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, 1995 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, 1995: 67,536,210 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 1995, 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 1995, 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 pages 5 and 12 of the company's Quarterly Report to Stockholders for the
second quarter of 1995, 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 77th annual meeting of stockholders was held on May
1, 1995, in Philadelphia, Pennsylvania.
(c) The following is a tabulation of the results of voting by security
holders:
Election of directors:
Nominees Votes For Votes Withheld
---------------------- ---------- --------------
George B. Beitzel 63,610,601 316,675
Daniel B. Burke 63,584,540 342,736
Earl G. Graves 63,577,888 349,388
James A. Henderson 63,620,654 306,622
John H. McArthur 63,618,432 308,844
Paul F. Miller, Jr. 63,606,216 321,060
Sandra O. Moose 63,604,110 323,166
John P. Mulroney 63,607,857 319,419
Robert E. Naylor, Jr. 63,550,409 376,867
Gilbert S. Omenn 63,624,872 302,404
Ronaldo H. Schmitz 63,406,582 520,694
Alan Schriesheim 63,603,259 324,017
Marna C. Whittington 63,613,345 313,931
J. Lawrence Wilson 63,567,139 360,137
<PAGE>
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, 1995.
Exhibit (27) - Financial Data Schedule
(b) No reports on Form 8-K were filed during the quarter ended
June 30, 1995.
<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 8, 1995 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)
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, --------------------------------------------
1995 1994 1993 1992 1991 1990
--------- ------ ------ ------ ------ -----
Earnings before
income taxes 254 407 $ 194 261 240 313
Fixed charges 40 82 79 83 79 77
Capitalized interest
adjustment (3) (2) (7) (3) (6) (17)
Undistributed earnings
adjustment (5) (2) 6 2 (2) (5)
--------- ------ ------ ------ ------ -----
Earnings 286 485 $ 272 343 $ 311 368
--------- ------ ------ ------ ------ -----
Ratio of earnings to
fixed charges 7.2 5.9 3.4 4.1 3.9 4.8
--------- ------ ------ ------ ------ -----
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.
EXHIBIT 20
COPY OF QUARTERLY REPORT TO STOCKHOLDERS
<PAGE>
ROHM AND HAAS COMPANY
SECOND QUARTER '95
ID: COVER GRAPHIC
<PAGE>
FINANCIAL HIGHLIGHTS (Millions of dollars, except earnings per share)
--------------------------------------------------------------------------------
Second Quarter Six Months
----------------------- -----------------------
Percent Percent
1995 1994 Change 1995 1994 Change
----------------------- -----------------------
Net sales $1,042 $ 944 10 $2,027 $1,800 13
Net earnings 87 95 (8) 166 162 2
Net earnings per
common share $ 1.26 $1.37 (8) $ 2.39 $ 2.33 3
-------------------------------------------------------------------------------
SALES BY BUSINESS GROUP
Millions of Dollars
Polymers, Resins and Monomers $480
Agricultural Chemicals $142
Plastics $182
Performance Chemicals $238
ID: GRAPHIC (PIE CHART)
SALES BY CUSTOMER LOCATION
Millions of Dollars
North America $558
Latin America $61
Europe $274
Pacific $149
ID: GRAPHIC (PIE CHART)
<PAGE>
CHAIRMAN'S LETTER
Sales topped $1 billion for the first time in the second quarter, up 10
percent from a year ago. Volume shipments were down 3 percent, with
most of the decreases occurring in North American businesses. Earnings
were $87 million, a decline of 8 percent from the second quarter of 1994.
A slowdown in the U.S. economy, higher manufacturing costs and costs
associated with monomer production problems at our plant in Houston,
Texas, contributed to lower earnings for the quarter. Business in
Europe and the Pacific continued to be strong, with sales up 23 percent
combined for those regions.
The most telling statistic for the first six months of the year is that
our gross profit margin has declined, from 37 percent in 1994 to 34
percent for the same period this year. Most of the decline is the
result of higher raw material prices -- up 28 percent over last year.
Average selling prices are up just 3 percent during that same period.
We will be working throughout the rest of 1995 to correct this
imbalance.
