Highlights for the Quarter:
- Sales down 13%, driven by
accelerating market declines that impacted all businesses and
regions except Salt
- Effective financial strategies,
pricing actions, proactive cost control and lower raw material
costs tempered, but could not offset, decline in demand
- Adjusted earnings per share,
which excludes special items, of $0.69
Rohm and Haas Company (NYSE:ROH) today reported fourth quarter
2008 sales of $2,030 million, a 13 percent decrease over the same
period in 2007, driven by accelerating market declines that
impacted all businesses and regions except Salt. The company
reported fourth quarter 2008 earnings from continuing operations of
$32 million, or $0.17 per share, compared to $180 million, or $0.91
per share, for the fourth quarter of 2007. The quarter's results
include special items totaling $0.52 per share: $0.08 per share in
costs associated with the proposed merger with The Dow Chemical
Company announced in July; $0.03 per share in costs resulting from
the impact of hurricanes on the company�s operations in the
quarter; and $0.41 per share in asset impairments and costs
resulting from restructuring actions. Adjusted earnings per share,
which excludes the special items noted above, were $0.69 compared
to $0.90 in the prior-year period.
For full-year 2008, the company reported sales of $9,575
million, an 8 percent increase over 2007, and earnings from
continuing operations of $480 million, or $2.44 per share. Adjusted
earnings per share were $3.31 for full-year 2008, compared to $3.37
per share for full-year 2007.
�We took proactive steps throughout 2008 to remain competitive
despite the challenges of a slowing economy, and our performance
reflects these efforts,� said Raj L. Gupta, chairman and chief
executive officer of Rohm and Haas Company. �As market conditions
continue to weaken, we are implementing additional actions to
navigate these difficult times, while remaining focused on
positioning our businesses for success when markets recover.�
Gupta added, �Our strong and balanced business platform
generated cash flow in excess of $1 billion in 2008, and our solid
balance sheet continues to provide Rohm and Haas with strength and
stability, even during these challenging times.�
� �
4th Quarter Full Year In millions
except per-share amounts �
2008 �
2007 �
%
Change
�
2008 �
2007 �
%
Change
Sales � $2,030 � $2,343 � (13)% � $9,575 � $8,897 � 8%
Earnings from continuing operations � $32 � $180 � (82)% �
$480 � $660 � (27)%
Diluted earnings per share from
continuing operations
� $0.17 � $0.91 � (81)% � $2.44 � $3.12 � (22)%
Earnings from
continuing operations excluding special items* � $136 � $178 �
(24)% � $650 � $713 � (9)%
Diluted earnings per share excluding
special items* � $0.69 � $0.90 � (23)% � $3.31 � $3.37 � (2)%
Weighted average common shares outstanding - diluted � 196.7
� 196.8 � 0% � 196.5 � 211.0 � (7)% � � � �
* Non-GAAP measure; see
reconciliation in Appendix IV.
�
FOURTH QUARTER 2008 FINANCIAL SUMMARY
Business and Regional Performance
Business results for Q4 2008 are presented on an adjusted basis
below, where earnings for both periods exclude special items. A
reconciliation of these adjusted earnings to U.S. GAAP by segment
is provided in Appendix IV.
Electronic Materials
Group
The Electronic Materials Group comprises two reportable segments
which provide materials for use in applications such as
telecommunications, consumer electronics and household appliances.
Sales for the Electronic Materials Group were $371 million in the
fourth quarter of 2008, down 23 percent over the same period in
2007, primarily reflecting a marked deceleration in demand for
semiconductor and electronic devices.
Adjusted pre-tax earnings for this Group were $28 million, down
72 percent from 2007, primarily reflecting a significant downturn
in demand for semiconductors and electronic devices.
Electronic Technologies
The Electronic Technologies segment is comprised of the
company�s Semiconductor Technologies, Circuit Board Technologies
and Packaging and Finishing Technologies business units. Sales for
the segment of $319 million were down 30 percent, reflecting a
pronounced decline in demand across all product lines and regions,
driven by a decrease in production of semiconductors and electronic
devices. Sales excluding precious metal pass-through were down 28
percent.
