UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D C 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1994
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 1-1463
UNION CARBIDE CORPORATION
(Exact name of registrant as specified in its charter)
New York 13-1421730
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
39 Old Ridgebury Road, Danbury, CT 06817-0001
(Address of principal executive offices) (Zip Code)
203-794-2000
Registrant's telephone number, including area code
(Former name, former address and former fiscal year,
if changed since last report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No _______
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at October 31, 1994
Common Stock, $1 par value 148,437,624 shares
Total number of sequentially numbered pages in this filing,
including exhibits thereto: 17
INDEX
PART I. FINANCIAL INFORMATION
PAGE
Financial Statements
Condensed Consolidated Statement of Income -
Union Carbide Corporation and Subsidiaries -
Quarter Ended September, 30, 1994 and 1993................... 3
Condensed Consolidated Statement of Income -
Union Carbide Corporation and Subsidiaries -
Nine Months Ended September 30, 1994 and 1993................ 4
Condensed Consolidated Balance Sheet - Union Carbide
Corporation and Subsidiaries - September 30, 1994 and
December 31, 1993............................................ 5
Condensed Consolidated Statement of Cash Flows -
Union Carbide Corporation and Subsidiaries -
Nine Months Ended September 30, 1994 and 1993................. 6
Notes to Condensed Consolidated Financial Statements -
Union Carbide Corporation and Subsidiaries................... 7-9
Discussion and Analysis of Results of Operations
and Financial Condition........................................ 10-12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings....................................... 13
Item 6. Exhibits and Reports on Form 8-K........................ 13
Signature........................................................ 14
Exhibit Index.................................................... 15
PART I. FINANCIAL INFORMATION
UNION CARBIDE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
Millions of dollars
(Except per share figures)
Quarter ended September 30,
1994 1993
NET SALES $ 1,252 $ 1,130
Deductions (additions)
Cost of sales, exclusive of depreciation and
amortization shown separately below 953 889
Research and development 35 33
Selling, administration and other expenses* 69 80
Depreciation and amortization 69 66
Interest on long-term and short-term debt 22 16
Other expense (income) - net (14) (7)
INCOME BEFORE PROVISION FOR INCOME TAXES 118 53
Provision for income taxes 35 22
INCOME OF CONSOLIDATED COMPANIES 83 31
Plus: UCC share of net income from
corporate investments carried at equity 13 7
NET INCOME 96 38
Preferred stock dividend, net of taxes 2 2
NET INCOME - COMMON STOCKHOLDERS $ 94 $ 36
Earnings per common share
Primary $ 0.61 $ 0.23
Fully diluted $ 0.57 $ 0.22
Cash dividends per common share $ 0.1875 $ 0.1875
* Selling, administration and other expenses include:
Selling $ 31 $ 31
Administration 21 28
Other expenses 17 21
$ 69 $ 80
The Notes to Condensed Consolidated Financial Statements on Pages 7 through 9
should be read in conjunction with this statement.
UNION CARBIDE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
Millions of dollars
(Except per share figures)
Nine Months ended September 30,
1994 1993
NET SALES $ 3,555 $ 3,567
Deductions (additions)
Cost of sales, exclusive of depreciation and
amortization shown separately below 2,715 2,750
Research and development 100 108
Selling, administration and other expenses* 213 265
Depreciation and amortization 203 210
Interest on long-term and short-term debt 58 57
Other expense (income) - net (14) 9
INCOME BEFORE PROVISION FOR INCOME TAXES 280 168
Provision for income taxes 83 60
INCOME OF CONSOLIDATED COMPANIES 197 108
Plus: UCC share of net income from
corporate investments carried at equity 35 13
INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE 232 121
Cumulative effect of change in accounting principle - (97)
NET INCOME 232 24
Preferred stock dividend, net of taxes 7 7
NET INCOME - COMMON STOCKHOLDERS $ 225 $ 17
Earnings per common share
Primary
- Income $ 1.44 $ 0.74
- Cumulative effect of change in accounting principle $ - $ (0.64)
- Net income - common stockholders $ 1.44 $ 0.10
Fully diluted $ 1.35 $ -
Cash dividends per common share $ 0.563 $ 0.563
* Selling, administration and other expenses include:
Selling $ 92 $ 103
Administration 74 94
Other expenses 47 68
$ 213 $ 265
The Notes to Condensed Consolidated Financial Statements on Pages 7 through 9
should be read in conjunction with this statement.