We are still ahead of where we were this time last year. Sales for the
first six months were up 13 percent; earnings for the first half of the
year were up 2 percent, and unit volume essentially was flat. Our
continued strong performance in Europe and the Pacific, the improving
product mix of our overall portfolio and ongoing productivity gains all
are indications that we are following the right strategies. Given these
factors, I continue to believe that Rohm and Haas will exceed last
year's earnings performance.
On July 24th, the Board of Directors approved an 11 percent increase in
the dividend paid on common stock, from 37 to 41 cents per share.
(J. LAWRENCE WILSON)
J. Lawrence Wilson August 8, 1995
Chairman
<PAGE>
MANAGEMENT DISCUSSION AND ANALYSIS
SECOND QUARTER 1995 VERSUS
SECOND QUARTER 1994
Second quarter 1995 earnings were $87 million and earnings per common
share were $1.26, down 8% from last year's earnings of $95 million and
$1.37 per common share. Net sales of $1,042 million were an all-time
quarterly high, up 10% from last year's results. Though volume
decreased 1%, excluding the sale of the styrene butadiene latex
business, sales were higher due to a higher-priced product mix, 3%
higher selling prices and a boost from 13% stronger European currencies
and a 22% stronger Japanese yen. Higher raw material prices, which
increased 27% over the prior-year period, a slowdown in the U.S.
economy, higher manufacturing costs and costs associated with monomer
production problems at the Houston plant resulted in lower earnings.
Polymers, Resins and Monomers earnings were $38 million, down 32% from
the prior-year period. Excluding the effect of the sale of the styrene
butadiene latex business, sales increased 10%, due to a higher-priced
product mix, higher selling prices and stronger currencies in Europe and
Japan. However, volume was down 1% due to the slowdown in the U.S.
economy, particularly in the construction and automotive markets. This
resulted in lower shipments during the quarter for architectural
coatings, construction products and specialty industrial polymers.
Demand remained strong in the European and Asian markets. Higher raw
material prices, costs associated with monomer production problems and
production variances hurt earnings.
Plastics reported earnings of $20 million, up 33% from 1994. Sales were
up 15% on flat volume, reflecting higher selling prices and stronger
European currencies. The large increase in raw material prices
negatively impacted earnings. Demand for Plastics Additives products
weakened in North America due to the slowdown in the construction
market, but continued to be strong in Europe. AtoHaas North America
reported increased shipments of molding resins to Europe and Asia.
AtoHaas Europe reported strong profits compared to breakeven results in
the prior-year period.
Performance Chemicals recorded earnings of $18 million, up 20% compared
to last year's second quarter earnings. Sales increased 16% due to 4%
higher volume and a higher-priced product mix. Shipley, the company's
electronic chemicals business, reported double-digit volume growth in
all regions and strong increases in sales and earnings. Ion Exchange
Resins had volume gains in all regions, but depressed selling prices,
higher raw material prices and production variances resulted in a loss
for the quarter.
Agricultural Chemicals earnings of $18 million were down slightly from
the second quarter of 1994. Softness in demand and increased
competitive activity led to reduced
2
<PAGE>
volume for Dithane fungicide. However, sales increased 7% reflecting
increased sales of newer, higher-priced insecticides and herbicides.
The second quarter gross profit margin decreased to 33% from 37% in
1994. Raw material prices were up 27% over last year's second quarter,
excluding the effect of currencies. The slowdown in the U.S. economy,
production variances and costs associated with monomer production
problems at the company's plant in Houston, Texas also hurt margins.
Selling, administrative and research expenses increased 5%, largely due
to stronger currencies in Europe and Japan. Interest expense decreased
$3 million due to higher capitalization of interest expense as part of
construction in progress. Affiliate earnings of $4 million were
significantly higher than the prior-year period. The AtoHaas affiliates
reported strong earnings compared to breakeven results in 1994. Other
income, net, was $3 million compared to other expense of $1 million in
the second quarter of 1994 due to a gain on the sale of technology.
SIX MONTHS 1995 VERSUS
SIX MONTHS 1994
Earnings for the first six months were $166 million, up 2% from last
year's earnings of $162 million. Earnings per common share were $2.39,
up 3% compared with the 1994 period. The 1995 results were reduced by a
$17 million after-tax charge for additional potential liability related
to the cleanup of the Whitmoyer waste site. Absent this charge,
earnings would have increased 13%. Net sales of $2,027 million were 13%
higher than 1994 due to 3% higher volume, excluding the sale of the
styrene butadiene latex business, 3% higher selling prices, a
higher-priced product mix, 11% stronger European currencies and a 16%
stronger Japanese yen. Earnings were hurt by 28% higher raw material
prices.
