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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, 1995 COMMISSION FILE NUMBER 1-3507
___________________________
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
- ------------------------------- ------------------------
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. / /
Aggregate market value of voting stock held by nonaffiliates of the registrant
as of March 8, 1996: $3,354,450,468
Common stock outstanding at March 8, 1996: 67,144,788 SHARES.
Documents incorporated by reference:
Part I --Annual Report to Stockholders for year ended December 31, 1995
Part II --Annual Report to Stockholders for year ended December 31, 1995
Part III --Definitive Proxy Statement to be filed with the Securities
and Exchange Commission on or about March 22, 1996, except
the Report on Executive Compensation and Graph titled
"Cumulative Total Return to Shareholders" on pages 12
through 15.
Part IV --Annual Report to Stockholders for year ended December 31, 1995
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PART I
ITEM 1. BUSINESS
The information indicated below appears in the 1995 Annual Report to
Stockholders (Stockholders' Report) and is incorporated by reference:
PAGE OF
STOCKHOLDERS'
REPORT
-------------
Business operations:
Polymers, Resins and Monomers ................... 9
Performance Chemicals ........................... 12
Plastics ........................................ 14
Agricultural Chemicals .......................... 17
Industry segment information for years 1993-95 ...... 40
Foreign operations for years 1993-95 ................ 40
Employees ........................................... 50
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 9 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 $194,000,000, $201,000,000 and
$205,000,000 in 1995, 1994 and 1993, respectively. Approximately 15% of the
company's employees were engaged in research and development activities in
1995 and 1994, and 16% in 1993.
Environmental Matters
A discussion of environmental matters is incorporated herein by reference
to pages 27 through 28 of the Stockholders' Report.
ITEM 2. PROPERTIES
The company, its subsidiaries and affiliates presently operate 44
manufacturing facilities in 21 countries. A list identifying those facilities
is found on page 56 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 29 of the company's Stockholders' Report and throughout the
various business discussions of the company's industry segments found on pages
9 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
pages 47 and 48 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 1995.
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 4,646 registered common stockholders
as of March 8, 1996. The 1995 and 1994 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 31 and 32 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 1991 through 1995 are incorporated in this Form 10-K by reference to
pages 50 through 52 of the Stockholders' Report.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Management's discussion and analysis of 1993 to 1995 results is
incorporated herein by reference to pages 22 through 30 of the Stockholders'
Report. These items should be read in conjunction with the consolidated
financial statements presented on pages 33 through 49 of the Stockholders'
Report.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated balance sheets as of December 31, 1995, and 1994, and the
related consolidated statements of earnings, stockholders' equity and cash
flows for the years ended December 31, 1995, 1994, and 1993, together with the
report of KPMG Peat Marwick LLP dated February 19, 1996 are incorporated in
this Form 10-K by reference to pages 33 through 49 of the Stockholders'
Report. Supplementary selected quarterly financial data is incorporated in
this Form 10-K by reference to pages 31 and 32 of the Stockholders' Report.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
No reports on Form 8-K were filed during 1995 or 1994 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, 1995, has been omitted, except for the
information presented below, because the company on or about March 22, 1996,
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 Proxy
Statement.
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Paul J. Baduini, 48, vice president since 1993; business unit director for
ion exchange resins since 1992; previously manager of the Southern Cone
countries from 1990 to 1991.
A. Wayne Carney, 47, vice president since 1995; business unit director for
formulation chemicals since 1990.
Albert H. Ceasar, 58, vice president since 1993; business unit director
and president of AtoHaas Americas Inc. since 1992; previously business
unit director for performance plastics from 1989 to 1992.
Patrick Colau, 50, vice president since 1995; business unit director for
Polymers and Resins since 1996; previously chief operating officer from 1994
to 1995 and chief executive officer from 1992 to 1994 of Shipley Company and
business director for architectural coatings from 1989 to 1992.
Nance K. Dicciani, 48, vice president since 1993; business unit director
for petroleum chemicals since 1991.
Robert M. Downing, 53, vice president since 1993; operations director for
the North American region since 1986.
David T. Espenshade, 57, vice president since 1993; director of materials
management since 1990.
J. Michael Fitzpatrick, 49, 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.
Marisa Guerin, 43, vice president since 1994; director of human resources
since 1994; previously manager of training and development from 1991 to 1994.
Rajiv L. Gupta, 50, vice president since 1993; regional director of
Asia-Pacific since 1993; previously business unit director for plastics
additives from 1989 to 1993.
Howard C. Levy, 52, vice president since 1993; business unit director for
biocides since 1989.
Phillip G. Lewis, 45, 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, 58, vice president and regional director of Latin
America since 1989.
John P, Mulroney, 60, director since 1982; president and chief operating
officer since 1986; director of Teradyne Inc. and Aluminum Company of America.
Fred W. Shaffer, 63, vice president since 1977; chief financial officer
since 1978.
Richard C. Shipley, 50, vice president since 1995; president of Shipley
Company L.L.C. since 1985, director of Semi/Sematech.
William H. Staas, 52, vice president since 1993; business unit director
for monomers since 1990.
John F. Talucci, 56, vice president and business group executive for
agricultural chemicals since 1989.
Charles M. Tatum, 48, vice president since 1990; business unit director
of plastics additives since 1993; previously director of research from 1989
to 1993.
Basil A. Vassiliou, 61, vice president since 1986; regional director of
Europe since 1985; business group executive for plastics since 1991.