UNION CARBIDE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
Millions of dollars
Sept. 30, Dec. 31,
1994 1993
ASSETS
Cash and cash equivalents $ 124 $ 108
Notes and accounts receivable 927 689
Inventories:
Raw materials and supplies 109 104
Work in process 39 52
Finished goods 236 229
384 385
Prepaid expenses 241 247
Total current assets 1,676 1,429
Property, plant and equipment 5,797 5,626
Less: Accumulated depreciation 3,330 3,206
Net fixed assets 2,467 2,420
Companies carried at equity 435 437
Other investments and advances 81 137
Total investments and advances 516 574
Other assets 338 266
Total assets $4,997 $4,689
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 338 $ 310
Short-term debt 92 24
Payments to be made within one year on
long-term debt 21 11
Accrued income and other taxes 178 189
Other accrued liabilities 625 662
Total current liabilities 1,254 1,196
Long-term debt 905 931
Postretirement benefit obligation 501 489
Other long-term obligations 515 378
Deferred credits 248 230
Minority stockholders' equity in consolidated
subsidiaries 24 1
Convertible preferred stock 148 150
Unearned employee compensation (106) (114)
UCC stockholders' equity:
Common stock authorized - 500,000,000 shares
Common stock issued - 154,609,669 shares 155 155
Additional paid-in capital 355 366
Equity adjustment from foreign currency
translation (52) (84)
Retained earnings 1,207 1,067
1,665 1,504
Less: Treasury stock, at cost-6,007,946 shares
(4,062,189 shares in 1993) 157 76
Total UCC stockholders' equity 1,508 1,428
Total liabilities and stockholders' equity $4,997 $4,689
The Notes to Condensed Consolidated Financial Statements on Pages 7 through 9
should be read in conjunction with this statement.
UNION CARBIDE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Millions of dollars
Nine Months ended September 30,
1994 1993
Increase (decrease) in
cash and cash equivalents
OPERATIONS
Income before accounting change $ 232 $ 121
Noncash charges (credits) to net income
Depreciation and amortization 203 210
Deferred income taxes 7 (35)
Other noncash charges 35 47
Investing credits to net income (18) (42)
Working capital(a) (236) (122)
Long-term assets and liabilities 109 91
Cash Flow From Operations 332 270
INVESTING
Capital expenditures (269) (214)
Investments (43) (25)
Sale of investments 87 223
Sale of fixed and other assets 47 14
Cash Flow Used for Investing (178) (2)
FINANCING
Increase (decrease) in short-term debt
(three months or less) 65 (256)
Proceeds from short-term debt 4 -
Repayment of short-term debt - (36)
Proceeds from long-term debt 17 320
Repayment of long-term debt (33) (234)
Issuance of common stock 59 47
Repurchase of common stock (161) (32)
Payments of dividends (95) (91)
Other 6 (1)
Cash Flow Used for Financing (138) (283)
Effect of exchange rate changes on cash and
cash equivalents - (1)
Change in cash and cash equivalents 16 (16)
Cash and cash equivalents beginning-of-period 108 171
Cash and cash equivalents end-of-period $ 124 $ 155
Cash paid for interest and income taxes
Interest (net of amount capitalized) $ 75 $ 67
Income taxes $ 49 $ 39
_____________
(a) Net change in working capital by component (excluding cash and cash
equivalents, deferred income taxes and short-term debt):
(Increase) decrease in current assets
Notes and accounts receivable $(214) $(121)
Inventories (16) (15)
Prepaid expenses (6) 37
Decrease in payables and accruals - (23)
Working capital $(236) $(122)
The Notes to Condensed Consolidated Financial Statements on Pages 7 through 9
should be read in conjunction with this statement.
