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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993 COMMISSION FILE NUMBER 1-3507
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ROHM AND HAAS COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 23-1028370
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
100 INDEPENDENCE MALL WEST, PHILADELPHIA, PA 19106
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 215-592-3000
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
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Common Stock of $2.50 par value New York Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
NONE
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 / /.
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. / X /
Aggregate market value of voting stock held by nonaffiliates of the
registrant as of March 4, 1994: $2,635,443,696
Common stock outstanding at March 4, 1994: 67,588,811 SHARES.
Documents incorporated by reference:
Part I -- Annual Report to Stockholders for year ended December 31, 1993
Part II -- Annual Report to Stockholders for year ended December 31, 1993
Part III -- Definitive Proxy Statement to be filed with the Securities and
Exchange Commission on or about March 28, 1994, except the
Report on Executive Compensation and Graph titled "Cumulative
Total Return to Shareholders" on pages 12 to 14.
Part IV -- Annual Report to Stockholders for year ended December 31, 1993
-- Form 8K filed with the Securities and Exchange Commission
on October 18, 1993
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PART I
ITEM 1. BUSINESS
The information indicated below appears in the 1993 Annual Report to
Stockholders (Stockholders' Report) and is incorporated by reference:
PAGE OF
STOCKHOLDERS'
REPORT
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Business operations:
Polymers, Resins and Monomers .......................... 12
Plastics ............................................... 14
Performance Chemicals .................................. 15
Agricultural Chemicals ................................. 17
Industry segment information for years 1991-93 ............. 42
Foreign operations for years 1991-93 ....................... 42
Employees .................................................. 54
Raw Materials
The company uses a variety of commodity chemicals as raw materials in its
operations. In most cases, these raw materials are purchased from multiple
sources under long-term contracts. Most of these materials are hydrocarbon
derivatives such as propylene, acetone and styrene.
Competition
The principal market segments in which the company competes are described
in the company's Annual Report to Stockholders on pages 12 through 18. The
company experiences vigorous competition in each of these segments. The
company's competitors include many large multinational chemical firms based in
Europe, Japan and the United States. In some cases, the company competes
against firms which are producers of commodity chemicals which the company
must purchase as the raw materials to make its products. The company,
however, does not believe this places it at any significant competitive
disadvantage. The company's products compete with products offered by other
manufacturers on the basis of price, product quality and specifications, and
customer service. Most of the company's products are specialty chemicals
which are sold to customers who demand a high level of customer service and
technical expertise from the company and its sales force.
Research and Development
The company maintains its principal research and development laboratories
at Spring House, Pennsylvania. Research and development expenses,
substantially all company sponsored, totaled $204,990,000, $199,520,000, and
$182,963,000 in 1993, 1992 and 1991, respectively. Approximately 16% of the
company's employees have been engaged in research and development activities
in each of the past three years.
Environmental Matters
A discussion of environmental matters is incorporated herein by reference
to pages 28 and 29 of the Stockholders' Report.
ITEM 2. PROPERTIES
The company, its subsidiaries and affiliates presently operate 47
manufacturing facilities in 21 countries. A list identifying those facilities
is found on page 60 of the company's Annual Report to Stockholders which is
hereby incorporated by reference. Additional information addressing the
suitability, adequacy and productive capacity of the company's facilities is
found on page 30 of the company's Stockholders' Report and throughout the
various business discussions of the company's industry segments found on pages
12 through 18 of the Stockholders' Report.
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ITEM 3. LEGAL PROCEEDINGS
A discussion of legal proceedings is incorporated herein by reference to
page 52 of the Stockholders' Report.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during the
fourth quarter of 1993.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The company's common stock of $2.50 par value is traded on the New York
Stock Exchange (Symbol: ROH). There were 4,973 registered common stockholders
as of March 4, 1994. The 1993 and 1992 quarterly summaries of the high and
low prices of the company's common stock and the amounts of dividends paid on
common stock are presented on pages 32 and 33 of the Stockholders' Report and
are incorporated in this Form 10-K by reference.
