SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report
(Date of earliest event reported)
January 20, 1997
UNION CARBIDE CORPORATION
(Exact name of registrant as specified in its charter)
New York
(State or other jurisdiction of incorporation)
1-1463 13-1421730
(Commission File Number) (IRS Employer Identification No.)
39 Old Ridgebury Rd, Danbury, CT 06817-0001
(Address of principal executive offices) (Zip code)
Registrant's telephone number,
including area code 203-794-2000
Total number of sequentially numbered pages in this filing,
including exhibits thereto: 13
Item 5. OTHER EVENTS.
See Union Carbide Corporation press release dated
January 20, 1997 accompanying this report as Exhibit 99.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
99. Press release, dated January 20, 1997.
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.
Date: January 21, 1997
UNION CARBIDE CORPORATION
By /s/J. MACDONALD
J. Macdonald
Assistant Secretary
EXHIBIT INDEX
Exhibit
99. Press Release, dated January 20, 1997.
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NEWS RELEASE
CONTACT: D.N. Kernis
(203) 794-6929
UNION CARBIDE EARNINGS IN LINE
WITH DECEMBER ANNOUNCEMENT
DANBURY, Conn., Jan. 20 -- Union Carbide Corporation (UCC) today
reported fourth quarter 1996 earnings of $0.68 per common share fully diluted,
compared to $1.21 per share in the same quarter of 1995.
The result was in line with the company's announcement last month that
rising raw material and energy costs, and other factors affecting its
Specialties & Intermediates segment, could reduce fourth quarter 1996 earnings
by as much as $0.42 per share compared to the $1.08 posted in the 1996 third
quarter.
Net income available to common stockholders for the fourth quarter of
1996 was $99 million, compared to $187 million for the same period in 1995 and
$159 million in the third quarter of 1996. Sales increased 7.8 percent in the
fourth quarter to $1.508 billion, compared to $1.399 billion in 1995. Sales
were $1.538 billion in the third quarter of 1996.
"Although volumes were strong for the quarter, and Carbide did a good
job of controlling fixed costs, results were hurt by significantly higher raw
material costs, especially ethane costs, which more than doubled since the
same period in 1995," said Union Carbide Chairman and CEO William H. Joyce.
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Dr. Joyce said that Carbide's Specialties & Intermediates segment
accounted for 69.3 percent of sales and 89.7 percent of operating profit in
the fourth quarter. In the Basic Chemicals & Polymers segment, glycol prices
improved during the quarter, as did polyethylene prices.
Dr. Joyce said the company would not know until later in the first
quarter the degree of success it would have with the polyethylene and ethylene
glycol price increases reported in last month's announcement.
For the full year 1996, UCC reported net income available to common
stockholders of $583 million, or $3.90 per common share fully diluted. Prior
year earnings were $915 million, or $5.83 per common share, including a net
non-recurring gain of $62 million, or $0.39 per share fully diluted.
Worldwide sales for 1996 rose 3.7 percent to $6.106 billion, compared to
$5.888 billion in 1995.
Income from corporate joint ventures declined from the prior year, the
result of increased raw material costs and lower polyethylene prices for
Polimeri Europa, and expenses relating to construction of the petrochemical
complex in Kuwait.
Volumes increased by 11.2 percent compared to the prior year, aided by
the acquisition of Shell Oil's polypropylene resin business, and 8.9 percent
volume growth for the Specialties & Intermediates segment. Fixed costs for
the year rose only 2.7 percent, bringing unit fixed costs to a new low of 11.0
cents per pound.
The company's Specialties & Intermediates segment accounted for 70.2
percent of sales and 80.6 percent of operating profit for the full year 1996.
Dr. Joyce said that the segment's operating profit grew only 4.7 percent, but
should show improved earnings growth in 1997 assuming continued moderation of
feedstock and energy costs and a return to more normal margins, particularly
in solvents and monomers.
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He added that good progress along several fronts during the year should
benefit 1997 as well as longer-term performance:
- UCC's cost reduction program was ahead of schedule, having advanced
more than halfway to its announced annual net savings target of $637 million
by the year 2000 (in then-current dollars).
