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 JUNE 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 August 4, 1994: 67,769,050 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 second 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 second 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 second
quarter of 1994, a complete copy of which is attached as Exhibit 20.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The company's 75th annual meeting of stockholders was held on May
2, 1994, in Philadelphia, Pennsylvania.
(c) The following is a tabulation of the results of voting by security
holders:
1. Election of directors:
Nominees Votes For Votes Withheld
---------------------- ---------- --------------
George B. Beitzel 60,215,058 700,982
Daniel B. Burke 60,229,532 686,508
Earl G. Graves 60,224,393 691,647
James A. Henderson 60,232,911 683,129
John H. McArthur 60,233,267 682,773
Paul F. Miller, Jr. 60,226,703 689,337
Sandra O. Moose 60,232,672 683,368
John P. Mulroney 60,220,914 695,126
Robert E. Naylor, Jr. 60,197,886 718,154
Gilbert S. Omenn 60,233,848 682,192
Ronaldo H. Schmitz 60,087,880 828,160
Alan Schriesheim 60,234,725 681,315
Marna C. Whittington 60,233,637 682,403
J. Lawrence Wilson 60,224,655 691,385
<PAGE>
2. Proposal to adopt the Rohm and Haas Top Executive Annual Award Plan:
For 57,266,758 Against 3,114,568 Abstain 534,444
---------- --------- -------
3. Proposal to adopt the Rohm and Haas Top Executive Long-term
Award Plan:
For 57,420,909 Against 2,952,963 Abstain 540,368
---------- --------- -------
4. Proposal to amend the Rohm and Haas Stock Option Plan of 1992:
For 58,128,375 Against 2,114,275 Abstain 672,850
---------- --------- -------
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 June 30, 1994.
(b) No reports on Form 8-K were filed during the quarter ended June 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: August 10, 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
<PAGE>
EXHIBIT 12
ROHM AND HAAS COMPANY
AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(MILLIONS OF DOLLARS)
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, --------------------------------------------
1994 1993 1992 1991 1990 1989
--------- ------ ------ ------ ------ -----
Earnings before
income taxes $ 251 $ 194 $ 261 $ 240 $ 313 $ 251
Fixed charges 39 79 83 79 77 70
Capitalized interest
adjustment 1 (7) (3) (6) (17) (12)
Undistributed earnings
adjustment (1) 6 2 (2) (5) 2
--------- ------ ------ ------ ------ -----
Earnings $ 290 $ 272 $ 343 $ 311 $ 368 $ 311
--------- ------ ------ ------ ------ -----
Ratio of earnings to
fixed charges 7.4 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
SECOND QUARTER REPORT 1994
ID: COVER GRAPHIC
<PAGE>
FINANCIAL HIGHLIGHTS (Millions of dollars, except earnings per share)
- - --------------------------------------------------------------------------------
Second Quarter Six Months
----------------------- -----------------------
Percent Percent
1994 1993 Change 1994 1993* Change
----------------------- -----------------------
Net sales $ 944 $ 884 7 $1,800 $1,710 5
Net earnings 95 63 51 162 121 34
Net earnings per
common share $1.37 $ .90 52 $ 2.33 $ 1.73 35
- - -------------------------------------------------------------------------------
*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 $133
Plastics $158
Performance Chemicals $206
Polymers, Resins and Monomers $447
ID: GRAPHIC (STACKED BAR CHART)
SALES BY CUSTOMER LOCATION
Millions of Dollars
Latin America $57
Pacific $124
Europe $221
North America $542
ID: GRAPHIC (STACKED BAR CHART)
<PAGE>
CHAIRMAN'S LETTER
Rohm and Haas reported earnings for the second quarter of $95 million.
Favorable external conditions and hard work throughout the organization
resulted in higher unit volumes, higher sales and smooth manufacturing
operations. Both Polymers, Resins and Monomers (PRM) and Plastics reported
double-digit unit volume growth. The company also began to see the benefit
of productivity improvements being put in place throughout Rohm and Haas to
control selling, administrative and research costs. The most notable of
these is in research, where costs were down 11 percent from the same period
a year ago.
Happily, there was a decline in another important number during the
quarter -- the number of employee injuries.
