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)
July 26, 1999
UNION CARBIDE CORPORATION
(Exact name of registrant as specified in its charter)
New York 1-1463 13-1421730
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
incorporation)
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: 11
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Item 5. OTHER EVENTS.
(b) See Union Carbide Corporation's press release dated July 26,
1999 accompanying this report as Exhibit 99.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
99. Press release, July 26, 1999.
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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 hereunto duly authorized.
Date: July 26, 1999
UNION CARBIDE CORPORATION
By /s/J. Macdonald
J. Macdonald
Assistant Secretary
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EXHIBIT INDEX
Exhibit
99. Press release, dated July 26, 1999.
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Exhibit 99
UNION CARBIDE
NEWS RELEASE
CONTACT: Sean S. Clancy
(203) 794-6976
UNION CARBIDE REPORTS 2nd QUARTER EARNINGS
DANBURY, Conn., July 26 -- Union Carbide Corporation (UCC) today reported
second quarter 1999 earnings of $0.41 per diluted share, compared to $0.52
per diluted share before the cumulative effect of a change in accounting
principle in the prior quarter and $0.85 per diluted share in the second
quarter of 1998.
Net income for the quarter totaled $56 million, compared to $71
million in the prior quarter before the cumulative effect of a change in
accounting principle and $118 million for last year's second quarter.
Sales in the second quarter totaled $1.418 billion, compared to $1.402
billion in the prior quarter and $1.459 billion for the second quarter of
1998.
"The quarter unfolded as we anticipated it might," said UCC Chairman
and CEO William H. Joyce. "We were affected by rapidly rising feedstock
costs early in the quarter that could not be passed along quickly enough
through higher selling prices, plus we experienced weak partnership
results. Licensing income, while strong, declined from the high levels
realized in the first quarter. On the positive side, fixed cost
productivity and volume were excellent. Income was also favorably affected
by a $12 million net ($9 million after taxes) litigation settlement related
to licensing and reduced losses from corporate investments carried at
equity versus the first quarter.
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1999
P3-01-009
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"Prospects for improved third quarter earnings appear encouraging
based upon current conditions," Dr. Joyce continued. "We expect strong
demand through the quarter for all businesses and increased product selling
prices in the Basic Chemicals & Polymers (BC&P) segment. Raw material
feedstock prices are expected to rise, but only slightly over second
quarter levels. While we will feel the impact of higher raw material
prices and transfer costs in the Specialties & Intermediate (S&I) segment,
we will benefit from a pre-tax gain of $38 million from the settlement of
litigation in the licensing business. Additionally, our corporate
investments carried at equity are expecting to benefit from improved
selling prices."
The S&I segment reported an operating profit of $182 million for the
second quarter of 1999, including the previously cited $12 million
litigation gain, compared to $203 million in the prior quarter and $166
million in the same period a year ago. Dr. Joyce stated increased raw
material costs combined with lower product selling prices, and poorer
results from the UOP partnership, contributed to the decline in operating
profit versus the first quarter of 1999.
The BC&P segment reported an operating loss of $46 million for the
second quarter of 1999, compared to an operating loss of $38 million in the
prior quarter and an operating profit of $42 million in the 1998 second
quarter. Increases in raw material feedstock prices negatively affected
the segment's operating profit, but a small increase in product selling
prices over first quarter levels helped to offset some of the impact.
Net income for the first six months of 1999 was $107 million, or $0.79
per diluted share. This compares to $260 million, or $1.86 per diluted
share, for the same period a year ago. Worldwide net sales for the first
six months of 1999 were $2.820 billion, compared to $3.020 billion for the
first half of 1998.
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Union Carbide is a worldwide chemicals company with advanced process
technologies and large-scale chemical production facilities.
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.
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 a large manufacturer of
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.
Cautionary Statement for Purposes of the "Safe Harbor" Provisions
Of the Private Securities Litigation Act of 1995
Those statements in the preceding pages that do not reflect historical
information are forward-looking statements. Forward-looking statements
include statements concerning anticipated future events or performance,
product prices, cost improvements, raw material costs, volume increases,
and earnings expectations. Naturally, such forward-looking statements are
subject to risks and uncertainties. In addition to all specific
assumptions cited, important factors that could cause actual results to
differ materially from those discussed in such forward-looking statements
include: the supply/demand balance for the corporation's products;
customer inventory levels; competitive pricing pressures; feedstock
availability and costs; changes in industry production capacities and
operating rates; currency exchange rates; interest rates; global economic
conditions; disruption in transportation facilities; competitive technology
positions; failure by the corporation to achieve technology objectives,
achieve cost reduction targets or complete projects on schedule and on
budget; and an inability to obtain new customers or retain existing ones.
