EXHIBIT 99
UNION CARBIDE
News Release
CONTACT: Tomm F. Sprick
(203) 794-6992
UNION CARBIDE REPORTS 3rd QUARTER EARNINGS
DANBURY, Conn., Oct. 30 -- Union Carbide Corporation (UCC) today
reported third quarter 2000 earnings of $0.22 per diluted share,
compared to $0.36 per diluted share (before inclusion of a $0.21 per
share gain from a litigation settlement) in the third quarter of 1999.
Second quarter 2000 earnings were $0.86 per diluted share, before
inclusion of an $0.08 per diluted share gain from the demutualization of
Metropolitan Life Insurance Company (Met Life), a provider of certain
employee benefits for the company.
Union Carbide Chairman and CEO William H. Joyce said the decline in
earnings and margins from the prior quarter reflected higher costs for
energy and raw materials combined with lower average selling prices from
prior quarter levels for polyethylene and ethylene glycol. Energy and
raw material costs continued to rise during the quarter, he said,
particularly in September.
Income from investments carried at equity totaled $33 million for
the current quarter, compared to $12 million in the third quarter of
last year, and $43 million in second quarter 2000. Partnership losses
totaled $6 million in third quarter 2000, compared to income of $18
million in the same period last year and income of $9 million in second
quarter 2000.
The Carbide CEO said that the company's EQUATE joint venture in
Kuwait was operating efficiently and well, and that the decline from its
second quarter performance was largely attributable to a nearly two-week
curtailment of ethane feedstock supply resulting from problems at a
nearby refinery.
- MORE -
2000
P3-01-014
<PAGE>
Page 2
of 12
He also indicated that a decline in UOP earnings was mainly
responsible for lower partnership results posted in the third quarter.
Dr. Joyce added that concerns about the current environment of high
demand and limited supply have caused oil companies to defer catalyst
replacement and technology upgrade projects in order to keep refinery
capacity running, which resulted in a delay in the expected upturn in
UOP earnings.
Dr. Joyce said that rapidly rising raw material and energy costs,
at the same time that the strong U. S. dollar hurt earnings from
overseas sales, made the third quarter of 2000 among the most difficult
in recent years for petrochemical producers. In this very challenging
business environment, the company has intensified efforts to control
fixed costs and capital expenditures and improve working capital
management.
Dr. Joyce noted that fixed costs declined in the quarter even
though costs associated with the third quarter 2000 startup of olefins
and polyethylene units in Canada were only partly offset by some non-
recurring declines in "selling, administrative and other expenses."
Reductions both in accounts receivable and in inventories from second
quarter 2000 to current levels contributed approximately $90 million to
cash flow in the current year's third quarter.
Having substantially completed the Canadian units, which are the
last of the corporation's planned major North American projects,
construction expenditures in the quarter were less than quarterly
depreciation for the first time since 1993. Dr. Joyce added that, over
the next year, investments would also decline. The company's largest
investment, construction of a fully integrated chemicals complex in
Malaysia by the OPTIMAL Group, is about 60 percent complete and expected
to be completed in late 2001.
- MORE -
<PAGE>
Page 3
of 12
Dr. Joyce said he was confident that capacity additions and
infrastructure improvements made during the past five years would have a
positive effect on earnings in future years and would make an
appreciable contribution to the success of the combined companies
following completion of the planned Dow Chemical/Union Carbide merger.
Net income for the quarter totaled $29 million, compared to $77
million for last year's third quarter, and $130 million for the second
quarter of this year. Third quarter sales totaled $1.637 billion,
compared to $1.498 billion for the third quarter of 1999 and $1.674
billion for second quarter 2000. The effective tax rate in the quarter
remained approximately 25 percent, the full year estimated rate.
Dr. Joyce noted that the corporation's performance in the near term
is highly dependent on external variables, such as the cost of raw
materials and energy, as well as industry operating rates. The company
is anticipating increases in average fourth quarter raw material and
energy costs compared to third quarter levels. Overall, average BC&P
selling prices in the fourth quarter are likely to be lower than in the
third quarter, despite price increases in selected products. Earnings
in the S&I segment should benefit from modest margin improvement in a
number of specialty and intermediate product lines.
Partnership income should remain weak in the quarter. Equity
company results will likely decline from third quarter, primarily
because of weakness at Polimeri Europa, the company's European-based
polyethylene joint venture, as well as increased costs associated with
the Malaysian joint venture projects.
The S&I segment reported an operating profit of $45 million for the
third quarter of 2000, compared to $96 million (before a gain from
litigation of $38 million) for the same period last year,
- MORE -
<PAGE>
Page 4
of 12
and $80 million (before the gain of $12 million from the demutualization
of Met Life) for the second quarter of this year. Average selling price
increases were insufficient to offset rising raw material and energy
costs. S&I segment results were negatively affected by reduced
partnership income.