ITEM 6. SELECTED FINANCIAL DATA
The company's summary of selected financial data and related notes for the
years 1989 through 1993 are incorporated in this Form 10-K by reference to
pages 54 through 56 of the Stockholders' Report.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Management's discussion and analysis of 1991 to 1993 results is
incorporated herein by reference to pages 22 through 31 of the Stockholders'
Report. These items should be read in conjunction with the consolidated
financial statements presented on pages 34 through 53 of the Stockholders'
Report.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated balance sheets as of December 31, 1993, and 1992, and the
related statements of consolidated earnings and retained earnings and cash
flows for the years ended December 31, 1993, 1992, and 1991, together with the
report of KPMG Peat Marwick dated February 21, 1994, are incorporated in this
Form 10-K by reference to pages 34 through 53 of the Stockholders' Report.
Supplementary selected quarterly financial data is incorporated in this Form
10-K by reference to pages 32 and 33 of the Stockholders' Report.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
No reports on Form 8-K were filed during 1993 or 1992 relating to any
disagreements with accountants on accounting and financial disclosure.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
AND
ITEM 11. EXECUTIVE COMPENSATION
The information called for by Items 10 and 11 of this Form 10-K report for
the fiscal year ended December 31, 1993, has been omitted, except for the
information presented below, because the company on or about March 28, 1994,
will file with the Securities and Exchange Commission a definitive Proxy
Statement pursuant to regulation 14(a) under the Securities Exchange Act of
1934.
Executive Officers
The company's executive officers along with their present position,
offices held and activities during the past five years are presented below.
All officers normally are elected annually and serve at the pleasure of the
Board of Directors. The company's non-employee directors and their business
experience during the past five years are listed in the company's definitive
Proxy Statement.
Paul J. Baduini, 46, vice president since 1993; business unit director for
ion exchange resins since 1992; previously manager of the Southern Cone
countries from 1990 to 1991 and general manager of Rohm and Haas Brazil form
1988 to 1991.
Albert H. Caesar, 56, vice president since 1993: business unit director
and president of AtoHaas North America Inc. since 1992; previously business
unit director for performance plastics from 1989 to 1992.
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Nance K. Dicciani, 46, vice president since 1993; business unit director
for petroleum chemicals since 1991; previously general manager for business
development and technology, chemicals group for Air Products and Chemicals,
Inc. from 1990 to 1991 and director commercial development and technology,
specialty chemicals division for Air Products and Chemicals, Inc. from 1988
to 1990.
Robert M. Downing, 51, vice president since 1993; operations director for
the North American region since 1986.
David T. Espenshade, 55, vice president since 1993; director of materials
management since 1990; previously business unit director for formulation
chemicals from 1989 to 1990.
J. Michael Fitzpatrick, 47, vice president since 1993; director of
research since 1993; previously general manager of Rohm and Haas (UK) Limited
and business director for polymers and resins from 1990 to 1993 and general
manager of Rohm and Haas Mexico from 1988 to 1990.
Donald C. Garaventi, 57, vice president since 1982; business group
executive for polymers, resins and monomers and business unit director for
polymers and resins since 1989; previously corporate business director for
industrial chemicals and polymers, resins and monomers from 1986 to 1989.
Rajiv L. Gupta, 48, vice president since 1993; regional director of
Pacific since 1993; previously business unit director for plastics additives
from 1989 to 1993.
Howard C. Levy, 50, vice president since 1993; business unit director for
biocides since 1989.
Phillip G. Lewis, 43, vice president since 1993; director of safety,
health and environmental affairs and product integrity since 1993; previously
director of safety, health and environmental affairs from 1989 to 1993 and
corporate medical director from 1987 to 1993.
Enrique F. Martinez, 56, vice president and regional director of Latin
America since 1989.
