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 31, 2000
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: 14
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Item 5. OTHER EVENTS.
See Union Carbide Corporation's press release dated
January 31, 2000 accompanying this report as Exhibit 99.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(C) Exhibits.
99. Press release, January 31, 2000.
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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: January 31, 2000
UNION CARBIDE CORPORATION
By: /s/J. Macdonald
J. Macdonald
Assistant Secretary
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EXHIBIT INDEX
Exhibits
99. Press release, dated January 31, 2000.
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EXHIBIT 99
UNION CARBIDE
NEWS RELEASE
CONTACT: Sean S. Clancy
(203) 794-6976
UNION CARBIDE REPORTS STRONG 4th QUARTER EARNINGS
DANBURY, Conn., Jan. 31 -- Union Carbide Corporation (UCC) today reported
fourth quarter 1999 earnings of $0.68 per diluted common share, compared to
$0.57 in the third quarter of 1999 and $0.49 for the same period in 1998.
Earnings from the third quarter of 1999 and the fourth quarter of 1998 include
per share gains from litigation settlements of $0.21 and $0.31, respectively.
"Our earnings reflected continuing high volumes, improved pricing in
Basic Chemicals & Polymers (BC&P) and strengthening performance by our joint
ventures, EQUATE and Polimeri Europa. These gains were partially offset by
higher raw material costs," said Dr. William H. Joyce, Carbide's Chairman and
Chief Executive Officer. "EQUATE's improved performance benefited from its
high operating rates and the ability to capitalize on its advantaged feedstock
cost position. Partnership income was negatively impacted by losses
associated with the corporation's Aspell joint venture and the continued
weakness in earnings from UOP."
Net income available to common stockholders for the quarter totaled $94
million, compared to $77 million in the third quarter and $67 million for the
same period a year ago. Sales in the fourth quarter totaled $1.552 billion,
compared to $1.498 billion in the prior quarter and $1.289 billion for the
same period in 1998.
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2000
P3-01-004
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UCC's Specialties & Intermediates (S&I) segment reported operating profit
of $77 million, compared to $134 million in the third quarter of 1999 and $232
million in the fourth quarter of 1998. Both the third quarter of 1999 and the
fourth quarter of 1998 include gains from the settlement of litigation
associated with the licensing business. The combination of weak pricing,
increased raw material costs and poor partnership results adversely affected
segment earnings.
Carbide's BC&P segment reported an operating profit of $61 million,
compared to operating losses of $7 million in the third quarter of 1999 and
$45 million in the fourth quarter of 1998. Continued high sales volumes and
higher average selling prices were responsible for this quarter's improved
performance.
Carbide's Other segment reported a fourth quarter 1999 loss of $30
million that was primarily the result of environmental expenses of a
discontinued business.
"Looking ahead, earnings in 2000 should be higher than last year. Recent
volatility in raw material prices, however, makes first quarter forecasting
difficult," said Dr. Joyce. "This is particularly true in BC&P where falling
prices in ethylene glycol and polyolefins, combined with increased raw
material costs, will create margin pressure. Equity companies should face
similar margin pressure resulting in an earnings decline. The S&I segment
should benefit from improvements in partnership and licensing income and lower
fixed costs. The net effect for the corporation will likely be lower income
in the first quarter than in the fourth quarter of 1999."
For the full year 1999, UCC reported net income available to common
stockholders of $311 million, or $2.27 per diluted common share before an
after-tax charge of $0.14 per diluted share representing the cumulative effect
of a required change in an accounting principle. Prior
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year earnings available to common stockholders were $403 million, or $2.91 per
diluted common share. Worldwide sales for 1999 were $5.870 billion, compared
to $5.659 billion in 1998.
Sales volumes for the year reached a record high of 16.8 billion pounds,
an increase of 13.9 percent over 1998. The corporation's fixed cost per pound
of products sold decreased to $0.102 per pound, down from $0.115 per pound in
1998 and $0.155 per pound in 1991.
