Ask the Scholar
Document scope · 1 page
Scholar
Ask about this object, its catalog metadata, its source description, or the page inventory.
For page-specific OCR and visual context, open one of the page chats.
Source Description
Records pertain to the Office of Science and Technology Policy.
Scholar Source Context
Document identity
localId
285791109
label
Invitations: General (4) [12 of 12] [1991]
core
doc
dtoType
document
citationUrl
pageCount
1
Source metadata
id
285791109
contentType
document
title
Invitations: General (4) [12 of 12] [1991]
description
Records pertain to the Office of Science and Technology Policy.
citationUrl
identifierLocal
62011-004
collections
Records of the White House Office of Science and Technology (George H. W. Bush Administration)
Allan D. Bromley Files
largeImageUrl
imageCount
1
hasImages
yes
source
import
hasTranscription
no
Source extras
naId
285791109
levelOfDescription
fileUnit
recordType
description
ocrSource
nara-archive
Single page context
seq
1
pageIndex
0
type
document
mediaId
5ada2e2be26ec7fc
ocrText
Originally Processed With FOIA(s):
FOIA Number:
2005-0336-F
2005-0336-F
FOIA
MARKER
This is not a textual record. This is used as an
administrative marker by the George Bush Presidential
Library Staff.
Record Group/Collection:
George H.W. Bush Presidential Records
Collection/Office of Origin:
Science and Technology Policy, Office of (OSTP)
Series:
Bromley, D. Allan, Files
Subseries:
Correspondence Files
OA/ID Number:
62011
Folder ID Number:
62011-004
Folder Title:
Invitations: General (4) [12 of 12] [1991]
Stack:
Row:
Section:
Shelf:
Position:
0
0
0
0
"Document Control"
TYPE:
ACTION
DOCUMENT NUMBER: 9200158
ORIGINATOR: 02
STATUS I
DIRECTORATE STATUS
FROM:
KATONA, Peter G.: THE WHITAKER FOUNDATION
TO:
DR. D.A. BROMLEY
DATE OF
CORRESPONDENCE: 01/10/92
SUBJECT: HE IS REQUESTING A SHORT BIOGRAPHY OF DR. BROMLEY
FOR HIS INTRODUCTION AT THE 02/25/92 INAUGURAL EVENT
OF THE AMERICAN INSTITUTE OF MEDICAL AND BIOLOGICAL
ENGINEERING.
DIRECTORATE
STAFF
ASSIGNED: DIRECTOR'S OFFICE
ASSIGNED:
ACTION
STAFF
REQUIRED: DIRECT REPLY
ACTION:
SENDER'S DUE DATE:
OSTP DUE DATE:
01/30/92
STAFF DUE DATE
DATE COMPLETED:
DATE COMPLETED/DEPT:
COPIES TO: D. Allan Bromley
WHITE HOUSE TRACKING #:
CONTACT PERSON:
PHONE:
EXT:
REMARKS:
OSTP RECEIVED: 01/16/92
DEPT RECEIVED:
CLOSED!
FILE: P-INVITATION
CENTRAL FILES:
0158 A
THE WHITAKER FOUNDATION
1133 CONNECTICUT AVENUE, N.W.
CB
SUITE 1010
WASHINGTON, DC 20036
Please
(202) 833-6920
RECEIVED
close-
Thks JAT
92 JAN 16 January P3: ³10, 1992
OSTP
MAIL ROOM
Dr. D. Allan Bromley
Assistant to the President
for Science and Technology
Room 360
Old Executive Office Building
Washington, DC 20500
Dear Dr. Bromley:
I was given the honor to introduce you at the February 25,
1992, inaugural event of the American Institute of Medical and
Biological Engineering.
To facilitate this task, would you send me a short
biographical sketch? This would ensure the accuracy and
timeliness of the introduction.
With much appreciation, and looking forward to meeting you,
St Peter Sincerely G. Katona 5 yours, Katu
Vice President
Biomedical Engineering Programs
FOUNDATION HEADQUARTERS:
4718 OLD GETTYSBURG ROAD, SUITE 405, MECHANICSBURG, PENNSYLVANIA 17055-4380 (717) 763-1391
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF SCIENCE AND TECHNOLOGY POLICY
WASHINGTON. 0.C 20500
DATE: 1-17-92
TO: Mr. Peter G. Katona
ADDRESS: Biomed Eng. Programs
@ The Whitaker Foundation
TELEPHONE NUMBER: 833-6920
FAX NUMBER:
8336928
FROM: JoyclynA Tussey
TELEPHONE NUMBER: 456-6272
FAX NUMBER:
(202)395-3261
NUMBER OF PAGES, INCLUDING COVER SHEET 3
"INVITATION FOR DR. BROMLEY"
TYPE: INVITATION
DOCUMENT NUMBER: 9120116
SPEECH:
YES
NO
FROM:
GARN, JAKE
DATE OF EVENT: 01/25/91
LOCATION OF EVENT: SD-538
TIME OF EVENT: 12:00PM
SUBJECT:
5TH ANNIVERSARY OF THE CHALLENGER CENTER FOR SPACE
SCIENCE EDUCATION
RSVP:
CONTACT PERSON: CINDY DAUT
CONTACT NUMBER: 703/683-9740
INVITATION ACCEPTED?
YES
NO
COPIES TO:
REMARKS:
DATE OF LETTER:
01/08/91
DATE RECEIVED: 01/19/91
FILE:
SPACE - CHALLENGER
P- Invitation
Challenger Center
Suite 190, 1101 King Street
Alexandria, Virginia 22314
for Space Science
703-683-9740
Education
Fax: 703-683-7546
Challenger
CENTER
January 8, 1991
Dr. Allen Bromley
Science Advisor to the President
Old Executive Office Building, Room 358
17th & Pennsylvania Avenue, NW
Washington, DC 20506
Dear Dr. Bromley:
Please join us in honoring the congressional, education and
corporate partners of the Challenger Center for Space Science
Education as it marks its fifth anniversary in 1991.
Founded by the seven families of the Challenger astronauts to
continue the crew's educational mission, Challenger Center
strives, through innovative teaching and learning experiences, to
inspire and prepare students for the technological demands of the
future.
John Glenn and I flew down to Florida after the accident in 1986
to comfort the families of the Challenger crew with then Vice
President George Bush. When Challenger Center was created as a
living memorial to the crew, we agreed to serve on the Board of
Directors. As a Board Member, I have watched this young
organization grow from a dream to a reality. Its' innovative
programs now reach hundreds of students and teachers across the
country every day. Challenger Center offers an important
solution to improving science and math education in this country.
Please join me in saluting Challenger Center and its supporters.
Very truly yours,
Jake Garn Lan
United States Senator
DATE:
Friday, January 25, 1991
TIME:
12:00 noon 1:00 pm
PLACE:
SD-538
R.S.V.P. Cindy Daut
Challenger Center for Space Science Education
(703) 683-9740
"INVITATION FOR DR. BROMLEY"
TYPE: INVITATION
DOCUMENT NUMBER:
9200051
ORIGINATOR: 02
SPEECH:
YES
NO
FROM:
WIMPRESS, Duncan: SOUTHWEST FOUNDATION FOR
BIOMEDICAL RESEARCH
DATE OF EVENT: 02/02/92
THRU:
02/04/92
TENTATIVE DATES:
LOCATION OF EVENT: SAN ANTONIO, TEXAS
TIME OF EVENT:
SUBJECT:
AN INVITATION TO ATTEND THEIR CONFERENCE, "TODAY'S
OPPORTUNITIES, TOMORROWS HEALTH", AS AN OBSERVER.
RSVP:
01/21/92
CONTACT PERSON: COOPER, Melody
CONTACT NUMBER:
INVITATION ACCEPTED?
YES
NO
COPIES TO:
LIFE SCIENCES
REMARKS:
DATE OF LETTER:
01/07/91
DATE RECEIVED: 01/07/92
FILE:
P-INVITATION
THE WHITE HOUSE
WASHINGTON
January 22, 1992
Dear Dr. Wimpress:
Thank you for your letter of January 6 inviting me to be an observer at your national
symposium entitled Today's Opportunities, Tomorrow's Health: The Future of
Biomedical Research in America, scheduled for February 2-4, in San Antonio, Texas.
I apologize for the much belated response.
Because we are very much interested in biomedical matters, I would have liked to join
you and your colleagues for this occasion. Unfortunately the period in question is not
a good one for me to be away from Washington so I must regretfully decline.
I appreciate your thinking of me and wish you a successful and productive
symposium.
Sincerely yours,
Dhan The Assistant D. Allan to Bromley the President Browley
for
Science and Technology
Dr. Duncan Wimpress, President
Symposium General Chairman
Southwest Foundation for Biomedical Research
United States Department of Health and Human Services
West Loop 410 at Military Drive
Post Office Box 28147
San Antonio, Texas 78228
JAN 07 '92 08:50AM SFBR ADMINISTRATION
P.1/13
SOUTHWEST FOUNDATION
West Loop 410 at Military Drive
P.O. Box 28147
0051
FOR BIOMEDICAL RESEARCH
San Antonio, Texas 78228-0147
RECEIVED
(512) 674-1410 ext. 219
,Nu
President's Office
FACSIMILE TRANSMITTAL SHEET 2:15
02 7
OSTP
FAX NO. : (202) 395-3261
MAIL ROOM DATE:
1/7/92
ORGANIZATION :
ATTENTION: D. Allan Bromley, Ph.D., Assistant to the President for
Science and Technology Policy
SUBJECT : Scientific Symposium Registration
MESSAGE : (see attached)
Into Invitation system
to DAB
DAH
CC
FROM:
Esther San Miguel
NUMBER OF PAGES (including this one):
13
FAX : (512) 675-0864
JAN 07 '92 08:51AM SFBR ADMINISTRATION
P.2/13
TODAY's OPPORTUNITIES
TOMORROW's HEALTH
The Fature of Bioniedical Research in America
January 6, 1992
D. Allan Bromley, Ph.D.
Assistant to the President for Science
and Technology Policy
Room 358, Old Executive Bldg.
17th St. & Pennsylvania Ave., N.W.
Washington, DC 20506
Dear Dr. Bromley:
I'm writing to invite you to attend as an observer at a
significant national symposium being co-sponsored by the U. S.
Department of Health and Human Services, the National Institutes
of Health, and the Southwest Foundation for Biomedical Research.
The symposium, "Today's Opportunities, Tomorrow's Health: The
Future of Biomedical Research in America, will be held February
2-4, 1992, in San Antonio, Texas.
The meeting will focus on strategic issues facing the
National Institutes of Health (NIH) and the U.S. biomedical
research enterprise.
The goal of the symposium will be to assess the Nation's
present status in the world of biomedical research and propose
strategies which will advance the field nationally and globally
through the next several decades. To this end, the symposium
will afford the scientific community its first opportunity to
provide input into the NIH Strategic Plan.
Participants and observers will be invited to review and
comment on a draft of the Plan which will be sent in advance of
the meeting. Arthur Kornberg, Ph.D., Professor Emeritus,
Stanford University, and Henry McGill, M.D., Scientific Director
of the Southwest Foundation, will serve as scientific co-chairs
of the symposium.
The symposium will be structured around five broad topical
panels - Basic and Clinical Research; Resource Balance; Research
Partnerships; Research Applications and Technology Transfer; and
Life Sciences Education and Public Literacy. The panels will
address critical issues currently facing the American biomedical
research enterprise and develop strategies for its advancement.
Southwest Foundation for Biomedical Research
United States Department of Health and Human Services
West Loop 410 at Military Drive, PO Box 28147, San Antonio, Texas 78228-0147
(512) 674-1410 Fax: (512) 675-0864
JAN 07 '92 08:51AM SFBR ADMINISTRATION
P.3/13
D. Allan Bromley, Ph.D.
-2-
January 6, 1992
Approximately sixty leading scientists from around the
country have been invited to participate as panel members. To
underscore the importance of life sciences education and public
literacy to the future of biomedical research, an outstanding
high school student and teacher from each of the fifty states
will be attending as observers. A draft symposium agenda is
enclosed for your information.
We hope you'll confirm your interest in attending the
symposium by completing the enclosed registration form and
sending it to Mrs. Melody Cooper at the Southwest Foundation for
Biomedical Research by mail (P.O. Box 28147, San Antonio, Texas
78228-0147) or facsimile (512-675-0864) by January 10, 1992.
For your convenience, we're also enclosing a copy of
"Logistical Arrangements for Symposium Observers." We hope you
find it useful.
We sincerely hope you'll be able to attend what we feel
will be a landmark event in the history of American biomedical
research. If you have any questions about the symposium or if we
can serve you in any way, please feel free to contact me. We'll
look forward to hearing from you.
Cordially yours,
Duneau Winghen
Duncan Wimpress, Ph.D.
President
Symposium General Chairman
JAN 07 '92 08:52AM SFBR ADMINISTRATION
P.4/13
TODAY's OPPORTUNITIES
TOMORROW's HEALTH
The Future of Promedical Résearch III America
January 6, 1992
D. Allan Bromley, Ph.D.
Assistant to the President for Science
and Technology Policy
Room 358, Old Executive Bldg.
17th St. & Pennsylvania Ave., N.W.
Washington, DC 20506
Dear Dr. Bromley:
We have enclosed a registration form for you and a guest if you plan to bring one.
Would you please fill it out and return it to us as soon as possible?
We'd be grateful if you would also complete the "Event Attendance" form which
we're enclosing and return it.
Finally, for your information, we're including a description of arrangements for
travel, lodging, meals, registration fee, etc., for the symposium
Please return the appropriate forms to me by January 10, 1992. We're delighted that
you'll be with us in February and we look forward to welcoming you to the symposium.
Thanks in advance for your help. If you have any questions, please don't hesitate in
contacting me.
Sincerely yours,
Melody Cooper
Melody Cooper
Symposium Assistant Coordinator
Enclosures
Southwest Foundation for Biomedical Research United States Department of Health and Human Services
West Loop 410 at Military Drive, PO Box 28147, San Antonio, Texas 78228-0147
(512) 674-1410 Fax: (512) 675-0864
JAN 07 '92 08:52AM SFBR ADMINISTRATION
P.5/13
TODAY's OPPORTUNITIES
TOMORROW's HEALTH
THE FUTURE OF BIOMEDICAL RESEARCH IN AMERICA
San Antonio, Texas
February 2-4, 1992
REGISTRATION FORM
FOR OBSERVERS AND GUESTS
NAME OF OBSERVER
TITLE
INSTITUTION
ADDRESS
TELEPHONE NO. ( )
FAX NO. ( )
*DATE OF BIRTH
*SOCIAL SECURITY NO.
NAME OF GUEST
*DATE OF BIRTH
*SOCIAL SECURITY NO.
Registration Fee for Observer, $250
$250.00
Registration Fee for Guest, $200
TOTAL $
Please mail completed, this form, the Event Attendance form and your check, payable
to Southwest Foundation for Biomedical Research, to
Southwest Foundation for Biomedical Research
ATTN: Mrs. Melody Cooper
P.O. Box 28147
San Antonio, TX 78228-0147
REGISTRATION DEADLINE: January 15, 1992
REFUND POLICY: Full refund of registration fee will be made if cancellation is received
by January 20, 1992
*Required for security clearance
JAN 07 '92 08:52AM SFBR ADMINISTRATION
P.6/13
EVENT ATTENDANCE FORM
Please indicate the number of people who will attend the following events:
Sunday, February 2
Dinner, Hilton Palacio del Rio, Salon del Rey Room
Monday, February 3
Breakfast, Hilton Palacio del Rio, Corte Real Room
Lunch, Henry B. Gonzalez Convention Center
Dinner
Gala, Dress attire: Business
Tuesday, February 4
Breakfast, Hilton Palacio del Rio, Corte Real Room
Lunch, Henry B. Gonzalez Convention Center
Name
JAN 07 '92 08:52AM SFBR ADMINISTRATION
P.7/13
TODAY'S OPPORTUNITIES, TOMORROW'S HEALTH:
THE FUTURE OF BIOMEDICAL RESEARCH
IN AMERICA
A SYMPOSIUM
JOINTLY SPONSORED BY THE
SOUTHWEST FOUNDATION FOR BIOMEDICAL RESEARCH
and the
UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES
National Institutes of Health
February 2-4, 1992
Henry B. Gonzalez Convention Center
San Antonio, Texas
PRELIMINARY AGENDA FOR SCIENTIFIC SESSIONS
JAN 07 '92 08:53AM SFBR ADMINISTRATION
P.8/13
SUNDAY, FEBRUARY 2, 1992
7:00pm - 9:00pm
Buffet dinner for participants and observers
Hilton Palacio del Rio, Salon del Rey Room
9:00pm - 10:00pm
Pre-symposium orientation for panel chairs,
co-chairs, and rapporteurs
Hilton Palacio del Rio, La Vista Room
MONDAY, FEBRUARY 3, 1992
Monday Morning
6:30am 8:30am
Buffet Breakfast
Hilton Palacio del Rio, Corte Real Room
First Plenary Session
Lila Cockrell Theatre
8:30am
Get acquainted with scientists at Lila Cockrell Theatre
9:00am
Opening of Symposium and
Mayor Wolff
Dr. Healy
Welcome to Participants
Dr. Wimpress
9:20am
Invocation
9:25am
Posting of the Colors and National Anthem
U.S.A.F.
9:40am
Introduction of Senator Phil Gramm
Dr. Wimpress
9:45am
Introduction of the President of the United
Senator Gramm
States and/or Secretary of Health and
Human Services, Dr. Louis W. Sullivan
10:00am
President's Address
President Bush*
10:30am
BREAK
*Tentative
Draft, December 31, 1991
2
JAN 07 '92 08:53AM SFBR ADMINISTRATION
P.9/13
Second Plenary Session
Lila Cockrell Theatre
11:00am
Keynote: "Biomedical Research, Entering the
Dr. Healy
Next Dimension"**
11:40am
"Basic Research, the Lifeline of Medicine"
Dr. Kornberg
12:05pm
Symposium goals, procedures, and charge to
Dr. Moskowitz
participants
Dr. McGill
Monday Afternoon
12:15pm - 1:15pm Lunch for panels and observers
Convention Center, Fiesta Rooms, A,B,C
1:15pm - 1:30pm
Guest Speaker, Assistant Secretary, DHHS
Dr. Mason
Convention Center, Fiesta Rooms, A,B,C,
1:30pm - 3:00pm
Panels meet concurrently, South Meeting Rooms
Basic and Clinical Research, Centro A
Life Sciences Education and Public Literacy, Centro B
Resource Balance, Centro C
Research Partnerships, Plaza D
Research Applications and Technology Transfer, Centro D
3:00pm - 3:15pm
Break
3:15pm - 5:30pm Panels meet concurrently, South Meeting Rooms
Monday Evening
6:30pm - 10:30pm Dinner and Special Event honoring Secretary Sullivan
San Antonio Marriott Rivercenter
**Tentative Title
Draft, December 31, 1991
3
JAN 07 '92 08:53AM SFBR ADMINISTRATION
P.10/13
TUESDAY, FEBRUARY 4, 1992
Tuesday Morning
6:30am - 8:00am
Buffet Breakfast
Hilton Palacio del Rio, Corte Real Room
8:30am - 12:00pm
Panels meet concurrently
Basic and Clinical Research, Centro A
Life Sciences Education and Public Literacy, Centro B
Resource Balance, Centro C
Research Partnerships, Plaza D
Research Applications and Technology Transfer, Centro D
12:00pm
Lunch for panels and observers
Convention Center, Fiesta Rooms, A,B,C
Third Plenary Session
South Meeting Rooms, Plaza A,B,C,D
Tuesday Afternoon
1:00pm - 1:30pm
Reporting by student representatives
1:30pm - 3:00pm
Panel chairs present summary reports of panel deliberations
Basic and Clinical Research
Life Sciences Education and Public Literacy
Resource Balance
Research Partnerships
Research Applications and Technology Transfer
3:00 pm
ADJOURN
3:00pm - 5:00pm
Panel chairs, co-chairs, and rapporteurs meet to discuss
final report preparation, South Meeting Room 207
Draft, December 31, 1991
4
JAN 07 '92 08:53AM SFBR ADMINISTRATION
P.11/13
TODAY's OPPORTUNITIES
TOMORROW's HEALTH
THE FUTURE OF BIOMEDICAL RESEARCH IN AMERICA
San Antonio, Texas
February 2-4, 1992
LOGISTICAL ARRANGEMENTS FOR SYMPOSIUM OBSERVERS
TRAVEL AGENT
Air transportation and lodging should be made through the following agency to obtain
special airfare and convention rates:
Rennert World Travel
ATTN: Southwest Foundation Symposium
8103 Broadway
San Antonio, Texas 78209
Tel: (800) 584-1100, 8:00 a.m. - 5:00 p.m. CST, Monday - Friday
Fax: (512) 829-7223
When you telephone or fax Rennert, please identify yourself as an OBSERVER in the
"Southwest Foundation Symposium."