John P. Mulroney, 58, director since 1982; president and chief operating
officer since 1986; director of Teradyne Inc. and Aluminum Company of America.
Robert E. Naylor, Jr., 61, director since 1986; group vice president and
regional director of North America since 1989; previously group vice president
for research and corporate development from 1985 to 1989; director of Airgas,
Inc.
Richard G. Peterson, 55, vice president since 1987; business group
executive for performance chemicals and business unit director for separations
since 1989; previously corporate business director for agricultural chemicals
from 1987 to 1989.
Frank R. Robertson, 53, vice president since 1991; business director for
polymers and resins, North America, since 1989; previously business director
for polymers, resins and monomers, European region, from 1985 to 1989.
Fred W. Shaffer, 61, vice president since 1977; chief financial officer
since 1978; previously controller from 1972 to 1990.
William H. Staas, 50, vice president since 1993; business unit director
for monomers since 1990; previously president of TosoHaas from 1988 to 1990.
John F. Talucci, 54, vice president and business group executive for
agricultural chemicals since 1989; previously director of polymers, resins and
monomers business group for the North America region from 1983 to 1989.
Charles M. Tatum, 46, vice president since 1990; business unit director of
plastics additives since 1993; previously director of research from 1989 to
1993 and business director of agricultural chemicals business group, North
America, from 1988 to 1989.
Basil A. Vassiliou, 59, vice president since 1986; regional director of
Europe since 1985; business group executive for plastics since 1991.
Robert P. Vogel, 49, vice president since 1993; general counsel
responsible for legal, insurance, tax and regulatory matters since 1994;
previously associate general counsel, regulatory counsel and director of
safety, health and environment and product integrity from 1991 to 1993 and
associate general counsel and regulatory counsel from 1983 to 1990.
J. Lawrence Wilson, 58, director since 1977; chairman of the board and
chief executive officer since 1988; director of The Vanguard Group of
Investment Companies and Cummins Engine Company, Inc.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The security ownership of certain beneficial owners and management is
incorporated in this Form 10-K by reference to pages 18 and 19 of the
definitive Proxy Statement to be filed with the Securities and Exchange
Commission on or about March 28, 1994.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information called for by Item 13 is incorporated in this Form 10-K by
reference to pages 18 and 19 of the definitive Proxy Statement to be filed
with the Securities and Exchange Commission on or about March 28, 1994.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Documents filed as part of this report:
1. Financial Statements
The consolidated financial statements of Rohm and Haas Company
and the accompanying report of KPMG Peat Marwick dated February 21,
1994, are incorporated in this Form 10-K by reference to pages 34
through 53 of the Stockholders' Report, a complete copy of which
follows page 6 of this report:
2. Financial Statement Schedules
The following supplementary financial information is filed in
this Form 10-K and should be read in conjunction with the financial
statements in the Stockholders' Report:
PAGE
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Independent Auditors' Report on Financial Statement Schedules ... 6
Schedules submitted:
V -- Land, buildings and equipment for the years 1993,
1992 and 1991 ............................................ 7
VI -- Accumulated depreciation of buildings and equipment
for the years 1993, 1992 and 1991 ........................ 8
VIII -- Valuation and qualifying accounts for the years 1993,
1992 and 1991 ............................................ 9
The schedules not included herein are omitted because they are
not applicable or the required information is presented in the
financial statements or related notes.
3. Exhibits
Exhibit (10), Material Contracts. The following management
compensatory plans, which are subject to stockholders' approval at
the annual meeting on May 2, 1994, are incorporated in this Form 10-K
by reference to Exhibits A, B and C of the definitive Proxy Statement
to be filed with the Securities and Exchange Commission on or about
March 28, 1993:
(a) Rohm and Haas Top Executive Annual Performance Award
(b) Rohm and Haas Top Executive Long-Term Award Plan
(c) Amended Rohm and Haas Stock Option Plan of 1992
Exhibit (12), Computation of Ratio of Earnings to Fixed Charges
for the company and subsidiaries, is attached as page 10 of this
Form 10-K.
