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Philadelphia, PA, October 16, 1997 -- Rohm and Haas Company (NYSE:ROH) reported record sales and earnings for the third quarter of 1997. Chairman J. Lawrence Wilson says the performance reflects strong ongoing demand for key segments of the company's acrylic portfolio of products, the fast-paced growth of its electronic chemicals business and continued gains in productivity and operational excellence.
Earnings for the third quarter of 1997 were $89 million, compared with $85 million for the same period a year ago. Earnings per common share were $1.45 an 11 percent increase over the $1.31 reported for the third quarter of 1996. The per-share increase includes the repurchase of 4.5 percent of the company's common shares since the end of September 1996.
Ongoing demand for Rohm and Haas products worldwide drove unit volume up 5 percent. "This volume growth is all the more notable because it was achieved in comparison with an extremely strong third quarter in 1996," said Wilson. Volume was up in every geographic region, with Latin America reporting growth at double-digit rates for the third quarter of 1997.
The company's largest business, Polymers and Resins, reported a 7 percent increase in worldwide volume. Demand for water-based, acrylic technology in specialty applications, such as adhesives, continues to grow, as does the need for high-technology polymers used to enhance the performance of paints and paper coatings.
Electronic Chemicals, the fastest-growing Rohm and Haas business, recorded a 16 percent increase in demand for the third quarter of 1997. Demand remained strong throughout the summer for products used to make photoresists and printed wiring boards for the semiconductor and electronics industries. The earnings increase for the Performance Chemicals group, which includes Electronic Chemicals, was helped by the contributions made by Rodel, Inc. Rohm and Haas purchased a 25 percent interest in Rodel, a Delaware-based electronic chemicals affiliate, in June.
Weaker foreign currencies continued to be a factor in the company's performance, as it has throughout 1997. An 11 percent decline in the overall value of European currencies and an 8 percent decline in the yen limited the company's overall sales growth to just 1 percent for the third quarter. However, internal cost control efforts and plants running smoothly at high production levels helped overcome currency impacts of about $.17 per share and allowed the company to report higher earnings for the quarter.
For the first nine months of the year, Rohm and Haas reported sales of $3,049 million, a 1 percent increase over the $3,017 million reported in 1996. Overall volume was up 8 percent. Earnings per common share were $4.92, an increase of 15 percent over the $4.28 reported for the first nine months of last year.
Commenting on the outlook for the fourth quarter, Wilson said, "We would expect to see another good earnings increase for the last three months of the year, and for as long as world economies and currencies remain stable."
He concluded, "We will continue to leverage our strengths in acrylic technology and electronic chemistry to make new products for growing markets and will deliver those products to customers in the most efficient manner possible. The fact that Rohm and Haas has been able to report increased volume and earnings in spite of an adverse currency situation throughout 1997 is clear evidence that we have a strong product portfolio, good positions in world markets, and the right strategies in place to provide a good return for our shareholders year after year."
Rohm and Haas Company
and Subsidiaries
STATEMENTS OF CONSOLIDATED EARNINGS
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September 30, |
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September 30, |
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Net sales |
$ |
974 |
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$ |
969 |
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1 |
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$ |
3,049 |
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$ |
3,017 |
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1 |
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Cost of goods sold |
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632 |
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622 |
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2 |
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1,945 |
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1,944 |
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0 |
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Gross profit |
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342 |
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347 |
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( 1) |
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1,104 |
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1,073 |
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3 |
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Selling and administrative expense |
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151 |
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156 |
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( 3) |
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467 |
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466 |
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0 |
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Research and development expense |
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50 |
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44 |
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14 |
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145 |
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138 |
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5 |
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Interest expense |
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9 |
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12 |
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(25) |
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30 |
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29 |
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3 |
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Share of affiliate net earnings (losses) |
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4 |
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(1) |
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-- |
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10 |
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(9) |
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-- |
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Other expense, net |
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2 |
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3 |
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(33) |
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8 |
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6 |
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33 |
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Earnings before |
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134 |
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131 |
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2 |
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464 |
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425 |
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9 |
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Income taxes |
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43 |
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44 |
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( 2) |
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152 |
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137 |
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11 |
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Net earnings |
$ |
91 |
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$ |
87 |
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5 |
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$ |
312 |
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$ |
288 |
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8 |
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Net earnings applicable to common shareholders |
$ |
89 |
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$ |
85 |
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5 |
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$ |
306 |
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$ |
282 |
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9 |
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Net earnings per common share (in dollars) |
$ |
1.45 |
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$ |
1.31 |
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11 |
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$ |
4.92 |
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$ |
4.28 |
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15 |
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Average common shares outstanding (000's) |
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61,562 |
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64,718 |
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( 5) |
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62,219 |
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65,930 |
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( 6) |
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Capital Spending |
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56 |
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65 |
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172 |