Blocks of hotel rooms will be held at the Symposium headquarters,
Hilton Palacio del Rio
200 South Alamo
San Antonio, TX 78205
Tel: (512) 222-1400
Fax: (512) 270-0761
Rates: $125/day, single or double occupancy
and at a hotel adjacent to the Convention Center.
San Antonio Marriott Rivercenter Hotel
Bowie & Commerce St.
San Antonio, TX 78205
Tel: (512) 223-1000
Fax: (512) 223-6239
Rates: $125/day, single occupancy; $135/day, double occupancy
A deposit or credit card number will be necessary to hold a hotel room for late arrival (after
6:00 p.m.).
1
December 31, 1991
JAN 07 '92 08:54AM SFBR ADMINISTRATION
P.12/13
REGISTRATION AND BADGING
The registration fee of $250 will entitle the observer to attend the Symposium plenary
sessions, scientific panels, meals, and the Monday evening Gala. The Symposium
Registration Office for the Symposium will be located in the Business Center at the north end
of the 1st floor of the Hilton Palacio del Rio Hotel, and will be open from 8:00 a.m. to 9
p.m. on Sunday, February 2, and from 7:00 a.m. to 12:00 noon on Monday, February 3.
The Registration Office will register you for your hotel room and issue your room key. The
registration staff will prepare an identification badge which will be required for admission to
Symposium meetings and meals.
GUESTS
For a registration fee of $200, your guest will be issued a badge for admission to
Symposium meetings, meals, and the Monday evening Special Event. Attached is a
registration form for your guest.
MEALS AND SPECIAL EVENTS
Meals and special events included in the registration fee are as follows:
Sunday, February 2
Dinner, Hilton Palacio del Rio, Salon del Rey Room
Monday, February 3
Breakfast, Hilton Palacio del Rio, Corte Real Room
Lunch, Convention Center Fiesta Rooms A,B,C,
Dinner and Special Event, San Antonio Marriott Rivercenter Hotel
Dress attire: Business
Tuesday, February 4
Breakfast, Hilton Palacio del Rio, Corte Real Room
Lunch, Convention Center Fiesta Rooms A,B,C
2
December 31, 1991
JAN 07 '92 08:54AM SFBR ADMINISTRATION
P.13/13
QUESTIONS
For any information not provided above, and to resolve any questions or problems
call or write
Southwest Foundation for Biomedical Research
ATTN: Mrs. Melody Cooper
P.O. Box 28147
San Antonio, TX 78228-0147
Tel: (512) 670-3201
Fax: (512) 675-0864
MISCELLANEOUS
Enclosed is an informational brochure showing the location of the San Antonio
International Airport, the Hilton Palacio del Rio Hotel, the Convention Center, and other
points of interest in San Antonio.
3
December 31, 1991
"INVITATION FOR DR. BROMLEY"
TYPE: INVITATION
DOCUMENT NUMBER:
9120084
SPEECH:
YES
NO
FROM:
PROF. J.P. GUPTA
DATE OF EVENT: 01/26/91
LOCATION OF EVENT:
TIME OF EVENT: 06:30AM
SUBJECT:
RECEPTION - INDIA'S REPUBLIC DAY
RSVP:
CONTACT PERSON: SOCIAL SECRETARY
CONTACT NUMBER: 202 939-9800
INVITATION ACCEPTED?
YES
NO
COPIES TO:
D. Allan Bromley
REMARKS:
DATE OF LETTER:
01/04/91
DATE RECEIVED: 01/09/91
FILE: P. INVITATION
name 742
On the occasion of India's Republic Day
the Ambassador of India and Mrs. Abid Hussain
request the pleasure of the company of
Dr D. Allen Bromley
9300216
at a Reception on
Saturday, January 26, 1991
from 6:30 p.m. to 8:30 p.m.
at 2700 Macomb Street, N.W.
Washington, DC
RSVP
Social Secretary
Please present the
(202) 939-9800
card at the entrance
(202) 939-7011
Dress: National or Lounge Suit
Prof. (Dr.) J.P. Gupta
Counsellor (Science)
Embassy of India
2107 Mass. Avenue, N.W.
Washington, D.C. 20008
The
Dr. Allen Bromley
Assistant to the President for Science
and Technology, and Director of the
Office of Science & Technology Policy,
Room No 236
Old Executive Office Building, Room 360
WASHINGTON DC 20500
OPERATIONS united
*
91 JAN 9 P| : 08
c
:
1.
name 742
"INVITATION FOR DR. BROMLEY"
TYPE: INVITATION
DOCUMENT NUMBER:
9120056
SPEECH:
YES
NO
FROM: Kohli
DATE OF EVENT: 01/18/91
LOCATION OF EVENT: 3 COMMONWEALTH, MADAM CAMA ROAD
TIME OF EVENT: 06:00PM
SUBJECT:
WEDDING - DRS KOSHU & SUSHIL MUNSI DAUGHTER
RSVP:
CONTACT PERSON:
CONTACT NUMBER:
INVITATION ACCEPTED?
YES
NO
COPIES TO:
DAB nice
note
REMARKS:
WH
DATE OF LETTER:
01/02/91
DATE RÉCEIVED: 01/10/91
FILE: P ININVITATION
jan20/98
9120050
RECEIVED
91 JAN 10 P4: 56
'OFFICE OF THE
DIRECTOR
Our son Anirudh's wedding
to Malavika
daughter of Drs. Koshu and Sushil Munsi
will be solemnised at 7.00 p.T.
on Friday, January 18, 1991
at P. V.M. Gymkhana, Cooperage, Maharshi Karve Road.
The barat will leave our residence 3, Commonwealth,
Madam Cama Road at 6.00 p.T.
It will be a pleasure to have you with us at the barat,
wedding ceremony and dinner thereafter.
Swarn + Faqir Kohu
RSVP
Compliments
3,Commonwealth,
Madhur & Meenoo
Madam Cama Road,
Sanjai & Gayatri
Bombay 400 020
Tel. 202 00 68
NEW
YOUR
@U.S.POSTAGE
JAN-2'91
±0.25 111
N.Y
1.0.544:20 DRMETER
Dr. + Mrs Allan Bromley
I
(Asst. to the President tor
Science + Technology)
The White House
Washington. Dc.
USA.
II ?I°T Paate 11
Sr
"INVITATION FOR DR. BROMLEY"
TYPE: INVITATION
DOCUMENT NUMBER:
9120019
SPEECH:
YES
NO
FROM:
KENNETH E. DAVIS
DATE OF EVENT: 02/04/91
LOCATION OF EVENT: HAY ADAMS - WASHINGTON, DC
TIME OF EVENT: 06:00PM
SUBJECT:
ROHM AND HAAS COMPANY - INFORMAL MTG
RSVP:
CONTACT PERSON: BETTY DEPPE
CONTACT NUMBER: 202 872-0660
INVITATION ACCEPTED?
YES
NO
COPIES TO:
D. Allan Bromley
Ken Yale
REMARKS:
DATE OF LETTER:
12/27/90
DATE RECEIVED: 01/04/91
FILE: P- INVITATION
INDEPENDENCE MALL WEST PHILADELPHIA, PA. 19105, U.S.A. TELEPHONE (215) 592-3000
- CABLE ADDRESS: ROHMHAAS TELEX 845-247 TWX 710-670-5335 TELECOPIER (215) 592-3377
A
December 27, 1990
ROHM
The Honorable D. Allan Bromley
HAAS
Assistant to The President
COMPANY
for Science and Technology
Office of Science and Technology Policy
Room 348
Old Executive Office Building
17th Street & Pennsylvania Avenue, NW
Washington, DC 20506
Dear Dr. Bromley:
On behalf of our Chairman, Larry Wilson, and our Board of
Directors, I would like to extend their invitation to attend a reception
at the Hay-Adams Hotel on February 4, 1991 from 6:00 PM to 7:30 PM.
The Rohm and Haas Company's Board will be meeting in Washington
9120019
earlier that day and would enjoy the opportunity to meet you later
in an informal setting to talk about some issues of mutual interest.
Rohm and Haas Company is a Philadelphia-based, multinational
manufacturer of specialty chemicals and plastics. It is a Fortune 200
company with annual sales approaching $3 billion, and a worldwide
work force of 13,000.
We have fifteen members on our Board, only four of whom are
inside the Company. In the back of our enclosed Annual Report you
will see that our eleven outside Directors are people from various walks
of business and academic life who have distinguished careers in their
own right. I hope you can drop by briefly to meet with them and to
learn more about us and our interests.
Please have someone reply on your behalf to Mrs. Betty Deppe,
in our Washington office, at (202) 872-0660. We look forward to seeing
you.
Sincerely,
Kenneth E. Davis
Director of Government Relations
KED/lfw
Enclosures
"INVITATION FOR DR. BROMLEY"
TYPE: INVITATION
DOCUMENT NUMBER: 9125081
ORIGINATOR: 02
SPEECH:
YES
NO
FROM:
THE DIRECTOR, THE PEACE CORPS OF THE UNITED STATES
DATE OF EVENT: 12/20/91
THRU:
TENTATIVE DATES:
LOCATION OF EVENT: 1990 K STREET NW, SUITE 8100
TIME OF EVENT: 3:00 P.M. -5:00 P.M.
SUBJECT:
AN INVITATION TO A HOLIDAY CELEBRATION.
RSVP:
12/16/91
CONTACT PERSON: LIEDER, Jesse
CONTACT NUMBER: 202-606-3970
INVITATION ACCEPTED?
YES
NO
COPIES TO:
INTERNATIONAL/POL
REMARKS:
DATE OF LETTER:
12/11/91
DATE RECEIVED: 12/12/91
FILE:
P-INVITATION
Celebrate a Season of Peace
The Director of
The Peace Corps of the United States
Cordially invites you to a Holiday Celebration
Friday, December 20th, 1991
from three o 'clock until five 0 'clockp.m.
at our offices
1990 KStreet, NW, Suite 8100
Washington, D.C.
RSVP
Jessie Lieder
202-606-3970
The 24
Honorable D. allan Bromley
assistant to the President
RECEIVED
for science and technology
the White House
washington. D.C. 20500
2/4
"INVITATION FOR DR. BROMLEY"
TYPE: INVITATION
DOCUMENT NUMBER:
9120019
SPEECH:
YES
NO
FROM:
KENNETH E. DAVIS
DATE OF EVENT: 02/04/91
LOCATION OF EVENT: HAY ADAMS WASHINGTON, DC
TIME OF EVENT: 06:00PM
SUBJECT:
ROHM AND HAAS COMPANY - INFORMAL MTG
RSVP:
CONTACT PERSON: BETTY DEPPE
CONTACT NUMBER: 202 872-0660
INVITATION ACCEPTED?
YES to Weppe
COPIES TO:
D. Allan Bromley
Ken Yale
REMARKS:
DATE OF LETTER:
12/27/90
DATE RECEIVED: 01/04/91
FILE:
INVITATION
ENCE
MALL
ADELPHIA
TELEPHONE
000
ESS
ROHMHAAS
TELEX
TELECOPIER (215) 592-3377
December 27, 1990
ROHM
The Honorable D. Allan Bromley
HAAS
AND
Assistant to The President
COMPANY
for Science and Technology
Office of Science and Technology Policy
Room 348
Old Executive Office Building
17th Street & Pennsylvania Avenue, NW
Washington, DC 20506
Dear Dr. Bromley:
On behalf of our Chairman, Larry Wilson, and our Board of
Directors, I would like to extend their invitation to attend a reception
at the Hay-Adams Hotel on February 4, 1991 from 6:00 PM to 7:30 PM.
The Rohm and Haas Company's Board will be meeting in Washington
9120019
earlier that day and would enjoy the opportunity to meet you later
in an informal setting to talk about some issues of mutual interest.
Rohm and Haas Company is a Philadelphia-based, multinational
manufacturer of specialty chemicals and plastics. It is a Fortune 200
company with annual sales approaching $3 billion, and a worldwide
work force of 13,000.
We have fifteen members on our Board, only four of whom are
inside the Company. In the back of our enclosed Annual Report you
will see that our eleven outside Directors are people from various walks
of business and academic life who have distinguished careers in their
own right. I hope you can drop by briefly to meet with them and to
learn more about us and our interests.
Please have someone reply on your behalf to Mrs. Betty Deppe,
in our Washington office, at (202) 872-0660. We look forward to seeing
you.
Sincerely,
Kenniths. In
Kenneth E. Davis
Director of Government Relations
KED/lfw
Enclosures
KENNETH E. DAVIS
DIRECTOR OF GOVERNMENT RELATIONS
ROHM AND HAAS COMPANY
INDEPENDENCE MALL WEST
PHILADELPHIA, PENNSYLVANIA 19105
(215) 592-3068
Document Originally
Attached to
Following Page
CONTENTS
Letter to Stockholders
3
Business Reviews
Polymers, Resins and Monomers
6
Plastics
10
Industrial Chemicals
15
Rohm and Haas Com-
Agricultural Chemicals
18
pany is a manufacturer
of specialty chemicals
Citizenship
23
and plastics. Not many
people are familiar with
Financial Review and Index
27
our name, but Rohm
and Haas products
Officers and Directors
57
quietly improve the
quality of life in every
part of the world. Our
technology is integral to
During its 80-year
products such as laun-
history, Rohm and Haas
dry detergents, house
has grown from a small
paints, food packaging,
maker of leather tan-
automobile taillights,
ning goods to a multi-
window frames,
billion dollar supplier of
diapers, motor oils,
products based on inno-
As this annual report
refined sugar, con-
vative polymer design
shows, Rohm and Haas
struction materials,
and small-molecule
is a company building
magazines, leather
chemistry. Today's
for its future. Con-
shoes, agricultural
Rohm and Haas is head-
struction is under way
products and laboratory
quartered in Philadel-
around the world to ex-
testing equipment.
phia and employs more
pand capacity for new
than 13,000 people at
and existing products,
research, manufactur-
to improve the effi-
ing and sales sites
ciency and quality of
around the world.
manufacturing sites and
to ensure that all of our
operations respect the
environment, today and
in the future.
SALES BY REGION
SALES BY INDUSTRY
SEGMENT
SALES
Latin America $186
Agricultural
BY REGION
Chemicals $367
AND INDUSTRY
Pacific $279
SEGMENT ($MM)
Plastics $512
Europe $685
Industrial
Chemicals $673
North America $1,511
Polymers, Resins
and Monomers $1,109
1
FINANCIAL HIGHLIGHTS
Dollars in millions (except per-share amounts)
1989
1988
Change
For the year:
Net sales
$2,661
$2,535
5%
Net earnings
176
230
(23)%
Research and development expense
175
156
Cash dividends
77
67
Capital additions
385
338
Depreciation
150
128
At year end:
Total assets
$2,455
$2,242
Total debt
531
454
Stockholders' equity
1,311
1,207
Ratios:
Total debt-to-equity
40.5%
37.6%
Return on net assets
8.3
11.2
Return on stockholders' equity
14.0
20.4
Per share:
Net earnings
$2.65
$3.46
(23)%
Dividends
1.16
1.02
Stockholders' equity
19.69
18.13
2
TO THE
STOCKHOLDERS OF
ROHM AND HAAS
COMPANY:
J. Lawrence Wilson,
Chairman
John P. Mulroney,
President
The Year in Review
The strength of the U.S. dollar cost us more than $11 million
Nineteen eighty-nine was a tough year for Rohm and Haas. Sales
when we translated European and Pacific region results into
were 5 percent higher than our record year of 1988; unit volume
U.S. dollar-denominated currency.
was up by 4 percent. Yet earnings declined by 23 percent. The
In short, the factors that were with us in 1987 and 1988 turned
primary cause for the earnings drop can be summed up in two
against us in 1989.
Since 1988, we have spent $268 million for capacity expansions
3
words-capacity constraints-though our performance also was
affected by higher startup and depreciation charges, higher
and new processes. In 1990, we're slated to spend $145 million
raw material costs and a stronger U.S. dollar.
more. However, the growth in demand for acrylic acid derivatives
From the end of 1986 through 1988, Rohm and Haas Company
and acrylic molding resins has simply outstripped the pace of our
enjoyed robust demand for its products worldwide. On the man-
planned expansions.
ufacturing scene and elsewhere, nearly everything went right. Our
The end of this manufacturing pinch is within sight. In 1989, we
plants ran at high, efficient rates. They ran smoothly, shutting down
started up six new major operations, including a new high-purity
only for scheduled maintenance. The U.S. dollar was weaker, mak-
Kelthane miticide plant in Mozzanica, Italy; expansions of the
ing American-based companies more competitive overseas and
acrylic acid separations unit in Houston, Texas; a state-of-the-art
providing favorable currency translations. Raw material prices were
emulsions facility in Knoxville, Tennessee; a new research pilot
higher, but we were able to institute price increases to mitigate
plant in Bristol, Pennsylvania, and a new technology for making
their impact. We boosted our volume by 20 percent, making the
imidized acrylic resins in Louisville, Kentucky.
company one-fifth larger than it had been just two years before.
In 1990, we have 10 major startups scheduled, more than any
In 1989, Rohm and Haas ran out of room to grow. We hit capac-
year in our history. The long-awaited expansions of the acrylic acid
ity ceilings in many of our major manufacturing operations. Acrylic
and methyl methacrylate monomer processes in Houston will OC-
acid and methyl methacrylate were the two most notable, since
cur during the second half of the year, to be followed by ripples of
they provide the basic feedstocks for more than 60 percent of our
relief through the product lines they support.
product portfolio.
Other significant startups for the year include a specialty mono-
We pushed some plants past the "red line," doing everything
mer consolidation in Bayport, Texas; a new acrylic coagulation
possible to eke out more product to meet demand. While we ran
technology and modifiers expansion in Grangemouth, Scotland; an
our plants safely, we operated less efficiently and incurred extra
automated reactor for emulsions in Lauterbourg, France; a molding
costs for overtime labor, maintenance, shipping and delivery.
resin capacity increase in Bristol, Pennsylvania, and an emulsion
More important, because we were already running many of our
modernization program in Hayward, California.
key plants 24 hours a day, seven days a week, there was no way to
These projects vary in their complexity and their sophistication.
recover from unexpected "hiccups" in production. The first blow
We hope they all evolve smoothly. Yet there is no doubt that our
came in February when an explosion in the acrylic acid facility
manufacturing startup and depreciation charges will be even
caused a 10-day shutdown in the operation. The final interruption
higher in 1990 than they were in 1989. That is part of the price we
came in December, when unusually cold weather caused freezing
pay willingly to increase the size and the profitability of Rohm and
problems for operations throughout the southern United States.
Haas Company.
In addition, external trends were not in our favor:
It is entirely possible that all of this new capacity will become
Raw material prices remained high for most of the year, com-
available just as the economy slumps and demand slackens. That
pared with 1988.
will be unfortunate timing, but the expansions are essential if we
The economy grew, but key construction and automotive mar-
are to reap the rewards of all the time and money we have put into
kets softened. This reduced sales in several product lines.
product development for future growth.
2,744
2,818
3,154
3,276
2,630
While manufacturing problems grabbed most of the attention
$2,203
$2,535
$2,661
$2,051
$2,067
during the year, there were many noteworthy achievements among
the business groups.