Robert P. Vogel, 51, 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.
J. Lawrence Wilson, 60, 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.
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 16 and 17 of the
definitive Proxy Statement to be filed with the Securities and Exchange
Commission on or about March 22, 1996.
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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 16 and 17 of the definitive Proxy Statement to be filed
with the Securities and Exchange Commission on or about March 22, 1996.
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 are
incorporated in this Form 10-K by reference to pages 33 through 49 of the
Stockholders' Report, a complete copy of which follows page 6 of this
report, together with the report of KPMG Peat Marwick LLP dated February
19, 1996.
2. Financial Statement Schedule
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
----
Independent Auditors' Report on Financial
Statement Schedule ............................................ 6
Schedule submitted:
II - Valuation and qualifying accounts for the years
1995, 1994 and 1993 ........................................ 7
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 are filed as Exhibit (10)(a) and (b) and are attached
as pages 9 through 14 of this Form 10-K.
(a) Agreement between Rohm and Haas Company and
Dr. Robert E. Naylor, Jr.
(b) Agreement between Rohm and Haas Company and
Mr. Donald C. Garaventi
Exhibit (12), Computation of Ratio of Earnings to Fixed Charges for
the company and subsidiaries, is attached as page 15 of this Form 10-K.
Exhibit (13), Annual Report to Stockholders, which follows page 6
of this report.
Exhibit (21), Subsidiaries of the registrant, is attached as page 16
of this Form 10- K.
Exhibit (23), Consent of independent certified public accountants,
is attached as page 18 of this Form 10-K.
Exhibit (27), Financial Data Schedule.
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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
---------------------------------
Fred W. Shaffer
Vice President and
Chief Financial Officer
March 22, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed on March 22, 1996 by the following persons on behalf of
the registrant and in the capacities indicated.
- ------------------------------------------------------------------------------
SIGNATURE AND TITLE SIGNATURE AND TITLE
- ------------------------------------------------------------------------------
/s/ J. Lawrence Wilson /s/ Paul F. Miller, Jr.
- ----------------------------------- -----------------------------------
J. Lawrence Wilson Paul F. Miller, Jr.
Director, Chairman of the Board and Director
Chief Executive Officer
/s/ Fred W. Shaffer /s/ Sandra O. Moose
- ----------------------------------- -----------------------------------
Fred W. Shaffer Sandra O. Moose
Vice President and Director
Chief Financial Officer
/s/ George B. Beitzel /s/ John P. Mulroney
- ----------------------------------- -----------------------------------
George B. Beitzel John P. Mulroney
Director Director
/s/ Daniel B. Burke /s/ Gilbert S. Omenn
- ----------------------------------- -----------------------------------
Daniel B. Burke Gilbert S. Omenn
Director Director
/s/ Earl G. Graves /s/ Ronaldo H. Schmitz
- ----------------------------------- -----------------------------------
Earl G. Graves Ronaldo H. Schmitz
Director Director
/s/ James A. Henderson /s/ Alan Schriesheim
- ----------------------------------- -----------------------------------
James A. Henderson Alan Schriesheim
Director Director
/s/ John H. McArthur /s/ Marna C. Whittington
- ----------------------------------- -----------------------------------
John H. McArthur Marna C. Whittington
Director Director
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INDEPENDENT AUDITORS' REPORT
The Board of Directors and Stockholders
Rohm and Haas Company:
We have audited the consolidated balance sheets of Rohm and Haas
Company and subsidiaries as of December 31, 1995 and 1994, and the related
consolidated statements of earnings, stockholders' equity and cash flows
for each of the years in the three-year period ended December 31, 1995. In
connection with our audits of the consolidated financial statements, we
also have audited the financial statement schedule as listed under the
heading "Financial Statement Schedule" on page 4. These financial
statements and financial statement schedule are the responsibility of the
company's management. Our responsibility is to express an opinion on these
consolidated financial statements and financial statement schedule based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Rohm
and Haas Company and subsidiaries at December 31, 1995 and 1994, and the
results of their operations and their cash flows for each of the years in
the three-year period ended December 31, 1995, in conformity with generally
accepted accounting principles. Also, in our opinion, the related
financial statement schedule, when considered in relation to the basic
consolidated financial statements taken as a whole, presents fairly, in all
material respects, the information set forth therein.
As discussed in Note 8 to the consolidated financial statements, the
company adopted the provisions of Financial Accounting Standards Board
Statement No. 112, "Accounting for Postemployment Benefits" in 1993.
/s/ KPMG PEAT MARWICK LLP
---------------------------------
KPMG PEAT MARWICK LLP
Philadelphia, PA
February 19, 1996
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SCHEDULE II
ROHM AND HAAS COMPANY AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
YEAR ENDED DECEMBER 31,
---------------------------------------
1995 1994 1993
---- ---- ----
(millions of dollars)
Deducted from Accounts Receivable --
Allowances for losses:
Balance at beginning of year..... $11 $10 $12
Additions charged to earnings.... 4 3 2
Charge-offs, net of recoveries... (3) (2) (4)
--- --- ---
Balance at end of year........... $12 $11 $10
=== === ===
Deducted from Notes Receivable --
Allowances for losses:
Balance at beginning of year..... $-- $-- $ 4
Additions charged to earnings.... -- -- --
Recoveries....................... -- -- (4)
--- --- ---
Balance at end of year........... $-- $-- $--
=== === ===
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