Polymers, Resins and Monomers earnings of $86 million were down 7% from
1994. Sales increased 13% and volume increased 3%, excluding the effect
of the sale of the styrene butadiene latex business. Most business
units reported good volume increases in Europe and Asia. Volume in
North America was hurt by the slowdown in the construction and
automotive markets. Higher raw material prices and costs associated
with monomer production problems more than offset the benefits of higher
selling prices, a higher-priced product mix and stronger foreign
currencies.
Plastics recorded earnings of $38 million, up 27% from $30 million in
1994. Volume increased 3% and sales were up 16%, reflecting higher
selling prices and stronger European currencies. Earnings were hampered
by the large increase in raw material prices. Plastics Additives
reported lower
3
<PAGE>
volume in North America caused by a production outage during the first
quarter and the slowdown in the construction market during the second
quarter. AtoHaas North America reported increased volume for molding
resins in the European and Pacific regions. AtoHaas Europe reported
strong earnings for the six-month period compared to a small loss in 1994.
Performance Chemicals reported earnings of $35 million, $9 million
higher than last year's earnings. The 16% increase in sales reflects 5%
higher volume, a higher-priced product mix and stronger currencies in
Europe and Japan. Petroleum Chemicals had lower volume in North America
due to the loss of a major customer in 1994. Shipley recorded strong
increases in volume, sales and earnings. Biocides had good volume
growth in North America and Europe. The Ion Exchange Resins business
reported significantly lower losses due to increased volume and the
strong Japanese yen. Selling prices still remained depressed and higher
raw material prices hurt results for this business unit.
Agricultural Chemicals earnings were $39 million, up 5% versus 1994.
Sales were up 9%, though volume decreased 6% due to increased sales of
newer, higher-priced insecticides and herbicides. The volume decline is
due to lower shipments of Dithane fungicide caused by softness in demand
and increased competition. The benefits of a more profitable product
mix and stronger currencies in Europe and Japan were somewhat offset by
higher raw material prices and increased operating costs.
Corporate expenses totaled $32 million, compared to $23 million in 1994.
The 1995 period includes a charge of $17 million for additional
potential liability related to the cleanup of the Whitmoyer waste site.
Interest expense was lower in 1995 due to higher capitalization of
interest as part of construction in progress.
The gross profit margin for the first six months was 34% compared to 37%
in the prior period. Margins declined due to 28% higher raw material
prices, higher production costs and costs associated with monomer
production problems.
Selling, administrative and research expenses were down 1% compared to
1994, excluding the effect of stronger currencies. The decrease
reflects the benefit of continuing productivity improvements. Interest
expense of $20 million was $6 million lower than last year, due to
higher capitalization of interest as part of construction in progress.
Affiliate earnings of $5 million reflect a substantial improvement from
earnings of $1 million reported last year, primarily due to earnings
from the AtoHaas affiliates in 1995 compared to a small loss in 1994.
Other expense, net, was $36 million, up from $7 million last year. The
current year includes a $26 million charge for additional potential
liability related to the Whitmoyer waste site.
4
<PAGE>
LIQUIDITY, CAPITAL RESOURCES
AND OTHER FINANCIAL DATA
At the end of the quarter, cash and cash equivalents totaled $38
million, down $89 million from the 1994 year-end balance. Accounts
receivable were up $206 million during the first six months, reflecting
higher sales and a normal seasonal pattern. The debt-to-equity ratio,
calculated without the reduction to stockholders' equity for the ESOP
transaction, was 42% at the end of June, compared with 44% at year-end 1994.
Fixed asset additions during the first half of 1995 totaled $165
million. Increased spending reflects the acceleration of the new
acrylic acid expansion at Houston, Texas, as well as spending for a new
Biocides production facility at Bayport, Texas and the Lone Star
emulsion facility at Houston, Texas. Spending for the full year is
estimated to be in the range of $400 million.