$230
$195
Polymers, Resins and Monomers led the company in volume
85
86
87
88
89
$176
VOLUME
$141
$138
growth due, in part, to an excellent year for Ropaque polymer. This
Millions of units
4
product was introduced in 1982 as a paint additive designed to
85
86
87
88
89
increase opacity, but its unique microvoid technology has been
SALES
Millions of dollars
adapted into a useful product for paper and paperboard coatings.
ROHM
85
86
87
88
89
Sales of water-based industrial coatings also did well.
AND HAAS
EARNINGS
There was a resurgence in business for Agricultural Chemicals in
COMPANY
Millions of dollars
North America, led by strong first-year sales of Rally/Nova fungi-
cide, which received its U.S. registration in time for the 1989
growing season.
We are ever aware that future growth in the worldwide specialty
In September, Rohm and Haas and other producers of ethylene
chemical industry will depend upon well-matched strategic al-
bisdithiocarbamate (EBDC) fungicides took the initiative and volun-
liances among industry leaders. In previous years we have chosen
tarily suspended certain registrations for EBDC fungicides, includ-
to form ventures with Tosoh Company (TosoHaas) for high-value
ing Dithane fungicide, beginning in 1990. This was done in order
separations, Sumitomo Chemical (SumikaHaas) for acrylic resins,
to prevent undue concern about the safety of the American food
Fujikura Kasei for toner resins (Polytribo), and Beijing Eastern
supply. Based on 40 years of use and analysis of more than 100
Chemical of the Peoples Republic of China (Eastern Rohm and
scientific studies, we remain confident that foods treated with Di-
Haas Development Center) for acrylic emulsions.
thane are safe for everyone to eat. The Environmental Protection
In 1989, two more ventures were formed. Norsolor S.A. of
Agency has been conducting a review of these fungicides for sev-
France and Rohm and Haas joined forces in June to manufacture
eral years and will make its final ruling on the product registrations
and market water-soluble polymers throughout Europe and the
in 1991. The company remains optimistic that it will retain its
Middle East. NorsoHaas, headquartered outside Paris, is expected
remaining Dithane registrations.
to make significant inroads in the detergent additives and house-
In January 1990, the U.S. Appeals Court ruled against Rhone-
hold/industrial cleaning markets in that region. Another European-
Poulenc S.A. in a long-standing dispute over the Blazer herbicide
based venture, this one with Kureha Chemical Company of Japan,
patents. A hearing expected in 1990 will determine the amount of
was formed late in the year. Called Rohm and Haas Scotland, this
monetary damages due to Rohm and Haas.
operation will produce both acrylic impact and methyl methacry-
Industrial Chemicals reported good sales growth for water-
late-butadiene-styrene modifiers for markets in both Western and
soluble polymers used as detergent additives. Lower sales for oil
Eastern Europe.
additives and ion exchange resins, along with write-downs associ-
We remain steadfast in our commitment to improve continually
ated with the electronic chemicals business, hurt overall
our impact on the environment. In 1989, $50 million of our total
performance.
capital budget was devoted to environmental expenditures.
In Plastics, flat demand for plastic additives, capacity constraints
Over the next few years, we expect that number to grow faster
on molding resins and higher startup costs hurt sales and earnings.
than any other element in our capital program. This spending will
However, earnings were helped by a gain from the sale of a portion
be used to help us meet the ambitious goals we have set. We also
of a manufacturing operation in Grangemouth, Scotland, part of a
are a full participant in the Responsible Care program outlined by
joint venture with Kureha Chemical Company.
the Chemical Manufacturers Association.
Actions speak louder than goals and promises. Rohm and Haas
is taking action now to eliminate odors and emissions at its facili-
ties worldwide. In Bristol, Pennsylvania, for example, we are build-
We will incur high charges for startup and depreciation as we
ing an enclosed state-of-the-art wastewater treatment plant. We are
bring on new manufacturing facilities.
developing more efficient processes and recycling waste materials.
The outlook for the economy remains cloudy. It is unclear
We are working to give the community a voice in how we run our
whether the U.S. economy will continue to grow slowly or
operations. At our plant in Jarrow, England, a community advisory
slide into a recession. We will be watching our key industrial
5
council acts as a conduit for communication between Rohm and
markets for any indicators of change.
Haas and its neighbors. This group, formed in 1989, is the first
Given this outlook, we anticipate that our 1990 earnings will be
community advisory council outside the United States. Details of
equivalent, roughly, to those reported for 1989. Our short-term
just a few of our programs can be found in the Citizenship section
strategies will revolve around ways of maintaining our hard-earned
of this report.
market share in key worldwide markets. Growth in sales, admin-
On February 15, 1990, the company established an Employee
istrative and marketing costs will be limited. Productivity will in-
Stock Ownership Plan. The ESOP acquired 6.3 million shares of
crease. We remain confident in the soundness of our longer term
Rohm and Haas common stock from the company, which had
goal to expand our manufacturing capacity and to upgrade our
been held originally by the William Penn Foundation. This trans-
product lines across the board.
action provides a very cost-effective method of funding the com-
In April 1989, we made internal adjustments to the company's
pany's match for employee savings, and further aligns employee
organizational structure, aligning ourselves more clearly along
interests with those of shareholders.
business lines. The regions continue to play important oversight
Board of Directors and Management
roles in managing the company's human and physical resources.
Two members of the Board of Directors did not stand for reelec-
But we believe that we will be quicker to bring new products to
tion in May. Dr. N. Bruce Hannay, former vice president of Re-
market and more responsive to worldwide opportunities if we
search at Bell Laboratories, Inc., and Mr. William L. Mobraaten,
focus along business lines and encourage fast, independent action.
retired chairman, Bell Atlantic Enterprises Corporation, had a tre-
We ask that our shareholders, customers and employees bear
mendous influence on the company. We thank them both for their
with us through this period of capacity constraints. We are certain
service.
of our direction and enthusiastic that the building we are doing
Three new directors were elected in May: Mr. James A. Hender-
today will lead us to a stronger, larger Rohm and Haas in the
son, president and chief operating officer of Cummins Engine Com-
future.
pany, Inc.; Dr. Alan Schriesheim, director and chief executive
officer of the Argonne National Laboratory, and Dr. Marna C. Whit-
J. Laurence
tington, senior vice president for the University of Pennsylvania.
J. Lawrence Wilson,
Samuel J. Talucci, vice president and director of the North Amer-
Chairman
ican Region, retired in November after 33 years of service. We are
grateful for Sam's leadership and the visionary role he played in
John P muliory
focusing attention to quality and excellence in all aspects of our
business.
John P. Mulroney,
President
Outlook for 1990
The year 1990 will look a lot like 1989. The factors which
March 26, 1990
affected our performance last year will not change dramatically:
Our monomer plants will continue to run at extreme rates until
new capacity begins to come on-stream in the latter part of the
year.
Polymers, Resins and
Monomers
6
Acrylic acid is one of two
key building blocks for
Rohm and Haas products.
This monomer and its de-
rivatives are used to make
laundry detergents, diapers,
plastic pipe, spackling
compounds, paints,
adhesives, and many other
products. A 50 percent ex-
pansion in the capacity of
the acrylic acid plant in
Houston, Texas, will be
completed later this year.
®
H
no
POLYMERS, RESINS AND MONOMERS
Operating problems in February caused a 10-day shutdown in
8
production, forcing the company to control monomer and polymer
sales to customers and to limit internal use throughout most of
1989. Supplies of acrylate monomer tightened even more in De-
cember, when a spell of unusually cold weather halted operation.
Production will continue to run at high rates and the company will
purchase acrylate monomers to try to meet needs. Supply will
remain tight until August 1990, when a 200-million pound expan-
Polymers, Resins and Monomers (PRM) consists of two business
sion of the acrylic acid facility is slated to come on line.
groupings. Polymers and Resins manufactures products for use in
The methyl methacrylate process, also at the Houston plant, is
house paints, industrial coatings, textile coatings and finishes, ad-
expanding by 125 million pounds. The capacity increase will be-
hesives, nonwoven materials, paper and paperboard coatings, con-
come available in the third quarter of 1990. Most of the expansion
struction products, floor polishes and leather chemicals. Monomers
is marked for use in a variety of products made by the Plastics
consists primarily of acrylate and methyl methacrylate monomers,
and PRM businesses, but there also will be capacity available for
materials which find their way into more than 60 percent of Rohm
purchase by customers.
and Haas's products. These monomers also are sold directly to
Ropaque polymer sales were excellent again in 1989. This prod-
customers.
uct, which has a well-earned reputation as a paint additive, con-
Business Discussion
tinued its growth. Ropaque also has found expanded use in paper
In 1989, PRM reported real volume growth of 6 percent. Sales
and paperboard coatings. Ropaque improves the gloss, printability
for the year totaled $1,109 million, an increase of 9 percent. How-
and opacity of paper. The editorial section of this year's Annual
ever, higher operating costs and capacity constraints limited earn-
Report is printed on paper stock coated with Ropaque polymer.
ings to $108 million, a 17 percent decline from the record reported
Sales of Rhoplex and Primal emulsions also were strong in 1989.
in 1988.
These materials are used to make paints, construction products,
PRM's greatest difficulty in 1989 was coping with high demand
textile coatings, adhesives and industrial finishes. Sales were good
for its monomers, particularly acrylic acid. The acrylic acid facility
in all regions, with the most rapid gains occurring in Europe and
in Houston, Texas, ran at maximum rates throughout the year, due
the Pacific. A joint venture in the Peoples Republic of China also
to demand from internal sources and from customers who use
did well.
acrylic acid in superabsorbent and other polymers.
Rohm and Haas has expanded emulsion capacity in the last
several years at plants in the United States, Australia, France,
Sweden, the United Kingdom and Mexico. The company now
operates 22 emulsion plants worldwide, with plans for capacity
expansions in all four geographic regions to support expected
growth.
Multilobe 200, an improved version of the successful 100 series
for use in house paints, was introduced late in 1989. This new
Multilobe provides an improved base for color development in
Outlook for 1990
paints and should do well in 1990. The architectural coatings
The ceiling on manufacturing capacity will continue to affect
group in North America also is launching a "Paint Quality In-
most of the PRM business until acrylic acid and methyl methacry-
stitute" campaign to demonstrate the benefits of acrylic-based ex-
late monomer expansions bring relief in the third quarter. The busi-
terior paints to both customers and final consumers in time for the
ness also will bear the high costs associated with running existing
spring painting season.
facilities at high rates, including inefficient scheduling, overtime
9
Environmental concerns continued to increase demand for the
labor charges, and above-average maintenance costs.
company's water-based industrial coatings and adhesives. Sales of
Demand for the products that did well in 1989 should continue
water-based coatings used to paint traffic lines on roads did well.
into 1990. Development continues on new generations of Ropaque
Another industrial coatings product, Primid XL-552, was introduced
polymer and on new applications, including paper used in fac-
for use in powder coatings where durable exterior finishes are
simile machines.
needed. End uses for this coating include lawnmowers and auto-
Environmental pressures will continue to work in favor of the
mobile parts. There was also significant growth worldwide in
company's water-based systems for industrial coatings, adhesives,
water-based emulsions used for making pressure-sensitive ad-
and leather products. A new family of floor polish vehicles will
hesives. New products for packaging tapes, film and paper labels
offer significantly improved application and performance proper-
will be introduced in 1990.
ties, and will have the added attraction of being metal free.
The development of products based on vinyl acetate is on track.
Lubritan WP, a new acrylic waterproofing and retanning agent used
Late in 1989, a new coatings binder was introduced for use in
to prepare leather hides, also will be introduced in 1990.
interior house paints. Additional products for use in adhesives,
As long as adequate monomer supply can be attained and the
paper and caulk applications will be forthcoming in 1990.
economy doesn't slide into a recession, the PRM business should
be able to report modest volume growth and slightly improved
sales and earnings in 1990.
1,843
1,952
1,420
1,438
1,576
$1,016
$1,109
$760
$768
$834
$130
85
86
87
88
89
$89
$99
$108
VOLUME
$77
Millions of units
85
86
87
88
89
SALES
Millions of dollars
85
86
87
88
89
POLYMERS,
RESINS AND
EARNINGS
MONOMERS
Millions of dollars
Plastics
Grangemouth, Scotland, is
expanding its capability for
making plastic modifiers
and processing aids. These
additives find their way into
window frames, house sid-
ing, and myriad plastic
packaging applications in-
cluding plastic bottles for
mineral water and house-
hold cleaners. When com-
pleted, the plant will have
the ability to make 45,000
metric tons of plastic ad-
ditives per year.
PLASTICS
Plastics offers products that range from the most traditional to the
most specialized. This business is home for acrylic sheet, polycar-
bonate sheet, acrylic molding resins, new heat-resistant imides, as
well as a full range of acrylic and MBS plastic additives for poly-
vinyl chloride (PVC) and engineering resins.
12
Business Discussion
Sales for the Plastics group were $512 million, nearly even with
1988 sales. Earnings dropped 13 percent to $53 million. Flat de-
mand for plastic additives, higher manufacturing costs and startup
costs for new manufacturing facilities all contributed to the de-
cline. Earnings were helped by a gain from the sale of a portion of
the Grangemouth, Scotland, manufacturing operation.
Plexiglas (known as Oroglas in Europe) molding resins are sold
primarily to the auto industry for taillights, and to manufacturers of
lights, lenses and lighting diffusers. Plexiglas acrylic sheet, Rohm
and Haas's most familiar product, is popular for use in signs, glaz-
ing, and skylights. Demand remained high for acrylic molding res-
ins and acrylic sheet in 1989, but capacity constraints resulted in
supply shortages.
The company is providing for future growth through the con-
struction of a new Plexiglas molding resin plant in Bristol, Pennsyl-
vania, which will be finished late in 1990. During 1989, it also
announced an expansion of the Plexiglas MC sheet facility in Ken-
sington, Connecticut, to be completed in 1991. These projects,
474
489
486
along with additional capacity from the Houston methyl methacry-
405
428
late plant, will alleviate capacity shortages.
A new line of acrylic resins, Kamax imidized plastics, are now
$488
$517
$512
available in commercial quantities. The manufacturing process for
$406
$435
the breakthrough technology needed to make the resins went
$66
through a complicated startup process in Louisville, Kentucky, dur-
85
86
87
88
89
$61
ing most of 1989. Startup costs were higher than expected, but the
$47
$53
VOLUME
Millions of units
$36
company is optimistic about future sales for Kamax. These resins
85
86
87
are clear, durable and resistant to heat and solvents. Kamax resins
88
89
SALES
will be used in high-intensity street lamps and automotive
Millions of dollars
lighting. They also can be used in applications such as baby food
85
86
87
88
89
jars, where extremely hot materials must be packaged without
EARNINGS
PLASTICS
Millions of dollars
damage or distortion to the container.
13
Late in the year, the company temporarily suspended construc-
A new additive aimed at improving the service temperature of
tion on a specialty plastics facility in Jarrow, England, to allow for
PVC was introduced during the year. Paraloid HT510, a heat distor-
further development of its novel process technology.
tion improver, can be used to make hot-filled, clear packaging,
Demand was flat for plastic additives products in 1989 due to
window profiles and house siding. This additive also does well as
weakness in the construction and automotive markets and an
an aid for injection-molded PVC processes.
increase in competitive pressures.
Outlook for 1990
One bright spot for the Plastics business in 1989 was the forma-
These are truly transition years for the Plastics business. After
tion of a joint venture with Kureha Chemical Company of Japan.
several years of strong growth, the business is faced with slow-
The new venture, called Rohm and Haas Scotland, produces plas-
downs in the automotive and construction markets, significant ex-
tic additives for sale to customers throughout Western and
penditures for increased plant capacity and the startup of state-of-
Eastern Europe.
the-art technologies. This will continue to put a tremendous strain.
As part of the venture, Rohm and Haas sold 25 percent of its
on both human and financial resources.
manufacturing operation in Grangemouth, Scotland, to Kureha.
By the end of the year, Plastics will have new capacity for acrylic
That plant currently is adding 15,000 metric tons of manufacturing
molding resins, production for Kamax imidized resins will be un-
capacity and installing a new coagulation technology for making
der way and Rohm and Haas Scotland will be producing a full
acrylic impact modifiers. When the plant is completed in the fourth
array of plastic additives. If the economy cooperates and the slow-
quarter of 1990, it will be capable of producing acrylic impact
down in the automotive and construction markets abates, then the
modifiers (AIMs), as well as the more traditional methyl-methacry-
Plastics group can expect to return to higher levels of profitability.
late-butadiene-styrene (MBS) modifiers.
The company also has made a commitment to invest in Kureha's
plastic additives plant now under construction in Singapore. This is
Plastics' second venture in the important Pacific Rim market.
SumikaHaas, a joint venture with Sumitomo Chemicals to sell plas-
tic resins, including the new Kamax imidized resin line, continues
to do well.
Supelco, the world's lead-
ing producer of chroma-
tographic equipment and
supplies, recently doubled
the production capacity of
its Bellefonte, Pennsylvania,
site. Supelco's equipment
allows analytical and qual-
ity control laboratories to
identify and quantify the
composition of chemical
mixtures.
15
Industrial Chemicals
INDUSTRIAL CHEMICALS
Industrial Chemicals encompasses technologies that lead to a
In June, Rohm and Haas and Norsolor S.A. formed NorsoHaas
wide range of products, including water-soluble polymers, bio-
S.A. to manufacture and market water-soluble polymers throughout
cides, ion exchange resins, petroleum chemicals, surfactants,
Europe and the Middle East. The venture is expected to make
chromatographic columns and media, membranes and electronic
significant inroads in the detergent additives and household/indus-
chemicals.
trial cleaner markets in that region. A 40,000-metric-ton manufac-
16
Business Discussion
turing facility under construction in Villers St. Paul, France, is
Industrial Chemicals sales of $673 million were slightly ahead of
expected to be completed late in 1990.
Kathon biocides continued to increase market share in a number
the year before. A strong performance by water-soluble polymers
was offset by lower sales for petroleum chemicals and ion ex-
of areas. In 1989, sales were particularly strong for use in drilling
change resins. Earnings of $16 million slid 64 percent below the
operations in the North Sea oil fields. Researchers continue to find
$44 million reported in 1988, due in large part to write-offs involv-
new applications for this adaptable family of biocides which con-
ing the electronic chemicals business.
trol bacteria, molds, fungi and algae. For example, Kathon 930 for
Sales of Acrysol water-soluble polymers increased dramatically
wood and marine antifoulant paints was registered for use in Japan
in 1989. The major growth has come from the use of these prod-
late in the year. Registration applications have been submitted both
ucts in household laundry detergents, where they help remove soil
in Europe and the United States. The company is funding a sub-
and keep it from redepositing on the clothing being cleaned.
stantial research program to develop patents for new biocide
Acrysol polymers also are used to control mineral deposits in cool-
products and applications.
ing towers and boilers, as mining dispersants, and in hard-surface
Petroleum Chemicals continues to deal with the challenges
cleaners.
posed by fierce competition and keen market dynamics in the
global lubricant market. Volume increased in Europe and was up
significantly in Canada. There was some volume lost in the U.S.
crankcase market, due to market share shifts among major custom-
ers, changes in oil formulation techniques and changes in end-user
grade preference. Petroleum Chemicals continues to focus its re-
sources on the growth segments of the industry, including heavy-
duty diesel oils and multigrade hydraulic fluids.
The company's various businesses aligned under Separation
622
638
Technologies made substantial progress during the year. Supelco,
522
541
571
Inc. doubled its production capacity for making analytical chroma-
$663
$673
tographic columns and supplies in Bellefonte, Pennsylvania. The
$517
$579
company also created an international division to focus on growth
$460
opportunities outside the United States, particularly in Europe and
$44
17
$36
in Asia.
$35
85
86
87
88
89
Romicon focuses on cross-flow filtration products for the water,
VOLUME
Millions of units
$21
$16
waste, food and beverage, pharmaceutical and electrocoat paint
85
86
87
88
89
markets. The Winefilter, a new product which clarifies wines, in-
SALES
creased sales substantially during the year.