- Semiconductor Technologies sales
were down 30 percent versus the same period in 2007, reflecting a
sharp decline in demand across all customer segments.
- Circuit Board Technologies sales
were down 21 percent as compared to the same period last year,
reflecting substantially lower production levels among
customers.
- Packaging and Finishing
Technologies sales decreased 38 percent versus last year, with
weakening demand across all segments and lower precious metal
pass-through sales. Excluding precious metal pass-through, sales
were down 27 percent.
Adjusted pre-tax earnings for this segment of $35 million were
down 68 percent from the fourth quarter of 2007, reflecting
substantially lower demand.
Display Technologies
In June 2007, the company acquired the assets of Eastman Kodak
Company�s Light Management Films technology business, which
produces advanced films that improve the brightness and efficiency
of liquid crystal displays (LCD). On November 30, 2007, the company
completed the formation of SKC Haas Display Films, a majority-owned
joint venture with SKC, Inc., of South Korea for the development,
manufacture and marketing of advanced optical and functional films
used in the displays industry. On April 4, 2008, the company
acquired Gracel Display, Inc., a leading developer and manufacturer
of Organic Light Emitting Diode (OLED) materials. These businesses,
along with process-related materials also used in the displays
industry previously included as part of the Semiconductor
Technologies unit, form the Display Technologies reportable
segment.
Display Technologies sales were $52 million in the quarter,
compared to $30 million in the prior-year period. Acquisitions more
than offset sharply lower demand, which resulted from lower
production by LCD panel customers. The segment reported an adjusted
pre-tax loss of $7 million in the quarter, flat to the prior-year
period, reflecting the impact of acquisitions offset by lower
demand and pricing.
Specialty Materials
Group
The Specialty Materials Group comprises three business units and
represents the majority of the company�s chemical business, serving
a broad range of end-use markets. Net sales for this Group of $974
million were down 17 percent from the prior-year period, primarily
due to decreased demand in all regions as well as unfavorable
currencies, partially offset by prior pricing actions and the
impact of acquisitions.
Adjusted pre-tax earnings for this Group were $31 million, down
68 percent from 2007. The impact of softer demand, higher raw
material and energy costs, and the negative operating impact of
volume shortfalls were partially offset by prior pricing
actions.
The results for Specialty Materials are reported under the three
separate reportable segments as follows:
Paint and Coatings Materials
Sales for the Paint and Coatings Materials business were $413
million, a decrease of 12 percent over the same period in 2007,
largely driven by a decrease in demand across all regions and
unfavorable currencies, partially offset by prior pricing actions
and the impact of an acquisition.
Adjusted pre-tax earnings of $19 million in the fourth quarter
of 2008 were down 60 percent compared to the same period last year.
The decrease in demand, higher raw material and energy costs and
the unfavorable impact of currencies were partially offset by prior
pricing actions.
Packaging and Building Materials
Packaging and Building Materials sales were $344 million, down
24 percent over the same period in 2007, reflecting a decrease in
demand in all regions and unfavorable currencies, partially offset
by prior pricing actions.
The segment reported an adjusted pre-tax loss of $6 million in
the quarter, compared to adjusted pre-tax earnings of $31 million
in the prior-year period. The decrease in demand, the negative
operating impact of volume shortfalls, unfavorable currencies and
higher raw material costs were partially offset by prior pricing
actions.
Primary Materials
Primary Materials sales were $427 million, a decrease of 14
percent over the same period in 2007. Primary Materials results
include sales to our internal downstream monomer-consuming
businesses, along with sales to third-party customers of Monomers,
Dispersants and Industrial and Household Polymers. Third-party
sales were down 14 percent compared to the prior-year period,
reflecting decreased demand and unfavorable currencies, partially
offset by prior pricing actions. Captive volumes were down 21
percent.
Adjusted pre-tax earnings of $18 million in the fourth quarter
of 2008 were down 5 percent compared to the fourth quarter of 2007.