UNION CARBIDE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Consolidated Financial Statements
In the opinion of management, the accompanying unaudited condensed
consolidated financial statements include all adjustments necessary for a
fair statement of the results for the interim periods. These adjustments
consisted of only normal recurring adjustments. The accompanying
statements should be read in conjunction with the Notes to Financial
Statements of Union Carbide Corporation and Subsidiaries (the
corporation) in the 1993 annual report to stockholders. On April 27,
1994, stockholders voted to approve the merger of Union Carbide
Corporation (UCC) into Union Carbide Chemicals and Plastics Company Inc.
(UCC&P). The merger was effective May 1, 1994. Immediately after the
merger, UCC&P had the same consolidated assets, liabilities and
stockholders' equity as the corporation. UCC&P has changed its name to
Union Carbide Corporation. All references to Union Carbide Corporation,
the corporation or UCC after the periods starting May 1, 1994 shall be a
reference to the merged company.
2. Union Carbide Corporation, EniChem SpA, to Form Joint Venture
On August 1, 1994 the corporation and EniChem SpA, Milan, Italy,
("EniChem") jointly announced that they intend to form a 50-50 joint
venture to produce and market polyethylene in Europe. The two companies
have signed a memorandum of understanding, and are proceeding with
negotiation of definitive agreements. They anticipate start up of the
venture following European Community approval in early 1995. Under the
proposed agreement, the new company will own EniChem's existing
polyethylene operations in Italy, France and Germany, EniChem's interest
in olefins crackers at Brindisi, Italy and Dunkirk, France, and build a
facility at Brindisi utilizing UCC's UNIPOL PE process technology.
3. UCAR International Inc. Registration Statement
On October 6, 1994 the corporation and Mitsubishi Corporation announced
that UCAR International Inc. (UCAR) had filed a registration statement
with the U.S. Securities & Exchange Commission (SEC) for an initial public
offering of 14.5 million UCAR shares, which would represent about
44 percent of the common stock of UCAR. The corporation and Mitsubishi
currently each own 50 percent of UCAR.
4. Common Stock
On July 27, 1994 the Board of Directors announced that it had authorized
the repurchase of an additional 10 million shares of UCC common stock,
bringing the total number authorized for repurchase to 20 million. The
repurchase program, which began in the first quarter of 1993, is being
carried out over an unlimited period in order to minimize future earnings
dilution due to common stock requirements under certain employee benefit
plans. Through September 30, 1994, the corporation had repurchased
9,413,160 shares at an average effective price of $24.32 per share.
In conjunction with the corporation's common stock buyback program, put
options were sold in a series of private placements entitling the holders
to sell 4,125,000 shares of common stock to UCC, at specified prices if
the holders exercise the options. Since the inception of this program,
through September 30, 1994, options representing 3,563,800 common shares
expired unexercised and options representing 211,200 shares were exercised
at $5,559,425 or $26.32 per share. Options representing 350,000 shares
remain outstanding at September 30, 1994. Premiums received on these
options reduced the average price of repurchased shares to $24.32 per
share from $24.64 per share.
5. Long-term Debt
The corporation signed two new credit agreements with a group of banks on
November 4, 1994 to replace the existing $850 million credit agreement
dated as of April 15, 1992 which was reduced to $600 million on August 3,
1993. One of the new agreements provides the corporation with $1 billion
in credit over the next five years and the other agreement provides $200
million over the next year.
6. Commitments and Contingencies
The corporation has three long-term agreements for the purchase of
ethylene related products and two agreements for terminal storage from
facilities located in the U.S. and Canada. The net present value of the
fixed and determinable portion of these obligations at September 30, 1994
totaled $464 million.
The corporation is subject to loss contingencies resulting from
environmental laws and regulations, which include obligations to remove or
mitigate the effects on the environment of the disposal or release of
certain wastes and substances at various sites. The corporation has
established accruals for those hazardous waste sites where it is probable
that a loss has been incurred and the amount of the loss can be reasonably
estimated. The reliability and precision of the loss estimates are
affected by numerous factors, such as different stages of site evaluation,
the allocation of responsibility among potentially responsible parties and
the potential assertion of additional claims. The corporation adjusts its
accruals as new remediation requirements are defined, as information
becomes available permitting reasonable estimates to be made, and to
reflect new and changing facts.
