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)
April 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: 9
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Item 5. OTHER EVENTS.
(b) See Union Carbide Corporation's press release dated April 26,
1999 accompanying this report as Exhibit 99.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
99. Press release, April 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: April 26, 1999
UNION CARBIDE CORPORATION
By /s/J. Macdonald
J. Macdonald
Assistant Secretary
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EXHIBIT INDEX
Exhibit
99. Press release, dated April 26, 1999.
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Exhibit 99
UNION CARBIDE
NEWS RELEASE
CONTACT: David N. Kernis
(203) 794-6929
UNION CARBIDE REPORTS 1st QUARTER EARNINGS
DANBURY, Conn., April 26 -- Union Carbide Corporation (UCC) today
reported first quarter 1999 earnings of $0.52 per diluted share before the
cumulative effect of a change in accounting principle. Carbide earned $0.49
per diluted share in the prior quarter (including $0.31 per share
from proceeds of a litigation settlement) and $1.01 in the first quarter of
1998.
The required change in accounting principle for start-up costs (SOP 98-5)
resulted in an after-tax charge of $20 million, or $0.14 per diluted share in
the current quarter, representing the cumulative effect of the change in
accounting for periods prior to Jan. 1, 1999.
Net income for the quarter before the cumulative effect of change in
accounting principle totaled $71 million, compared to $67 million in the prior
quarter and $142 million for last year's first quarter. Sales in the first
quarter totaled $1.402 billion, compared to $1.289 billion in the prior
quarter and $1.561 billion for the first quarter of 1998.
UCC Chairman and CEO William H. Joyce said that stronger volume, improved
product mix and well above trend-line licensing income in the company's
Specialties & Intermediates (S&I) segment accounted for the improvement over
the prior quarter (excluding the proceeds from the litigation settlement).
Carbide's S&I segment reported operating profit of $203 million for the first
quarter of 1999, compared to $161 million in the prior quarter (excluding the
effect of the favorable litigation settlement) and $202 million in the same
period a year ago.
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1999
P3-01-006
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The company's Basic Chemicals & Polymers (BC&P) segment reported an
operating loss of $38 million for the first quarter of 1999, compared to a
loss of $45 million in the prior quarter and operating profit of $36 million
in the 1998 first quarter. Carbide said that first quarter price increases in
polyethylene and in glycol used for antifreeze and reduced turnaround costs
were offset by price declines in polyester glycol and increased raw material
costs. Compared to a year ago, BC&P continued to suffer from weak pricing.
While pleased with the company's volume growth and improved fixed cost
productivity in the first quarter, Dr. Joyce said it is difficult to get a
clear picture of the second quarter. We do not know how long the current
spike in raw material costs will last or how much of the increases will be
offset by higher product prices, in addition to cost savings. It is likely,
however, that licensing income will be weaker than in the first quarter, said
Dr. Joyce.
Union Carbide repurchased 503,700 of its shares during the first quarter
of 1999, at a cost of $21.6 million. Since the start of the common share
buyback program in 1993, UCC has repurchased 55.9 million shares out of a
total authorization of 60 million shares, and reduced the net total of common
shares outstanding by 34.7 million, excluding the conversion in 1997 of
15.4 million ESOP preferred shares into common shares.
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 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 looking-forward 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
Mar. 31, Dec. 31, Mar. 31,
Millions of Dollars, Except Per Share Amounts 1999 1998 1998
<S> <C> <C> <C>
NET SALES $1,402 $1,289 $1,561
Cost of sales, exclusive of
depreciation and amortization 1,042 1,010 1,161
Research and development 37 36 37
Selling, administrative and
other expenses (a) 70 70 84
Depreciation and amortization 104 101 95
Partnership income 6 15 37
Net gains from settlements of
UNIPOL Systems-business litigations - 71 -
Other income - net 14 20 11
INCOME BEFORE INTEREST EXPENSE AND PROVISION
FOR INCOME TAXES 169 178 232
Interest expense 31 30 27
INCOME BEFORE PROVISION FOR INCOME TAXES 138 148 205
Provision for income taxes 34 49 59
INCOME OF CONSOLIDATED COMPANIES AND
PARTNERSHIPS 104 99 146
Minority interest 1 1 1
Loss from corporate investments
carried at equity 32 31 3
INCOME BEFORE CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE 71 67 142
Cumulative effect of change
in accounting principle (20) - -
NET INCOME $ 51 $ 67 $ 142
Earnings per common share
Basic - Income before cumulative effect of
change in accounting principle $ 0.53 $ 0.50 $ 1.03
- Cumulative effect of change in
accounting principle 0.14 - -
- Net income - common stockholders $ 0.39 $ 0.50 $ 1.03
Based on the indicated number of shares 132,848,490 132,869,126 136,875,966
Diluted - Income before cumulative effect of
change in accounting principle $ 0.52 $ 0.49 $ 1.01
- Cumulative effect of change in
accounting principle 0.14 - -
- Net income - common stockholders $ 0.38 $ 0.49 $ 1.01
Based on the indicated number of shares 135,710,019 135,830,721 140,410,216
(a) Selling $ 23 $ 25 $ 26
Administrative 25 23 29
Other expenses 22 22 29
Total $ 70 $ 70 $ 84
</TABLE>
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<TABLE>
UNION CARBIDE CORPORATION AND SUBSIDIARIES
SEGMENT DATA
<CAPTION>
Quarter Ended
Mar. 31, Dec. 31, Mar. 31,
Millions of dollars 1999 1998 1998
SALES
<S> <C> <C> <C>
Specialties & Intermediates $1,034 $ 964 $1,120
Basic Chemicals & Polymers 421 383 518
Intersegment Eliminations (53) (58) (77)
Total $1,402 $1,289 $1,561
OPERATING PROFIT (LOSS)
Specialties & Intermediates $ 203 $ 232 $ 202
Basic Chemicals & Polymers (38) (45) 36
Other 4 (9) (6)
Total $ 169 $ 178 $ 232
DEPRECIATION AND AMORTIZATION
Specialties & Intermediates $ 63 $ 65 $ 60
Basic Chemicals & Polymers 41 36 35
Total $ 104 $ 101 $ 95
CAPITAL EXPENDITURES
Specialties & Intermediates $ 69 $ 106 $ 90
Basic Chemicals & Polymers 104 105 56
Total $ 173 $ 211 $ 146
</TABLE>
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