With half the year now behind us, it is clear that Rohm and Haas
earnings will be substantially above the $126 million reported for 1993,
and may even exceed the $230 million record earnings reported for 1988.
However, the outlook for the rest of the year is not entirely rosy. We
have experienced increases in our costs for propylene, ammonia, methanol,
acetone and styrene. We will have to raise prices for certain product
lines to limit the impact these raw material price increases will have
during the rest of this year.
In order to deliver the financial performance our shareholders have a
right to expect, we must continue to grow the company, satisfy customers
and hold down costs. Our second quarter results reflect advances in all
three areas, but we know that more progress is necessary to improve our
competitive standing within the industry.
(J. LAWRENCE WILSON)
J. Lawrence Wilson August 10, 1994
Chairman
<PAGE>
MANAGEMENT DISCUSSION AND ANALYSIS
SECOND QUARTER 1994 VERSUS
SECOND QUARTER 1993
Second quarter 1994 earnings were $95 million, up 51% from last year's
earnings of $63 million. Earnings per common share were $1.37, up 52% from 90
cents reported in the 1993 period. The prior-year period included a net
after-tax charge of $5 million related to asset writedowns, net of a gain on
the sale of Supelco. Absent these non-recurring items, earnings increased
40%. Sales of $944 million were 7% higher, compared with the prior-year
period. Volume increased 9% with the strongest improvements in the Polymers,
Resins and Monomers and Plastics business groups. The increase in earnings
reflects the benefit of higher volumes and smooth plant operations. Selling
prices were slightly below the prior-year period and raw material costs were
flat.
Polymers, Resins and Monomers (PRM) earnings were $56 million, up 44% from the
prior-year period. Sales increased 9% and volume was up 11%. Businesses with
good volume increases included architectural coatings, industrial coatings,
adhesives and construction products. Earnings also benefited from high
production volumes.
Plastics reported earnings of $15 million, up $8 million compared to
1993, excluding a $16 million after-tax charge in 1993 for asset
writedowns. Volume increased 10% and sales were up 8%. PVC additives had
strong volume growth in North America and Europe. AtoHaas North America
reported volume increases for all product lines. AtoHaas Europe reported
breakeven results, a significant improvement compared to the prior-year
period.
Performance Chemicals recorded earnings of $15 million, up $5 million compared
to last year's earnings, excluding the 1993 gain on the sale of Supelco.
Sales increased 7% on 5% higher volume, excluding Supelco. Strong volume
growth was reported by Biocides in North America and Electronic Chemicals in
North America and Europe. Ion Exchange Resins had volume growth in North
America and Europe, but continued depressed selling prices and inventory
writedowns impacted this business adversely.
Agricultural Chemicals earnings of $19 million were down 14% from the second
quarter of 1993. Volume declined 3% and sales were flat, due to lower selling
prices and reduced sales of Dithane caused by increased competition in Europe
and reduced spending by growers in Latin America.
North American region earnings were $62 million, up 44% from the prior-year
period, excluding an after-tax gain in 1993 of $11 million from the sale of
Supelco. Sales and volume increased 9%. Increased volume and reduced
operating costs contributed to the higher earnings.
2
<PAGE>
European region earnings were $27 million, compared with $6 million in 1993.
The results in 1993 included an after-tax charge of $16 million related to
asset writedowns. Excluding this non-recurring charge, earnings increased
23%. Sales grew 4% reflecting 11% higher volume and 3% weaker European
currencies.
Pacific region earnings of $11 million were up 38% compared to the
second quarter of 1993. Sales and volume were up 7% on the strength of the
PRM and Plastics business groups. Higher earnings also reflected the
effect of a 9% stronger Yen.
Latin America posted earnings of $5 million, flat compared to the
prior-year period. Sales were unchanged from the second quarter of 1993.
Improved results in Colombia and Mexico were offset by reduced sales in
Brazil due to uncertainty regarding the new economic reforms.
Net sales were $944 million, up 7% from last year's results on a 9% volume
increase. The second quarter gross profit margin increased to 37% from 35% in
1993 due to higher volumes and smooth plant operation.