At September 30, 1994, the corporation had established environmental
remediation accruals in the amount of $287 million. Approximately
52 percent of the corporation's environmental accrual at September 30,
1994 pertained to closure and postclosure costs for both operating and
closed facilities. In addition, the corporation had environmental loss
contingencies of $136 million.
The corporation had additional contingent obligations at September 30,
1994 of $95 million, principally related to guarantees of debt, litigation
costs and discounted receivables from customers.
During the first quarter of 1994, the corporation reduced the carrying
value of its stock in Union Carbide India Ltd. (UCIL) to zero. During the
third quarter of 1994, agreement was reached to sell to McLeod Russel
(India), Ltd. the stock of UCIL, pledged to the Bhopal Hospital Trust (the
trust), for the equivalent of $90 million. A portion of this will be used
by the trust to fund the hospital to be built in Bhopal by the Government,
and the remainder will be subject to the attachment by the magistrate in
the pending criminal proceedings in Bhopal. See Note 17 of Notes to
Financial Statements in the corporation's 1993 Annual Report to
Stockholders for information about suits and proceedings arising from or
related to the December 3, 1984 methyl isocyanate incident at the plant at
Bhopal, India, owned and operated by UCIL.
The corporation provisionally joined a multi-billion dollar silicone
breast implant litigation settlement agreement. Union Carbide's
contribution to the settlement will be $138 million over the next several
years. The corporation has previously taken before-tax charges
aggregating $35 million for this litigation. Although insurance coverage
is subject to issues as to scope and application of policies, retention
limits, exclusions and policy limits, and the insurers have reserved their
rights to deny coverage, the corporation believes that after probable
insurance recoveries, the settlement will not have a material effect on
the company's earnings in the future. The corporation was not a
manufacturer of breast implants but did supply generic bulk silicone
materials to the industry.
The settlement has been approved by the United States District Court,
Northern District of Alabama. A number of appeals have been filed which
will delay implementation and might require settlement terms to be
reconsidered. Both the corporation and the other companies which are
parties to the agreement have the right to withdraw from the settlement
if, among other factors, in their individual judgment, there are too few
recipients of breast implants covered by the final settlement.
In addition to the above, the corporation and its consolidated subsidiaries
are involved in a number of legal proceedings and claims with both private
and governmental parties. These cover a wide range of matters including,
but not limited to: product liability; governmental regulatory proceedings;
health, safety and environmental matters; employment; patents; contracts and
taxes. In some of these legal proceedings and claims, the remedies that may
be sought or damages claimed are substantial.
While it is impossible at this time to determine with certainty the
ultimate outcome of any legal proceedings and claims referred to in this
note, management believes that adequate provisions have been made for
probable losses with respect thereto and that such ultimate outcome, after
provisions therefor, will not have a material adverse effect on the
consolidated financial position of the corporation but could have a
material effect on consolidated results of operations in a given quarter
or year. Should any losses be sustained in connection with any of such
legal proceedings and claims, in excess of provisions therefor, they will
be charged to income in the future.
DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
Overview
The corporation reported third quarter, 1994 net income available to common
stockholders of $94 million, or $0.61 per share primary ($0.57 per share fully
diluted). For the first nine months of 1994 net income available to common
stockholders was $225 million, or $1.44 per share primary ($1.35 per share
fully diluted).
For the corresponding quarter in 1993 the corporation reported earnings of
$36 million, or $0.23 per share primary ($0.22 per share fully diluted). For
the first nine months of 1993 the corporation had net income available to
common shareholders of $17 million, or $0.10 per share primary, which included
a noncash after-tax charge of $97 million, or $0.64 per share primary, for the
adoption of FAS 112, "Employers' Accounting for Postemployment Benefits."
Excluding the accounting change, net income was $114 million, or $0.74 per
share.
The earnings improvement quarter to quarter resulted from increased volumes
for the corporation's key products, and strengthening prices toward the end of
the third quarter of 1994, especially for commodity polyolefins and ethylene
glycol. Also contributing to improved earnings were lower overhead costs and
the results from its joint ventures and partnerships. The corporation expects
margins to improve in the fourth quarter of 1994, with price increases
offsetting any increase in raw material costs.