Millions of dollars
Sales for TosoHaas doubled in 1989. This joint venture between
85
86
87
88
89
INDUSTRIAL
EARNINGS
Tosoh Corporation of Japan and Rohm and Haas provides high-
CHEMICALS
Millions of dollars
performance liquid chromatography (HPLC) columns, media and
equipment for purification of genetically engineered products.
lon exchange resins sales declined slightly, due to softening in
traditional industrial markets. During the past few years, the ion
exchange segment has been increasing business aimed at specialty
Outlook for 1990
applications. Today, approximately one-third of resin sales are
The demand for Acrysol water-soluble polymers is expected to
made to the pharmaceutical, catalysis and food processing indus-
continue through 1990. Sales will be limited only by availability of
tries. These resins are used to make everything from gasoline
its key raw material, acrylic acid, from Houston.
octane enhancers to corn-syrup sweeteners.
Biocides also should do well, especially if registrations to sell the
The company's electronic chemicals businesses did not do well
new wood and marine antifoulant biocides are received in the
in 1989. Plaskon Electronic Materials, Inc. consolidated its man-
United States before the end of the year and market introductions
ufacturing efforts for the important semiconductor encapsulating
proceed well in Japan and Europe.
business at its new plant in Singapore. However, a write-off of the
Separation Technologies should continue to grow as its products
passive molding compound business and manufacturing facility in
find additional uses in the food and beverage, pharmaceutical,
Toledo, Ohio, led to a $13 million charge against earnings in the
catalysis and waste-treatment markets.
fourth quarter. The company also incurred a $4 million charge for
the discontinuance of a business operated by its Shipley Company
affiliate. Both of these changes should improve business prospects
in future years.
A new plant completed
early in 1989 in
Mozzanica, Italy, allows
Rohm and Haas to make a
higher-purity Kelthane miti-
cide which meets all new
government standards. Kel-
thane is used on a wide
range of crops, including
citrus and cotton.
18
Agricultural Chemicals
ELTHANE TECHNICAL
13
KELTHANE
R
AGRICULTURAL CHEMICALS
218
223
successful years in Europe. Worldwide sales of the fungicide,
197
200
200
known as Rally and Nova in the United States, and as Systhane
$340
$347
$367
elsewhere, nearly doubled in 1989. Used on apples, grapes, roses,
$302
$339
and grain crops, this product is well on its way to becoming a
mainstay in the Agricultural Chemicals portfolio.
20
$12
The most notable event in Agricultural Chemicals occurred in
85
86
87
88
89
$9
September when Rohm and Haas and three other producers of
$8
VOLUME
($17) LOSS
ethylene bisdithiocarbamate (EBDC) fungicides announced they
Millions of units
$4
would voluntarily suspend 42 U.S. registrations for these products,
85
86
87
88
89
beginning in 1990. The company's largest selling agricultural prod-
SALES
Millions of dollars
uct, Dithane, belongs to this class of fungicides. Rohm and Haas
85
86
87
88
89
took this action in order to prevent undue concern about the safety
AGRICULTURAL
EARNINGS
CHEMICALS
of fruits and vegetables purchased by the American consumer. The
Millions of dollars
voluntary suspension is expected to reduce U.S. Dithane sales in
1990 by one-third, or by approximately $5 million.
In December, the Environmental Protection Agency (EPA) said it
Agricultural Chemicals provides specialty products for the
would recommend the suspension of three additional crop registra-
worldwide crop protection industry, including herbicides and fun-
tions in 1991. However, the EPA, which has been conducting a
gicides for use on fruits, vegetables, cereals, nuts and vines.
special review of EBDC fungicides for several years, will postpone
Business Discussion
any final decision pending the outcome of a study which will
Profitability continued to improve for this business in 1989. Sales
measure the amount of product residue on fruits or vegetables
of $367 million were up 8 percent from the year before. Earnings
purchased in the grocery store. This study should be completed by
of $12 million represented a 33 percent increase over 1988.
the end of 1990. The company continues to be confident in the
The greatest improvement occurred in sales of a systemic fungi-
safety of the fungicide and remains committed to doing whatever is
cide which received U.S. registration early in 1989 after several
necessary to assure government agencies and the public that
Dithane fungicide poses no threat to human health.
Worldwide, Dithane performed well in 1989. A new, non-dust-
ing formulation of the product was well received. Volume sales of
the traditional wettable powder formulation also increased.
A high-purity version of Kelthane miticide was introduced early
in the year, after construction of a sophisticated manufacturing
process was completed in Mozzanica, Italy. This Kelthane meets all
new standards required by the EPA and other regulatory agencies.
While no new products are expected to be offered for sale in
The company now is in the process of obtaining registrations for
1990, development work continues on a new fungicide and a new
the high-purity version throughout the world.
insecticide which show promise. Work also continues on a higher-
Goal herbicide continued to establish itself in niche markets
purity version of Goal herbicide.
around the world. In 1989, Goal made strides on rice crops in the
Systhane fungicide and Goal herbicide should continue to grow
rapidly. The full effect of the voluntary suspension for certain uses
21
Peoples Republic of China. Further inroads in the Southeast Asian
market are expected in 1990.
of Dithane fungicide will not be known until the 1990 growing
Compete herbicide was introduced for use on cereals in mix-
season is completed. However, the company continues to believe
tures with other herbicides. The future for this product looks
the results of the market-basket study will provide a rational basis
promising, particularly in Europe.
for future decisions about the safety of the EBDC family of
In January 1990, a long-standing patent dispute with Rhone-
fungicides.
Poulenc S.A. involving the Blazer herbicide patents was settled.
Even though the company sold the Blazer business to BASF in
1987, it has remained responsible for the patent litigation. The U.S.
Appeals Court ruled in the company's favor, saying that Rohm and
Haas's patents are valid and have been infringed by Rhone-
Poulenc. A hearing expected in 1990 will determine the amount of
monetary damages due to Rohm and Haas.
Outlook for 1990
During the coming year, the Agricultural Chemicals group will
focus on ways to reduce costs. Early in 1990, steps were an-
nounced which will reduce research costs by 25 percent. To re-
duce reregistration costs, the company may decide to let certain
registrations lapse, rather than burden the product with expenses
that preclude profitability. This was the case with Karathane fungi-
cide in 1989.
Па
Citizenship
23
The new facility being built
at the Bristol, Pennsylvania,
plant will have the capacity
to treat 1.4 million gallons
of chemical wastewater
each day. The three vessels
at the facility will be con-
tained in concrete dikes to
prevent groundwater con-
tamination and will be
sealed to eliminate odors.
CITIZENSHIP
In recent years, Rohm and Haas has spent an increasing percent-
chemicals were unloaded from barges and trucks. In 1989, the
age of its resources-both human and capital-on improving its
plant installed a venting system which captures the offending
performance with respect to the environment.
odors. Jarrow also has instituted an ongoing program to improve its
It always has been company practice to meet or exceed govern-
air emissions monitoring.
ment requirements in countries where products are made or sold,
Odors have been a source of irritation for people living near the
24
but meeting standards is no longer sufficient. Today, Rohm and
Bristol, Pennsylvania, plant for a number of years. When conditions
Haas must improve continually to match the increasingly stringent
are right, the wind carries a harmless, but distinct, odor from the
expectations of a public concerned about the future of the planet.
plant's wastewater facility into the surrounding community. In
Rohm and Haas recognizes the power of public opinion and is
1989, Rohm and Haas broke ground on a $22 million fully en-
making a concerted effort to incorporate it into day-to-day operat-
closed facility for treating Bristol wastewater. Odor control is one of
ing decisions.
the primary considerations in the new facility, which will be com-
Most often, progress is not dramatic. It is measured in the incre-
pleted in 1991.
mental steps taken at plant after plant to reduce the size of the
Water Quality
footprints the company makes on the environment. In 1989, Rohm
Water quality is an ongoing concern to a public that has seen
and Haas took steps to reduce odors associated with its manufac-
pollution in its streams, lakes and rivers. Rohm and Haas is work-
turing processes, to improve water quality and to reduce the
ing to make certain that it preserves or improves the quality of
amount of wastes being sent to landfills.
water near its manufacturing sites around the world.
Odors
The Lauterbourg, France, plant is in the middle of a five-year,
At one time, odors emanating from a chemical facility were
$10 million project to improve the quality of water released into
considered a nuisance, but a necessary by-product of doing busi-
the Rhine River. The project, which is being completed with the
ness. Today, communities regard odors as unwarranted intrusions.
support of French water authorities, includes manufacturing pro-
Rohm and Haas is eliminating them.
cess changes. In addition, plants throughout Europe have built re-
When residents of Jarrow, England, began to complain about
tention systems to keep firewater runoff and accidental chemical
objectionable odors coming from the plant, it was investigated. Part
spills from reaching nearby rivers and streams.
of the problem stemmed from fumes released into the air when
Minimizing Waste
A few decades ago, waste landfills were considered a safe and
efficient long-term solution to hazardous waste disposal. Times
have changed.
In 1984, the company set a goal to eliminate landfills as its
primary disposal method for hazardous wastes. In the following
years, engineering and process changes were made in manufactur-
ing operations to reduce wastes or to recycle them back into pro-
duction processes. New methods were developed to carefully burn
wastes in on-site powerhouses, generating energy for other uses.
By the end of 1989, the company had virtually eliminated the
landfilling of its hazardous process wastes worldwide. Ninety-five
percent of Rohm and Haas's hazardous waste is incinerated, either
Benefiting from Public Opinion
at commercial incinerators or in its powerhouses. The company
One of the company's proudest achievements in recent years
expects to reduce the amount of hazardous wastes sent to landfills
has been the development of Community Advisory Councils as a
to the absolute minimum level by the mid-1990s.
means of incorporating public opinion into the operating practices
In February 1989, the French government's Ministry of Environ-
of its manufacturing sites.
25
ment and Gaz de France presented the Chauny, France, plant with
These councils are composed of leaders who represent a wide
its "Enterprise and Environment: Clean Technology Award" for a
range of community interests. Government officials, homeowners,
process that minimizes the amount of waste acid generated during
small business executives and local environmental activists meet
the manufacture of ion exchange resins. The new process recycles
regularly to hear what a site has planned for its operations and to
most of the wastes for use within the plant.
offer feedback about how the community will react to those plans.
Rohm and Haas also continues to make progress in cleaning up
Quite often, council members are among the first to receive infor-
problems caused by the disposal practices of an earlier time. For
mation about the results of employee health studies, data about air
example, late in 1989, Rohm and Haas, 3M Company and Her-
and water emissions, or plans for a new manufacturing process.
cules, Inc., reached agreement with the New Jersey Department of
Seven Community Advisory Councils have been formed during
Environmental Protection to remove wastes from two Woodland
the past five years. In 1989, Rohm and Haas created its first council
Township, New Jersey, sites by the middle of 1990.
outside the United States in Jarrow, England. The company believes
that its long-term survival depends, in part, on its ability to listen to
community concerns and to accommodate its business practices to
the needs of each community. The value of the councils continues
to lie in the enhanced communication between Rohm and Haas
and its neighbors.
CITIZENSHIP
It is no secret that a lot of people are unhappy with chemical
All of these programs require a financial commitment. In 1989
companies. That sentiment is one of the reasons why the company
Rohm and Haas spent nearly $50 million for environmental im-
fully supports the Chemical Manufacturers Association "Responsi-
provements around the world. In 1990, that figure will increase to
ble Care" program in the United States. Like other CMA members,
more than $60 million. In fact, over the next three years, spending
Rohm and Haas has pledged its commitment to improve its perfor-
on environmental improvements will represent the fastest-growing
26
mance in the safe management of chemical products. The Respon-
segment of the company's capital spending budget.
sible Care initiative has been designed to give the public an
Around the world, Rohm and Haas will continue to invest the
opportunity to become more involved with our industry as we look
people, time and money needed to improve its performance and
for new ways to improve our performance. One aspect of the
diminish its impact on the environment. Compliance is not
Responsible Care program-CMA Public Advisory Panels-is fash-
enough. Environmental excellence is sought. It's the right thing to
ioned after the Rohm and Haas Community Advisory Councils.
do; it's good business, and the public demands it.
Finally, Rohm and Haas launched an outreach program in 1989
designed to improve the performance of firefighters, emergency
units and company personnel who may be called upon to respond
to transportation emergencies. The "Safety Train," a rail tank car
and two accompanying truck trailers, serves as a traveling class-
room for hands-on experience in dealing with the valves and de-
vices found on equipment that hauls chemicals on the railways and
highways of North America. The Rohm and Haas Safety Train made
its first stop in Philadelphia at the end of 1989 and will make nine
more, from California to Tennessee, in 1990.
1989 FINANCIAL REVIEW
Contents
Accounting and Reporting Change
Management Discussion and Analysis
1989 Results of Operations
28
Summary of 1985-1989 Results by Industry Segment
28
Summary of 1985-1989 Results by Customer Location
29
1988 Results of Operations
33
Liquidity, Capital Resources and Other Financial Data
35
27
Quarterly Results of Operations
38
Consolidated Financial Statements
Summary of Significant Accounting Policies
40
Statements of Consolidated Earnings
41
Statements of Consolidated Cash Flows
42
Consolidated Balance Sheets
43
Notes to Consolidated Financial Statements
Note 1
Disposition of Assets
44
Note 2
Investments
44
Note 3
Other Income, Net
44
Note 4
Supplementary Income Statement Information
44
Note 5
Income Taxes
45
Note 6
Industry Segment Reporting and Information about
Foreign Operations
46
Note 7
Pension Plans and Other Post-Retirement Benefits
48
Note 8
Cash and Cash Equivalents
49
Note 9
Accounts Receivable, Net
49
Note 10
Inventories
49
Note 11
Prepaid Expenses and Other Assets
49
Note 12
Land, Buildings and Equipment, Net
49
Note 13
Other Assets, Net
49
Note 14
Notes Payable
50
Note 15
Long-Term Debt
50
Note 16
Accounts Payable and Accrued Liabilities
50
Note 17
Stockholders' Equity
51
Note 18
Lease and Rental Commitments
51
Note 19
Contingent Liabilities, Guarantees and
Commitments
52
Report on Financial Statements
53
Independent Auditors' Report
53
Eleven-Year Summary of Selected Financial Data
54
ACCOUNTING AND REPORTING CHANGE
Depreciation Effective January 1, 1989, the company changed to the
straight-line method of depreciation for newly acquired buildings and
equipment. Buildings and equipment acquired before that date
continue to be depreciated principally by accelerated methods. The
company believes that straight-line depreciation provides better
matching of costs and revenues over the lives of the new assets and is
consistent with the method used by most other chemical companies.
This change has no cumulative effect on prior years' earnings, but did
increase net earnings by $9 million, or 14 cents per share, in the
current year.
MANAGEMENT DISCUSSION AND ANALYSIS
1989 RESULTS OF OPERATIONS
planned shut-down of the company's production facilities in
Net earnings were $176 million, or $2.65 per share, down 23%
Toledo, Ohio, reduced earnings in 1989. The provision for the
from the 1988 record results. Factors contributing to the earnings
shut-down totaled $13 million, or 20 cents per share. This year's
decline included high costs of operating monomer plants at or
results also included a charge of $4 million, or 6 cents per share,
above design capacity, increased depreciation and startup costs
for the discontinuance of a business located in Switzerland and
associated with the company's capital expenditure program,
owned by Shipley Company, an electronic chemicals affiliate.
higher raw material costs, production outages at the Houston,
Agricultural Chemicals earnings grew $3 million on 8% higher
Texas, monomer production facility and unfavorable currency
sales. The sales and earnings growth reflects market acceptance of
28
movements. Increased selling, administrative and research ex-
a new systemic fungicide for both U.S. and European applications.
penses also reduced earnings. On a positive note, higher volume
Registration was received in the United States during the first
of shipments and selling price increases helped earnings. Addi-
quarter of 1989. The voluntary suspension of U.S. registrations for
tional factors affecting earnings are discussed below, and are sum-
EBDC fungicides (see business discussion for the Agricultural
marized on page 32 on a per-share basis.
Chemicals segment on page 20) is not expected to have a material
effect on future earnings. Rohm and Haas EBDC fungicide sales in
Summary by Industry Segment
(Refer to table at right)
the U.S. totaled approximately $14 million in 1989. Products in-
cluded as part of the voluntary suspension represent approx-
The company's industry segments are consistent with its world-
imately one-third of the company's U.S. EBDC business.
wide business group organization. A description of each chemical
segment's operations can be found in the business review section
of this report.
The Polymers, Resins and Monomers (PRM) segment posted 9%
higher sales during the year, but could not match the record earn-
Summary of 1985-1989 Results by Industry Segment
ings reported in 1988. Products contributing to the sales growth
included Ropaque polymers for paint and paper coatings, as well
(Millions of dollars)
1989
1988
1987
1986
1985
as Rhoplex and Primal emulsions for architectural coatings and
Net Sales
industrial finishes. Acrylic acid and methyl methacrylate, key in-
Polymers, Resins
termediates for the PRM segment, remain in tight supply. This
and Monomers
$1,109
$1,016
$ 834
$ 768
$ 760
restricted volume growth in 1989 and will continue to limit
Plastics
512
517
488
435
406
growth until the third quarter of 1990. Increased production and
Industrial Chemicals
673
663
579
517
460
distribution costs associated with operating these monomer facili-
Agricultural Chemicals
367
339
302
347
340
ties at capacity, as well as higher selling, administrative and re-
Corporate
I
—
-
-
85
search expenses, were responsible for a 17% earnings decline.
Total
$2,661
$2,535
$2,203
$2,067
$2,051
Two 10-day production outages at the Houston, Texas, plant dur-
ing the year also reduced earnings.
Net Earnings
Plastics segment sales were down slightly for the year, and earn-
Polymers, Resins
ings dropped $8 million, or 13%. Flat demand for plastic ad-
and Monomers
$ 108
$ 130
$ 99
$ 89
$ 77
ditives, and capacity constraints for molding resins were
Plastics
53
61
66
47
36
responsible for the lower sales. Startup costs at the Louisville,
Industrial Chemicals
16
44
35
36
21
Kentucky, plant to produce imidized methyl methacrylate, a new
Agricultural Chemicals
12
9
4
(17)
8
molding resin, as well as the stronger U.S. dollar and higher man-
Corporate
(13)
(14)
(9)
(17)
(1)
ufacturing costs, combined to reduce earnings. The 1989 results
Total
$ 176
$ 230
$ 195
$ 138
$ 141
included a $15 million gain on the sale of a 25% interest in the
plastic additives manufacturing operation located in
RONA
Grangemouth, Scotland. The UK subsidiary sold this interest to
Polymers, Resins
Kureha Chemical Company of Japan as part of the formation of a
and Monomers
13.6%
20.1%
18.8%
20.1%
17.9%
joint venture. The capacity expansion which is currently under-
Plastics
10.4
14.9
18.4
15.0
12.0
way at the Grangemouth location is expected to be completed
Industrial Chemicals
2.6
7.3
6.6
7.4
5.4
during 1990. After the expansion, the plant will be capable of
Agricultural Chemicals
4.3
3.0
1.6
(6.0)
2.3
producing acrylic impact modifiers, as well as methyl-methacry-
Corporate
(5.4)
(4.4)
(2.9)
(3.4)
(0.2)
late-butadiene-styrene modifiers.
Total
8.3%
11.2%
11.0%
8.7%
10.0%
Industrial Chemicals sales were up slightly from last year's record,
The company's industry segments are consistent with its worldwide business group
while earnings declined 64%. Good sales growth in the specialty
organization. Corporate includes interest income and expense, charges in 1986 from
polymers business offset lower sales of petroleum chemicals and
litigation settlement, and results of discontinued non-specialty chemical businesses in
1985.
ion exchange resins. Operating losses in the electronic chemicals
portion of this business, including charges associated with the
See page 32 for definition of RONA.