Selling, administrative and research expenses declined 2%, reflecting
productivity improvements implemented to control costs. Interest expense
increased $3 million due to lower capitalization of interest expense as
part of construction in progress. Affiliate earnings were $1 million, a
significant improvement from the $2 million loss reported last year,
primarily due to reduced losses from the AtoHaas affiliates. Other
expense, net, was down $4 million from 1993. The prior-year period
included costs for cancelling construction of a plastics facility in
England, net of a gain on the sale of Supelco.
SIX MONTHS 1994 VERSUS
SIX MONTHS 1993
Earnings for the first six months were $162 million, up 34% from last year's
earnings of $121 million (before cumulative effect of an accounting change for
postemployment benefits). Earnings per common share were $2.33, up 35%
compared with the 1993 period. The 1993 period included a net charge of $5
million for unusual items. Absent these unusual items, earnings increased
29%. Net sales of $1,800 million were 5% higher than 1993. Volume grew 8%
and raw material costs were 2% lower compared to the prior year. Earnings
also benefited from smooth plant operations and improved affiliate results.
Polymers, Resins and Monomers earnings of $92 million were up 24% from 1993.
Sales increased 7% and volume increased 10%, with significant gains in the
industrial coatings, architectural coatings, adhesives, and construction
products businesses. Raw material costs continued to be lower than the prior
year and plants ran smoothly.
3
<PAGE>
Plastics recorded earnings of $30 million compared to $15 million in 1993,
excluding a 1993 after-tax charge of $16 million related to asset writedowns.
Volume increased 11% and sales were up 8%, reflecting lower selling prices
caused by competitive pricing to maintain market share. 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 reported significantly reduced losses
compared to 1993.
Performance Chemicals reported earnings of $26 million, $9 million higher than
last year's earnings, excluding the 1993 gain on the sale of Supelco. Volume
increased 4% and sales rose 6%, excluding Supelco. Earnings improved due to
volume increases, a more favorable product mix and the strengthening of the
Yen. The Ion Exchange Resins business continued to suffer from depressed
pricing due to intense competition and higher operating costs due to low
manufacturing volumes.
Agricultural Chemicals earnings were $37 million, down 8% versus 1993. Sales
increased 2% though volume was flat, due to a more favorable product mix.
Intense competition, higher raw material costs and increased research expense
resulted in lower earnings.
North American region earnings were $105 million, 25% higher than the
prior-year period, excluding the 1993 after-tax gain of $11 million from the
sale of Supelco. Sales grew 7% on 10% higher volume, excluding Supelco. All
businesses contributed to the volume increase. Smooth plant operations and
lower raw material costs also contributed to the earnings increase.
European earnings of $49 million were 23% higher compared to 1993 results,
excluding the 1993 after-tax charge of $16 million for asset writedowns.
Sales increased 3%, reflecting an 11% volume increase and weaker European
currencies.
Pacific region earnings were $22 million, $9 million higher than 1993. Sales
increased 9% on 7% higher volume, excluding Supelco. Strong volume increases
were recorded by the Polymers and Resins and Plastics Additives businesses.
An 11% stronger Yen was a major factor in the earnings performance.
Latin America posted earnings of $9 million, flat compared to 1993. Sales
were unchanged from the prior year and volume increased 1%. Uncertainty in
Brazil regarding economic reforms and cost pressures on growers in Costa Rica
offset the benefit of volume increases in Colombia and Mexico.
Net sales of $1,800 million were 5% higher compared to last year's results on
a 9% volume increase, excluding Supelco. The gross profit margin for the
first six months was 37% compared to 36% in the prior period. Volume
increases and smooth plant operations were the main contributors to the margin
improvement.
4
<PAGE>
Selling, administrative and research expenses were down 1% compared to 1993,
reflecting the benefit of productivity improvements. Interest expense of $26
million was $3 million higher than last year due to lower capitalization of
interest as part of construction in progress. Affiliate earnings of $1
million reflect a substantial improvement from the losses reported in 1993,
primarily due to improved results from the AtoHaas affiliates. Other expense,
net, was flat compared to the prior-year period.
LIQUIDITY, CAPITAL RESOURCES
AND OTHER FINANCIAL DATA
On June 29, 1994 the company completed the previously announced acquisition of
Monsanto's worldwide pyridine family of chemistry and a new fungicide. The
purchase price will be paid in equal installments over a four-year period.
The assets acquired included a manufacturing facility, inventory and patents.
