-free workplace for all.
Raw material costs have leapt upward during the past few months. All
indications predict they will remain high for the foreseeable future. We are
instituting price increases that are necessary to maintain the viability of
our businesses.
Through the first nine months of the year, we have tallied $217 million in
earnings. Barring any unforeseen dramatic occurrences during the next few
weeks, we will reach a new earnings high in 1994. Unfortunately, it will have
taken us six years to surpass the $230 million mark set in 1988, and our
return on equity for the year will not match the 20 percent return on equity
we saw in 1988. We will continue to increase our productivity in pursuit of
our goal of 20 percent return on equity.
(J. LAWRENCE WILSON)
J. Lawrence Wilson,
Chairman November 9, 1994
<PAGE>
MANAGEMENT DISCUSSION AND ANALYSIS
THIRD QUARTER 1994 VERSUS
THIRD QUARTER 1993
Third quarter 1994 earnings were $55 million, compared to a loss of $21
million in the third quarter of 1993. Earnings per common share were 78
cents, up from a loss of 34 cents reported in the 1993 period. The prior-year
period included after-tax charges of $50 million related to asset writedowns
and environmental remediation costs. Absent these non-recurring items,
earnings increased 90%. Sales of $874 million were 9% higher, compared with
the prior-year period. Volume was up 6%, with all regions and business
groups, except Agricultural Chemicals, reporting increases. The higher
earnings reflect the benefit of volume gains, excellent plant operations,
reduced selling, administrative and research costs and strengthening European
currencies. Selling prices were slightly lower than the prior-year period,
excluding currency effects, and raw material costs increased 7%.
Polymers, Resins and Monomers earnings were $43 million, up 54% from the
prior-year period. Sales increased 9% due to a 6% volume gain. All
businesses reported volume increases, with the largest gains in the European
and Pacific regions. Earnings also benefited from smooth plant operations,
favorable currency comparisons, and reduced selling, administrative and
research costs. However, higher raw material costs partly offset these
earnings gains.
Plastics reported earnings of $15 million, up $5 million compared to 1993,
excluding an $18 million after-tax charge in 1993 for the writedown of a
production line in Kentucky. Volume and sales increased 12%. Additives used
in PVC had strong volume growth in Europe and the Pacific. Additives used in
engineering resins reported double-digit growth in North America and Europe.
AtoHaas North America reported significant volume increases for Plexiglas MC
sheet and acrylic molding resins. Favorable plant operations and currency
movements also contributed to the earnings improvement. AtoHaas Europe's loss
for the third quarter was equal to the prior-year period.
Performance Chemicals recorded earnings of $3 million, compared to a loss of
$2 million in 1993. Sales increased 10% on 6% higher volume. Strong volume
gains were reported by Biocides in the European, Pacific and Latin American
regions and by Electronic Chemicals in North America and Europe. Despite
volume gains and reduced selling,
2
<PAGE>
administrative and research costs, the Ion Exchange Resins business continued
to report losses due to deeply depressed selling prices caused by intense
competition.
Agricultural Chemicals earnings were breakeven for the quarter, compared to a
$2 million loss in the third quarter of 1993. Sales increased 8%, but volume
declined 8%, thus reflecting a higher-priced product mix. The lower volume
was caused by reduced Dithane sales due to adverse weather conditions in
Europe and the Pacific and reduced spending by growers in Latin America.
Earnings also benefited from smooth plant operations.
Net sales were $874 million, up 9% from last year's results due to a 6% volume
increase. The third quarter gross profit margin increased to 34% from 33% in
1993, excluding asset writedowns in 1993, due to higher production volume and
smooth plant operations. Raw material costs were 7% higher than the prior
year. The increase in raw material costs is due mainly to capacity shortages
for key commodity materials, including propylene, methanol, acetone, ammonia
and styrene. These increased costs are capacity-related and are expected to
remain high for the foreseeable future.