The BC&P segment reported an operating loss of $15 million for the
third quarter of 2000, compared to an operating loss of $7 million for
the third quarter of 1999, and operating income of $68 million (before
the gain of $6 million from the Met Life demutualization) in the prior
quarter. Compared to last year's third quarter, the loss in the current
quarter reflects higher energy and raw material costs that were only
slightly offset by higher selling prices. Lower average selling prices
compared to the prior quarter, and higher energy and raw material costs,
resulted in a 35 percent decline in unit variable margins for the
segment compared to second quarter 2000.
Net income for the first nine months of 2000 was $256 million, or
$1.86 per diluted share. This compares to $217 million in the same
period last year, or $1.59 per diluted share, before the cumulative
effect of a change in accounting principle of $20 million, or $0.14 per
diluted share. Net worldwide sales for the first nine months of 2000
were $4.928 billion, compared to $4.318 billion for the same period last
year.
Union Carbide is a worldwide chemicals company with advanced
process technologies and large-scale chemical production facilities.
- Specialties & Intermediates (S&I) -- 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.
- MORE -
<PAGE>
Page 5
of 12
- Basic Chemicals & Polymers (BC&P) -- 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 the pending Dow Chemical/Union
Carbide merger, anticipated future events or performance, sales prices,
cost improvements, raw material costs, volume increases, operating rates
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; raw material and energy 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; an inability to
obtain new customers or retain existing ones; and, with respect to the
Dow merger, failure to obtain necessary regulatory and other
governmental approvals and failure to satisfy conditions of the merger
agreement.
- MORE -
<PAGE>
Page 6
of 12
<TABLE>
UNION CARBIDE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
<CAPTION>
Quarter Ended
Sept. 30, June 30, Sept. 30,
Millions of dollars, except per share amounts 2000 2000 1999
<S> <C> <C> <C>
NET SALES $1,637 $1,674 $1,498
Cost of sales, exclusive of depreciation and amortization 1,421 1,354 1,232
Research and development 37 39 38
Selling, administrative and other expenses (a) 48 61 72
Depreciation and amortization 100 102 103
Partnership income (loss) (6) 9 18
Other income - net 9 36 52
INCOME BEFORE INTEREST EXPENSE AND PROVISION
FOR INCOME TAXES 34 163 123
Interest expense 35 45 32
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES (1) 118 91
Provision for income taxes - 29 24
INCOME (LOSS) OF CONSOLIDATED COMPANIES AND
PARTNERSHIPS (1) 89 67
Minority interest 3 2 2
Income from corporate investments carried at equity 33 43 12
NET INCOME $ 29 $ 130 $ 77
Earnings per common share
Basic - Net income $ 0.22 $ 0.96 $ 0.58
Based on the indicated number of shares 134,960,774 134,745,740 133,464,524
Diluted - Net income $ 0.22 $ 0.94 $ 0.57
Based on the indicated number of shares 137,075,390 137,919,070 136,898,772
(a) Selling $ 21 $ 22 $ 24
Administrative 21 22 28
Other expenses 6 17 20
Total $ 48 $ 61 $ 72
</TABLE>
- MORE -
<PAGE>
Page 7
of 12
<TABLE>
UNION CARBIDE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
<CAPTION>
Nine Months Ended
Sept. 30,
Millions of dollars, except per share amounts 2000 1999
<S> <C> <C>
NET SALES $4,928 $4,318
Cost of sales, exclusive of depreciation and amortization 4,089 3,369
Research and development 115 114
Selling, administrative and other expenses (a) 182 199
Depreciation and amortization 304 302
Partnership income 6 20
Other income - net 69 93
INCOME BEFORE INTEREST EXPENSE AND PROVISION