At the end of the quarter, cash and cash equivalents totaled $19 million, down
$16 million from the 1993 year-end balance. Customer receivables were up $228
million during the first six months, reflecting higher sales and a normal
seasonal pattern. Inventories increased $36 million, mainly due to
inventories acquired from Monsanto as described above. The debt-to-equity
ratio, calculated without the reduction to stockholders' equity for the ESOP
transaction, was 47% at the end of June, compared with 48% at year-end 1993.
Fixed asset additions during the first half of 1994 totaled $122 million,
including the manufacturing facility acquired from Monsanto. Spending for the
full year is estimated to be less than $350 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 July 25, 1994, the board of directors approved a 6% increase in the
quarterly dividend on common shares from 35 cents to 37 cents per share. The
board also declared a regular quarterly dividend of $.6875 per preferred
share. Both dividends are payable September 1, 1994, to stockholders of
record on August 5, 1994.
5
<PAGE>
ROHM AND HAAS COMPANY AND SUBSIDIARIES
SALES BY BUSINESS GROUP AND CUSTOMER LOCATION (Millions of dollars)
- - -------------------------------------------------------------------------------
SECOND 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 $320 $293 $ 92 $ 84 $ 89 $ 85 $ 41 $ 37 $542 $499
- - ------- ----------- ----------- ----------- ------------ ------------
Europe 68 62 50 46 55 54 48 50 221 212
- - ------- ----------- ----------- ----------- ------------ ------------
Pacific 35 32 10 9 56 52 23 23 124 116
- - ------- ----------- ----------- ----------- ------------ ------------
Latin
America 24 23 6 7 6 5 21 22 57 57
- - ------- ----------- ----------- ----------- ------------ ------------
Total $447 $410 $158 $146 $206 $196 $133 $132 $944 $884
- - ------- ----------- ----------- ----------- ------------ ------------
FIRST SIX MONTHS 1994 AND 1993
North
America $592 $550 $183 $168 $171 $171 $ 74 $ 74 $1,020 $ 963
- - ------- ----------- ----------- ----------- ------------ --------------
Europe 128 119 97 90 107 107 98 100 430 416
- - ------- ----------- ----------- ----------- ------------ --------------
Pacific 68 61 19 16 104 99 51 47 242 223
- - ------- ----------- ----------- ----------- ------------ --------------
Latin
America 46 47 11 12 11 11 40 38 108 108
- - ------- ----------- ----------- ----------- ------------ --------------
Total $834 $777 $310 $286 $393 $388 $263 $259 $1,800 $1,710
- - ------- ----------- ----------- ----------- ------------ --------------
6
<PAGE>
PHYSICAL VOLUME CHANGE
CURRENT QUARTER RELATIVE TO YEAR-EARLIER QUARTER
- - -------------------------------------------------------------------------------
Percent CUSTOMER Percent
BUSINESS GROUP Change LOCATION Change
- - -------------------------------------------------------------------------------
Polymers, Resins and Monomers 11 North America 9
Plastics 10 Europe 11
Performance Chemicals 1 Pacific 7
Agricultural Chemicals (3) Latin America 1
- - -------------------------------------------------------------------------------
Worldwide 9 Worldwide 9
- - -------------------------------------------------------------------------------
CURRENT SIX MONTHS RELATIVE TO YEAR-EARLIER SIX MONTHS
- - -------------------------------------------------------------------------------
Percent CUSTOMER Percent
BUSINESS GROUP Change LOCATION Change
- - -------------------------------------------------------------------------------
Polymers, Resins and Monomers 10 North America 9
Plastics 11 Europe 11
Performance Chemicals (4) Pacific 6
Agricultural Chemicals -- Latin America 1
- - -------------------------------------------------------------------------------
Worldwide 8 Worldwide 8
- - -------------------------------------------------------------------------------
7
<PAGE>
ROHM AND HAAS COMPANY AND SUBSIDIARIES
NET EARNINGS** BY BUSINESS GROUP AND CUSTOMER LOCATION
- - -------------------------------------------------------------------------------