Selling, administrative and research expenses declined 4%, reflecting cost
containment efforts begun in the latter part of 1993. Interest expense
increased $1 million due to higher interest rates. Other expense, net, was
$11 million, down from $54 million in 1993. The current year included
severance costs related to restructuring certain operations in Europe and
North America. The prior-year period included $50 million for environmental
remediation.
NINE MONTHS 1994 VERSUS
NINE MONTHS 1993
Earnings for the first nine months were $217 million, up from last year's
earnings of $100 million (before cumulative effect of an accounting change for
postemployment benefits). Earnings per common share were $3.12, compared with
$1.39 in 1993. Nineteen ninety-three included a net charge of $55 million
related to asset writedowns, environmental remediation and the sale of a
subsidiary. Absent these unusual items, earnings increased 40%. Net sales of
$2,674 million were 7% higher than 1993. Earnings benefited from 8% higher
volume, smooth plant operations and the strengthening of European currencies
and the Yen. Lower selling prices and higher raw material costs adversely
impacted results.
3
<PAGE>
Polymers, Resins and Monomers earnings of $135 million were up 32% from 1993.
Sales increased 8% and volume increased 9%. Volume gains were reported in all
regions. Significant increases were recorded by the specialty industrial
polymers, industrial coatings, architectural coatings, adhesives, and
construction products businesses. The higher volume and favorable plant
operations were responsible for the earnings improvement.
Plastics recorded earnings of $45 million, compared to $25 million in 1993,
excluding after-tax charges of $34 million in 1993 for asset writedowns.
Sales increased 10% on 11% higher volume. Additives used in PVC and
engineering resins experienced good volume growth in the North American,
European and Pacific regions. AtoHaas North America reported increased volume
for all product lines. AtoHaas Europe had significantly reduced losses
compared to 1993.
Performance Chemicals reported earnings of $29 million, up from last year's
earnings of $15 million, excluding an $11 million gain in 1993 from the sale
of Supelco. Sales were up 7% on 5% higher volume, excluding Supelco.
Biocides reported volume gains in all regions. Electronic Chemicals had
strong growth in North America and Europe. Earnings improved due to volume
increases and a more favorable product mix. The Ion Exchange Resins business
continued to suffer from depressed pricing due to intense competition, higher
operating costs due to low manufacturing volumes and writedowns of excess
inventories.
Agricultural Chemicals earnings were $37 million, down $1 million from 1993.
Sales increased 3% though volume decreased 1%, due to a more favorable product
mix. Higher operating costs and selling, administrative and research expenses
resulted in lower earnings.
Net sales of $2,674 million were 7% above last year's results on an 8% volume
increase. The gross profit margin for the first nine months was 36%, compared
to 35% in the prior period, excluding a charge in 1993 for asset writedowns.
Volume increases and smooth plant operations were the main contributors to the
margin improvement. Raw material costs were slightly higher than 1993 due to
a significant increase in the cost of commodity materials during the third
quarter and selling prices remained below the prior year's levels.
Selling, administrative and research expenses were down 2% from 1993,
reflecting the results of cost containment
4
<PAGE>
efforts implemented in the second half of 1993. Interest expense of $37
million was 12% higher than last year due to higher interest rates and lower
capitalization of interest as part of construction in progress. Affiliate
results were breakeven, reflecting substantially lower losses from the AtoHaas
affiliates. Other expense, net, was $18 million, down $43 million from 1993.
The current year included severance costs related to restructuring certain
operations in Europe and North America. The prior-year period included $50
million for environmental remediation.
LIQUIDITY, CAPITAL RESOURCES
AND OTHER FINANCIAL DATA
At the end of the quarter, cash and cash equivalents totaled $122 million, up
$87 million from the 1993 year-end balance. Customer receivables were up $109
million during the first nine months, reflecting higher sales and a normal
seasonal pattern. Inventories were up $39 million, due to the second quarter
acquisition of the Monsanto pyridine herbicide business. The debt-to-equity
ratio, calculated without the reduction to stockholders' equity for the ESOP,
was 44% at the end of September, compared with 48% at year-end 1993.