On July 20, 1995, a lawsuit was filed against the company and other
defendants, seeking class action certification for property damage,
personal injury and medical monitoring allegedly related to
contamination of the Lipari landfill, nearby streams and Lake Alcyon in
Pitman, New Jersey. The company believes it has substantial defenses to
this lawsuit; it is too early to determine what financial impact, if
any, it may have.
On July 24, 1995, the board of directors approved an 11% increase in the
quarterly dividend on common shares from 37 cents to 41 cents per share.
The board also declared a regular quarterly dividend of $.6875 per
preferred share. Both dividends are payable September 1, 1995, to
stockholders of record on August 4, 1995.
On July 31, 1995, the company completed the sale of its Plaskon
Electronic Materials subsidiary to Amoco Corporation. Plaskon makes
molding compounds used to encapsulate semiconductors. The sale did not
have a material effect on the company's results.
5
<PAGE>
ROHM AND HAAS COMPANY AND SUBSIDIARIES
SALES BY BUSINESS GROUP AND CUSTOMER LOCATION (Millions of dollars)
-------------------------------------------------------------------------------
SECOND QUARTER 1995 AND 1994
-------------------------------------------------------------------------------
Polymers,
Resins and Performance Agricultural
Monomers Plastics Chemicals Chemicals Total
----------- ----------- ----------- ------------ -------------
1995 1994 1995 1994 1995 1994 1995 1994 1995 1994
------- ----------- ----------- ----------- ------------ -------------
North
America $320 $320 $ 97 $ 92 $ 91 $ 89 $ 50 $ 41 $ 558 $ 542
------- ----------- ----------- ----------- ------------ -------------
Europe 87 68 66 50 71 55 50 48 274 221
------- ----------- ----------- ----------- ------------ -------------
Pacific 49 35 13 10 70 56 17 23 149 124
------- ----------- ----------- ----------- ------------ -------------
Latin
America 24 24 6 6 6 6 25 21 61 57
------- ----------- ----------- ----------- ------------ -------------
Total $480 $447 $182 $158 $238 $206 $142 $133 $1,042 $ 944
------- ----------- ----------- ----------- ------------ -------------
FIRST SIX MONTHS 1995 AND 1994
North
America $615 $592 $197 $183 $180 $171 $ 82 $ 74 $1,074 $1,020
------- ----------- ----------- ----------- ------------ --------------
Europe 166 128 125 97 131 107 109 98 531 430
------- ----------- ----------- ----------- ------------ --------------
Pacific 95 68 27 19 132 104 52 51 306 242
------- ----------- ----------- ----------- ------------ --------------
Latin
America 49 46 12 11 12 11 43 40 116 108
------- ----------- ----------- ----------- ------------ --------------
Total $925 $834 $361 $310 $455 $393 $286 $263 $2,027 $1,800
------- ----------- ----------- ----------- ------------ --------------
6
<PAGE>
PHYSICAL VOLUME CHANGE
CURRENT QUARTER RELATIVE TO YEAR-EARLIER QUARTER
-------------------------------------------------------------------------------
Percent CUSTOMER Percent
BUSINESS GROUP Change LOCATION Change
-------------------------------------------------------------------------------
Polymers, Resins and Monomers (4) North America (9)
Plastics (1) Europe 7
Performance Chemicals 4 Pacific 18
Agricultural Chemicals (10) Latin America 1
-------------------------------------------------------------------------------
Worldwide (3) Worldwide (3)
-------------------------------------------------------------------------------
CURRENT SIX MONTHS RELATIVE TO YEAR-EARLIER SIX MONTHS
-------------------------------------------------------------------------------
Percent CUSTOMER Percent
BUSINESS GROUP Change LOCATION Change
-------------------------------------------------------------------------------
Polymers, Resins and Monomers -- North America (5)
Plastics 3 Europe 9
Performance Chemicals 5 Pacific 23
Agricultural Chemicals (6) Latin America 6
-------------------------------------------------------------------------------
Worldwide -- Worldwide --
-------------------------------------------------------------------------------
7
<PAGE>
NET EARNINGS BY BUSINESS GROUP AND CUSTOMER LOCATION
-------------------------------------------------------------------------------
Quarter Ended Six Months Ended
June 30, June 30,
--------------------- --------------------
1995 1994 1995 1994
--------------------------------------------
BUSINESS GROUP (Millions of dollars)
--------------------------------------------
Polymers, Resins and Monomers $38 $56 $ 86 $ 92
Plastics 20 15 38 30
Performance Chemicals 18 15 35 26
Agricultural Chemicals 18 19 39 37