FOR INCOME TAXES 313 447
Interest expense 117 98
INCOME BEFORE PROVISION FOR INCOME TAXES 196 349
Provision for income taxes 49 90
INCOME OF CONSOLIDATED COMPANIES AND
PARTNERSHIPS 147 259
Minority interest 6 4
Income (loss) from corporate investments carried at equity 115 (38)
INCOME BEFORE CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING PRINCIPLE 256 217
Cumulative effect of change in accounting principle - (20)
NET INCOME $ 256 $ 197
Earnings per common share
Basic - Income before cumulative effect of
change in accounting principle $ 1.90 $ 1.63
- Cumulative effect of change in accounting
principle - (0.15)
- Net income $ 1.90 $ 1.48
Based on the indicated number of shares 134,705,126 133,135,986
Diluted - Income before cumulative effect of
change in accounting principle $ 1.86 $ 1.59
- Cumulative effect of change in accounting
principle - (0.14)
- Net income $ 1.86 $ 1.45
Based on the indicated number of shares 137,520,401 136,356,408
(a) Selling $ 66 $ 70
Administrative 65 69
Other expenses 51 60
Total $ 182 $ 199
</TABLE>
- MORE -
<PAGE>
Page 8
of 12
<TABLE>
UNION CARBIDE CORPORATION AND SUBSIDIARIES
SEGMENT DATA
<CAPTION>
Quarter Ended
Sept. 30, June 30, Sept. 30,
2000 2000 1999
Millions of dollars, except as indicated
Specialties & Intermediates
<S> <C> <C> <C>
Segment revenues $1,122 $1,125 $1,057
Depreciation and amortization 65 67 67
Partnership income (loss) (6) 8 17
Operating profit 45 92 134
Income (loss) from corporate
investments carried at equity 1 (2) -
Unit variable margin (cents/pound) 17.6 18.6 20.1
Fixed cost per pound of products
sold (cents/pound) 13.1 13.3 14.1
Capital expenditures 29 47 58
Basic Chemicals & Polymers
Segment revenues $ 614 $ 655 $ 522
Depreciation and amortization 35 35 36
Partnership income (loss) - 1 1
Operating profit (loss) (15) 74 (7)
Income (loss) from corporate
investments carried at equity 32 45 12
Unit variable margin (cents/pound) 7.5 11.6 7.1
Fixed cost per pound of products
sold (cents/pound) 6.4 6.3 5.9
Capital expenditures 46 80 120
Other
Operating profit (loss) $ 4 $ (3) $ (4)
</TABLE>
- MORE -
<PAGE>
Page 9
of 12
<TABLE>
UNION CARBIDE CORPORATION AND SUBSIDIARIES
SEGMENT DATA
<CAPTION>
Nine Months Ended
Sept. 30, Sept. 30,
2000 1999
Millions of dollars, except as indicated
Specialties & Intermediates
<S> <C> <C>
Segment revenues $3,355 $3,127
Depreciation and amortization 199 192
Partnership income 4 19
Operating profit 219 530
Income (loss) from corporate
investments carried at equity - 4
Unit variable margin (cents/pound) 18.4 22.9
Fixed cost per pound of products
sold (cents/pound) 13.1 13.7
Capital expenditures 145 220
Basic Chemicals & Polymers
Segment revenues $1,877 $1,379
Depreciation and amortization 105 110
Partnership income 2 1
Operating profit (loss) 89 (82)
Income (loss) from corporate
investments carried at equity 115 (42)
Unit variable margin (cents/pound) 9.5 5.8
Fixed cost per pound of products
sold (cents/pound) 6.3 5.4
Capital expenditures 252 339
Other
Operating profit (loss) $ 5 $ (1)
</TABLE>
- MORE -
<PAGE>
Page 10
of 12
<TABLE>
UNION CARBIDE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
<CAPTION>
Millions of Dollars
Sept. 30, June 30,
2000 2000
ASSETS
<S> <C> <C>
Cash and cash equivalents $ 63 $ 59
Notes and accounts receivable 1,104 1,166
Inventories 701 743
Other current assets 314 301
Current assets 2,182 2,269
Net fixed assets 4,577 4,616
Investments and other assets 1,613 1,532
Total Assets $8,372 $8,417
LIABILITIES AND STOCKHOLDERS' EQUITY
Short-term debt and current portion of
long-term debt $1,111 $1,109
Other current liabilities 1,085 1,071
Current liabilities 2,196 2,180
Long-term debt 1,755 1,758
Other long-term obligations 1,655 1,694
Stockholders' equity 2,766 2,785
Total Liabilities and Stockholders' Equity $8,372 $8,417