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<TABLE>
UNION CARBIDE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
<CAPTION>
Quarter Ended
June 30, Mar. 31, June 30,
Millions of Dollars, Except Per Share Amounts 1999 1999 1998
<S> <C> <C> <C>
NET SALES $1,418 $1,402 $1,459
Cost of sales, exclusive of depreciation and amortization 1,115 1,042 1,087
Research and development 39 37 36
Selling, administrative and other expenses (a) 57 70 72
Depreciation and amortization 95 104 98
Partnership income (loss) (4) 6 27
Other income - net 27 14 10
INCOME BEFORE INTEREST EXPENSE AND PROVISION
FOR INCOME TAXES 135 169 203
Interest expense 35 31 29
INCOME BEFORE PROVISION FOR INCOME TAXES 100 138 174
Provision for income taxes 25 34 51
INCOME OF CONSOLIDATED COMPANIES AND PARTNERSHIPS 75 104 123
Minority interest 1 1 1
Loss from corporate investments carried at equity 18 32 4
INCOME BEFORE CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE 56 71 118
Cumulative effect of change in accounting principle - (20) -
NET INCOME $ 56 $ 51 $ 118
Earnings per common share
Basic - Income before cumulative effect of
change in accounting principle $ 0.42 $ 0.53 $ 0.87
- Cumulative effect of change in accounting
principle - (0.14) -
- Net income $ 0.42 $ 0.39 $ 0.87
Based on the indicated number of shares 133,088,173 132,848,490 136,132,527
Diluted - Income before cumulative effect of
change in accounting principle $ 0.41 $ 0.52 $ 0.85
- Cumulative effect of change in accounting
principle - (0.14) -
- Net income $ 0.41 $ 0.38 $ 0.85
Based on the indicated number of shares 136,453,663 135,710,019 139,905,442
(a) Selling $ 23 $ 23 $ 23
Administrative 16 25 29
Other expenses 18 22 20
Total $ 57 $ 70 $ 72
</TABLE>
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<TABLE>
UNION CARBIDE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
<CAPTION>
Six Months Ended
June 30,
Millions of Dollars, Except Per Share Amounts 1999 1998
<S> <C> <C>
NET SALES $2,820 $3,020
Cost of sales, exclusive of depreciation and amortization 2,157 2,248
Research and development 76 73
Selling, administrative and other expenses (a) 127 156
Depreciation and amortization 199 193
Partnership income 2 64
Other income - net 41 21
INCOME BEFORE INTEREST EXPENSE AND PROVISION FOR INCOME TAXES 304 435
Interest expense 66 56
INCOME BEFORE PROVISION FOR INCOME TAXES 238 379
Provision for income taxes 59 110
INCOME OF CONSOLIDATED COMPANIES AND PARTNERSHIPS 179 269
Minority interest 2 2
Loss from corporate investments carried at equity 50 7
INCOME BEFORE CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING PRINCIPLE 127 260
Cumulative effect of change in accounting principle (20) -
NET INCOME $ 107 $ 260
Earnings per common share
Basic - Income before cumulative effect of
change in accounting principle $ 0.95 $ 1.91
- Cumulative effect of change in accounting principle (0.15) -
- Net income $ 0.80 $ 1.91
Based on the indicated number of shares 132,968,994 136,502,193
Diluted - Income before cumulative effect of
change in accounting principle $ 0.93 $ 1.86
- Cumulative effect of change in accounting principle (0.14) -
- Net income $ 0.79 $ 1.86
Based on the indicated number of shares 136,082,504 140,155,776
(a) Selling $ 46 $ 49
Administrative 41 58
Other expenses 40 49
Total $ 127 $ 156
</TABLE>
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<TABLE>
UNION CARBIDE CORPORATION AND SUBSIDIARIES
SEGMENT DATA
<CAPTION>
Quarter Ended
June 30, Mar. 31, June 30,
Millions of dollars 1999 1999 1998
<S> <C> <C> <C>
SALES
Specialties & Intermediates $1,036 $1,034 $1,060
Basic Chemicals & Polymers 436 421 480
Intersegment Eliminations (54) (53) (81)
Total $1,418 $1,402 $1,459
OPERATING PROFIT (LOSS)
Specialties & Intermediates $ 182 $ 203 $ 166
Basic Chemicals & Polymers (46) (38) 42
Other (1) 4 (5)
Total $ 135 $ 169 $ 203
DEPRECIATION AND AMORTIZATION
Specialties & Intermediates $ 62 $ 63 $ 61
Basic Chemicals & Polymers 33 41 37
Total $ 95 $ 104 $ 98
CAPITAL EXPENDITURES
Specialties & Intermediates $ 93 $ 69 $ 131
Basic Chemicals & Polymers 115 104 80
Total $ 208 $ 173 $ 211
</TABLE>
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<TABLE>
UNION CARBIDE CORPORATION AND SUBSIDIARIES
SEGMENT DATA
<CAPTION>
Six Months Ended June 30,
Millions of dollars 1999 1998
<S> <C> <C>
SALES
Specialties & Intermediates $2,070 $2,180
Basic Chemicals & Polymers 857 998
Intersegment Eliminations (107) (158)
Total $2,820 $3,020
OPERATING PROFIT (LOSS)
Specialties & Intermediates $ 385 $ 368
Basic Chemicals & Polymers (84) 78
Other 3 (11)
Total $ 304 $ 435
DEPRECIATION AND AMORTIZATION
Specialties & Intermediates $ 125 $ 121
Basic Chemicals & Polymers 74 72
Total $ 199 $ 193
CAPITAL EXPENDITURES
Specialties & Intermediates $ 162 $ 221
Basic Chemicals & Polymers 219 136
Total $ 381 $ 357
</TABLE>
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