- UCC's new 200-million-pound-capacity ethylene/propylene rubber plant
was completed in December and is now in its startup phase.
- The polypropylene resins business acquired from Shell Oil in the first
quarter was fully integrated into UCC operations, and both its polypropylene
plants were expanded.
- Financing was completed for the Equate petrochemical complex jointly
owned with Kuwaiti partners, and a polyethylene marketing company was
established in anticipation of Equate's production facilities being ready for
startup in the third quarter of 1997.
- A planned 50/50 joint venture with Exxon Chemical Company was
announced to research, develop, market and license leading edge technologies
and catalysts for polyethylene production.
Union Carbide is a worldwide chemicals company with advanced process
technologies and large-scale chemical production facilities.
o Specialties & Intermediates -- Union Carbide is the leading North
American supplier of solvents and intermediates to the paint and coatings
industry; the leading licensor of several technologies; and a leading supplier
of specialty chemicals, polymers and services used in the personal care
products, pharmaceuticals, automotive, wire and cable, oil and gas and
industrial lubricants industries.
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o Basic Chemicals & Polymers --Union Carbide is among the largest
manufacturers of polyethylene, the world's most widely used plastic, and the
technology leader in this industry; and polypropylene, one of the world's
fastest-growing, large-volume plastics. UCC is also the world's largest
producer of ethylene oxide and its derivative ethylene glycol, used for
polyester fiber, resin and film, automotive antifreeze and other products.
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<TABLE>
UNION CARBIDE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
<CAPTION>
Quarter Ended
Dec. 31, Sept 30,
Millions of Dollars, Except Per Share Amounts 1996 1996
<S> <C> <C>
NET SALES $1,508 $1,538
Cost of sales, exclusive of depreciation and
amortization 1,174 1,145
Research and development 44 39
Selling, administration and other expenses(a) 82 80
Depreciation and amortization 77 81
Partnership income (38) (43)
Other income - net (6) (6)
INCOME BEFORE INTEREST EXPENSE AND PROVISION
FOR INCOME TAXES 175 242
Interest expense 21 18
INCOME BEFORE PROVISION FOR INCOME TAXES 154 224
Provision for income taxes 42 63
INCOME OF CONSOLIDATED COMPANIES 112 161
Loss from corporate investments carried
at equity (10) -
NET INCOME 102 161
Preferred stock dividends, net of
income taxes 3 2
NET INCOME - COMMON STOCKHOLDERS $ 99 $ 159
Earnings per common share
Primary $ 0.74 $ 1.19
Based on the indicated number of shares 131,504,702 133,436,084
Fully diluted $ 0.68 $ 1.08
Based on the indicated number of shares 147,553,773 149,781,685
(a) Selling $ 34 $ 32
Administration 30 32
Other expenses 18 16
Total $ 82 $ 80
<CAPTION>
Quarter Ended
Dec. 31,
Millions of Dollars, Except Per Share Amounts 1995
<S> <C>
NET SALES $1,399
Cost of sales, exclusive of depreciation and
amortization 960
Research and development 38
Selling, administration and other expenses(a) 81
Depreciation and amortization 79
Partnership income (31)
Other income - net (29)
INCOME BEFORE INTEREST EXPENSE AND PROVISION
FOR INCOME TAXES 301
Interest expense 25
INCOME BEFORE PROVISION FOR INCOME TAXES 276
Provision for income taxes 77
INCOME OF CONSOLIDATED COMPANIES 199
Loss from corporate investments carried
at equity (9)
NET INCOME 190
Preferred stock dividends, net of
income taxes 3
NET INCOME - COMMON STOCKHOLDERS $ 187
Earnings per common share
Primary $ 1.33
Based on the indicated number of shares 140,318,627
Fully diluted $ 1.21
Based on the indicated number of shares 156,564,534
(a) Selling $ 33
Administration 27
Other expenses 21
Total $ 81