Quarter Ended Six Months Ended
June 30, June 30,
--------------------- --------------------
1994 1993 1994 1993
--------------------------------------------
BUSINESS GROUP (Millions of dollars)
--------------------------------------------
Polymers, Resins and Monomers $56 $39 $ 92 $ 74
Plastics 15 (9) 30 (1)
Performance Chemicals 15 21 26 28
Agricultural Chemicals 19 22 37 40
Corporate (10) (10) (23) (20)
- - --------------------------------------------------------- -------------------
Total $95 $63 $162 $121
- - --------------------------------------------------------- -------------------
CUSTOMER LOCATION
North America $62 $54 $105 $ 95
Europe 27 6 49 24
Pacific 11 8 22 13
Latin America 5 5 9 9
Corporate (10) (10) (23) (20)
- - --------------------------------------------------------- -------------------
Total $95 $63 $162 $121
- - --------------------------------------------------------- -------------------
Corporate includes 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)
-----------------------------
SECOND FIRST
GROSS PROFIT QUARTER SIX MONTHS
------------ --------------
Selling prices* $(.16) $(.70)
Physical volume and product mix .33 .71
Raw material costs* -- .07
Other manufacturing costs* .21 .46
- - ----------------------------------------------------- ---------------
Increase in gross profit .38 .54
- - ----------------------------------------------------- ---------------
OTHER CAUSES
Selling, administrative and
research expenses* .03 .05
Share of affiliate earnings (losses) .04 .09
Other .02 (.08)
- - ----------------------------------------------------- ---------------
Increase from other causes .09 .06
- - ----------------------------------------------------- ---------------
Increase in per-share earnings $ .47 $ .60
- - ----------------------------------------------------- ---------------
*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 six months ended June 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 Six Months Ended
June 30, June 30,
------------------------ --------------------
1994 1993 1994 1993*
-----------------------------------------------
CURRENT EARNINGS (Millions of dollars, except per share amounts)
-----------------------------------------------
Net sales $ 944 $ 884 $ 1,800 $ 1,710
Cost of goods sold 593 572 1,132 1,098
- - -------------------------------------------------------- --------------------
Gross profit 351 312 668 612
Selling and administrative
expense 147 144 291 289
Research and development
expense 47 53 94 101
Interest expense 14 11 26 23
Share of net earnings (losses)
of affiliates 1 (2) 1 (5)
Other expense, net 1 5 7 7
- - -------------------------------------------------------- --------------------
Earnings before income taxes 143 97 251 187
Income taxes 48 34 89 66
- - -------------------------------------------------------- --------------------
Earnings before cumulative
effect of accounting change 95 63 162 121
Cumulative effect of accounting
change -- -- -- (19)
- - -------------------------------------------------------- --------------------
NET EARNINGS $ 95 $ 63 $ 162 $ 102
Less preferred stock dividends 2 2 4 4
- - -------------------------------------------------------- --------------------
NET EARNINGS APPLICABLE TO
COMMON SHAREHOLDERS $ 93 $ 61 $ 158 $ 98
- - -------------------------------------------------------- --------------------
PER COMMON SHARE:
Earnings before cumulative
effect of accounting change $ 1.37 $ .90 $ 2.33 $ 1.73
Cumulative effect of accounting
change -- -- -- (28)
------------------------ --------------------
Net earnings $ 1.37 $ .90 $ 2.33 $ 1.45
------------------------ --------------------
Common dividends $ .35 $ .33 $ .70 $ .66
Average number of common shares
outstanding (000's) 67,721 67,622 67,696 67,602
- - -------------------------------------------------------- --------------------
*Restated to reflect adoption of a new accounting standard for postemployment
benefits in the third quarter of 1993, effective January 1, 1993.
See notes to consolidated financial statements.