Lower demand was partially offset by the favorable selling
price/raw material relationship.
Performance Materials
Group
Sales for the Performance Materials Group were $284 million in
the quarter, down 12 percent over the same period last year,
reflecting decreased demand across all business lines except
AgroFresh.
Process Chemicals and Biocides sales were down 12 percent over
the same period last year, reflecting decreased demand and
unfavorable currencies, partially offset by prior pricing
actions.
Powder Coatings sales were down 22 percent compared to the same
period in 2007, primarily driven by decreased demand and
unfavorable currencies, partially offset by prior pricing
actions.
Adjusted pre-tax earnings for the Performance Materials Group
were $31 million for the fourth quarter of 2008, down 30 percent
versus the prior-year period. Decreased demand, unfavorable
currencies and higher raw material costs were partially offset by
prior pricing actions.
Salt
Salt sales of $401 million were up 10 percent compared to the
same period a year ago, primarily driven by continued improvement
in product line management.
Adjusted pre-tax earnings for the Salt business in the quarter
were $103 million, up $50 million versus the prior-year period.
Favorable business conditions and the successful implementation of
the Salt business�s strategic road map continued to boost
earnings.
Regional
Performance
Sales were down versus the prior-year period in all regions,
reflecting market weakness worldwide. RDEs were down 16 percent
over the same period last year, and represented 25 percent of total
company sales.
�
4th Quarter Sales
In millions
�
2008 �
2007 �
%
Change
North America Region � $1,027 � $1,117 � (8)% Europe, Middle East
and Africa Region � $445 � $550 � (19)% Asia Pacific Region � $454
� $565 � (20)% Latin America Region � $104 � $111 � (6)%
TOTAL �
$2,030 �
$2,343 �
(13)% � � � �
� � � Rapidly Developing Economies (RDEs) � $498 � $593 � (16)% � �
* RDEs include all countries in the company�s defined Latin
America Region; Central and Eastern Europe and Turkey; and the Asia
Pacific Region excluding Japan, Australia and New Zealand.
Corporate
Adjusted Corporate expense of $60 million was down $16 million
versus the prior-year period. The decrease was largely due to lower
shared service costs and interest expense.
INCOME STATEMENT AND OTHER HIGHLIGHTS
Gross profit of $523 million in the quarter was down 18 percent
from the same period in 2007. Pricing actions and proactive cost
control were more than offset by the decline in demand and
unfavorable currencies.
Selling and administrative expense was $265 million, down 11
percent over the same period last year, largely attributable to
lower shared services expenses resulting from strict cost-control
efforts, reduced employee bonus payments in-line with company
performance and the favorable impact of currencies.
Research and development expense of $83 million was the same as
last year.
Interest expense for the quarter was $40 million, down $3
million from the same period in 2007.
Other expense for the quarter was $36 million, up $52 million
from last year, primarily reflecting the costs associated with the
proposed merger with The Dow Chemical Company, the negative impact
of hedging activities and the unfavorable impact of currencies.
The company recorded an income tax benefit of $34 million for
the fourth quarter of 2008, reflecting a revised full-year
effective tax rate of 13.7 percent, compared to an effective tax
rate of 23.4 percent for the full-year of 2007. The underlying tax
rate for 2008 was significantly lower than expected, primarily due
to lower-than-expected earnings in the U.S., where the company�s
tax rate is higher, and lower taxes on foreign earnings. Additional
tax benefits were also recognized during the quarter as a result of
the reinstitution of the research and experimentation tax credit in
the U.S.
For 2008, net cash provided by operating activities was $1,040
million, up $77 million from 2007. Net debt at the end of December
31, 2008 was $3,052 million, an increase of $23 million from
year-end 2007.
In June 2008 and January 2009, the company announced plans to
adjust its operations and cost structure to reflect the slowing
economy and widespread market weakness. Good progress was made in
implementing the first set of actions announced in June 2008,
primarily impacting operations in North America. These initiatives,
which included a 30 percent reduction of installed capacity in the
North American emulsions network, as well as other site closings
and reductions, are expected to generate approximate pre-tax annual
run-rate savings of $110 million in 2010, with less than half of
the benefit realized in 2009.