Sales by Region and Industry Segment
North America
Europe
Pacific
Latin America
Total
(Millions of dollars)
1989
1988
1987
1989
1988
1987
1989
1988
1987
1989
1988
1987
1989
1988
1987
Polymers, Resins
and Monomers
$ 760
$ 700
$ 595
$179
$167
$127
$105
$ 93
$ 68
$ 65
$ 56
$ 44
$1,109
$1,016
$ 834
Plastics
303
294
297
171
188
160
21
21
18
17
14
13
512
517
488
Industrial Chemicals
343
340
303
213
212
185
89
89
75
28
22
16
673
663
579
29
Agricultural Chemicals
105
81
66
122
124
108
64
63
56
76
71
72
367
339
302
Total
$1,511
$1,415
$1,261
$685
$691
$580
$279
$266
$217
$186
$163
$145
$2,661
$2,535
$2,203
Summary by Customer Location
with higher selling, administrative and research expenses, negated
(Refer to table at right)
the effect of higher sales. Though consumer price level increases
Sales, net earnings and return on net assets (RONA) are shown
reached hyper-inflationary levels in Brazil and Argentina, the
relative to shipments to customers located in each of four market-
company reported favorable overall after-tax currency and finan-
ing regions, North America (including Canada), Europe (including
cial related income in the region, when compared to the prior-
the Middle East and Africa), Latin America (including Mexico) and
year period.
Pacific.
North American region earnings declined 36% to $81 million on
record sales of $1.5 billion. All industry segments contributed to
Summary of 1985-1989 Results by Customer Location
the sales growth. The favorable effect of higher selling prices was
overwhelmed by increased raw material prices, plant operating
(Millions of dollars)
1989
1988
1987
1986
1985
costs, startup costs and depreciation expense. The higher operat-
Net Sales
ing costs resulted from running plants above design capacity in
North America
$1,511
$1,415
$1,261
$1,273
$1,321
order to meet market demand for some products. This resulted in
Europe
685
691
580
467
366
less than optimal production plans, causing higher operating,
Pacific
279
266
217
180
149
maintenance and transportation costs. Two production outages at
Latin America
186
163
145
147
130
the Houston, Texas, plant during the year also reduced earnings.
Corporate
—
—
-
-
85
The charges associated with the planned shut-down of the com-
Total
pany's Toledo, Ohio, plant and the discontinuance of a business
$2,661
$2,535
$2,203
$2,067
$2,051
by Shipley Company also reduced earnings.
Net Earnings
European region earnings were flat on slightly lower sales. Though
North America
$ 81
$ 127
$ 79
$ 65
$ 91
volume was up in the region, particularly in the PRM segment, the
Europe
82
81
88
57
23
strengthening of the U.S. dollar against European currencies had a
Pacific
14
23
19
14
8
negative effect on sales and earnings. Currency movements re-
Latin America
12
13
18
19
20
duced earnings by approximately $8 million, or 12 cents per
Corporate
(13)
(14)
(9)
(17)
(1)
share. Higher selling, administrative and research expenses also
Total
$ 176
$ 230
$ 195
$ 138
$ 141
reduced earnings. The 1989 results included a gain of $15 mil-
lion, or 23 cents per share, on the sale of a 25% interest in the
RONA
plastic additives manufacturing operation located in
North America
6.5%
11.2%
8.1%
6.9%
10.0%
Grangemouth, Scotland.
Europe
13.9
17.5
21.9
16.4
7.2
The Pacific region posted 5% higher sales, while earnings de-
Pacific
6.4
10.6
13.1
12.3
7.7
clined $9 million, or 39%. The earnings decline was the result of
Latin America
8.5
10.0
14.5
16.8
17.5
higher manufacturing costs, including imports from the United
Corporate
(5.4)
(4.4)
(2.9)
(3.4)
(0.2)
States, and the strengthening of the U.S. dollar. Strong volume
Total
8.3%
11.2%
11.0%
8.7%
10.0%
gains in the PRM segment helped earnings.
The four geographic regions reflect the company's major marketing profit centers
Latin American earnings were down slightly on 14% higher sales.
relative to customer location. Corporate includes interest income and expense,
Strong gains in the PRM segment contributed to the sales and
charges in 1986 from litigation settlement, and results of discontinued non-specialty
chemical businesses in 1985.
volume growth. However, increased manufacturing costs, both lo-
cally and on products imported from North America, combined
See page 32 for definition of RONA.
Summary of Consolidated Results
Net sales were up 5% in 1989 to a record $2,661 million. The
Physical volume of shipments increased by 4% in 1989
increase resulted from 4% volume growth and 1% higher selling
over 1988:
prices. North American selling prices rose 5%. The weakening of
European currencies and the Japanese yen against the U.S. dollar
Percent
caused selling price declines, when expressed in dollar terms, at
Industry segment
change
those locations. The graph on page 31 shows the historical trend
of gross profit, selling, administrative and research (SAR) expenses
Polymers, Resins and Monomers
6%
and operating earnings as a percent of sales.
Plastics
30
(1)
Industrial Chemicals
Raw material purchase prices rose for the third year in a row, up
3
3% in 1989, compared with a 13% increase in 1988. Purchase
Agricultural Chemicals
-
prices in North America were up 7%. The charts on pages 30 and
Worldwide
4%
31 identify year-to-year changes for average unit raw material
costs and average unit selling prices based on the company's ac-
Percent
tual product mix each year. The company's experience is consis-
Customer location
change
tent with trends in the chemical industry, where tight supplies of
North America
1%
commodity chemicals have led to rapid increases in prices since
Europe
7
the first quarter of 1987. Raw material prices leveled off in
Pacific
10
mid-1989 and declined slightly in the latter half of the year.
Latin America
16
Gross profit was $841 million, down 5% from 1988. The impact
Worldwide
4%
of higher selling prices exceeded that of higher raw material costs,
but was not enough to overcome the impact of higher deprecia-
SALES AND VOLUME INDICES
SELLING PRICE INDEX
1979 100
1979 100
180
150
160
140
140
130
120
120
100
110
80
100
Year
79
80
81
82
83
84
85
86
87
88
89
Year
79
80
81
82
83
84
85
86
87
88
89
SALES DOLLARS
INDEX
100
108
119
115
118
128
129
130
139
159
167
100
115
121
125
124
123
120
123
127
134
135
VOLUME
PERCENT CHANGE
100
90
93
89
92
95
97
93
99
111
116
%
9
15
6
2
(1)
(1)
(2)
3
3
5
1
tion expense and startup costs, the weakening of local currencies
Gain on sale of an interest in a subsidiary in 1989 is the $15
in Europe and Japan and the high incremental cost of operating
million gain on the sale of a 25% interest in the Grangemouth,
key monomer plants above design capacity. The gross profit mar-
Scotland, plastic additives manufacturing operation. The interest
gin was 31.6% in 1989, down from 35.1% reported in the prior
was sold to Kureha Chemical Company of Japan. See Note 1 for
year. An analysis of gross profit changes is summarized on a per-
additional detail.
share basis on page 32.
Other income, net was $9 million in 1989, compared to $16
Selling, administrative and research (SAR) expenses were up $39
million in the prior year. The decline is the result of charges
million, or 7% in 1989. The higher costs reflect growth to support
associated with the planned shut-down of the company's produc-
business expansion, new product development facilities, and in-
tion facilities in Toledo, Ohio, offset by the impact of foreign
31
flationary pressures.
exchange gains recorded during the year.
Interest expense rose to $39 million in 1989 from $32 million a
The effective tax rate was 29.9% in 1989, compared with 33.5%
year earlier. The increase reflects higher financing costs in Argen-
in 1988. The decline in the consolidated tax rate is the result of
tina and Brazil, partially offset by currency gains, which are re-
lower taxes on non-U.S. earnings, including the effect of the non-
ported as other income in the Latin American region.
taxable gain on the sale of an interest in the manufacturing opera-
Equity in net earnings of affiliates was $1 million, down from the
tion in Grangemouth, Scotland. The lower rate also reflects higher
strong results reported in 1988. The lower earnings reflect the
non-taxable translation gains in 1989. See Note 5 in the consoli-
weakening of the Japanese yen and a loss for Shipley Company,
dated financial statements for more detail. New rules for income
the electronic chemicals affiliate. This year's results included a $4
tax accounting were published by the Financial Accounting Stan-
million charge for the discontinuance of a business located in
dards Board in 1987. These rules, which must be adopted begin-
Switzerland and owned by Shipley Company.
ning in 1992, are not expected to have a material effect on the
company's results.
RAW MATERIAL COST INDEX
GROSS PROFIT, SAR, OPERATING EARNINGS
1979 = 100
Percent of sales
150
40%
140
30%
130
20%
120
10%
110
0%
Year
79
80
81
82
83
84
85
86
87
88
89
GROSS PROFIT
100
%
28.5
26.6
26.3
26.4
32.0
33.2
31.7
34.9
35.1
35.1
31.6
Year
79
80
81
82
83
84
85
86
87
88
89
SAR
INDEX
%
16.0
17.2
17.5
19.0
18.9
19.4
20.7
21.9
21.7
21.2
21.6
100
129
142
142
129
129
123
113
119
135
139
OPERATING EARNINGS
PERCENT CHANGE
%
7.0
5.9
5.1
5.1
7.5
8.1
6.7
7.5
9.3
9.6
7.1
%
14
29
10
-
(9)
-
(5)
(8)
5
13
3
Return on net assets (RONA) equals net earnings plus after-tax
Analysis of Change in Per-Share Earnings
Current Year Relative to Year Earlier
interest expense, divided by year-end total assets. For 1989,
RONA was 8.3%, compared with 11.2% in 1988.
$/Share (after tax)
Return on stockholders' equity (ROE) is obtained by dividing net
earnings by average year-end stockholders' equity. For 1989, ROE
1989
1988
was 14.0%, compared with 20.4% for 1988.
Gross Profit
The following graph shows these measures of return on invest-
Selling prices*
$ .40
$1.11
ment for the past 11 years.
32
Physical volume and product mix
.26
.66
Raw material costs*
(.24)
(.74)
Startup and depreciation
(.35)
(.21)
Other manufacturing costs*
(.55)
.20
Increase (decrease) in gross profit
1.02
RETURN ON INVESTMENT
(.48)
Other Causes
Selling, administrative and research
Percent
expenses*
(.39)
(.52)
25%
Asset dispositions
(.02)
(.06)
Change in average shares outstanding
-
.10
Other
.08
.07
20%
Decrease from other causes
(.33)
(.41)
Increase (decrease) in per-share earnings
$(.81)
$ 61
*The amounts shown are on a U.S. dollar basis and include the impact of currency
15%
movements as compared to the prior period.
10%
5%
0%
Year
79
80
81
82
83
84
85
86
87
88
89
STOCKHOLDERS' EQUITY
%
17.3
14.0
12.7
10.9
16.1
18.4
14.9
14.3
19.0
20.4
14.0
NET ASSETS
%
10.2
8.9
7.9
7.6
10.5
12.2
10.0
8.7
11.0
11.2
8.3
1988 RESULTS OF OPERATIONS
Summary by Customer Location
(Refer to table on page 29)
Net earnings were a record $230 million, an increase of 18%
over 1987 on a 15% sales increase. Earnings per share of $3.46
All regions posted double-digit sales growth in 1988. North Amer-
were up 21% over the $2.85 per share reported in 1987. The
ican region earnings increased 61% to $127 million on record
higher per-share percentage increase reflects the impact of shares
sales of $1.4 billion, a 12% gain over the prior year. Volume
purchased during the fourth quarter of 1987. Strong sales growth
increased 11% in the region, with 80% of the growth occurring in
and good economic conditions worldwide were responsible for
the PRM segment. The combined effect of the higher shipping
the company's record-setting performance in 1988.
volumes, higher selling prices and lower tax rates overrode the
impact of higher raw material, selling and administrative costs.
33
Summary by Industry Segment
The European region achieved record sales of $691 million during
(Refer to table on page 28)
the year, an increase of 19% above the prior record set in 1987.
The Polymers, Resins and Monomers (PRM) segment recorded
The sales growth was spread across all industry segments. The
exceptional sales and earnings growth in 1988. Sales were 22%
European PRM segment led the way with a 32% improvement
and earnings were 31% higher than the records set in 1987. Prod-
over the prior year. Earnings were down 8% as the impact of the
ucts which showed continued strong growth include: Ropaque
strong volume gains was negated by rising raw material and man-
polymers for paint and paper coatings; Rhoplex and Primal emul-
ufacturing costs. Higher selling and administrative costs in support
sions for construction materials, textiles and industrial finishes;
of the volume gains also contributed to the reduced earnings.
Robond polymers for adhesives, and acrylate monomers. Also
contributing to the 1988 sales gain was a full year of the vinyl
The Pacific region posted sales and earnings increases of 23% and
acetate emulsion business purchased in mid-1987.
21%, respectively. Most of the gain was attributable to strong
results in the PRM segment. Strong volume growth, partially offset
Plastics sales rose 6% during the year, reflecting strong demand
by higher selling, administrative and research expenses, contrib-
for Paraloid plastic modifiers and additives in Europe, as well as
uted to the gain.
for Plexiglas acrylic molding resins in the United States. Plastics
earnings dropped 8% in 1988. The 1987 results included a profit
Although sales increased 12% in Latin America, earnings were off
from the sale of the Kydex plastic sheet product line. Also contrib-
28%. Dollar costs rose rapidly as inflation in local currencies
uting to the earnings decline was the effect of raw material price
exceeded devaluation rates in some countries. A higher effective
increases in Europe, which reduced gross profit margins. Selling
tax rate in Latin America reduced earnings. Volume gains in the
and administrative expenses for the Plastics segment were up in
PRM segment had a favorable impact on earnings.
all regions in 1988.
The higher loss for the Corporate segment reflects the absence of
The Industrial Chemicals segment reported record sales and earn-
the gain in 1987 on the sale of ICN stock.
ings for the year. Earnings grew 26% on 15% higher sales. The
substantial growth in sales and earnings resulted from continued
worldwide growth for Amberlite and Duolite ion exchange resins,
Kathon biocides and Acrysol polymers. Earnings also improved
due to the absence of losses associated with the Hydranautics
business, which was sold in 1987. Earnings for 1988 include the
cost of starting up new facilities in Singapore and Pennsylvania for
electronic chemicals product lines.
Agricultural Chemicals posted sharply higher earnings on 12%
higher sales. During 1987, the segment's results were hurt by a
temporary suspension of Kelthane registration in the United States.
The registration was reinstated in the third quarter of 1987, and
the product line returned to normal levels of profitability for the
full-year 1988. Increased demand for Goal herbicide also contrib-
uted to the earnings gain.
Summary of Consolidated Results
Net sales were up 15% in 1988 to a record $2,535 million. The
Physical volume of shipments increased by 12% in 1988
increase represents 12% volume growth and 5% higher selling
over 1987:
prices, offset by a 2% reduction due to sales mix (higher than
average growth of lower-priced products).
Percent
Gross profit was up $116 million, or 15%, over 1987. The sub-
Industry segment
change
stantial increase in gross profit was the result of the large sales
growth. The impact of higher selling prices overcame that of
Polymers, Resins and Monomers
17%
higher raw material costs. The gross profit margin for 1988 was
Plastics
3
34
35.1%, unchanged from the prior year. Raw material purchase
Industrial Chemicals
9
prices rose for the second year in a row, up 13% in 1988, after a
Agricultural Chemicals
2
5% increase in 1987.
Worldwide
12%
Selling, administrative and research (SAR) expenses were up 13%
Percent
over 1987. The increased level of spending was due to higher
Customer location
change
costs to support business expansion and new product introduc-
tions, increased costs in dollar terms at non-U.S. locations, and
North America
11%
inflationary pressures.
Europe
16
Pacific
Interest expense rose from $31 million in 1987 to $32 million in
19
Latin America
4
1988. This reflects the net impact of increased borrowings, offset
by higher capitalizations of interest as part of construction cost.
Worldwide
12%
Equity in net earnings of affiliates was up $1 million when com-
pared with the strong results of a year ago. Shipley Company, the
electronic chemicals affiliate, posted strong results for the third
year in a row. The company's Japanese affiliates' 1987 earnings
included large currency gains not repeated in 1988.
Other income, net was $16 million in 1988, compared with $29
million in the prior year. The decline is the result of 1988 foreign
exchange losses in the Latin American region and the absence of
1987 favorable asset dispositions.
The effective tax rate was 33.5% in 1988, compared with 35.6%
in 1987. The lower 1988 rate reflects the lower U.S. statutory tax
rate, partially offset by higher U.S. taxes on foreign earnings.
LIQUIDITY, CAPITAL RESOURCES AND OTHER FINANCIAL DATA
Funds Flow At the end of 1989, the company's debt-to-equity
The company is a named party in several government enforce-
ratio was 41%, compared with 38% and 35% at the end of 1988
ment and private actions associated with alleged chemical con-
and 1987, respectively. The company's long-term targeted debt-to-
tamination and old waste disposal sites, some of which are on the
equity ratio is 50%. See the following paragraph for details of the
U.S. Environmental Protection Agency's Superfund priority list.
company's financings during 1989 which were responsible for the
These actions seek cleanup costs and, in some cases, damages for
increase in the debt-to-equity ratio. Cash and cash equivalents
alleged personal injury or property damage. In addition, the com-
plus marketable securities at the end of 1989 totaled $150 million,
pany has been identified as potentially responsible for cleanup
compared with $223 million at the end of 1988.
costs at other waste disposal sites. The company has accrued the
Financing In March 1989, the company issued $75 million of
net present value of the anticipated future costs for remediation of
35
debt with an 18-month maturity and a 10.3% interest rate. This
waste disposal sites. The accruals were $12 million, $5 million
interest rate was subsequently swapped into a floating rate with a
and $12 million, respectively, in 1989, 1988 and 1987. In 1990
lower overall effective financing cost. This debt has been called
the accrual is expected to be within the range of prior amounts.
for payment as of March 15, 1990. In November 1989, $100
Costs of operating and maintaining environmental facilities were
million of debt with a 9.375% interest rate and a 30-year maturity
$87 million in 1989, $73 million in 1988 and $61 million in
1987.
was issued. The proceeds of both debt issues were used for gen-
eral corporate purposes, including funding of the company's cap-
Capital spending for new environmental protection equipment
ital spending program and debt refinancing. Further detail about
was $50 million in 1989, and is expected to be in the range of
long-term and short-term borrowings can be found in the notes to
$67 million and $79 million in 1990 and 1991, respectively. This
the consolidated financial statements. Total borrowings at the end
includes expenditures for projects whose primary purpose is pol-
of 1989 were $531 million, compared to $454 million and $365
lution control and safety, as well as portions of projects in other
million at the end of 1988 and 1987, respectively.
categories shown on page 37. These expenditures and other ac-
The company has adequate financial resources to provide cash
tions taken to comply with laws and regulations relating to the
required for future operations. In addition, the 50% debt-to-equity
discharge of materials into the environment are not expected to
target was established to insure strong financial ratios and access
have a material adverse effect upon the earnings or consolidated
to additional external financing as required in both the United
financial position of the company or upon the company's compet-
States and abroad.
itive position.
Environmental The company believes that its current environ-
mental policies are in accordance with laws and regulations and
are adequate to prevent significant environmental and other
damage. Some risk of environmental and other damage is inherent
in the company's operations, as it is with other companies en-
gaged in similar operations. Therefore, it is possible that future
developments or stricter environmental regulations will require
additional, unforeseen expenditures by the company.
Dividends In the third quarter of 1989, the quarterly dividend
Stock Repurchases The company purchased 0.3 million of its
rate was increased by 7% to $.30 per share. Nineteen eighty-nine
shares in 1988. In 1985 the company acquired 4 million of its
is the twelfth consecutive year that the company has increased its
shares from the William Penn Foundation. The total payment for
dividend payout. Total dividends paid in 1989 were $1.16 per
these shares, which is being made over a five-year period, is based
share, compared with $1.02 per share in 1988, and $.86 per
on the average of market prices for the company's shares over the
share in 1987. The company's dividend payout is targeted at 35%
payment period. In 1989 the company and the William Penn
of earnings. Dividends have been paid each year since 1927.