9
<PAGE>
Rohm and Haas Company and Subsidiaries
STATEMENTS OF CONSOLIDATED CASH FLOWS (Subject to Year-end Audit)
- - -------------------------------------------------------------------------------
Six Months Ended
June 30,
----------------------
1994 1993*
----------------------
CASH FLOWS FROM OPERATING ACTIVITIES (Millions of dollars)
----------------------
Net earnings $ 162 $ 102
Adjustments to reconcile net earnings
to cash provided by operating activities:
Cumulative effect of accounting change, net of tax -- 19
Depreciation 114 108
Deferred income taxes 31 35
Accounts receivable (221) (194)
Inventories (36) 3
Accounts payable 3 (15)
Gain on disposition of facilities and investments -- (19)
Provision for writedown of plant assets -- 24
Other working capital changes, net 48 (38)
Other, net 12 38
- - -------------------------------------------------------------------------------
Net cash provided by operating activities 113 63
- - -------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to land, buildings and equipment (122) (184)
Proceeds from the sale of facilities and investments 3 58
Collection of note receivable -- 23
- - -------------------------------------------------------------------------------
Net cash used by investing activities (119) (103)
- - -------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of long-term debt 34 88
Repayments of long-term debt (6) (99)
Net change in short-term borrowings (3) 58
Payment of dividends (50) (47)
Other, Net 14 5
- - -------------------------------------------------------------------------------
Net cash provided (used) by financing activities (11) 5
- - -------------------------------------------------------------------------------
Effect of exchange rate changes on cash 1 --
- - -------------------------------------------------------------------------------
NET DECREASE IN CASH AND CASH EQUIVALANTS $ (16) $ (35)
- - -------------------------------------------------------------------------------
*Restated to reflect adoption of a new accounting standard for postemployment
benefits in the third quarter of 1993, effective January 1, 1993.
See notes to consolidated financial statements.
10
<PAGE>
Rohm and Haas Company and Subsidiaries
CONSOLIDATED BALANCE SHEETS (Subject to Year-end Audit)
- - -------------------------------------------------------------------------------
JUNE 30, December 31, June 30,
1994 1993 1993*
---------------------------------------
ASSETS (Millions of dollars)
---------------------------------------
Current assets:
Cash and cash equivalents $ 19 $ 35 $ 56
Receivables, net 825 604 735
Inventories (note d) 430 394 426
Prepaid expenses and other assets 168 167 183
- - -------------------------------------------------------------------------------
Total current assets 1,442 1,200 1,400
- - -------------------------------------------------------------------------------
Land, buildings and equipment 3,819 3,696 3,585
Less accumulated depreciation 1,930 1,827 1,777
- - -------------------------------------------------------------------------------
Net land, buildings and equipment 1,889 1,869 1,808
- - -------------------------------------------------------------------------------
Other assets 452 455 457
- - -------------------------------------------------------------------------------
$3,783 $3,524 $3,665
- - -------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 90 $ 83 $ 114
Accounts payable and accrued
liabilities 619 615 523
Accrued income taxes 52 3 59
- - -------------------------------------------------------------------------------
Total current liabilities 761 701 696
- - -------------------------------------------------------------------------------
Long-term debt 722 690 739
Other liabilities 734 692 741
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 151 150 149
Retained earnings 1,556 1,444 1,489
- - -------------------------------------------------------------------------------
2,039 1,927 1,971
Less: Treasury stock (note f) 319 323 323
Less: ESOP shares 159 163 166
Other equity adjustments 5 -- 7
- - -------------------------------------------------------------------------------
Total stockholders' equity 1,566 1,441 1,489
- - -------------------------------------------------------------------------------
$3,783 $3,524 $3,665
- - -------------------------------------------------------------------------------
*Restated to reflect adoption of a new accounting standard for postemployment
benefits in the third quarter of 1993, effective January 1, 1993. Additionally
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 named party in various government enforcement and private
actions associated with former waste disposal sites. The amounts charged
to earnings before tax for environmental remediation were $8 million and
$7 million for the six months ended June 30, 1994, and 1993, respectively.
At June 30, 1994, the reserves for remediation were $189 million and
probable insurance recoveries were $72 million.
(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)
JUNE 30, Dec. 31, June 30,
1994 1993 1993
-------- -------- --------
Finished products and
work in process $323 $297 $322
Raw materials and
supplies 107 97 104
---- ---- ----
Total inventories $430 $394 $426
---- ---- ----
(E) The number of preferred shares issued and outstanding were:
June 30, 1994 2,700,963
December 31, 1993 2,719,803
June 30, 1993 2,722,074
(F) The number of common treasury shares were:
June 30, 1994 10,905,772
December 31, 1993 11,007,436
June 30, 1993 11,020,343
Dithane is a trademark 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 2
Stacked Bar Description included in introduction to Exhibit 20
Charts (not incorporated by reference)