Fixed asset additions during the first nine months of 1994 totaled $211
million, including an agricultural chemicals manufacturing facility acquired
from Monsanto in the second quarter. Spending for the full year is expected
to be approximately $325 million, and includes expenditures for capacity
expansion for acrylic acid at Houston, Texas, a new research laboratory
building at Bristol, Pennsylvania and a new biocides production facility at
Bayport, Texas.
On October 13, 1994, the board of directors declared regular quarterly
dividends of $.37 per common share and $.6875 per preferred share. Both
dividends are payable December 1, 1994, to stockholders of record on November
4, 1994.
5
<PAGE>
ROHM AND HAAS COMPANY AND SUBSIDIARIES
SALES BY BUSINESS GROUP AND CUSTOMER LOCATION (Millions of dollars)
- ------------------------------------------------------------------------------
THIRD QUARTER 1994 AND 1993
- ------------------------------------------------------------------------------
Polymers,
Resins and Performance Agricultural
Monomers Plastics Chemicals Chemicals Total
------------- ----------- ----------- ----------- -------------
1994 1993 1994 1993 1994 1993 1994 1993 1994 1993
------------- ----------- ----------- ----------- -------------
North
America $301 $286 $ 95 $ 89 $ 84 $ 80 $ 16 $ 12 $496 $467
- ---------- ------------- ----------- ----------- ----------- -------------
Europe 67 54 51 42 55 47 18 16 191 159
- ---------- ------------- ----------- ----------- ----------- -------------
Pacific 39 33 11 10 63 55 15 16 128 114
- ---------- ------------- ----------- ----------- ----------- -------------
Latin
America 26 26 8 6 4 6 21 21 59 59
- ---------- ------------- ----------- ----------- ----------- -------------
Total $433 $399 $165 $147 $206 $188 $ 70 $ 65 $874 $799
- ---------- ------------- ----------- ----------- ----------- -------------
- -------------------------------------------------------------------------------
FIRST NINE MONTHS 1994 AND 1993
- -------------------------------------------------------------------------------
North
America $ 893 $ 836 $278 $257 $255 $251 $ 90 $ 86 $1,516 $1,430
- ---------- ------------- ----------- ----------- ----------- -------------
Europe 195 173 148 132 162 154 116 116 621 575
- ---------- ------------- ----------- ----------- ----------- -------------
Pacific 107 94 30 26 167 154 66 63 370 337
- ---------- ------------- ----------- ----------- ----------- -------------
Latin
America 72 73 19 18 15 17 61 59 167 167
- ---------- ------------- ----------- ----------- ----------- -------------
Total $1,267 $1,176 $475 $433 $599 $576 $333 $324 $2,674 $2,509
- ---------- ------------- ----------- ----------- ----------- -------------
6
<PAGE>
PHYSICAL VOLUME CHANGE
CURRENT QUARTER RELATIVE TO YEAR-EARLIER QUARTER
- ------------------------------------------------------------------------------
Percent CUSTOMER Percent
BUSINESS GROUP Change LOCATION Change
- ------------------------------------------------------------------------------
Polymers, Resins and Monomers 6 North America 3
Plastics 12 Europe 16
Performance Chemicals 6 Pacific 14
Agricultural Chemicals (8) Latin America 9
- ------------------------------------------------------------------------------
Worldwide 6 Worldwide 6
- ------------------------------------------------------------------------------
CURRENT NINE MONTHS RELATIVE TO YEAR-EARLIER NINE MONTHS
- ------------------------------------------------------------------------------
Percent CUSTOMER Percent
BUSINESS GROUP Change LOCATION Change
- ------------------------------------------------------------------------------
Polymers, Resins and Monomers 9 North America 7
Plastics 11 Europe 12
Performance Chemicals (1) Pacific 9
Agricultural Chemicals (1) Latin America 4
- ------------------------------------------------------------------------------
Worldwide 8 Worldwide 8
- ------------------------------------------------------------------------------
7
<PAGE>
NET EARNINGS** BY BUSINESS GROUP AND CUSTOMER LOCATION
- ------------------------------------------------------------------------------
Quarter Ended Nine Months Ended
September 30, September 30,
---------------- ------------------
1994 1993 1994 1993
--------------------------------------
BUSINESS GROUP (Millions of dollars)
--------------------------------------
Polymers, Resins and Monomers $43 $ 28 $135 $102
Plastics 15 (8) 45 (9)
Performance Chemicals 3 (2) 29 26
Agricultural Chemicals -- (2) 37 38
Corporate (6) (37) (29) (57)
- ------------------------------------------------------------------------------
Total $55 $(21) $217 $100
- ------------------------------------------------------------------------------
CUSTOMER LOCATION
North America $40 $ 6 $145 $101
Europe 9 3 58 27
Pacific 8 3 30 16
Latin America 4 4 13 13
Corporate (6) (37) (29) (57)
- ------------------------------------------------------------------------------
Total $55 $(21) $217 $100
- ------------------------------------------------------------------------------
Corporate includes an after-tax charge of $32 million in 1993 for
environmental remediation as well as other non-operating items such as
interest income and expense.