Union Carbide is a worldwide chemicals company with advanced process
technologies and large-scale chemical production facilities. The
corporation's two business segments are:
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, raw
material costs, prices, volume, cost improvements and margins 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 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 or within 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
Dec. 31, Sept. 30, Dec. 31,
Millions of Dollars, 1999 1999 1998
Except Per Share Amounts
<S> <C> <C> <C>
NET SALES $1,552 $1,498 $1,289
Cost of sales, exclusive of
depreciation and amortization 1,240 1,232 1,010
Research and development 40 38 36
Selling, administrative and
other expenses (a) 58 72 70
Depreciation and amortization 106 103 101
Partnership income (loss) (9) 18 15
Other income - net 9 52 91
INCOME BEFORE INTEREST EXPENSE AND
PROVISION FOR INCOME TAXES 108 123 178
Interest expense 35 32 30
INCOME BEFORE PROVISION FOR INCOME TAXES 73 91 148
Provision for income taxes 18 24 49
INCOME OF CONSOLIDATED COMPANIES AND
PARTNERSHIPS 55 67 99
Minority interest 1 2 1
Income (loss) from corporate
investments carried at equity 40 12 (31)
NET INCOME $ 94 $ 77 $ 67
Earnings per common share
Basic - $ 0.70 $ 0.58 $ 0.50
Based on the indicated number of shares 133,953,770 133,464,524 132,869,126
Diluted - $ 0.68 $ 0.57 $ 0.49
Based on the indicated number of shares 137,557,329 136,898,772 135,830,721
<FN>
(a) Selling $ 24 $ 24 $ 25
Administrative 21 28 23
Other expenses 13 20 22
Total $ 58 $ 72 $ 70
</FN>
</TABLE>
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<TABLE>
UNION CARBIDE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
<CAPTION>
Year Ended
Dec. 31,
Millions of Dollars, Except Per Share Amounts 1999 1998
<S> <C> <C>
NET SALES $5,870 $5,659
Cost of sales, exclusive of depreciation
and amortization 4,609 4,294
Research and development 154 143
Selling, administrative and other expenses (a) 257 304
Depreciation and amortization 408 389
Partnership income 11 33
Other income - net 102 241
INCOME BEFORE INTEREST EXPENSE AND PROVISION
FOR INCOME TAXES 555 803
Interest expense 133 114
INCOME BEFORE PROVISION FOR INCOME TAXES 422 689
Provision for income taxes 108 217
INCOME OF CONSOLIDATED COMPANIES AND PARTNERSHIPS 314 472
Minority interest 5 3
Income (loss) from corporate investments
carried at equity 2 (66)
INCOME BEFORE CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING PRINCIPLE 311 403
Cumulative effect of change in accounting principle (20) -
NET INCOME $ 291 $ 403
Earnings per common share
Basic - Income before cumulative effect of
change in accounting principle $ 2.33 $ 2.98
- Cumulative effect of change in accounting
principle (0.15) -
- Net income $ 2.18 $ 2.98
Based on the indicated number of shares 133,342,112 135,028,100
Diluted - Income before cumulative effect of
change in accounting principle $ 2.27 $ 2.91
- Cumulative effect of change in accounting
principle (0.14) -
- Net income $ 2.13 $ 2.91
Based on the indicated number of shares 136,658,319 138,409,895
<FN>
(a) Selling $ 94 $ 99
Administrative 90 107
Other expenses 73 98
Total $ 257 $ 304
</FN>
</TABLE>
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<TABLE>
UNION CARBIDE CORPORATION AND SUBSIDIARIES
SEGMENT DATA
<CAPTION>
Quarter Ended
Dec. 31, Sept. 30, Dec. 31,
1999 1999 1998
Millions of dollars, Except As Indicated
<S> <C> <C> <C>
Specialties and Intermediates
Segment revenues $1,055 $1,057 $964
Depreciation and amortization 70 67 65
Partnership income (loss) (13) 17 15
Operating profit 77 134 232
Income (loss) from corporate
investments carried at equity (5) - (1)
Unit variable margin (cents/pound) 21.1 20.1 24.8
Fixed cost per pound of products
sold (cents/pound) 14.4 14.1 15.7
Capital expenditures 71 58 106
Basic Chemicals & Polymers
Segment revenues $ 597 $ 522 $383
Depreciation and amortization 36 36 36
Partnership income (loss) 4 1 -
Operating profit (loss) 61 (7) (45)
Income (loss) from corporate
investments carried at equity 45 12 (30)
Unit variable margin (cents/pound) 11.2 7.1 7.5
Fixed cost per pound of products
sold (cents/pound) 6.7 5.9 7.9
Capital expenditures 134 120 105
Other
Operating loss $ (30) $ (4) $ (9)
</TABLE>
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<TABLE>
UNION CARBIDE CORPORATION AND SUBSIDIARIES
SEGMENT DATA
<CAPTION>
Year Ended Dec. 31,
1999 1998
Millions of dollars, Except As Indicated
<S> <C> <C>
Specialties and Intermediates
Segment revenues $4,182 $4,139