Foundation amended the terms of the prior agreement covering
the purchase of shares from the foundation. Under the terms of
36
the revised agreement, the company will purchase approximately
2.2 million shares from the foundation on April 1, 1991. The price
EARNINGS AND DIVIDENDS
to be paid for the shares will be based on the average market price
of Rohm and Haas shares during the period from August 1989
through March 1995, with a minimum purchase price of approx-
Per share
imately $70 million. The company retains the right of first refusal
$4.00
on the remaining shares held by the foundation.
On February 15, 1990, the company established a leveraged Em-
ployee Stock Ownership Plan (ESOP). The ESOP was formed with
$3.00
6.3 million shares of company stock purchased from the com-
pany. On the same date, the company purchased 6.3 million
shares from the William Penn Foundation. The ESOP was financed
with approximately $185 million of debt. This additional financ-
$2.00
ing would have increased the year-end debt to 55% of year-end
equity. The transaction provides a cost-effective method of funding
the company's match for employee savings and further aligns em-
$1.00
ployee interests with those of shareholders. See Note 19 to the
consolidated financial statements for more detail.
It is expected that after the above transactions, the aggregate hold-
$0.00
ings of the foundation, the Haas family, and Haas trusts will be
Year
79
80
81
82
83
84
85
86
87
88
89
approximately 39% of all outstanding Rohm and Haas stock,
while the ESOP and the original company savings plan will hold
EARNINGS
13%. The remaining 48% will continue to be held by others.
$
1.33
1.21
1.20
1.11
1.78
2.24
2.01
2.01
2.85
3.46
2.65
Additions to Land, Buildings and Equipment Fixed asset addi-
DIVIDENDS
tions in 1989 totaled $385 million, marking the fifth consecutive
$
.29
.36
.43
.47
.50
.60
.70
.78
.86
1.02
1.16
year of increased capital expenditures. Spending for the year in-
cluded projects to expand production capacity of certain lines that
are operating at capacity. Capacity expansion projects in 1989
included acrylic acid and methyl methacrylate monomer in
Houston, Texas; acrylic molding resins in Bristol, Pennsylvania,
and plastic modifiers in Lauterbourg, France. Projects to add new
products and modernize production facilities include new grades
of plastic modifiers in Grangemouth, Scotland, and a new mold-
ing resin, imidized methyl methacrylate, in Louisville, Kentucky.
The company has budgeted $1 billion for additions over the next
three years, with a $380 million budget for 1990.
Expenditures for the past three years, categorized by primary
the end of 1989 and 1988 are as follows:
purpose of project, were:
(Millions of dollars)
1989
1988
(Millions of dollars)
1989
1988
1987
Inventories
Capacity additions and
Year-end balance
$347
$340
new products
$140
$128
$56
Annual turnover
5.2x
4.8x
Pollution control and safety
27
23
24
Cost savings, maintenance of
Customer receivables
37
existing businesses and
Year-end balance
$368
$349
support facilities
176
141
93
Annual turnover
7.2x
7.3x
Research facilities and
equipment
22
30
38
Net Fixed Assets
Investment in net fixed assets is summarized
Capitalized interest cost
20
16
11
below:
Total
$385
$338
$222
(Millions of dollars)
1989
1988
Working Capital Total working capital, the excess of current
assets over current liabilities, was $434 million at year-end 1989,
Year-end balance
$1,148
$935
compared with $485 million at the end of 1988. The ratio of
Annual turnover
2.3x
2.7x
current assets to current liabilities was 1.8:1 at year-end 1989,
compared with 1.9:1 at the end of the prior year. The acid test
These annual turnover figures were calculated by dividing annual
ratio was 1.0:1 and 1.1:1 at the end of 1989 and 1988, respec-
sales (for customer receivables and net fixed assets) or cost of
tively. Details about two major components of working capital at
goods sold (for inventories) by the year-end balance.
The graph below presents the trend of receivables, inventories,
and net fixed assets as a percent of sales.
CAPITAL ADDITIONS AND DEPRECIATION
ASSETS
Millions of dollars
Percent of sales
$400
50%
$300
40%
$200
30%
$100
20%
$0
10%
Year
79
80
81
82
83
84
85
86
87
88
89
Year
79
80
81
82
83
84
85
86
87
88
89
ADDITIONS
FIXED ASSETS
$MM
68
93
182
126
72
134
159
179
222
338
385
%
30.7
28.3
28.5
29.9
27.6
27.2
28.3
31.3
33.2
36.9
43.1
DEPRECIATION
INVENTORIES
$MM
79
82
75
83
93
93
101
103
112
128
150
%
17.7
18.5
20.0
16.0
15.6
17.4
16.5
14.9
14.0
13.4
13.0
RECEIVABLES
%
17.5
15.8
14.8
12.6
13.5
13.3
15.3
15.4
16.1
15.5
15.8
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
Though sales gains were reported in each quarter, the robust quar-
QUARTERLY STOCK PRICES
terly growth in earnings that the company experienced in 1988
was not repeated in 1989. High costs associated with the com-
pany's capital expenditure program, high manufacturing costs and
$52
a stronger dollar had a negative impact on results in each 1989
period.
First quarter 1989 earnings declined 15% from the prior-year
$44
period on record sales of $680 million. In addition to the nega-
38
tives mentioned above, first quarter earnings were hurt by a
10-day outage at the company's Houston plant which manufac-
$36
tures acrylic acid, a key intermediate product which was already
in tight supply. Most of the earnings decline was reported in the
North American region.
$28
Sales of $735 million reported in the second quarter were an all-
time record, but the impact of higher manufacturing costs and
$20
weaker currencies reduced earnings to $69 million, off 9% from
1st
2nd
3rd
4th
1st
2nd
3rd
4th
1st
2nd
3rd
4th
the 1988 period. The second quarter marked the first time since
1987
1988
1989
1985 that the Plastics segment reported a decline in quarterly
volume, as segments of the European and U.S. economies showed
First Qtr.
Second Qtr.
Third Qtr.
Fourth Qtr.
signs of weakness.
1987
In the third quarter, earnings of $33 million, down 35% from the
High
47
497/8
531/4
431/2
1988 period, were reported on sales of $623 million. A slowing in
Low
35
373/4
381/2
24
the U.S. economy, capacity limitations for key product lines and
Close
43½
473/8
405/8
315/8
high costs associated with the company's capital expenditure pro-
gram reduced earnings.
1988
High
353/4
347/8
37½
357/8
Fourth quarter 1989 earnings were $21 million on sales of $623
Low
28
293/4
325/8
303/4
million. Earnings were off 50% in the quarter as a result of higher
Close
32½
343/4
34
343/8
costs associated with the company's capital expenditure program
and increased manufacturing costs. Earnings were hurt by a
1989
High
371/4
353/8
37½
367/8
10-day outage at the company's Houston, Texas, plant resulting
Low
321/8
311/4
315/8
31
from freeze damage in December. Fourth quarter earnings in-
Close
325/8
321/4
347/8
343/4
cluded a gain of $15 million, or 23 cents per share, on the sale of
a 25% interest in the plastic additives production facility located
in Grangemouth, Scotland. The fourth quarter also included write-
= Quarterly Stock Price Close
offs totaling $13 million associated with the planned shut-down of
the company's production facilities in Toledo, Ohio, as well as a
$4 million charge for the discontinuance of a business in
Switzerland by Shipley Company, an electronic chemicals affiliate.
1989 Quarterly Results
(Millions of dollars)
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Year 1989
Net sales
$680
$ 735
$623
$623
$2,661
Gross profit
218
248
197
178
841
Net earnings
53
69
33
21
176
Net earnings per share, in dollars
$ .80
$1.04
$ .49
$ .32
$ 2.65
39
Cash dividends per share, in dollars
$ .28
$ .28
$ .30
$ .30
$ 1.16
Percentage change from prior year
Net sales
10%
5%
-%
5%
5%
Physical volume
8
3
-
5
4
Net earnings
(15)%
(9)%
(35)%
(50)%
(23)%
Net earnings per share
(15)%
(9)%
(35)%
(50)%
(23)%
1988 Quarterly Results
(Millions of dollars)
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Year 1988
Net sales
$620
$ 700
$620
$595
$2,535
Gross profit
227
255
208
199
889
Net earnings
62
76
50
42
230
Net earnings per share, in dollars
$ .93
$1.14
$ .75
$ .64
$ 3.46
Cash dividends per share, in dollars
$ .23
$ .23
$ .28
$ .28
$ 1.02
Percentage change from prior year
Net sales
16%
17%
15%
12%
15%
Physical volume
11
14
12
11
12
Net earnings
9%
23%
28%
14%
18%
Net earnings per share
12%
27%
32%
16%
21%
1987 Quarterly Results
(Millions of dollars)
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Year 1987
Net sales
$533
$597
$541
$532
$2,203
Gross profit
198
218
179
178
773
Net earnings
57
62
39
37
195
Net earnings per share, in dollars
$ .83
$ .90
$ .57
$ .55
$ 2.85
Cash dividends per share, in dollars
$ .20
$ .20
$ .23
$ .23
$ .86
Percentage change from prior year
Net sales
(1)%
5%
11%
13%
7%
Physical volume
2
4
10
13
7
Net earnings
50%
88%
5%
23%
41%
Net earnings per share
48%
88%
5%
28%
42%
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation The consolidated financial state-
Inventories are stated at the lower of cost or market. Cost is
ments include the accounts of the company and all significant
primarily determined under the last-in, first-out (LIFO) method.
majority-owned subsidiaries engaged in manufacturing operations.
Land, Buildings and Equipment and Related Depreciation Land,
Intercompany accounts, transactions and unrealized profits and
buildings and equipment are carried at cost. Assets are depreci-
losses on transactions within the consolidated group and with
ated over their estimated useful lives. Effective January 1, 1989,
affiliates are eliminated in consolidation. Investments in uncon-
the company changed its method of depreciation for newly ac-
solidated subsidiaries, which are engaged in selling operations
quired buildings and equipment to the straight-line method. Build-
outside of the United States, are carried at cost and are insignifi-
ings and equipment acquired before that date continue to be
40
cant in total. Investments in affiliates (20-50% owned) are re-
depreciated principally by accelerated methods. Maintenance and
corded at cost plus equity in their undistributed earnings since
repairs are charged to earnings; replacements and betterments are
acquisition, unless the cost method is considered appropriate.
capitalized.
Translation Procedures Foreign currency accounts are trans-
The cost and related accumulated depreciation of buildings and
lated into U.S. dollars under the provisions of SFAS No. 52, with
equipment are removed from the accounts upon retirement or
the U.S. dollar as the functional currency. Under this standard: (1)
other disposition; any resulting profit or loss is reflected in
land, buildings and equipment and related depreciation, invento-
earnings.
ries and cost of goods sold, goodwill and intangibles are translated
at historical rates of exchange; (2) all other assets and liabilities
Intangible Assets The company amortizes identifiable intangible
are translated at current rates of exchange; and (3) monthly in-
assets such as patents and trademarks on the straight-line basis
come, costs and expenses other than depreciation and cost of
over their estimated useful lives. Goodwill is amortized on the
goods sold are translated at current rates of exchange. Foreign
straight-line basis over periods not greater than 40 years.
exchange adjustments, including recognition of unperformed for-
Income Taxes are provided in the period in which the related
eign exchange contracts other than those which are intended to
transactions enter into the determination of net income. Provision
hedge an identifiable foreign currency commitment, are charged
has been made for deferred income taxes where differences exist
or credited to current income.
between the period in which transactions affect taxable income
Marketable Securities are stated at cost, which approximates
and the period in which they enter into the determination of net
market value.
income.
Rohm and Haas Company and Subsidiaries
STATEMENTS OF CONSOLIDATED EARNINGS
Years ended December 31, 1989, 1988 and 1987
(Millions of dollars, except per-share amounts)
1989
1988
1987
Current Earnings
Net sales
$2,661
$2,535
$2,203
Note 10
Cost of goods sold
1,820
1,646
1,430
41
Gross profit
841
889
773
Selling and administrative expense
401
381
335
Research and development expense
175
156
142
Note 12
Interest expense
39
32
31
Note 2
Equity in net earnings of affiliates
1
10
9
Note 1
Gain on sale of an interest in a subsidiary
15
-
-
Note 3
Other income, net
9
16
29
Earnings before income taxes
251
346
303
Note 5
Income taxes
75
116
108
Net earnings
$ 176
$ 230
$ 195
Net earnings per share
$ 2.65
$ 3.46
$ 2.85
Retained Earnings
Retained earnings at beginning of year
$1,221
$1,058
$ 922
Net earnings for the year
176
230
195
1,397
1,288
1,117
Cash dividends paid ($1.16, $1.02 and $.86 per
share in 1989, 1988 and 1987, respectively)
77
67
59
Retained earnings at end of year
$1,320
$1,221
$1,058
See accompanying summary of significant accounting policies (page 40) and notes to consolidated financial statements (pages 44-52).
Rohm and Haas Company and Subsidiaries
STATEMENTS OF CONSOLIDATED CASH FLOWS
Years ended December 31, 1989, 1988 and 1987
(Millions of dollars)
1989
1988
1987
Cash Flows from Operating Activities
Net earnings
$ 176
$ 230
$ 195
Adjustments to reconcile net earnings to net cash provided by
42
operating activities:
Depreciation
150
128
112
Deferred income taxes
13
17
9
Accounts receivable
(26)
(38)
(42)
Inventories
(7)
(31)
(21)
Accounts payable
16
17
28
Other working capital changes, net
(12)
(10)
-
Other, net
(1)
1
10
Net cash provided by operating activities
309
314
291
Cash Flows from Investing Activities
Additions to land, buildings and equipment
(385)
(338)
(222)
Proceeds from sale of facilities and investments
7
59
96
Acquisitions and long-term investments
(2)
-
(40)
Net cash used by investing activities
(380)
(279)
(166)
Cash Flows from Financing Activities
Purchase of treasury shares
—
(10)
(72)
Proceeds from issuance of long-term debt
179
93
5
Repayments of long-term debt
(71)
(32)
(49)
Net change in short-term borrowings
(30)
22
4
Payment of dividends
(77)
(67)
(59)
Other, net
(3)
(1)
1
Net cash provided (used) by financing activities
(2)
5
(170)
Effect of exchange rate changes on cash
(1)
(2)
5
Net increase (decrease) in cash and cash equivalents
$ (74)
$ 38
$ (40)
See accompanying summary of significant accounting policies (page 40) and notes to consolidated financial statements (pages 44-52).
Rohm and Haas Company and Subsidiaries
CONSOLIDATED BALANCE SHEETS
December 31, 1989 and 1988
(Millions of dollars)
1989
1988
Assets
Current assets
Note 8
Cash and cash equivalents
$ 148
$ 222
43
Marketable securities
2
1
Note 9
Accounts receivable, net
420
394
Note 10
Inventories
347
340
Note 11
Prepaid expenses and other assets
94
75
Total current assets
1,011
1,032
Note 2
Investments in and advances to unconsolidated subsidiaries and affiliates
107
100
Note 12
Land, buildings and equipment, net
1,148
935
Note 13
Other assets, net
189
175
$2,455
$2,242
Liabilities and Stockholders' Equity
Current liabilities
Note 14
Notes payable
$ 172
$ 166
Note 16
Accounts payable and accrued liabilities
398
367
Federal, foreign and other income taxes
7
14
Total current liabilities
577
547
Note 15
Long-term debt
359
288
Note 5
Deferred income taxes and other liabilities
208
200
Stockholders' equity
Note 17
Common stock; par value-$2.50; authorized-
100,000,000 shares; issued-78,652,380 shares
197
197
Note 17
Additional paid-in capital
93
94
Note 15
Retained earnings
1,320
1,221
1,610
1,512
Note 17
Treasury stock (1989-12,034,654 shares; 1988-12,111,434 shares)
299
305
Total stockholders' equity
1,311
1,207
$2,455
$2,242
See accompanying summary of significant accounting policies (page 40) and notes to consolidated financial statements (pages 44-52).
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1: Disposition of Assets
Note 3: Other Income, Net
In December of 1989, the UK subsidiary sold a 25% interest in its
plastic additives manufacturing operation located in
(Millions of dollars)
1989
1988
1987
Grangemouth, Scotland, to Kureha Chemical Company of Japan.
Interest income
$17
$21
$21
The company recognized a gain of $15 million, or $.23 per share.
Foreign exchange gains (losses), net
6
(8)
5
These plastic additives facilities became part of a new jointly
Asset dispositions (Note 1)
(20)
-
12
owned company. No income taxes are currently payable on the
Other, net
6
3
(9)
gain nor are any taxes expected to be payable in the future;
Total
$ 9
$16
44
therefore, no current or deferred tax provision is required. In the
$29
fourth quarter of 1989, the company wrote off assets associated
with production facilities of its electronic chemicals business. The
Note 4: Supplementary Income Statement Information
shut-down of these facilities in Toledo, Ohio, was announced in
The following amounts were charged to costs and expenses:
January 1990. These charges reduced earnings before tax by $20
million and net earnings by $13 million, or $.20 per share. Also in
(Millions of dollars)
1989
1988
1987
the fourth quarter, the company recorded, in equity in net
Taxes other than income taxes
earnings of affiliates, a charge of $4 million, or $.06 per share, for
Payroll
$ 38
$ 35
the discontinuance of a business located in Switzerland and
$ 31
Sales and use
22
17
13
owned by Shipley Company, an electronic chemicals affiliate.
Other
23
22
19
During 1987 the company completed the sale of three
businesses-Blazer herbicide, Kydex plastic sheet, and
$ 83
$ 74
$ 63
Hydranautics membranes-and sold shares of ICN
Maintenance and repairs
$146
$128
$114
Pharmaceuticals, Inc. stock received in the 1985 divestiture of
Micromedic Systems, Inc. In total, these asset sales increased
1987 earnings before tax by $12 million and net earnings by $5
million, or $.07 per share.
Note 2: Investments
The company's investments in its affiliates (20-50% owned) totaled
$86 million at December 31, 1989, and 1988. These amounts
exceed the company's equity in the net assets of the affiliates by
about $16 million, principally representing goodwill arising from
the acquisition in 1982 of a 30% equity interest in Shipley
Company. Consolidated retained earnings include $47 million and
$49 million of undistributed earnings of affiliates at December 31,
1989, and 1988, respectively.
Note 5: Income Taxes
Deferred income taxes are provided on the difference in earnings
The components of earnings before income taxes presented as
as determined for tax and financial reporting purposes. The signifi-
either domestic or foreign (i.e., generated by operations within or
cant components of the deferred tax portion of the total income
outside the United States) are shown below:
tax provision are as follows:
(Millions of dollars)
1989
1988
1987
(Millions of dollars)
1989
1988
1987
Tax over book depreciation
$ 6
$11
$ 7
Domestic
Pension
—
6
5
Parent and subsidiaries
$ 40
$134
$ 95
Other, net
(3)
|
(3)
Affiliates
(1)
4
3
45
Foreign
Deferred income taxes
$ 3
$17
$ 9
Subsidiaries
210
202
199
Affiliates
2
6
6
The effective tax rate on income differs from the U.S. statutory tax
Earnings before income taxes
$251
$346
$303
rate due to the following:
1989
1988
1987
The provision for income taxes is composed of the following:
Statutory tax rate
34.0%
34.0%
40.0%
(Millions of dollars)
1989
1988
1987
Research and other
U.S. tax credits
(1.7)
(1.5)
(1.7)
Taxes on domestic earnings
Federal
Asset dispositions
(1.4)
1.4
1.6
Effect of non-taxable currency items
(6.8)
(3.4)
(2.8)
Current
$ 8
$ 30
$ 25
Deferred
—
15
9
Taxes on foreign earnings
and tax adjustments of
8
45
34
foreign subsidiaries
4.8
3.3
(2.1)
State and other
Other, net
1.0
(0.3)
0.6
Current
1
2
2
Effective tax rate
29.9%
33.5%
35.6%
Deferred
-
1
-
1
3
2
A provision for U.S. income taxes, after applying statutory tax
credits, has been made on the unremitted earnings of foreign
Total taxes on
subsidiaries and affiliates when dividend remittances are antici-
domestic earnings
9
48
36
pated in the near future. All other unremitted earnings have been
Taxes on foreign earnings
indefinitely reinvested abroad. Such unremitted earnings after pro-
Current
63
67
72
vision for applicable foreign income taxes were approximately
Deferred
3
1
-
$266 million at December 31, 1989. If the foreign subsidiary and
affiliate earnings were remitted as dividends, the amount of addi-
Total taxes on
tional U.S. income taxes, after applying statutory tax adjustments,
foreign earnings
66
68
72
would not be material. New rules for income tax accounting were
Total income taxes
$75
$116
$108
published by the Financial Accounting Standards Board in 1987.