ANALYSIS OF CHANGE IN PER-SHARE EARNINGS**
CURRENT PERIOD RELATIVE TO YEAR-EARLIER PERIOD
- ------------------------------------------------------------------------------
$/Share
(after-tax)
-----------------------------------
THIRD FIRST
GROSS PROFIT QUARTER NINE MONTHS
------------ -------------
Selling prices* $ .06 $(.51)
Physical volume and product mix .25 .90
Raw material costs* (.13) (.05)
Other manufacturing costs* .43 .80
- ------------------------------------------------------- -------------
Increase in gross profit .61 1.14
- ------------------------------------------------------- -------------
OTHER CAUSES
Selling, administrative and
research expenses* .08 .13
Certain waste disposal site cleanup costs .43 .43
Share of affiliate losses -- .09
Other -- (.06)
- ------------------------------------------------------- -------------
Increase from other causes .51 .59
- ------------------------------------------------------- -------------
Increase in per-share earnings $1.12 $1.73
- ------------------------------------------------------- -------------
*The amounts shown are on a U.S. dollar basis and include the impact of
currency movements as compared to the prior-year period.
**Net earnings and earnings per share for the nine months ended September 30,
1993 are before a charge of $19 million for the cumulative effect of adopting
a new accounting standard for postemployment benefits, effective January 1,
1993.
8
<PAGE>
Rohm and Haas Company and Subsidiaries
STATEMENTS OF CONSOLIDATED EARNINGS (Subject to Year-end Audit)
- ------------------------------------------------------------------------------
Quarter Ended Nine Months Ended
September 30, September 30,
--------------------- ----------------------
1994 1993 1994 1993
-----------------------------------------------
CURRENT EARNINGS (Millions of dollars, except per share amount)
-----------------------------------------------
Net sales $ 874 $ 799 $ 2,674 $ 2,509
Cost of goods sold 576 564 1,708 1,662
- ---------------------------------------------------- -----------------------
Gross profit 298 235 966 847
Selling and administrative
expense 144 148 435 437
Research and development
expense 48 52 142 153
Interest expense 11 10 37 33
Share of net losses of
of affiliates (1) (1) -- (6)
Other expense, net 11 54 18 61
- ---------------------------------------------------- -----------------------
Earnings (loss) before income
taxes 83 (30) 334 157
Income taxes 28 (9) 117 57
- ---------------------------------------------------- -----------------------
Earnings (loss) before cumulative
effect of accounting change 55 (21) 217 100
Cumulative effect of accounting
change -- -- -- (19)
- ---------------------------------------------------- -----------------------
NET EARNINGS (LOSS) $ 55 $ (21) $ 217 $ 81
Less preferred stock dividends 2 2 6 6
- ---------------------------------------------------- -----------------------
NET EARNINGS (LOSS) APPLICABLE
TO COMMON SHAREHOLDERS $ 53 $ (23) $ 211 $ 75
- ---------------------------------------------------- -----------------------
PER COMMON SHARE:
Earnings (loss) before
cumulative effect of
accounting change $ .78 $ (.34) $ 3.12 $ 1.39
Cumulative effect of accounting
change -- -- -- (.28)
--------------------- -----------------------
Net earnings (loss) $ .78 $ (.34) $ 3.12 $ 1.11
--------------------- -----------------------
Common dividends $ .37 $ .35 $ 1.07 $ 1.01
Average number of common
shares outstanding (000's) 67,743 67,635 67,710 67,612
- ---------------------------------------------------- -----------------------
See notes to consolidated financial statements.