The second set of actions, announced in January 2009, was
designed to build on these efforts, in order to mitigate the impact
of continued market weakness worldwide. These initiatives affect
all regions and businesses within the company except Salt, and are
expected to be completed predominantly in 2009, delivering pre-tax
run-rate savings of approximately $90 million in 2010.
Further information related to these results is available
through the Investors section of the company�s website,
www.rohmhaas.com.
Forward Looking Statements
This press release contains forward-looking statements that
involve risks and uncertainties and are subject to change based on
various factors. These factors include, but are not limited to (1)
the cost of raw materials, natural gas, and other energy sources,
and the ability to achieve price increases to offset such cost
increases, (2) development of operational efficiencies; (3) changes
in foreign currencies; (4) changes in interest rates; (5) the
continued timely development and acceptance of new products and
services; (6) the impact of competitive products and pricing; (7)
the impact of new accounting standards; (8) assessments for asset
impairments; (9) the impact of tax and other legislation and
regulation in the jurisdictions in which the company operates; (10)
the impact of any developments related to the pending transaction
between Rohm and Haas and The Dow Chemical Company, including the
related litigation; (11) the risk that pending transaction disrupts
current plans and operations and the potential difficulties in
employee retention as a result of the pending transaction with The
Dow Chemical Company; and (12) the possibility that Rohm and Haas
may be adversely affected by other economic, business, and/or
competitive factors. Many of these factors are beyond Rohm and
Haas�s ability to control or predict. Actual results could vary
materially from those expressed or implied in the forward-looking
statement. Further information about these and other risks can be
found in the company's SEC 10-K filing of February 21, 2008, and
updated in the 8-K filing on June 6, 2008. This press release
speaks only as of its date. Rohm and Haas is under no duty to
update this information.
Copies of all recent SEC filings, and additional information
about Rohm and Haas, are available through our web site:
www.rohmhaas.com
About Rohm and Haas Company
Leading the way since 1909, Rohm and Haas is a global pioneer in
the creation and development of innovative technologies and
solutions for the specialty materials industry. The company�s
technologies are found in a wide range of industries including:
Building and Construction, Electronics and Electronic Devices,
Household Goods and Personal Care, Packaging and Paper,
Transportation, Pharmaceutical and Medical, Water, Food and Food
Related, and Industrial Process. Innovative Rohm and Haas
technologies and solutions help to improve life every day, around
the world. Based in Philadelphia, PA, the company generated annual
sales of approximately $9.6 billion in 2008. Visit www.rohmhaas.com
for more information. imagine the possibilities�
�
Rohm and Haas Company and Subsidiaries Consolidated
Statements of Operations (in millions, except per share
amounts) (unaudited) � � � � � � � � � � � � � � � � � � � � � � �
Three Months Ended � Twelve Months Ended December 31, December 31,
� � Percent � � Percent
2008 2007 Change
2008 2007
Change Net sales
$ 2,030 $ 2,343 -13 %
$
9,575 $ 8,897 8 % Cost of goods sold �
1,507 � �
1,703 � -12 % �
7,165 � 6,430 � 11 % � Gross profit