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218 |
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Depreciation Expense |
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71 |
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67 |
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206 |
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192 |
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PHYSICAL VOLUME CHANGE | ||||||
Current Quarter Relative to |
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First Nine Months of Current Year | ||||
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BUSINESS GROUP |
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Change |
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BUSINESS GROUP |
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Change |
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Polymers, Resins and |
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7 |
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Polymers, Resins and Monomers |
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9 |
Performance Chemicals |
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9 |
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Performance Chemicals |
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3 |
Plastics |
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(6) |
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Plastics |
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5 |
Agricultural Chemicals |
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(2) |
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Agricultural Chemicals |
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(2) |
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WORLDWIDE |
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5 |
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WORLDWIDE |
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8 |
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CUSTOMER LOCATION |
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Change |
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CUSTOMER LOCATION |
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Change |
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North America |
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3 |
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North America |
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7 |
Europe |
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6 |
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Europe |
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8 |
Asia-Pacific |
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9 |
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Asia-Pacific |
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8 |
Latin America |
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18 |
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Latin America |
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13 |
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WORLDWIDE |
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5 |
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WORLDWIDE |
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8 |
Rohm and Haas Company | |||||||||||||
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SALES BY BUSINESS GROUP | |||||||||||||
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BUSINESS GROUP | |||||||||||||
Polymers, Resins and Monomers |
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$ |
526 |
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$ |
513 |
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$ |
1,594 |
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$ |
1,545 |
Performance Chemicals |
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196 |
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185 |
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566 |
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561 |
Plastics |
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165 |
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179 |
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522 |
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525 |
Agricultural Chemicals |
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87 |
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92 |
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367 |
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386 |
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Total |
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$ |
974 |
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$ |
969 |
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$ |
3,049 |
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$ |
3,017 |
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CUSTOMER LOCATION | |||||||||||||
North America |
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$ |
543 |
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$ |
534 |
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$ |
1,692 |
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$ |
1,622 |
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Europe |
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215 |
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223 |
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739 |
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778 |
Asia-Pacific |
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142 |
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144 |
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413 |
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429 |
Latin America |
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74 |
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68 |
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205 |
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188 |
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Total |
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$ |
974 |
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$ |
969 |
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$ |
3,049 |
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$ |
3,017 |
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NET EARNINGS BY BUSINESS | |||||||||||||
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September 30, |
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September 30, | ||||||||
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BUSINESS GROUP | |||||||||||||
Polymers, Resins and Monomers |
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$ |
69 |
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$ |
72 |
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$ |
211 |
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$ |
180 |
Performance Chemicals |
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24 |
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20 |
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67 |
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64 |
Plastics |
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17 |
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14 |
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49 |
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41 |
Agricultural Chemicals |
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(2) |
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2 |
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35 |
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42 |
Corporate |
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(17) |
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(21) |
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(50) |
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(39) |
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Total |
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$ |
91 |
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$ |
87 |
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$ |
312 |
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$ |
288 |
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CUSTOMER LOCATION | |||||||||||||
North America |
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$ |
70 |
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$ |
68 |
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$ |
224 |
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$ |
181 |
Europe |
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17 |
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18 |
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72 |
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81 |
Asia-Pacific |
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12 |
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14 |
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40 |
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42 |
Latin America |
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9 |
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8 |
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26 |
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23 |
Corporate |
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(17) |
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(21) |
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(50) |
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(39) |
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Total |
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$ |
91 |
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$ |
87 |
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$ |
312 |
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$ |
288 |
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