9
<PAGE>
Rohm and Haas Company and Subsidiaries
STATEMENTS OF CONSOLIDATED CASH FLOWS (Subject to Year-end Audit)
- ------------------------------------------------------------------------------
Nine Months Ended
September 30,
----------------------------
1994 1993
----------------------------
CASH FLOWS FROM OPERATING ACTIVITIES (Millions of dollars)
----------------------------
Net earnings $ 217 $ 81
Adjustments to reconcile net earnings
to cash provided by operating activities:
Cumulative effect of accounting change,
net of tax -- 19
Depreciation 171 164
Deferred income taxes 34 (5)
Accounts receivable (112) (111)
Inventories (39) 31
Accounts payable 7 (58)
Gain on disposition of facilities
and investments -- (19)
Provision for writedown of plant assets -- 41
Other working capital changes, net 58 --
Other, net 33 63
- ------------------------------------------------------------------------------
Net cash provided by operating activities 369 206
- ------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to land, buildings and equipment (211) (259)
Proceeds from the sale of facilities and investments 3 58
Collection of note receivable -- 23
- ------------------------------------------------------------------------------
Net cash used by investing activities (208) (178)
- ------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of long-term debt 34 96
Repayments of long-term debt (12) (150)
Net change in short-term borrowings (38) 77
Payment of dividends (76) (73)
Other, net 17 6
- ------------------------------------------------------------------------------
Net cash used by financing activities (75) (44)
- ------------------------------------------------------------------------------
Effect of exchange rate changes on cash 1 --
- ------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $ 87 $ (16)
- ------------------------------------------------------------------------------
See notes to consolidated financial statements.
10
<PAGE>
Rohm and Haas Company and Subsidiaries
CONSOLIDATED BALANCE SHEETS (Subject to Year-end Audit)
- ------------------------------------------------------------------------------
SEPT. 30, December 31, Sept. 30,
1994 1993 1993*
-------------------------------------------
ASSETS (Millions of dollars)
-------------------------------------------
Current assets:
Cash and cash equivalents $ 122 $ 35 $ 75
Receivables, net 716 604 652
Inventories (note d) 433 394 398
Prepaid expenses and other assets 170 167 175
- ------------------------------------------------------------------------------
Total current assets 1,441 1,200 1,300
- ------------------------------------------------------------------------------
Land, buildings and equipment 3,896 3,696 3,637
Less accumulated depreciation 1,976 1,827 1,810
- ------------------------------------------------------------------------------
Net land, buildings and equipment 1,920 1,869 1,827
- ------------------------------------------------------------------------------
Other assets 452 455 457
- ------------------------------------------------------------------------------
$3,813 $3,524 $3,584
- ------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 50 $ 83 $ 133
Accounts payable and
accrued liabilities 630 615 545
Accrued income taxes 45 3 8
- ------------------------------------------------------------------------------
Total current liabilities 725 701 686
- ------------------------------------------------------------------------------
Long-term debt 723 690 696
Other liabilities 772 692 758
Stockholders' equity:
$2.75 Cumulative convertible
preferred stock (note e) 135 136 136
Common stock: shares issued--
78,652,380 197 197 197
Additional paid-in capital 151 150 150
Retained earnings 1,585 1,444 1,442
- ------------------------------------------------------------------------------
2,068 1,927 1,925
Less: Treasury stock (note f) 322 323 323
Less: ESOP shares 158 163 164
Other equity adjustments 5 -- 6
- ------------------------------------------------------------------------------
Total stockholders' equity 1,593 1,441 1,444
- ------------------------------------------------------------------------------
$3,813 $3,524 $3,584
- ------------------------------------------------------------------------------
*Certain items have been reclassified to conform with current financial
statement presentation.