523 640 -18 %
2,410 2,467 -2 % � Selling and
administrative expense
265 298
1,138 1,091 Research
and development expense
83 83
327 296 Interest
expense
40 43
164 120 Amortization of intangibles
15 15
63 57 Restructuring and asset impairments
97 -
199 28 Pension judgment
- -
- 65
Share of affiliate earnings, net
1 5
97 22 Other
expense (income), net �
36 � � (16 ) �
55 � (48 ) �
(Loss) earnings from continuing
operations before income taxes
and minority interest (12 ) 222
561 880
Income tax (benefit) expense
(34 ) 38
77 206
Minority interest �
(10 ) � 4 � �
4 � 14 � �
Net earnings from continuing operations $ 32 �
$ 180 �
$ 480 $ 660 � �
Net earnings from
discontinued operation �
- � � - � �
2 � 1 � �
Net earnings $ 32 � $ 180 �
$
482 $ 661 � �
Basic net earnings per share: Net
earnings from continuing operations
0.17 0.93
2.48
3.17 Net earnings from discontinued operation �
- � � - � �
0.01 � 0.01 �
Net earnings $ 0.17 � $
0.93 �
$ 2.49 $ 3.18 � �
Diluted net earnings per
share: Net earnings from continuing operations
0.17 0.91
2.44 3.12 Net earnings from discontinued operation �
- � � - � �
0.01 � 0.01 �
Net earnings
$ 0.17 � $ 0.91 �
$ 2.45 $ 3.13 � �
Weighted average common shares outstanding - basic:
193.8
193.6
193.6 207.8 Weighted average common shares outstanding
- diluted:
196.7 196.8
196.5 211.0 � � � � � � � � �
� � � � � � � � � � � � �
Other Data:
Capital spending
$ 154 $ 178
$ 520 $
454 Depreciation expense �
$ 119 � � $ 103 � � � � �
$ 467 � $ 412 � � � � � �
Appendix I Rohm
and Haas Company and Subsidiaries (in millions) � � � � � �
(unaudited) �
Net Sales by Business Segment and Region �
Three Months Ended Twelve Months Ended December 31, December 31, �
2008 2007
2008 2007 �
Business Segment
Electronic Technologies
$ 319 $ 454 -30 %
$
1,654 $ 1,666 -1 % Display Technologies �
52 � � 30 �
73 % �
284 � � 45 � 531 % Electronic Materials Group
$ 371 $ 484 -23 %
$ 1,938 $ 1,711 13 %
Paint and Coatings Materials
413 468 -12 %
2,217
2,120 5 % Packaging and Building Materials
344 453 -24 %
1,807 1,826 -1 % Primary Materials
427 494 -14 %
2,367 2,078 14 % Elimination of Intersegment Sales �
(210 ) � (243 ) -14 % �
(1,222 ) �
(1,103 ) 11 % Specialty Materials Group
$ 974 $ 1,172
-17 %
$ 5,169 $ 4,921 5 % Performance Materials Group
284 323 -12 %
1,248 1,205 4 % Salt �
401 � �
364 � 10 % �
1,220 � � 1,060 � 15 % Total
$
2,030 � $ 2,343 � -13 %
$ 9,575 � $ 8,897 � 8
% �
Customer Location North America
$ 1,027 $
1,117 -8 %
$ 4,402 $ 4,297 2 % Europe
445 550
-19 %
2,408 2,241 7 % Asia-Pacific
454 565 -20 %
2,313 1,973 17 % Latin America �
104 � � 111 � -6 % �
452 � � 386 � 17 % Total
$ 2,030 � $ 2,343 �
-13 %
$ 9,575 � $ 8,897 � 8 % �
Pre-Tax Earnings
(Loss) from Continuing Operations by Business Segment � Three
Months Ended Twelve Months Ended December 31, December 31,
2008 2007
2008 2007
Business Segment
Electronic Technologies
$ 13 $ 110 -88 %
$
390 $ 410 -5 % Display Technologies �
(10 ) �
(8 ) 25 % �
(40 ) � (23 ) 74 % Electronic Materials
Group
$ 3 $ 102 -97 %
$ 350 $ 387 -10 %
Paint and Coatings Materials
(14 ) 48 -129 %
169 323 -48 % Packaging and Building Materials
(33
) 31 -206 %
55 161 -66 % Primary Materials �
17 � � 19 � -11 % �
82 � � 108 � -24 % Specialty
Materials Group
$ (30 ) $ 98 -131 %
$
306 $ 592 -48 % Performance Materials Group
12 45 -73
%
117 132 -11 % Salt
95 53 79 %
177 115 54 %
Corporate �
(92 ) � (76 ) 21 % �
(389 )
� (346 ) 12 % Total
$ (12 ) $ 222 � -105 %
$ 561 � $ 880 � -36 % � Prior to 2008, our Business
Segment results were reported on an after-tax basis.