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</TABLE>
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UNION CARBIDE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
Year Ended December 31,
Millions of Dollars, Except Per Share Amounts 1996 1995
NET SALES $6,106 $5,888
Cost of sales, exclusive of depreciation and
amortization 4,568 4,100
Research and development 159 144
Selling, administration and other expenses(a) 321 387
Depreciation and amortization 312 306
Partnership income (144) (152)
Other income - net (b) (31) (245)
INCOME BEFORE INTEREST EXPENSE AND PROVISION
FOR INCOME TAXES 921 1,348
Interest expense 76 89
INCOME BEFORE PROVISION FOR INCOME TAXES 845 1,259
Provision for income taxes 236 380
INCOME OF CONSOLIDATED COMPANIES 609 879
Income (loss) from corporate investments
carried at equity (16) 46
NET INCOME 593 925
Preferred stock dividends, net of income taxes 10 10
NET INCOME - COMMON STOCKHOLDERS $ 583 $ 915
Earnings per common share
Primary $ 4.28 $ 6.44
Based on the indicated number of shares 135,521,904 141,663,656
Fully diluted $ 3.90 $ 5.83
Based on the indicated number of shares 151,642,658 158,380,545
(a) Selling $ 130 $ 128
Administration (c) 121 186
Other expenses 70 73
Total $ 321 $ 387
(b) Includes a gain of $381 million from the sales of the corporation's
interest in UCAR International, Inc., in the first and third quarters of
1995, and a charge of $191 million for future lease payments on unused
office space, primarily at the corporation's Danbury headquarters, in the
first quarter of 1995.
(c) Includes a $68 million charge for postemployment benefits, including
severance, in the third quarter of 1995.
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UNION CARBIDE CORPORATION AND SUBSIDIARIES
SEGMENT DATA
Quarter Ended
Dec. 31, Sept. 30, Dec. 31,
Millions of dollars 1996 1996 1995
SALES
Specialties & Intermediates $1,045 $1,055 $1,006
Basic Chemicals & Polymers 527 552 490
Intersegment Eliminations (64) (69) (97)
Total $1,508 $1,538 $1,399
OPERATING PROFIT
Specialties & Intermediates $ 157 $ 202 $ 177
Basic Chemicals & Polymers 17 40 115
Other 1 - 9
Total $ 175 $ 242 $ 301
DEPRECIATION AND AMORTIZATION
Specialties & Intermediates $ 44 $ 50 $ 49
Basic Chemicals & Polymers 33 31 30
Total $ 77 $ 81 $ 79
CAPITAL EXPENDITURES
Specialties & Intermediates $ 135 $ 121 $ 126
Basic Chemicals & Polymers 55 47 52
Total $ 190 $ 168 $ 178
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UNION CARBIDE CORPORATION AND SUBSIDIARIES
SEGMENT DATA
Year Ended December 31,
Millions of dollars 1996 1995
SALES
Specialties & Intermediates $4,286 $4,123
Basic Chemicals & Polymers 2,125 2,080
Intersegment Eliminations (305) (315)
Total $6,106 $5,888
OPERATING PROFIT
Specialties & Intermediates $ 742 $ 709
Basic Chemicals & Polymers 162 444
Other 17 195
Total $ 921 $1,348
DEPRECIATION AND AMORTIZATION
Specialties & Intermediates $ 188 $ 194
Basic Chemicals & Polymers 124 112
Total $ 312 $ 306
CAPITAL EXPENDITURES
Specialties & Intermediates $ 522 $ 392
Basic Chemicals & Polymers 199 150
Total $ 721 $ 542
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UNION CARBIDE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
Millions of Dollars
at December 31,
1996 1995
ASSETS
Cash and cash equivalents $ 94 $ 449
Notes and accounts receivable 1,047 996
Inventories 541 544
Other current assets 191 207
Current assets 1,873 2,196
Net fixed assets 3,409 2,808
Investments and other assets 1,264 1,252
Total Assets $6,546 $6,256
LIABILITIES AND STOCKHOLDERS' EQUITY
Short-term debt and current portion of
long-term debt $ 112 $ 38
Other current liabilities 1,166 1,300
Current liabilities 1,278 1,338
Long-term debt 1,487 1,285
Other long-term obligations 1,667 1,588
Stockholders' equity 2,114 2,045
Total Liabilities and Stockholders' Equity $6,546 $6,256
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