See notes to consolidated financial statements.
11
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
(A) These interim financial statements are unaudited, but, in the opinion of
management, all adjustments, which are of a normal recurring nature,
have been made to present fairly the company's financial position,
results of operations and cash flows. It is suggested that these
financial statements be read in conjunction with the financial
statements, accounting policies and the notes included in the company's
annual report for the year ended December 31, 1993.
(B) The company is a party in various government enforcement and private
actions associated with former waste disposal sites. The company is
also involved in corrective actions at some of its manufacturing
facilities. The amounts charged to earnings before tax for
environmental remediation were $17 million and $60 million for the nine
months ended September 30, 1994 and 1993, respectively. The 1993 period
included an accrual of $50 million for the cost of remediating lake and
marsh property near the Lipari landfill. At September 30, 1994, the
reserves for remediation were $179 million and probable insurance
recoveries were $72 million.
In addition to accrued environmental liabilities, the company has
reasonably possible loss contingencies relating to environmental matters
of approximately $115 million. The company knows that additional future
environmental remediation may be required, but these loss contingencies
are not reasonably estimable at this time. The company believes that
these matters, when ultimately resolved, which may be over an extended
period of time, will not have a material adverse effect on the
consolidated financial position of the company, but could have a
material adverse effect on consolidated results of operations in any
given quarter.
(C) The company and its subsidiaries are parties to litigation arising out
of the ordinary conduct of its business. Recognizing the amounts
reserved for such items and the uncertainty of the outcome, it is the
company's opinion that the resolution of all pending lawsuits and claims
will not have a material adverse effect, individually or in the
aggregate, upon the results of operations and the consolidated financial
position of the company.
(D) Inventories consist of:
(Millions of dollars)
SEPT. 30, Dec. 31, Sept. 30,
1994 1993 1993
---------- --------- ----------
Finished products and
work in process $327 $297 $298
Raw materials and
supplies 106 97 100
---- ---- ----
Total inventories $433 $394 $398
---- ---- ----
(E) The number of preferred shares issued and outstanding were:
September 30, 1994 2,691,029
December 31, 1993 2,719,803
September 30, 1993 2,721,758
(F) The number of common treasury shares were:
September 30, 1994 10,940,637
December 31, 1993 11,007,436
September 30, 1993 11,014,948
Plexiglas and Dithane are trademarks of Rohm and Haas Company
12
<PAGE>
APPENDIX TO EXHIBIT 20
(Pursuant to Part 232.304(a) of Regulation S-T)
Graphic Description/Cross Reference
- --------------------- -------------------------------------------------
Cover Company name with enlarged number 3
Stacked Bar Description included in introduction to Exhibit 20
Charts (not incorporated by reference)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information extracted
from financial statements as of September 30, 1994 and is
qualified in its entirety by reference to such financial
statements.
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994
<CASH> 122
<SECURITIES> 0
<RECEIVABLES> 652
<ALLOWANCES> 12
<INVENTORY> 433
<CURRENT-ASSETS> 1,441
<PP&E> 3,896
<DEPRECIATION> 1,976
<TOTAL-ASSETS> 3,813
<CURRENT-LIABILITIES> 725
<BONDS> 723
0
135
<COMMON> 197
<OTHER-SE> 1,261
<TOTAL-LIABILITY-AND-EQUITY> 3,813
<SALES> 2,674
<TOTAL-REVENUES> 2,674
<CGS> 1,708
<TOTAL-COSTS> 1,708
<OTHER-EXPENSES> 575
<LOSS-PROVISION> 2
<INTEREST-EXPENSE> 37
<INCOME-PRETAX> 334
<INCOME-TAX> 117
<INCOME-CONTINUING> 217
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 217
<EPS-PRIMARY> 3.12
<EPS-DILUTED> 3.12
</TABLE>