See Form 8-K, filed June 6, 2008
for presentation of prior year Business Segment results on a
pre-tax basis.
� �
Appendix II
�
Rohm and Haas Company and Subsidiaries �
�
� � (in millions) � (unaudited) �
Provision for Restructuring
and Asset Impairments by Business Segment � �
Pre-tax
Three Months Ended Twelve Months Ended December 31, December 31,
2008 2007
2008 2007
Business Segment
Electronic Technologies
$ 20 $ 1
$ 27 $
(2 ) Display Technologies �
3 � 1 � �
8 � 4 �
Electronic Materials Group
$ 23 $ 2
$
35 $ 2 Paint and Coating Materials
27 (1 )
67
1 Packaging and Building Materials
23 -
39 2 Primary
Materials �
- � - � �
1 � - � Specialty Materials
Group
$ 50 $ (1 )
$ 107 $ 3 Performance
Materials Group
19 (1 )
29 9 Salt
- -
3
- Corporate �
5 � - � �
25 � 14 � Total
$
97 $ - �
$ 199 $ 28 � �
After-tax Three
Months Ended Twelve Months Ended December 31, December 31,
2008
2007
2008 2007
Business Segment Electronic
Technologies
$ 14 $ -
$ 19 $ (2 )
Display Technologies �
3 � 1 � �
6 � 3 � Electronic
Materials Group
$ 17 $ 1
$ 25 $ 1 Paint
and Coating Materials
21 -
48 1 Packaging and
Building Materials
16 -
27 1 Primary Materials �
1 � - � �
1 � - � Specialty Materials Group
$
38 $ -
$ 76 $ 2 Performance Materials Group
14 (1 )
21 6 Salt
- -
2 - Corporate �
4 � - � �
18 � 10 � Total
$ 73 $ - �
$ 142 $ 19 � � � Due to the varying impacts of debt,
interest rates, acquisition related amortization, asset impairments
and effective tax rates, EBITDA is calculated to facilitate
comparisons between Rohm and Haas Company and its competitors.
EBITDA is not a measurement recognized in accordance with generally
accepted accounting principles (GAAP) and should not be viewed as
an alternative to GAAP measures of performance. Furthermore, this
measure may not be consistent with similar measures presented by
other companies. Three Months Ended � Twelve Months Ended December
31, December 31,
2008 � 2007
2008 � 2007
Business
Segment Electronic Technologies
$ 42 $ 132
$ 486 $ 488 Display Technologies �
(6 )
� (6 ) �
(22 ) � (16 ) Electronic Materials Group
$ 36 $ 126
$ 464 $ 472 Paint and
Coating Materials
14 63
262 383 Packaging and
Building Materials
(10 ) 48
143 229 Primary
Materials �
35 � � 40 � �
158 � � 190 � Specialty
Materials Group
$ 39 $ 151
$ 563 $ 802
Performance Materials Group
30 61
189 206 Salt
117 77
270 204 Corporate �
(42 ) � (29
) �
(189 ) � (191 ) Total
$ 180 � $ 386
�
$ 1,297 � $ 1,493 �
�
(1) EBITDA is defined as Earnings from Continuing Operations
Before Interest, Taxes, Depreciation and Amortization, Asset
Impairments and Minority Interest.