Exhibit (22), Subsidiaries of the registrant, is attached as
page 11 of this Form 10-K.
Exhibit (24), Consent of independent certified public
accountants, is attached as page 13 of this Form 10-K.
(b) On October 18, 1993, the company filed Form 8-K for reporting and
filing a copy of the company's press release dated October 15, 1993,
disclosing that the company expected to report a loss for the quarter
ended September 30, 1993, due to charges not related to ongoing
operations totaling $50 million, after tax, or 74 cents per share.
These charges included an accrual for a landfill in New Jersey and a
writedown of a plastics manufacturing facility in Kentucky. The
company also restated first quarter earnings to reflect an after-tax
charge of $20 million related to the adoption of a new accounting
standard.
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SIGNATURES
Pursuant to the requirements of Section 13 of the Securities Exchange Act
of 1934, Rohm and Haas Company has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
/s/ Fred W. Shaffer
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Fred W. Shaffer
Vice President and
Chief Financial Officer
March 25, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed on March 25, 1994 by the following persons on behalf of
the registrant and in the capacities indicated.
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SIGNATURE AND TITLE SIGNATURE AND TITLE
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/s/ J. Lawrence Wilson /s/ Sandra O. Moose
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J. Lawrence Wilson Sandra O. Moose
Director, Chairman of the Board and Director
Chief Executive Officer
/s/ Fred W. Shaffer /s/ John P. Mulroney
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Fred W. Shaffer John P. Mulroney
Vice President and Director
Chief Financial Officer
/s/ George B. Beitzel /s/ Robert E. Naylor, Jr.
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George B. Beitzel Robert E. Naylor, Jr.
Director Director
/s/ Daniel B. Burke /s/ Gilbert S. Omenn
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Daniel B. Burke Gilbert S. Omenn
Director Director
/s/ Earl G. Graves /s/ Ronaldo H. Schmitz
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Earl G. Graves Ronaldo H. Schmitz
Director Director
/s/ James A. Henderson /s/ Alan Schriesheim
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James A. Henderson Alan Schriesheim
Director Director
/s/ John H. McArthur /s/ Marna C. Whittington
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John H. McArthur Marna C. Whittington
Director Director
/s/ Paul F. Miller, Jr.
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Paul F. Miller, Jr.
Director
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INDEPENDENT AUDITORS' REPORT
The Board of Directors and Stockholders
Rohm and Haas Company:
Under date of February 21, 1994, we reported on the consolidated balance
sheets of Rohm and Haas Company and subsidiaries as of December 31, 1993 and
1992, and the related statements of consolidated earnings and retained
earnings, and cash flows for each of the years in the three-year period ended
December 31, 1993, as contained in the 1993 Annual Report to Stockholders.
These consolidated financial statements and our report thereon are
incorporated by reference in the annual report on Form 10-K for the year 1993.
In connection with our audits of the aforementioned consolidated financial
statements, we also audited the related financial statement schedules as
listed under the heading "Financial Statement Schedules" on page 4. These
financial statement schedules are the responsibility of the company's
management. Our responsibility is to express an opinion on these financial
statement schedules based on our audits.
In our opinion, such financial statement schedules, when considered in
relation to the basic consolidated financial statements taken as a whole,
present fairly, in all material respects, the information set forth therein.
As discussed in Notes 5 and 16 to the consolidated financial statements,
the company adopted the provisions of Financial Accounting Standards Board
Statement No. 112, "Accounting for Postemployment Benefits" in 1993, and the
provisions of Financial Accounting Standards Board Statements No. 106,
"Accounting for Postretirement Benefits Other Than Pensions" and No. 109,
"Accounting for Income Taxes," in 1992.
/s/ KPMG PEAT MARWICK
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KPMG PEAT MARWICK
Philadelphia, PA
February 21, 1994