Results of Operations
Sales increased 11 percent in the third quarter of 1994 over the same period
in 1993, while remaining virtually flat on a nine month year-to-year basis.
Excluding the OrganoSilicon (OSi) specialty chemicals business, sold in July,
1993 from the nine month period, sales rose five percent as volumes for the
corporation's key products improved.
The corporation's variable margin for the third quarter of 1994 increased
slightly to 44.9 percent, from 44.6 percent in the third quarter of 1993 due
to increased volumes. For the first nine months of 1994 and 1993 variable
margin ran at 45.6 percent. Excluding the higher margin OSi products from the
nine month 1993 totals, variable margin was 44.8 percent. Gross margin for
the third quarter of 1994 improved to 23.9 percent from 21.3 percent in the
third quarter of 1993. For the nine month period ending September 30, 1994
gross margin was 23.6 percent versus 22.9 percent in the same period last
year. During the comparable three month and nine month periods, sales and
volumes increased while manufacturing and distribution period costs decreased
slightly. When excluding the OSi business for 1993, gross margin was
22.1 percent for the first nine months. Selling, administration and other
expenses continued to fall over comparable periods, even after considering the
absence of the OSi business.
Partnership income doubled in the third quarter of 1994 over the same period
in 1993; on a comparable nine month basis it was 81 percent ahead of 1993's
pace. In the first nine months of 1994 the corporation recorded the following
items within other expense (income) - net: a $24 million charge for the write-
off of its investment in India and associated costs; a $12 million charge on
the proposed sale of the corporation's uranium mill and certain uranium mines
to Energy Fuels, Ltd.; and a $24 million gain on the sale of its preferred
stock investment in OSi Specialties, Inc.
Interest expense is higher in 1994 than in the comparable periods of 1993 due
to rising interest rates. The corporation expects its level of interest
expense in the fourth quarter of 1994 to remain at approximately the same
level as in the third quarter. In addition, interest expense was lower in
1993 due to benefits received from lower interest rates associated with
financial instruments used as hedges to manage exposure to financial market
risk.
Earnings from the corporation's investments carried at equity continued to
show strong improvement on a comparative basis for the quarter and first nine
months of 1994, with UCAR International Inc. (UCAR) being the major
contributor. On October 6, 1994, UCAR filed a registration statement with the
SEC for an initial public offering of 44 percent of its common stock. The
proposed initial public offering represents one alternative being considered
to realize value from the corporation's investment. If a divestment
alternative is effected, it is anticipated that the corporation would
thereafter own 28 percent or less of the outstanding common stock of UCAR.
The corporation regularly reviews its assets with the objective of maximizing
the deployment of resources in core operations. In this regard, UCC continues
to consider strategies and/or transactions with respect to certain noncore
assets and other assets not essential to the operation of the business which,
if implemented, could result in material nonrecurring gains or losses.
Estimates of future expenses related to environmental protection for
compliance with Federal, state and local laws regulating solid and hazardous
wastes and discharge of materials to air and water, as well as for waste site
remedial activities, and of future capital expenditures relating to
environmental protection, have not changed materially since December 31, 1993.
The reliability and precision of the loss estimates are affected by numerous
factors, such as different stages of site evaluation, the allocation of
responsibility among potentially responsible parties and the potential
assertion of additional claims.
The corporation has provisionally joined the multi-billion dollar silicone
breast implant litigation settlement agreement. This litigation is discussed
in more detail in the "Commitments and Contingencies" footnote to the
financial statements on pages 8 and 9 of this report on Form 10-Q.
Financial Condition - September 30, 1994
Cash flow from operations increased by $62 million during the first nine
months of 1994 compared to the same period in 1993 due to improved operating
results and a $42 million dividend from UCAR. The earnings improvement
resulted from increased sales volumes for key products, lower manufacturing
and distribution period costs and lower overhead costs.
The corporation used $178 million for investing purposes during the first nine
months of 1994 as opposed to $2 million during the same period in 1993. The
primary difference between the two periods was the receipt of $220 million
from the sale of the OrganoSilicon (OSi) business in July, 1993. The sale of
the corporation's remaining investment in OSi, during 1994, provided
$86 million in proceeds.