�
Appendix III Rohm and Haas Company and Subsidiaries
� (unaudited) �
Change in Net Sales by Business Segment and
Region � Three Months Ended December 31, 2008 Demand � Price �
Currency � Other* �
Total Business Segment � � � � �
Electronic Technologies % (29 ) % (2 ) % 2 % (1 )
%
(30 ) Display Technologies (45 ) (5 ) (5 ) 128
73 Electronic Materials Group (30 ) (3 ) 1 9
(23
) Paint and Coatings Materials (19 ) 9 (3 ) 1
(12
) Packaging and Building Materials (25 )
�
6 (4 ) (1 )
(24 ) Primary Materials (3rd Party) (17 )
9 (4 ) (2 )
(14 ) Specialty Materials Group (21 ) 7
(4 ) 1
(17 ) Performance Materials Group (11 ) 3 (3 )
(1 )
(12 ) Salt - 14 (4 ) -
10 Total
% �
(18 ) % �
6 �
% �
(3 ) % �
2 �
% �
(13
) �
Customer Location North America % (16 ) % 10 % (2
) % -
% (8 ) Europe, Middle East and Africa
(15 ) 3 (9 ) 2
(19 ) Asia-Pacific (26 ) (1 ) 2 5
(20 ) Latin America (15 ) 11 (1 ) (1 )
(6
) Total % �
(18 ) % �
6 �
% �
(3 ) % �
2 �
% �
(13 ) �
* Other includes items such as the
acquisitions (e.g. the November 2007 acquisition of our share of
SKC Co. Ltd.), divestitures and rounding.
�
Appendix IV
Rohm and Haas Company and Subsidiaries (in millions, except
share amounts in thousands) (unaudited) �
Reconciliation of
EBITDA to Earnings from Continuing Operations � � Three Months
Ended Twelve Months Ended December 31, �
December 31,
2008 � � 2007
2008 � 2007 EBITDA
$ 180
$ 386
$ 1,297 $ 1,493 Asset Impairments
18 3
42 24 Interest expense
40 43
164 120 Income
taxes
(34 ) 38
77 206 Depreciation expense
119 103
467 412 Amortization of finite-lived
intangibles
15 15
63 57 Minority Interest �
(10 ) � 4 �
4 � 14
Earnings from Continuing
Operations
$ 32 � $ 180
$ 480 $ 660 �
(1) EBITDA is defined as Earnings
from Continuing Operations Before Asset Impairments, Interest,
Taxes, Depreciation and Amortization and Minority Interest.
� � �
Non GAAP Reconciliation of Adjusted Pre-Tax Earnings
�
�
�
�
�
�
�
�
�
Pre-Tax Earnings As
Reported
Add: Restructuring, Asset
Impairments & Accelerated Depreciation
Add: Operating Impact of
Hurricane (2008) / Sale of UP Chemical (2007)
Add: Dow Transaction Related
Costs
Pre-Tax Earnings
Adjusted
�
Three Months Ended
Three Months Ended Three Months Ended Three Months Ended Three
Months Ended
December 31,
December 31, December 31, December 31, December 31,
2008 �
2007
2008 � 2007 �
2008 � 2007
2008 � 2007
2008 � 2007
Business Segment Electronic Technologies
$ 13 $ 110
$ 22 $ 1
$ - $
(3 )
$ - $ -
$ 35 $ 108 -68 % Display
Technologies �
(10 ) � (8 ) �
3 � 1 � �
- � � - � �
- � - �
(7 ) � (7 ) 0 %
Electronic Materials Group
$ 3 $ 102
$
25 $ 2
$ - $ (3 )
$ - $ -
$ 28 $ 101 -72 % Paint and Coatings Materials
(14 ) 48
33 (1 )
- -
- -
19 47 -60 % Packaging and Building Materials
(33
) 31
27 -
- -
- -
(6 ) 31
-119 % Primary Materials �
17 � � 19 � �
- � - � �
1 � � - � �
- � - �
18 � � 19 � -5 % Specialty
Materials Group
$ (30 ) $ 98
$
60 $ (1 )
$ 1 $ -
$ - $ -
$ 31 $ 97 -68 % Performance Materials Group
12
45
19 (1 )
- -
- -
31 44 -30 % Salt
95 53
- -
8 -
- -
103 53 94 %
Corporate �
(92 ) � (76 ) �
5 � - � �
-
� � - � �
27 � - �
(60 ) � (76 ) -21 % Total
$ (12 ) $ 222 �
$ 109 $ - �
$ 9 � $ (3 )
$ 27 $ -
$
133 � $ 219 � -39 %
�
�
�
�
�
�
�
Pre-Tax Earnings As
Reported
Add: Restructuring, Asset
Impairments & Accelerated Depreciation
Add: Operating Impact of
Hurricane (2008) / Sale of UP Chemical / Pension Adjustment
(2007)
Add: Dow Transaction Related
Costs
Pre-Tax Earnings
Adjusted
� Twelve Months Ended Twelve Months Ended Twelve Months Ended
Twelve Months Ended Twelve Months Ended December 31, December 31,
December 31, December 31, December 31,
2008 2007
2008
2007
2008 2007
2008 2007
2008 2007
Business
Segment Electronic Technologies
$ 390 $ 410
$ 31 $ (2 )
$ (87 ) $ (13 )
$ 1 $ -
$ 335 $ 395 -15 % Display
Technologies �
(40 ) � (23 ) �
8 � 4 � �
- � � - � �
- � - �
(32 ) � (19 ) 68 %
Electronic Materials Group
$ 350 $ 387
$
39 $ 2
$ (87 ) $ (13 )
$
1 $ -
$ 303 $ 376 -19 % Paint and Coatings
Materials
169 323
85 1
- -
2 -
256 324 -21 % Packaging and Building Materials
55 161
48 2
- -
- -
103 163 -37 % Primary
Materials �
82 � � 108 � �
2 � - � �
19 � � -
� �
- � - �
103 � � 108 � -5 % Specialty Materials
Group
$ 306 $ 592
$ 135 $ 3
$
19 $ -
$ 2 $ -
$ 462 $ 595 -22 %
Performance Materials Group
117 132
29 9
1 -
1 -
148 141 5 % Salt
177 115
3 * -
9 -
- -
189 115 64 % Corporate �
(389
) � (346 ) �
25 � 14 � �
- � � 65 � �
50 � - �
(314 ) � (267 ) 18 % Total
$
561 � $ 880 �
$ 231 $ 28 �
$ (58
) $ 52 �
$ 54 $ -
$ 788 � $ 960
� -18 %
* Salt 2008 asset impairments of
$3 million relate to the impact of the hurricane.
� Prior to 2008, our Business Segment results were reported on an
after-tax basis.
See Form 8-K, filed June 6, 2008
for presentation of prior year Business Segment results on a
pre-tax basis.
�
Non GAAP Reconciliation of Adjusted EPS � � � � Three
Months Ended Twelve Months Ended December 31, December 31,
2008 2007
2008 2007 � Net earnings from continuing
operations
$ 32 $ 180
$ 480 $ 660
Restructuring, asset impairment
and accelerated depreciation, net of taxes of $28, $0, $68 and $9,
respectively
81 - 163 19
Impact of hurricane, pension
adjustment and sale of UP Chemical, net of taxes of $3, $(1), $(30)
and $18, respectively
6 (2 ) (28 ) 34
Dow transaction related costs, net
of taxes of $10, $0, $19 and $0, respectively
17 - 35 - � � � � � � � � � �
Earnings from continuing
operations excluding restructuring, asset impairments accelerated
depreciation, the impact of hurricanes, pension adjustment, sale of
UP Chemical and Dow transaction related costs, net of tax
$ 136 $ 178 �
$ 650 � $ 713 � Diluted earning per
share from continuing operations 0.17 0.91 2.44 3.12 Restructuring,
asset impairment and accelerated depreciation, net of tax 0.41 -
0.83 0.09 Impact of hurricane, sale of UP Chemical and pension
adjustment, net of tax 0.03 (0.01 ) (0.14 ) 0.16 Dow transaction
related costs, net of tax 0.08 - 0.18 - � � � � � � � � � �
Earnings from continuing
operations excluding restructuring, asset impairments accelerated
depreciation, the impact of hurricanes and Dow transaction related
costs, net of tax
$ 0.69 $ 0.90 �
$ 3.31 � $ 3.37 � Weighted average
common shares outstanding - diluted 196.7 196.8 196.5 211.0 �
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