Corporate (7) (10) (32) (23)
--------------------------------------------------------- -------------------
Total $87 $95 $166 $162
--------------------------------------------------------- -------------------
CUSTOMER LOCATION
North America $49 $62 $ 96 $105
Europe 32 27 64 49
Pacific 9 11 29 22
Latin America 4 5 9 9
Corporate (7) (10) (32) (23)
--------------------------------------------------------- -------------------
Total $87 $95 $166 $162
--------------------------------------------------------- -------------------
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* $ .65 $ 1.14
Physical volume and product mix .12 .40
Raw material costs* (.57) (1.14)
Other manufacturing costs* (.30) (.11)
----------------------------------------------------- ---------------
Increase (decrease) in gross profit (.10) .29
----------------------------------------------------- ---------------
OTHER CAUSES
Selling, administrative and
research expenses* (.09) (.08)
Interest expense .03 .06
Share of affiliate earnings .04 .06
Certain waste disposal site cleanup costs -- (.25)
Other .01 (.02)
----------------------------------------------------- ---------------
Decrease from other causes (.01) (.23)
----------------------------------------------------- ---------------
Increase (decrease) in per-share earnings $(.11) $ .06
----------------------------------------------------- ---------------
*The amounts shown are on a U.S. dollar basis and include the impact
of currency movements as compared to the prior-year period.
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,
------------------------ --------------------
1995 1994 1995 1994
-----------------------------------------------
CURRENT EARNINGS (Millions of dollars, except per share amounts)
-----------------------------------------------
Net sales $ 1,042 $ 944 $ 2,027 $ 1,800
Cost of goods sold 701 593 1,329 1,132
-------------------------------------------------------- --------------------
Gross profit 341 351 698 668
Selling and administrative
expense 156 147 301 291
Research and development
expense 47 47 92 94
Interest expense 11 14 20 26
Share of net earnings
of affiliates 4 1 5 1
Other expense (income), net (3) 1 36 7
-------------------------------------------------------- --------------------
Earnings before income taxes 134 143 254 251
Income taxes 47 48 88 89
-------------------------------------------------------- --------------------
NET EARNINGS $ 87 $ 95 $ 166 $ 162
Less preferred stock dividends 2 2 4 4
-------------------------------------------------------- --------------------
NET EARNINGS APPLICABLE TO
COMMON SHAREHOLDERS $ 85 $ 93 $ 162 $ 158
-------------------------------------------------------- --------------------
PER COMMON SHARE:
Net earnings $ 1.26 $ 1.37 $ 2.39 $ 2.33
Common dividends $ .37 $ .35 $ .74 $ .70
Average number of common shares
outstanding (000's) 67,613 67,721 67,646 67,696
-------------------------------------------------------- --------------------
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,
----------------------
1995 1994
----------------------
CASH FLOWS FROM OPERATING ACTIVITIES (Millions of dollars)
----------------------
Net earnings $ 166 $ 162
Adjustments to reconcile net earnings
to cash provided by operating activities:
Depreciation 119 114
Deferred income taxes 19 31
Accounts receivable (206) (221)
Inventories 13 (36)
Accounts payable (14) 3
Other working capital changes, net (20) 48
Other, net 32 12
-------------------------------------------------------------------------------
Net cash provided by operating activities 109 113
-------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to land, buildings and equipment (165) (122)
Proceeds from the sale of facilities and investments 24 3
-------------------------------------------------------------------------------
Net cash used by investing activities (141) (119)
-------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Purchase of treasury shares (13) --
Proceeds from issuance of long-term debt 18 34
Repayments of long-term debt (97) (6)
Net change in short-term borrowings 67 (3)
Payment of dividends (52) (50)
Other, net 21 14
-------------------------------------------------------------------------------
Net cash used by financing activities (56) (11)
-------------------------------------------------------------------------------
Effect of exchange rate changes on cash (1) 1
-------------------------------------------------------------------------------
NET DECREASE IN CASH AND CASH EQUIVALENTS $ (89) $ (16)
-------------------------------------------------------------------------------