Depreciation and amortization 262 247
Partnership income (loss) 6 27
Operating profit 607 833
Income (loss) from corporate
investments carried at equity (1) 1
Unit variable margin (cents/pound) 22.5 24.3
Fixed cost per pound of products
sold (cents/pound) 13.9 14.7
Capital expenditures 291 438
Basic Chemicals & Polymers
Segment revenues $1,976 $1,802
Depreciation and amortization 146 142
Partnership income (loss) 5 6
Operating profit (loss) (21) 20
Income (loss) from corporate
investments carried at equity 3 (67)
Unit variable margin (cents/pound) 7.2 9.6
Fixed cost per pound of products
sold (cents/pound) 5.8 7.5
Capital expenditures 473 344
Other
Operating loss $ (31) $ (50)
</TABLE>
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<TABLE>
UNION CARBIDE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
<CAPTION>
Millions of Dollars
at Dec. 31,
1999 1998
ASSETS
<S> <C> <C>
Cash and cash equivalents $ 41 $ 49
Notes and accounts receivable 1,132 933
Inventories 680 667
Other current assets 297 257
Current assets 2,150 1,906
Net fixed assets 4,521 4,181
Investments and other assets 1,286 1,204
Total Assets $7,957 $7,291
LIABILITIES AND STOCKHOLDERS' EQUITY
Short-term debt and current portion of
long-term debt $ 782 $ 426
Other current liabilities 1,007 1,044
Current liabilities 1,789 1,470
Long-term debt 1,869 1,796
Other long-term obligations 1,682 1,576
Stockholders' equity 2,617 2,449
Total Liabilities and Stockholders' Equity $7,957 $7,291
</TABLE>
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Union Carbide Corporation
Data Sheet
<CAPTION>
Union Carbide Corporation 4Q99 3Q99 4Q98 4Q/3Q 4Q/4Q
<S> <C> <C> <C> <C> <C>
Net Sales MM $ 1552 1498 1289 3.6% 20.4%
Customer Volumes MM lb 4217 4185 3604 0.8% 17.0%
Average Selling Prices % Change 3.4% 2.8%
Unit Variable Margin Cents/lb 16.3 14.1 16.9
Fixed Costs MM $ 472 434 435 8.8% 8.5%
S&I Segment
Segment Revenues MM $ 1055 1057 964 (0.2)% 9.4%
Customer Volumes MM lb 2223 2244 1948 (0.9)% 14.1%
Average Selling Prices % Change 0.8% (4.0)%
Unit Variable Margin Cents/lb 21.1 20.1 24.8
*Operating Profit MM $ 77 134 232
Increase in Key Raw Mtl. Costs MM $ 35 81
BC&P Segment
Segment Revenues MM $ 597 522 383 14.4% 55.9%
Customer Volumes MM lb 1994 1941 1656 2.7% 20.4%
Average Selling Prices % Change 9.7% 27.0%
Unit Variable Margin Cents/lb 11.2 7.1 7.5
Operating Profit (loss) MM $ 61 (7) (45)
Increase in Key Raw Mtl. Costs MM $ 12 118
Change in Average Selling Prices
BC&P Chemicals Cents/lb 3.4 6.3
BC&P Resins Cents/lb 2.1 9.6
Change in Customer Volumes
BC&P Chemicals % Change (0.7)% 3.7%
BC&P Resins % Change 1.7% 13.0%
Hydrocarbon By-products % Change 14.9% 111.4%
* S&I Operating Profit for the 3rd Quarter of 1999 includes a gain from a favorable litigation
settlement of the licensing business of $38 million and for the 4th Quarter of 1998 includes a
gain of $71 million from favorable net litigation settlements related to the licensing business.
</TABLE>
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Union Carbide Corporation
Data Sheet
<CAPTION>
Union Carbide Corporation 1999 1998 1999/1998
<S> <C> <C> <C>
Net Sales MM $ 5870 5659 3.7%
Customer Volumes MM lb 16763 14715 13.9%
Average Selling Prices % Change (9.1)%
Unit Variable Margin Cents/lb 15.3 17.7
Fixed Costs MM $ 1716 1689 1.6%
Increase in Key Raw Mtl. Costs MM $ 264
Capital Expenditures MM $ 764 782
S&I Segment
Segment Revenues MM $ 4182 4139 1.0%
Customer Volumes MM lb 8946 8101 10.4%
Average Selling Prices % Change (8.6)%
Unit Variable Margin Cents/lb 22.5 24.3
*Operating Profit MM $ 607 833
Increase in Key Raw Mtl. Costs MM $ 43
BC&P Segment
Segment Revenues MM $ 1976 1802 9.7%
Customer Volumes MM lb 7817 6614 18.2%
Average Selling Prices % Change 21.6 23.0 (6.1)%
Unit Variable Margin Cents/lb 7.2 9.6
Operating Profit (Loss) MM $ (21) 20
Increase in Key Raw Mtl. CostS MM $ 211
Change in Average Selling Prices
BC&P Chemicals Cents/lb (1.3)
BC&P Resins Cents/lb 0.9
Change in Customer Volumes
BC&P Chemicals % Change 13.8%
BC&P Resins % Change 10.4%
Hydrocarbon By-products % Change 54.3%
* S&I Operating Profit for the year 1999 includes a gain of $50 million from the favorable
settlement of litigation of the licensing business, and for the year 1998 includes a gain
of $189 million from net favorable litigation settlements related to the licensing business.
In 1998, S&I Operating Profit includes $53 million of losses associated with the Aspell joint venture.
</TABLE>
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