</TABLE>
- MORE -
<PAGE>
Page 11
of 12
<TABLE>
Union Carbide Corporation
Data Sheet
<CAPTION>
3Q00 2Q00 3Q99 3Q/2Q 3Q/3Q
Union Carbide Corporation
<S> <C> <C> <C> <C> <C> <C>
Net Sales MM $ 1,637 1,674 1,498 (2.2)% 9.3 %
Customer Volumes MM Lb. 4,202 4,128 4,185 1.8 % 0.4 %
Average Selling Prices Cents/Lb. 39.0 40.6 35.8 (4.0)% 8.8 %
Unit Variable Margin Cents/Lb. 12.9 15.5 14.1 (16.8)% (8.7)%
Fixed Costs MM $ 410 418 434 (1.9)% (5.5)%
S & I Segment
Segment Revenues * MM $ 1,122 1,125 1,057 (0.3)% 6.1 %
Customer Volumes MM Lb. 2,216 2,266 2,244 (2.2)% (1.2)%
Average Selling Prices Cents/Lb. 50.6 49.7 47.1 1.8 % 7.5 %
Unit Variable Margin Cents/Lb. 17.6 18.6 20.1 (5.4)% (12.4)%
Operating Profit / Loss ** MM $ 45 92 134 (51.1)% (66.4)%
Increase in Raw Material,
Energy & Related
Manufacturing Variable Costs MM $ 25 132
B C & P Segment
Segment Revenues MM $ 614 655 522 (6.3)% 17.6 %
Customer Sales Revenues MM $ 515 549 441 (6.2)% 16.8 %
Customer Volumes MM Lb. 1,986 1,862 1,941 6.7 % 2.3 %
Average Selling Prices Cents/Lb. 25.9 29.5 22.7 (12.2)% 14.2 %
Unit Variable Margin Cents/Lb. 7.5 11.6 7.1 (35.3)% 5.6 %
Operating Profit / Loss MM $ (15) 74 (7) (120.3)% (114.3)%
Increase in Raw Material,
Energy & Related
Manufacturing Variable Costs MM $ 24 79
Change in Average Selling Prices
B C & P Chemicals Cents/Lb. Change (6.8) 2.2
B C & P Plastics Cents/Lb. Change (2.2) 2.2
Change in Customer Volumes
B C & P Chemicals % Change 15.3 % (4.4)%
B C & P Plastics % Change 1.4 % 7.7 %
Hydrocarbon By-products % Change 0.4 % 8.3 %
* Segment Revenues equal Customer Revenues.
** S&I Operating Profit for the 2nd Quarter of 2000 includes a gain of $12 million, and BC&P Operating
Profit for the same Quarter includes a gain of $6 million, both from the demutualization of
Metropolitan Life, a provider of certain employee benefit programs for the company; S&I Operating
Profit for the 3rd Quarter of 1999 includes a gain of $38 million from a favorable litigation settlement.
</TABLE>
- MORE -
<PAGE>
Page 12
of 12
<TABLE>
Union Carbide Corporation
Data Sheet
<CAPTION>
9 Mo. 00/
9 Mo. 00 9 Mo. 99 9 Mo. 99
Union Carbide Corporation
<S> <C> <C> <C> <C>
Net Sales MM $ 4,928 4,318 14.1 %
Customer Volumes MM Lb. 12,528 12,546 (0.1)%
Average Selling Prices Cents/Lb. 39.3 34.4 14.2 %
Unit Variable Margin Cents/Lb. 14.3 15.0 (4.7)%
Fixed Costs MM $ 1,251 1,244 0.6 %
S & I Segment
Segment Revenues * MM $ 3,355 3,127 7.3 %
Customer Volumes MM Lb. 6,770 6,723 0.7 %
Average Selling Prices Cents/Lb. 49.6 46.5 6.7 %
Unit Variable Margin Cents/Lb. 18.4 22.9 (19.7)%
Operating Profit / Loss ** MM $ 219 530 (58.7)%
Increase in Raw Material,
Energy & Related
Manufacturing Variable Costs MM $ 528
B C & P Segment
Segment Revenues MM $ 1,877 1,379 36.1 %
Customer Sales Revenues MM $ 1,573 1,191 32.1 %
Customer Volumes MM Lb. 5,758 5,823 (1.1)%
Average Selling Prices Cents/Lb. 27.3 20.5 33.2 %
Unit Variable Margin Cents/Lb. 9.5 5.8 63.8 %
Operating Profit / Loss ** MM $ 89 (82) 208.5 %
Increase in Raw Material,
Energy & Related
Manufacturing Variable Costs MM $ 279
Change in Average Selling Prices
B C & P Chemicals Cents/Lb. Change 7.3
B C & P Plastics Cents/Lb. Change 7.2
Change in Customer Volumes
B C & P Chemicals % Change (14.1)%
B C & P Plastics % Change 4.2 %
Hydrocarbon By-products % Change 9.8 %
* Segment Revenues equal Customer Revenues.
** S&I Operating Profit for the Nine Months of 2000 includes a gain of $12 million, and
BC&P Operating Profit for the same Nine Months includes a gain of $6 million, both from the
demutualization of Metropolitan Life, a provider of certain employee benefit programs for the
company; S&I Operating Profit for the Nine Months of 1999 includes a gain of $50 million
from favorable litigation settlements.
</TABLE>
- END -