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,
1995 1994 1994
---------------------------------------
ASSETS (Millions of dollars)
---------------------------------------
Current assets:
Cash and cash equivalents $ 38 $ 127 $ 19
Receivables, net 885 679 825
Inventories (note d) 472 487 430
Prepaid expenses and other assets 157 147 168
-------------------------------------------------------------------------------
Total current assets 1,552 1,440 1,442
-------------------------------------------------------------------------------
Land, buildings and equipment 4,044 3,969 3,819
Less accumulated depreciation 2,054 2,009 1,930
-------------------------------------------------------------------------------
Net land, buildings and equipment 1,990 1,960 1,889
-------------------------------------------------------------------------------
Other assets 489 461 452
-------------------------------------------------------------------------------
$4,031 $3,861 $3,783
-------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 154 $ 157 $ 90
Accounts payable and accrued
liabilities 661 699 619
Accrued income taxes 81 76 52
-------------------------------------------------------------------------------
Total current liabilities 896 932 761
-------------------------------------------------------------------------------
Long-term debt 640 629 722
Other liabilities 741 680 734
Stockholders' equity:
$2.75 Cumulative convertible preferred
stock (note e) 133 134 135
Common stock: shares issued--78,652,380 197 197 197
Additional paid-in capital 151 151 151
Retained earnings 1,720 1,606 1,556
-------------------------------------------------------------------------------
2,201 2,088 2,039
Less: Treasury stock (note f) 333 323 319
Less: ESOP shares 154 156 159
Other equity adjustments 40 11 5
-------------------------------------------------------------------------------
Total stockholders' equity 1,754 1,620 1,566
-------------------------------------------------------------------------------
$4,031 $3,861 $3,783
-------------------------------------------------------------------------------
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, 1994.
(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 potential corrective actions at some of its
manufacturing facilities. The amounts charged to earnings before
tax for environmental remediation were $30 million and $8 million
for the six months ended June 30, 1995 and 1994, respectively. The
charge in the 1995 period includes additional accruals in the first
quarter related to the Whitmoyer waste site. At June 30, 1995, the
reserves for remediation were $184 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 $80 million. The company has also
identified other sites where future environmental remediation
expenditures may be required, but these expenditures are not
reasonably estimable at this time. The company believes that these
matters, when ultimately resolved, which may be over the next
decade, 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 year.
(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,
1995 1994 1994
-------- -------- --------
Finished products and
work in process $345 $378 $323
Raw materials and
supplies 127 109 107
---- ---- ----
Total inventories $472 $487 $430
---- ---- ----
(E) The number of preferred shares issued and outstanding were:
June 30, 1995 2,668,855
December 31, 1994 2,676,515
June 30, 1994 2,700,963
(F) The number of common treasury shares were:
June 30, 1995 11,134,046
December 31, 1994 10,960,614
June 30, 1994 10,905,772
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 globe and words "Second Quarter '95"
Pie Charts Description included in introduction to Exhibit 20
(not incorporated by reference)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> ROHM AND HAAS COMPANY AND SUBSIDIARIES
FINANCIAL DATA SCHEDULE (MILLIONS OF DOLLARS)
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM FINANCIAL STATEMENTS AS OF JUNE 30, 1995 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 38
<SECURITIES> 0
<RECEIVABLES> 824
<ALLOWANCES> 12
<INVENTORY> 472
<CURRENT-ASSETS> 1,552
<PP&E> 4,044
<DEPRECIATION> 2,054
<TOTAL-ASSETS> 4,031
<CURRENT-LIABILITIES> 896
<BONDS> 640
0
133
<COMMON> 197
<OTHER-SE> 1,424
<TOTAL-LIABILITY-AND-EQUITY> 4,031
<SALES> 2,027
<TOTAL-REVENUES> 2,027
<CGS> 1,329
<TOTAL-COSTS> 1,329
<OTHER-EXPENSES> 392
<LOSS-PROVISION> 1
<INTEREST-EXPENSE> 20
<INCOME-PRETAX> 254
<INCOME-TAX> 88
<INCOME-CONTINUING> 166
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 166
<EPS-PRIMARY> 2.39
<EPS-DILUTED> 2.39
</TABLE>