These rules, which must be adopted beginning in 1992, are not
Total cash used for the payment of income taxes was $80 million,
expected to have a material effect on the company's financial
$115 million and $94 million in 1989, 1988 and 1987,
statements.
respectively.
Note 6: Industry Segment Reporting and Information
about Foreign Operations
(Millions of dollars)
1989
1988
1987
In accordance with the provisions of SFAS No. 14, the tables
Identifiable assets at year end
below present information for the years 1987-1989 related to the
Polymers, Resins and Monomers
$ 787
$ 647
$ 530
company's results in four industry segments-Polymers, Resins
Plastics
515
408
357
and Monomers; Plastics; Industrial Chemicals, and Agricultural
Industrial Chemicals
562
533
468
Chemicals. The company defines the industry segment for each
Agricultural Chemicals
264
269
232
product shipment (including intermediates) by the customer's use
Total
$2,128
$1,857
$1,587
46
of the product shipped. Therefore, no inter-segment sales or elim-
inations are shown. In computing each segment's identifiable
Investment in affiliates
assets, production facilities that are shared by more than one
Polymers, Resins and Monomers
$ 6
$ 5
$ 4
segment are allocated to each segment on an annual utilization
Industrial Chemicals
60
61
56
basis.
Agricultural Chemicals
9
9
8
Corporate
11
11
11
(Millions of dollars)
1989
1988
1987
Total
$ 86
$ 86
$ 79
Sales to customers
Depreciation expense
Polymers, Resins and Monomers
$1,109
$1,016
$ 834
Polymers, Resins and Monomers
$ 51
$ 47
$ 39
Plastics
512
517
488
Plastics
36
30
28
Industrial Chemicals
673
663
579
Industrial Chemicals
37
30
25
Agricultural Chemicals
367
339
302
Agricultural Chemicals
18
14
15
Total
$2,661
Corporate
8
$2,535
7
$2,203
5
Total
$ 150
$ 128
$ 112
Operating profit (loss)
Polymers, Resins and Monomers
$ 172
$ 208
$ 167
Capital additions
Plastics
61
95
107
Polymers, Resins and Monomers
$ 160
$ 121
$ 84
Industrial Chemicals
28
58
52
Plastics
116
84
44
Agricultural Chemicals
26
16
(3)
Industrial Chemicals
62
75
57
Total
$ 287
Agricultural Chemicals
27
$ 377
42
$ 323
26
Corporate
20
16
11
Equity in earnings of affiliates
Total
$ 385
$ 338
$ 222
Polymers, Resins and Monomers
$ -
$ 1
$ 1
Industrial Chemicals
—
6
5
In addition, the tables on the following page provide information
Agricultural Chemicals
1
3
3
pertaining to the company's operations in different geographic
Total
$ 1
$ 10
$ 9
areas, in accordance with SFAS No. 14. Transfers between geo-
graphic areas are accounted for at market prices.
United States export sales to customers were $145 million, $134
(Millions of dollars)
1989
1988
1987
million and $115 million in 1989, 1988 and 1987, respectively.
Sales to customers
Total operating profit and total identifiable assets for both the seg-
United States
$1,541
$1,451
$1,289
ment and geographic results are reconciled below to consolidated
Canada
113
109
91
earnings before income taxes and consolidated total assets. Gen-
Europe
669
671
579
eral corporate income (expense) represents interest income earned
Pacific
183
169
128
by general corporate assets, offset by the portion of total expenses
Latin America
155
135
116
incurred at corporate headquarters that do not relate directly to
Total
$2,661
$2,535
$2,203
the operations of any geographic area or industry segment. Gen-
47
eral corporate assets primarily include cash and cash equivalents
Transfers between geographic areas
and marketable securities, advances to unconsolidated subsidi-
United States
$ 229
218
$ 146
aries and affiliates and a portion of the net fixed assets located at
Canada
16
16
7
corporate headquarters. Corporate capital additions include cap-
Europe
126
88
72
italized interest cost. The reconciliation of operating profits and
Pacific
3
2
1
identifiable assets to consolidated totals is as follows:
Latin America
2
2
3
Adjustments and eliminations
(376)
(326)
(229)
(Millions of dollars)
1989
1988
1987
Total
$ -
$ -
$ -
Total operating profit
$ 287
$ 377
$ 323
Interest expense
(39)
(32)
(31)
Total sales
United States
$1,770
$1,669
$1,435
General corporate
income (expense)
2
(9)
2
Canada
129
125
98
Equity in net earnings of affiliates
1
10
9
Europe
795
759
651
Pacific
186
171
129
Earnings before income taxes
$ 251
$ 346
$ 303
Latin America
157
137
119
Identifiable assets at year end
$2,128
$1,857
$1,587
Adjustments and eliminations
(376)
(326)
(229)
General corporate assets
241
299
288
Total
$2,661
$2,535
$2,203
Investment in affiliates
86
86
79
Operating profit (loss)
Total assets at year end
$2,455
$2,242
$1,954
United States
$ 109
$ 198
$ 136
Canada
16
21
17
The data presented above differ in certain ways from the com-
Europe
155
158
164
pany's results by industry segment/business team and customer
Pacific
(5)
(9)
(4)
location presented on pages 28 and 29. The customer location
Latin America
12
13
8
data on page 29 reflect the company's major marketing profit
Adjustments and eliminations
-
(4)
2
centers relative to customer location, while the above data are
Total
$ 287
$ 377
$ 323
categorized by the geographic location from which the goods
were shipped. The gain on the sale of the 25% interest in the UK
Identifiable assets at year end
subsidiary's plastic additives manufacturing operation is included
United States
$1,422
$1,331
$1,053
in the European region Plastics segment for management reporting
Canada
38
34
30
purposes, but is included in general corporate income for pur-
Europe
551
465
406
poses of this footnote. Except for these differences, industry seg-
Pacific
93
84
66
mentation is generally the same for management reporting
Latin America
107
94
85
purposes and SFAS No. 14 requirements. Other differences in-
Adjustments and eliminations
(83)
(151)
(53)
clude the manner of directly assigning or allocating certain parts
of administrative expense, interest income and expense, other in-
Total
$2,128
$1,857
$1,587
come and expense and equity in affiliates. In addition, the earn-
ings data on pages 28 and 29 are on an after-tax basis.
Note 7: Pension Plans and Other Post-Retirement Benefits
The funded status of these plans at year end was as follows:
The company maintains noncontributory pension plans which
provide defined benefits to substantially all domestic employees
(Millions of dollars)
1989
1988
meeting age and length of service requirements. Pension cost de-
Actuarial present value of plan benefits
termined in accordance with plan provisions is presented below:
Vested
$ 411
$ 386
Nonvested
2
2
(Millions of dollars)
1989
1988
1987
Accumulated benefit obligation
413
388
Pension cost
$(21)
$(20)
$(13)
Effect of projected future compensation
48
Pension benefit payments
35
35
37
increase
121
123
The negative cost in 1989, 1988 and 1987 primarily reflects more
Projected benefit obligation
534
511
rapid recognition of favorable investment experience as stipulated
by SFAS No. 87.
Plan assets at market value
899
793
Pension cost includes the following components:
Plan assets in excess of projected benefit
obligation
365
282
(Millions of dollars)
1989
1988
1987
Unrecognized net gain existing at
adoption of SFAS No. 87
(148)
(161)
Service cost-benefits earned
Other unrecognized net gain
(145)
(70)
during the year
$ 21
$ 20
$ 20
Interest cost on projected
Prepaid pension cost
$ 72
$ 51
benefit obligation
41
41
38
Return on plan assets
-actual
$(144)
$(90)
$(56)
Net assets of the pension trusts, which primarily consist of com-
-less deferred
76
24
(2)
mon stocks and debt securities, were measured at market value.
The assumed long-term rate of return on trust assets is 8.5%.
(68)
(66)
(58)
Pension benefit obligations were determined from actuarial valua-
tions using an assumed discount rate of 8.5% and an assumed
Other amortization, net
(2)
(2)
-
long-term rate of compensation increase of 6%.
Amortization of net gain
existing at adoption of
Certain of the company's non-U.S. subsidiaries maintain pension
SFAS No. 87
(13)
(13)
(13)
plans which are not material in total. As of their latest valuation
dates, the assets of these plans exceeded the present value of
Net pension cost
$(21)
$(20)
$(13)
vested benefits.
The company provides health care and life insurance benefits for
substantially all of its domestic retired employees. These benefits
and similar benefits for active employees are provided primarily
through insurance companies whose premiums are based on the
benefits paid during the year. The company charges these annual
premiums for both active and retired employees against current
period income. Total premiums for 1989 were about $32 million.
The cost of providing these benefits for approximately 3,500 re-
tirees is not separable from the cost of providing benefits for ap-
proximately 8,500 active domestic employees. Post-retirement
benefit plans of the company's non-U.S. subsidiaries are not
significant.
Note 8: Cash and Cash Equivalents
Note 12: Land, Buildings and Equipment, Net
(Millions of dollars)
1989
1988
(Millions of dollars)
1989
1988
Cash
$ 31
$ 34
Land
$ 16
$ 19
Time deposits
92
23
Buildings and improvements
403
365
Certificates of deposit
25
155
Machinery and equipment
1,640
1,407
Commercial paper
—
10
Capitalized interest cost
88
68
Total
$148
$222
Construction
249
203
49
2,396
2,062
Note 9: Accounts Receivable, Net
Less accumulated depreciation
1,248
1,127
Total
$1,148
$ 935
(Millions of dollars)
1989
1988
Customers
$368
$349
The principal lives (in years) used in determining depreciation
Unconsolidated subsidiaries and affiliates
14
15
rates of various assets are: buildings and improvements (10-50);
Employees
5
6
machinery and equipment (5-20); automobiles, trucks and tank
Other
39
29
cars (3-10); furniture and fixtures, laboratory equipment and other
426
399
assets (5-10).
Less allowance for losses
6
5
Effective January 1, 1989, the company changed its method of
Total
$420
$394
depreciation for newly acquired buildings and equipment to the
straight-line method. The change had no cumulative effect on
prior years' earnings but did increase net earnings by $9 million,
Note 10: Inventories
or $.14 per share in 1989.
(Millions of dollars)
1989
1988
At December 31, 1989, the gross book values of assets depreci-
ated by accelerated methods totaled $1,449 million and assets
Finished products and work in process
$247
$245
depreciated by the straight-line method totaled $682 million.
Raw materials
60
65
Supplies
40
30
In 1989, 1988 and 1987, respectively, interest costs of $20 mil-
lion, $16 million and $11 million were capitalized and added to
Total
$347
$340
the gross book value of land, buildings and equipment. Amortiza-
tion of such capitalized costs included in depreciation expense
Beginning inventories used in determining the 1989 and the 1988
was $8 million in 1989, $7 million in 1988 and $5 million in
cost of goods sold were $340 million and $309 million, respec-
1987.
tively. The excess of current cost over the stated amount for in-
ventories valued under the LIFO method approximated $77
Note 13: Other Assets, Net
million and $74 million at December 31, 1989, and 1988, respec-
tively. Liquidation of prior years' LIFO inventory layers in 1989
(Millions of dollars)
1989
1988
and 1988 did not materially affect cost of goods sold in either
Notes receivable
$ 3
$ 3
year.
Contract advances
27
28
Note 11: Prepaid Expenses and Other Assets
Patents, trademarks, etc.
70
70
Goodwill
24
24
(Millions of dollars)
1989
1988
Prepaid pension cost
76
55
Prepaid expenses
$ 18
$ 17
Other noncurrent assets
27
27
Deferred tax benefits
61
47
227
207
Other current assets
15
11
Less accumulated amortization
Total
$ 94
$ 75
of intangibles
38
32
Total
$189
$175
Note 14: Notes Payable
The various loan agreements contain certain restrictions with re-
spect to tangible net worth, maintenance of working capital, pay-
(Millions of dollars)
1989
1988
ment of dividends and repurchase of the company's stock.
Short-term borrowings
$ 65
$ 95
Retained earnings free of dividend restrictions at December 31,
Current portion of long-term debt
107
71
1989, amounted to $513 million.
Total
$172
$166
Total cash used for the payment of interest expense was $35 mil-
lion, $27 million and $32 million in 1989, 1988 and 1987,
Information for 1989 and 1988 as to short-term borrowings
respectively.
50
is as follows:
Long-term debt maturing in the next five years is:
(Millions of dollars)
1989
1988
(Millions of dollars)
Average year-end interest rate
34%
13%
1990
$107
1993
$27
Average interest rate for year
21%
18%
1991
11
1994
11
Average annual amount outstanding
$ 76
$65
1992
11
Maximum month-end amount outstanding
$116
$95
Note 16: Accounts Payable and Accrued Liabilities
Short-term borrowings represent bank debt owed by foreign sub-
sidiaries. The high interest rates are due to borrowings in certain
(Millions of dollars)
1989
1988
Latin American countries with high inflation rates.
Trade payables
$194
$174
Note 15: Long-Term Debt
Salaries and wages
56
57
Social Security and other taxes
19
16
(Millions of dollars)
1989
1988
Interest
17
13
Other
112
107
Borrowings from foreign banks due 1991 to
1995 at average year-end interest rate of
Total
$398
$367
43% in 1989, 39% in 1988
$ 2
$ 3
Note payable to the William Penn
Foundation due annually to 1990 at
variable interest rate, 10.4% at year-end
1988
—
16
11.75% note (Sterling denominated) due
annually to 1997
11
14
8.875% environmental improvement
revenue bonds due 1993
16
16
9.875% notes due annually to 1995
17
20
8.125% notes due 1996
50
50
9.625% notes due 1998
75
75
9.375% debentures due 2019
100
-
8.00% notes due annually to 1999
24
27
9.875% debentures due 1991 to 2000
33
33
6.25% environmental improvement revenue
bonds due 1993 to 2002
24
24
Other
7
10
Total
$359
$288
The company has revolving credit agreements totaling $150 mil-
lion, which expire in 1994. These agreements, which carry vari-
ous interest rates and fees, are available to support commercial
paper borrowings. Several permit foreign subsidiaries to borrow
local currencies and Eurocurrencies. At December 31, 1989, $4
million was outstanding under these agreements.
Note 17: Stockholders' Equity
Note 18: Lease and Rental Commitments
The changes in additional paid-in capital and treasury stock are
The company leases certain properties and equipment used in its
summarized as follows:
operations primarily under operating leases. Under most operating
lease agreements, the company pays a minimum rental, plus con-
Additional
Treasury
tingent rental, based on equipment usage and escalation factors.
Paid-in
Stock,
The net rental expense for such property was $34 million in 1989,
(Millions of dollars)
Capital
at Cost
$31 million in 1988 and $26 million in 1987.
Balance at January 1, 1987
$98
$215
The company is committed under the terms of non-cancellable
-
89
operating leases for future rentals as follows:
51
Purchases of treasury stock
Shares issued to employees
under bonus plans
(3)
(7)
(Millions of dollars)
Balance at December 31, 1987
95
297
1990
$21
1994
$3
Purchases of treasury stock
-
12
1991
18
1995-1999
8
Shares issued to employees
1992
10
2000-2004
3
under bonus plan
(1)
(4)
1993
6
After 2004
3
Balance at December 31, 1988
94
305
Leases that meet the criteria for capitalization set forth in SFAS No.
Adjustment to cost of previously
13 have been classified and accounted for as capital leases. Land,
acquired shares
-
(6)
buildings and equipment, net includes $12 million and $15 mil-
Purchase of treasury stock
-
2
lion at the end of 1989 and 1988, respectively, for assets recorded
Shares issued to employees
under capitalized leases. The related obligations for these leases,
under bonus plan
(1)
(2)
which totaled $6 million at the end of 1989 and $7 million at the
Balance at December 31, 1989
$93
$299
end of 1988, are included in notes payable and long-term debt.
Purchases of treasury stock in 1989 totaled 7,544 shares, com-
pared with 310,231 and 2,420,702 shares in 1988 and 1987,
respectively. The cost of the treasury stock acquired from the
William Penn Foundation and the related note payable were in-
creased by $2 million in 1989, $2 million in 1988, and $18
million in 1987, according to terms of the agreement (see Note 19
for additional information on the William Penn Foundation agree-
ment). At year-end 1989 and 1988 there were 12,034,654 and
12,111,434, respectively, reacquired shares in treasury.
The $6 million credit to treasury stock in 1989 represents an
adjustment to the previously recorded cost of the shares acquired
under the William Penn Foundation agreement.
The company is authorized to issue up to 25 million shares of
preferred stock. No such shares have been issued.
Note 19: Contingent Liabilities, Guarantees and Commitments
On February 15, 1990, the company established a leveraged
The company is a named party in several government enforce-
Employee Stock Ownership Plan (ESOP). The ESOP purchased 6.3
ment and private actions associated with old waste disposal sites,
million shares of company stock from the company at the Febru-
some of which are on the U.S. Environmental Protection Agency's
ary 14, 1990, composite closing stock price. These shares were
Superfund priority list. These actions seek cleanup costs and, in
previously held by Rohm and Haas as treasury shares. The ESOP
some cases, damages for alleged personal injury or property
initially financed the transaction with $185 million in debt at a
damage. In addition, the company has been identified by govern-
rate of LIBOR + 1/8%, guaranteed by the company. The company
ment authorities as potentially responsible for cleanup costs at
intends to refinance this debt at long-term rates.
52
other waste disposal sites. The company has accrued the net pres-
On February 15, 1990, the company replaced the treasury shares
ent value of the anticipated future costs for remediation of waste
with 6.3 million shares of company stock purchased from the
disposal sites. The accruals were $12 million, $5 million and $12
William Penn Foundation at a price equal to the average com-
million in 1989, 1988 and 1987, respectively. On March 21,
posite closing stock price of Rohm and Haas stock during the six-
1989, Warner-Lambert Company brought suit against Rohm and
month period beginning in February 1990 and ending in August
Haas alleging damages from the delayed launch of a Warner-
1990.
Lambert product as a result of contamination of a raw material
The sale of 6.3 million treasury shares to the ESOP and the
furnished by Rohm and Haas. The complaint seeks $55 million in
replacement purchase of 6.3 million shares from the William Penn
damages, plus punitive and treble damages. Several class actions
Foundation will result in an approximate $185 million increase in
and individual claims resulting from the contamination of that raw
long-term debt on the consolidated balance sheet, with an offset-
material have also been filed. The company and its subsidiaries
ting reduction to stockholders' equity, as follows:
are parties to other litigation arising out of the ordinary conduct of
its business. Although the ultimate outcome is not determinable at
CONDENSED CONSOLIDATED BALANCE SHEETS
this time, it is the company's opinion that the resolution of all
DECEMBER 31, 1989
pending lawsuits and claims will not have a material adverse ef-
PRO FORMA
fect, individually or in the aggregate, upon the consolidated finan-
AS REPORTED
(UNAUDITED)
cial position of the company.
Assets
$2,455
$2,455
In 1985 the company acquired 4 million of its shares from the
Debt (notes payable plus
William Penn Foundation pursuant to a prior agreement. The total
long-term debt)
531
716
payment for these shares, which is being made over a five-year
Other liabilities
613
613
period, is based on the average of market prices for the company's
Stockholders' equity
1,311
1,126
shares over the payment period. In 1989 the company and the
Liabilities and Stock-
William Penn Foundation amended the terms of the prior agree-
ment covering the purchase of shares from the foundation. Under
holders' Equity
$2,455
$2,455
the terms of the revised agreement, the company will purchase
approximately 2.2 million shares from the foundation on April 1,
In the ordinary course of business, the company has entered into
1991. The price to be paid for the shares will be based on the
certain purchase commitments and has guaranteed certain loans,
primarily for the benefit of unconsolidated subsidiaries and affili-
average market price of Rohm and Haas shares during the period
August 1989 through March 1995, with a minimum purchase
ates. It is believed that these commitments and any liabilities
price of approximately $70 million. The company retains the right
which may result from these guarantees will not have a material
of first refusal on the remaining shares held by the foundation.
adverse effect upon the consolidated financial position of the
company.