During 1994 capital spending increased by $55 million over 1993, primarily on
new projects, including the UNIPOL II unit at the Star, LA plant and the
butanol unit at Taft, LA. The corporation's investments included the purchase
of an interest in a Brazilian ethylene company. Sale of fixed and other
assets for 1994 included divestiture of the corporation's electronic materials
business and its interest in a Zimbabwe mining and smelting operation.
On August 1, 1994 the corporation and EniChem SpA jointly announced their
intention to form a joint venture to produce and market polyethylene in
Europe. The corporation expects its cash investment, which is expected to
take place in early 1995, to total approximately $200 million, financed
through operations and short-term borrowings.
Cash flow used for financing was $138 million in 1994 compared to $283 million
during the first nine months of 1993. During 1994, the corporation
repurchased $161 million in common stock and redeemed its 5.3 percent sinking
fund debentures due 1997 for $26 million. These actions were financed through
operations and an increase in short term borrowings. In 1993, the corporation
redeemed for cash $12 million in senior debentures and $84 million of the
outstanding $345 million 7.5 percent convertible debentures, of which the
remaining $261 million was converted to common stock. The 1993 redemptions
were refinanced through a two-part public debt offering totaling $300 million.
During the first half of 1994, the corporation terminated substantially all of
its financial instruments used as hedges to manage exposure to financial
market risk caused by interest rate fluctuations. A net charge of $19 million
($13 million after tax) resulting from such terminations was deferred and is
being amortized to interest expense over the remaining terms of the underlying
instruments, which had various maturity dates through the year 2002. The
corporation also unwound its positions in financial instruments which were
designed to reduce earnings fluctuations due to business conditions. During
the first half of 1994, the corporation recorded a net charge of $4 million
after tax relating to these activities.
The corporation's ratio of debt to capital decreased to 39.9 percent at
September 30, 1994 from 40.3 percent at December 31, 1993. At September 30,
1994 there were no outstanding borrowings under the existing major bank credit
agreement of $600 million. On November 4, 1994 the corporation signed two new
credit agreements with a group of banks to replace the existing credit
agreement. One of the new agreements provides the corporation with $1 billion
in credit over the next five years and the other agreement provides $200
million over the next year.
Cash dividends to UCC common stockholders through September 30, 1994 amounted
to $85 million.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
See Note 6 to the corporation's consolidated financial statements on
page 8 and 9 of this 10-Q Report.
As reported in the corporation's Form 10-K for the period ended
December 31, 1993, on November 19, 1993, the U.S. Environmental
Protection Agency ("EPA") issued an administrative complaint to the
corporation alleging violations of the federal Clean Air Act at the
Texas City, Texas plant. The complaint sought a civil penalty of
$194,550. On October 13, 1994, the corporation and EPA reached a
settlement of this matter pursuant to which the corporation agreed to
pay a penalty of $55,500.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
The following exhibits are filed as part of this report:
11 - Computation of Earnings Per Share.
27 - Financial Data Schedule.
(b) The corporation's Form 8-K dated August 3, 1994 reported the
joint announcement by the corporation and EniChem SpA of their
intention to form a joint venture to produce and market
polyethylene in Europe.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UNION CARBIDE CORPORATION
(Registrant)
Date: November 10, 1994 By: JOHN K. WULFF
John K. Wulff
Vice-President, Controller
and Principal Accounting
Officer
EXHIBIT INDEX
Exhibit Page
No. Exhibit No.
11 Computation of Earnings Per Share 16
27 Financial Data Schedule 17
<TABLE>
Exhibit 11
UNION CARBIDE CORPORATION AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(In millions of dollars except per share amounts)
<CAPTION>
Quarter Ended Sept. 30,
1994 1993
Earnings Per Share - Primary
<S> <C> <C>
Income $ 96 $ 38
Less: Preferred stock dividend 2 3
Net income available to common stockholders
for primary income calculation 94 35
Cumulative effect of accounting change - -
Net income - common stockholders $ 94 $ 35
Weighted average number of common
and common equivalent shares applicable
to primary earnings per share calculation
Weighted average number of shares outstanding 150,009,443 151,639,770
Dilutive effect of stock options 4,518,960 3,345,652
154,528,403 154,985,422
Earnings per share - primary
Income $ 0.61 $ 0.23
Cumulative effect of accounting change - -
Net income - common stockholders $ 0.61 $ 0.23
Earnings Per Share Assuming Full Dilution
Income $ 96 $ 38
Plus: Interest on convertible debentures -
(net of taxes) - -
Less: Additional ESOP contribution resulting from
assumed conversion of preferred stock - -
Income for fully diluted income calculation 96 38
Cumulative effect of accounting change - -
Net income for fully diluted income calculation $ 96 $ 38
Weighted average number of common
and common equivalent shares applicable to
fully diluted earnings per share calculation
Weighted average number of shares outstanding 150,009,443 151,639,770
Dilutive effect of stock options 4,812,336 3,527,626
Shares issuable upon conversion of UCC
convertible debentures - -
Shares issuable upon conversion of UCC
convertible preferred stock 16,503,425 16,790,927
171,325,204 171,958,323
Per share assuming full dilution
Income $ 0.57 $ 0.22
Cumulative effect of accounting change - -
Net income $ 0.57 $ 0.22
<CAPTION>
Nine Months Ended Sept. 30,
1994 1993
Earnings Per Share - Primary
<S> <C> <C>
Income $ 232 $ 121
Less: Preferred stock dividend 9 10
Net income available to common stockholders
for primary income calculation 223 111
Cumulative effect of accounting change - (97)
Net income - common stockholders 223 $ 14
Weighted average number of common
and common equivalent shares applicable
to primary earnings per share calculation
Weighted average number of shares outstanding 150,737,123 146,698,165
Dilutive effect of stock options 4,239,724 3,491,151
154,976,847 150,189,316
Earnings per share - primary
Income $ 1.44 $ 0.74
Cumulative effect of accounting change - (0.64)
Net income - common stockholders $ 1.44 $ 0.10
Earnings Per Share Assuming Full Dilution
Income $ 232 $ 121
Plus: Interest on convertible debentures -
(net of taxes) - 4
Less: Additional ESOP contribution resulting from
assumed conversion of preferred stock - -
Income for fully diluted income calculation 232 125
Cumulative effect of accounting change - (97)
Net income for fully diluted income calculation 232 28
Weighted average number of common
and common equivalent shares applicable to
fully diluted earnings per share calculation
Weighted average number of shares outstanding 150,737,123 146,698,165
Dilutive effect of stock options 5,023,826 3,781,060
Shares issuable upon conversion of UCC
convertible debentures - 7,192,395
Shares issuable upon conversion of UCC
convertible preferred stock 16,571,530 16,825,560
172,332,479 174,497,180
Per share assuming full dilution
Income $ 1.35 $ 0.72
Cumulative effect of accounting change - (0.56)
Net income $ 1.35 $ 0.16*
<FN>
* Fully diluted per share amounts are not presented in the Condensed
Consolidated Statement of Income where amounts are antidilutive.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM UNION
CARBIDE CORPORATION'S FORM 10Q FOR THE PERIOD ENDED SEPTEMBER 30, 1994 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000100790
<NAME> UNION CARBIDE CORPORATION
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994
<CASH> 119
<SECURITIES> 5
<RECEIVABLES> 758
<ALLOWANCES> 12
<INVENTORY> 384
<CURRENT-ASSETS> 1676
<PP&E> 5797
<DEPRECIATION> (3330)
<TOTAL-ASSETS> 4997
<CURRENT-LIABILITIES> 1254
<BONDS> 905
<COMMON> 155
148
0
<OTHER-SE> 1353
<TOTAL-LIABILITY-AND-EQUITY> 4997
<SALES> 3555
<TOTAL-REVENUES> 3555
<CGS> 2715
<TOTAL-COSTS> 2715
<OTHER-EXPENSES> 502
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 58
<INCOME-PRETAX> 280
<INCOME-TAX> 83
<INCOME-CONTINUING> 232
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 225
<EPS-PRIMARY> 1.44
<EPS-DILUTED> 1.35
</TABLE>