Additions to land, buildings and equipment are scheduled at $380
million for 1990. At December 31, 1989, construction commit-
ments totaled approximately $142 million.
REPORT ON FINANCIAL STATEMENTS
The financial statements of Rohm and Haas Company and subsidiaries were prepared by the company in accordance with
generally accepted accounting principles. The financial statements necessarily include some amounts that are based on the best
estimates and judgments of the company. The financial information in this annual report is consistent with that in the financial
statements.
The company maintains accounting systems and internal accounting controls designed to provide reasonable assurance that
assets are safeguarded, transactions are executed in accordance with the company's authorization and transactions are properly
53
recorded. The accounting systems and internal accounting controls are supported by written policies and procedures, by the
selection and training of qualified personnel and by an internal audit program. In addition, the company's code of business conduct
requires employees to discharge their responsibilities in conformity with the law and with a high standard of business conduct.
The company's financial statements have been audited by KPMG Peat Marwick, independent certified public accountants, as
stated in their report below. Their audit was conducted in accordance with generally accepted auditing standards and included
a review of internal accounting controls to the extent considered necessary to determine the audit procedures required to
support their opinion.
The audit committee of the board of directors, composed entirely of non-employee directors, recommends to the board of
directors the selection of the company's independent auditors, approves their fees and considers the scope of their audits, audit
results, the adequacy of the company's internal accounting control systems and compliance with the company's code of
business conduct.
I. Laurence Winson
Aw
J. Lawrence Wilson
Fred W. Shaffer
Chairman of the Board and
Vice President and
Chief Executive Officer
Chief Financial Officer
INDEPENDENT AUDITORS' REPORT
KPMG Peat Marwick
1600 Market Street
The Board of Directors and Stockholders
Philadelphia, Pennsylvania 19103
Rohm and Haas Company:
We have audited the accompanying consolidated balance sheets of Rohm and Haas Company and subsidiaries as of
December 31, 1989 and 1988, and the related consolidated statements of earnings and cash flows for each of the years in the
three-year period ended December 31, 1989. These financial statements are the responsibility of the company's management.
Our responsibility is to express an opinion on these financial statements 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, 1989 and 1988, and the results of their operations and
their cash flows for each of the years in the three-year period ended December 31, 1989, in conformity with generally accepted
accounting principles.
As described in Note 12 to the consolidated financial statements, effective January 1, 1989, the company changed its method
of computing depreciation for newly acquired buildings and equipment.
KPM6 Peat Marrick
February 23, 1990
Rohm and Haas Company and Subsidiaries
ELEVEN-YEAR SUMMARY OF SELECTED FINANCIAL DATA
(Millions of dollars, except per-share amounts)
1989
1988
1987
1986
Summary of Operations
Net sales
$ 2,661
$ 2,535
$ 2,203
$ 2,067
Cost of goods sold
1,820
1,646
1,430
1,346
Gross profit
841
889
773
721
Selling and administrative expense
401
381
335
320
Research and development expense
175
156
142
133
54
Interest expense
39
32
31
36
Other income (expense), net
25
26
38
(13)
Earnings before income taxes
251
346
303
219
Income taxes
75
116
108
81
Net earnings
$
176
$
230
$
195
$
138
Net earnings per share
$ 2.65
$ 3.46
$ 2.85
$ 2.01
Cash dividends per share
$ 1.16
$ 1.02
$
.86
$
.78
Financial Position - Year End
Working capital
$
434
$
485
$
486
$
507
Gross fixed assets
2,396
2,062
1,754
1,627
Total assets
2,455
2,242
1,954
1,842
Long-term debt
359
288
258
278
Stockholders' equity
1,311
1,207
1,053
1,002
Financial Ratios
As a percent of sales
Gross profit
31.6%
35.1%
35.1%
34.9%
Selling, administrative and research expense
21.6
21.2
21.7
21.9
Net earnings
6.6
9.1
8.9
6.7
Debt-to-equity ratio at year end
40.5%
37.6%
34.7%
38.7%
Return on stockholders' equity
14.0%
20.4%
19.0%
14.3%
Ten-year compound growth rate
Sales
4.8%
6.6%
6.3%
6.7%
Earnings per share
6.5
15.3
17.1
12.1
Cash dividends per share
13.4
14.5
13.7
12.7
General
For the year
Volume of shipments, millions of units
3,276
3,154
2,818
2,630
Additions to land, buildings and equipment
$
385
$
338
$
222
$
179
Depreciation
150
128
112
103
Cash dividends
77
67
59
54
Wages and salaries
$
481
$
457
$
420
$
390
Common stock price
High
$
37½
$
37½
$
53 ¹/₄
$
383/4
Low
31
28
24
237/8
Year-end close
34³/₄
34³/₈
31 ⁵/₈
347/8
Average number of shares outstanding in thousands
66,593
66,561
68,578
68,963
At year end
Number of registered stockholders
5,816
5,695
5,864
5,540
Number of employees
13,040
12,444
12,021
11,972
See accompanying notes on page 56.
See 1989, 1988 and 1987 results in Management Discussion and Analysis on pages 28 to 39.
1985
1984
1983
1982
1981
1980
1979
$ 2,051
$ 2,042
$ 1,876
$ 1,828
$ 1,885
$ 1,725
$ 1,590
1,400
1,365
1,276
1,345
1,388
1,266
1,137
651
677
600
483
497
459
453
300
285
255
256
254
229
201
124
109
100
92
77
67
54
51
44
37
28
24
27
34
55
51
47
38
22
16
13
3
227
286
246
129
158
149
167
86
114
108
43
65
55
64
$
141
$
172
$
138
$
86
$
93
$
94
$
103
$ 2.01
$ 2.24
$ 1.78
$ 1.11
$ 1.20
$ 1.21
$ 1.33
$
.70
$
.60
$
.50
$
.47
$
.43
$
.36
$
.29
$
480
$
427
$
533
$
465
$
450
$
440
$
369
1,503
1,446
1,344
1,300
1,242
1,185
1,121
1,734
1,633
1,511
1,365
1,349
1,243
1,194
245
172
228
240
251
233
243
936
965
904
808
760
700
635
31.7%
33.2%
32.0%
26.4%
26.3%
26.6%
28.5%
20.7
19.4
18.9
19.0
17.5
17.2
16.0
6.9
8.4
7.3
4.7
4.9
5.4
6.4
44.3%
31.8%
30.6%
37.1%
40.4%
38.0%
44.4%
14.9%
18.4%
16.1%
10.9%
12.7%
14.0%
17.3%
7.9%
8.1%
10.1%
11.7%
13.5%
13.4%
12.5%
15.8
7.9
8.0
4.8
8.4
9.8
9.3
11.4
10.8
10.5
11.9
11.5
10.0
8.4
2,744
2,705
2,602
2,510
2,648
2,559
2,833
$
159
$
134
$
72
$
126
$
182
$
93
$
68
101
93
93
83
75
82
79
49
46
39
36
33
28
23
$
367
$
350
$
316
$
330
$
323
$
286
$
255
$
26½
$
23
$
27
$
13 ¹/₈
$
117/8
$
91/8
$
8
18½
16
12½
7½
73/4
53/8
5½
25½
21 ¹/4
201/4
13
10¹/₈
75/8
8
70,416
76,806
77,472
77,472
77,496
77,442
77,538
5,492
5,681
5,444
5,825
6,515
6,922
7,498
11,840
11,911
11,379
11,541
13,458
13,218
13,294
NOTES
A. The cost of settling a number of lawsuits relating to chemical
exposure of certain employees reduced 1986 net earnings by
$13.5 million, or $.20 per share.
B. Write-offs associated with the seeds business, which was dis-
continued at year-end 1986, reduced 1986 net earnings by $17.2
million, or $.25 per share.
C. In 1986, the company adopted SFAS No. 87, "Employers'
Accounting for Pensions," which reduced 1986 pension cost by
56
$11 million. Pension cost was reduced about $20 million in 1985
due to changes in actuarial cost method and certain actuarial
funding assumptions.
D. In 1989, the company changed its method of depreciation for
newly acquired buildings and equipment to the straight-line
method. This change, which had no cumulative effect on prior
years' earnings, resulted in an increase in net earnings of $9 mil-
lion, or $.14 per share in 1989.
E. In 1989, the UK subsidiary sold a 25% interest in its plastic
additives manufacturing operation located in Grangemouth, Scot-
land, to Kureha Chemical Company. The company recognized a
gain of $15 million, or $.23 per share.
F. Provisions for write-offs associated with the company's planned
shut-down of its production facilities in Toledo, Ohio, totaled $13
million, or $.20 per share in 1989.
G. In 1989, the company recorded a charge of $4 million, or $.06
per share, for the discontinuance of a business located in Switzer-
land and owned by Shipley Company, an electronic chemicals
affiliate.
OFFICERS
J. LAWRENCE WILSON
JOHN T. SUBAK
Chairman of the Board
Group Vice President
and Chief Executive Officer
and General Counsel
JOHN P. MULRONEY
JOHN F. TALUCCI
President and Chief
Vice President
Operating Officer
BASIL A. VASSILIOU
JOHN J. DOYLE, JR.
Vice President
Vice President
JOHN A. WEAVER
DONALD C. GARAVENTI
Vice President
Vice President
57
GAIL P. GRANOFF
WILLIAM A. KULIK
Secretary
Vice President
ANGUS F. SMITH
ALLEN M. LEVANTIN
Treasurer
Vice President
DAVID A. STITELY
ENRIQUE F. MARTINEZ
Controller
Vice President
STANLEY J. HARMER
ROBERT E. NAYLOR, JR.
Assistant Secretary
Group Vice President
WILLIAM E. LAMBERT III
RICHARD G. PETERSON
Assistant Secretary
Vice President
LESLIE A. SHEARMAN
FRED W. SHAFFER
Assistant Controller
Vice President and Chief
Financial Officer
THEODORE J. SUESS III
Assistant Treasurer
BOARD OF DIRECTORS AND COMMITTEES
GEORGE B. BEITZEL
DANIEL B. BURKE
G. MORRIS DORRANCE, JR.
EARL G. GRAVES
Retired Senior Vice President and
President, Chief Operating
Chairman of the Executive
President, Earl G. Graves Ltd. and
Director, International Business
Officer and Director, Capital
Committee and Director,
Publisher, Black Enterprise
Machines Corporation
Cities/ABC, Inc.
CoreStates Financial Corporation
Magazine
Audit
Corporate Responsibility
Corporate Responsibility
Corporate Responsibility
Finance (Chairman)
Executive
Executive
Executive Compensation
Nominating
Executive Compensation
Executive Compensation
Nominating
Strategic Planning
Nominating
(Chairman)
Strategic Planning (Chairman)
Strategic Planning
Nominating
Strategic Planning
58
JAMES A. HENDERSON
JOHN H. McARTHUR
PAUL F. MILLER, JR.
SANDRA O. MOOSE
President, Chief Operating
Dean, Harvard Business School
Partner in Miller, Anderson &
Senior Vice President and
Officer and Director, Cummins
Audit (Chairman)
Sherrerd, investment managers
Director, The Boston Consulting
Engine Company, Inc.
Finance
Audit
Group, Inc.
Corporate Responsibility
Nominating
Executive
Corporate Responsibility
Executive Compensation
Strategic Planning
Finance
(Chairman)
Nominating
Nominating (Chairman)
Executive Compensation
Strategic Planning
Strategic Planning
Nominating
Strategic Planning
JOHN P. MULRONEY
ROBERT E. NAYLOR, JR.
GILBERT S. OMENN
ALAN SCHRIESHEIM
President and Chief Operating
Group Vice President and
Dean, School of Public Health
Chief Executive Officer and
Officer, Rohm and Haas
Regional Director for North
and Community Medicine,
Director, Argonne National
Company
America, Rohm and Haas
University of Washington, Seattle
Laboratory
Corporate Responsibility
Company
Audit
Corporate Responsibility
Executive
Finance
Finance
Executive Compensation
Strategic Planning
Strategic Planning
Nominating
Nominating
Strategic Planning
Strategic Planning
59
JOHN T. SUBAK
MARNA C. WHITTINGTON
J. LAWRENCE WILSON
Group Vice President and
Senior Vice President, the
Chairman and Chief Executive
General Counsel, Rohm and
University of Pennsylvania
Officer, Rohm and Haas
Haas Company
Audit
Company
Finance
Finance
Executive (Chairman)
Strategic Planning
Nominating
Strategic Planning
Strategic Planning
ROHM AND HAAS COMPANY LOCATIONS
CORPORATE
Rohm and Haas
Rohm and Haas
Rohm and Haas
MANUFACTURING
HEADQUARTERS
Kentucky Incorporated
Brasil Ltda.
Scotland
LOCATIONS
Louisville,
Sao Paulo,
Grangemouth,
Rohm and Haas Company
Kentucky
Brazil
Scotland
Argentina: Buenos Aires
Independence Mall West
(75%-owned)
Rohm and Haas
Australia: Geelong
Philadelphia,
Rohm and Haas
Latin America, Inc.
Brazil: Jacarei
Pennsylvania 19105
Canada Inc.
Rohm and Haas
Tel: (215) 592-3000
Wilmington,
Canada: Morrisburg; West Hill
West Hill,
(UK) Limited
Delaware
Colombia: Barranquilla
(Delaware Corporation)
Canada
Croydon,
Costa Rica: San Jose
Rohm and Haas
England
England: Binley; Cambridge;
Rohm and Haas
UNITED STATES
Science Inc.
Jarrow
60
Centro America S.A.
Wilmington,
Romicon, B.V.
SUBSIDIARIES
France: Chauny; Lauterbourg;
San Jose,
Delaware
Oosterhout,
Villers St. Paul
Costa Rica
Holland
Plaskon Electronic
India: Modinagar; Thana
Materials, Inc.
Rohm and Haas
Italy: Mozzanica
Rohm and Haas
Philadelphia,
Southern California Inc.
Japan: Nagoya; Oji; Sasagami
Colombia S.A.
AFFILIATES
Pennsylvania
Carson,
Mexico: Apizaco; Matamoros
Bogota,
California
New Zealand: Auckland
Colombia
Akril
Polytribo, Inc.
Philippines: Las Pinas
Istanbul,
Philadelphia,
Rohm and Haas
Scotland: Grangemouth
Rohm and Haas
Turkey
Pennsylvania
Technology Holdings, Inc.
Singapore: Singapore
Deutschland GmbH
(48.5%-owned)
(60%-owned)
Wilmington,
Spain: Tudela
Frankfurt,
Delaware
Sweden: Landskrona
Germany
Eastern Rohm and Haas
Rohm and Haas
Turkey: Istanbul
Development Center
Rohm and Haas
United States:
Bayport Inc.
Rohm and Haas
Beijing, China
Bayport,
Tennessee Incorporated
California-Carson; Hayward;
Espana S.A.
(50%-owned)
Irvine
Texas
Knoxville,
Barcelona,
Tennessee
Connecticut-Kensington
Spain
Japan Acrylic
Rohm and Haas
Florida-Glen St. Mary
Chemical Co., Ltd.
California Incorporated
Rohm and Haas
Illinois-Illiopolis
Rohm and Haas
Tokyo,
Hayward,
Texas Incorporated
Kentucky-Louisville
Foreign Sales Corporation
Japan
California
Houston,
Massachusetts-Marlborough,
St. Croix,
(47.5%-owned)
Texas
Woburn
U.S. Virgin Islands
Rohm and Haas
Pennsylvania-Bellefonte;
Modipon Limited
Capital Corporation
Romicon, Inc.
Bristol; Philadelphia
Rohm and Haas
Modinagar,
Woburn,
Tennessee-Knoxville
Wilmington,
France S.A.
India
Delaware
Massachusetts
Texas-Bayport; Houston
Paris,
(37%-owned)
Yugoslavia: Ljubljana
France
Rohm and Haas
The Southern Resin and
NorsoHaas, S.A.
Connecticut Incorporated
Chemical Company
Rohm and Haas
Villers St. Paul,
RESEARCH LABORATORIES
Kensington,
Glen St. Mary,
Holdings Ltd.
France
Connecticut
Florida
Hamilton,
(50%-owned)
Corporate Research
Bermuda
Headquarters
Rohm and Haas
Supelco, Inc.
Quimica Trepic, S.A. de C.V.
Spring House,
Credit Corporation
Bellefonte,
Rohm and Haas
Mexico City,
Pennsylvania
Wilmington,
Pennsylvania
Italia S.r.l.
Mexico
Delaware
Milan,
(40%-owned)
Other Research Facilities
SUBSIDIARIES
Italy
Bristol, Pennsylvania
Rohm and Haas
Delaware Inc.
OUTSIDE THE
Shipley Company
Philadelphia, Pennsylvania
Rohm and Haas
UNITED STATES
Newton,
Valbonne, France
Wilmington,
Japan K.K.
Massachusetts
Delaware
Tokyo,
(30%-owned)
SALES OFFICES
Laboratorios Quimicos
Industriales, S.A.
Japan
Rohm and Haas
SumikaHaas
In major cities of the world
Delaware Valley Inc.
San Jose,
Rohm and Haas
Costa Rica
Tokyo,
Bristol,
Mexico S.A. de C.V.
Japan
Pennsylvania
Mexico City,
(50%-owned)
Maquiladora General
Mexico
The company owns a number
Rohm and Haas
de Matamoros, S.A. de C.V.
Tokyo Organic Chemical
of other domestic and foreign
Equity Corporation
Matamoros,
Rohm and Haas
Industries, Ltd.
subsidiaries which are involved
Wilmington,
Mexico
New Zealand Limited
Tokyo,
primarily in sales activities.
Delaware
Auckland,
Japan
These subsidiaries, either singly
Plaskon Electronic
New Zealand
Rohm and Haas
(50%-owned)
or in the aggregate, are not
Materials, Ltd.
significant. These accounts are
Finance Company
Hamilton,
Rohm and Haas
TosoHaas
not included in the
Wilmington,
Bermuda
Nordiska AB
Philadelphia,
consolidated financial
Delaware
Stockholm,
Rohm and Haas
Pennsylvania
statements.
Sweden
Rohm and Haas
(50%-owned)
Australia Pty. Ltd.
Illinois Inc.
Melbourne,
Rohm and Haas
Illiopolis,
Australia
Yugocryl
Illinois
Philippines, Inc.
Ljubljana,
Manila,
Rohm and Haas
Yugoslavia
Philippines
(49%-owned)
(Bermuda), Ltd.
Hamilton,
Bermuda
1990 ANNUAL
MEETING
The 1990 annual meet-
ing of stockholders will
be held at the studios of
WHYY, Independence
Mall West, 150 N. Sixth
Street, Philadelphia,
Pennsylvania 19106, at
10:30 a.m. on Monday,
May 7th. Formal notice
of the meeting, the
FORM 10-K REPORT
proxy statement and
A copy of the com-
form of proxy will be
pany's annual report to
mailed on March 30,
the Securities and Ex-
1990.
change Commission on
Form 10-K will be pro-
vided upon written re-
quest to the Public
Relations Department,
Rohm and Haas Com-
pany, Independence
TRADEMARKS
Mall West, Philadelphia,
Acrysol, Amberlite,
Pennsylvania 19105.
Compete, Dithane,
Duolite, Goal, Kamax,
Karathane, Kathon,
Kelthane, Multilobe,
Nova, Oroglas,
Paraloid, Plexiglas,
Primal, Primid, Rally,
Rhoplex, Robond,
Ropaque and Systhane
are trademarks of Rohm
and Haas Company.
ROHM
HAAS
Д
PHILADELPHIA, PA. 19105