10-Q 1 firstquarterreport.txt QUARTERLY REPORT ON FORM 10-Q - MARCH 31, 2001 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D C 20549 FORM 10-Q (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2001 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 1-1463 UNION CARBIDE CORPORATION (a subsidiary of The Dow Chemical Company) (Exact name of registrant as specified in its charter) New York 13-1421730 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 39 Old Ridgebury Road, Danbury, CT 06817-0001 (Address of principal executive offices) (Zip Code) 203-794-2000 Registrant's telephone number, including area code (Former name, former address and former fiscal year, if changed since last report.) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No At April 30, 2001, 1,000 shares of common stock were outstanding, all of which were held by the registrant's parent, The Dow Chemical Company. The registrant meets the conditions set forth in General Instructions H(1)(a) and (b) of Form 10-Q and is therefore filing this form with a reduced disclosure format.
Union Carbide Corporation (a subsidiary of The Dow Chemical Company) Table of Contents Part I: Financial Information Page Item 1. Financial Statements Consolidated Statements of Income 3 Consolidated Balance Sheets 4 Consolidated Statements of Cash Flows 6 Consolidated Statements of Comprehensive Income 7 Notes to Consolidated Financial Statements 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 13 Item 3. Quantitative and Qualitative Disclosure About Market Risk 14 Part II: Other Information Item 1. Legal Proceedings 15 Item 6. Exhibits and Reports on Form 8-K 15 Signature 16
Cautionary statement: All statements in this Quarterly Report on Form 10-Q that do not reflect historical information are forward- looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995 (as amended). Forward-looking statements include statements concerning the accounting and tax treatment of the merger with The Dow Chemical Company ("Dow" and, with regard to the merger, the "Dow Merger"); plans; capital expenditures; environmental accruals; anticipated future events; interest rate and currency risk management; ongoing and planned capacity additions and other expansions; joint ventures; Management's Discussion and Analysis of Financial Condition and Results of Operations, and any other statements that do not reflect historical information. Such forward-looking statements are subject to risks and uncertainties. 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; competitive pricing pressures; raw material availability and costs; changes in industry production capacities and operating rates; currency exchange rates; global economic conditions; competitive technology positions; failure by the corporation to achieve technology objectives or complete projects on schedule and on budget, and an inability to obtain new customers or retain existing ones. Accordingly, there is no assurance that the corporation's expectations will be realized. The corporation assumes no obligation to provide revisions to any forward-looking statements should circumstances change. -2- Part I: Financial Information Item 1: Financial Statements:
Union Carbide Corporation and Subsidiaries Consolidated Statements of Income Quarter ended March 31, In millions (Unaudited) 2001 2000 Net Sales $ 1,536 $ 1,617 Cost of sales 1,476 1,402 Research and development expenses 46 58 Selling, general and administrative expenses 55 64 Amortization of intangibles 3 4 Merger-related expenses and restructuring 1,275 - Insurance and finance company operations, pretax income 1 1 Equity in earnings of nonconsolidated affiliates 12 42 Sundry income (expense) - net (1) 7 Earnings (Loss) Before Interest, Income Taxes and Minority Interests (1,307) 139 Interest income 2 16 Interest expense and amortization of debt discount 51 37 Income (Loss) Before Income Taxes and Minority Interests (1,356) 118 Provision (benefit) for income taxes (486) 20 Minority interests' share in income 1 1 Net Income (Loss) $ (871) $ 97 Depreciation $ 100 $ 98 Capital Expenditures $ 34 $ 195 See Notes to Consolidated Financial Statements.
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Union Carbide Corporation and Subsidiaries Consolidated Balance Sheets March 31, Dec. 31, In millions (Unaudited) 2001 2000 Assets Current Assets Cash and cash equivalents $ 46 $ 63 Marketable securities 74 74 Accounts and notes receivable: Trade (net of allowance for doubtful receivables) 906 897 Other 186 137 Inventories: Finished and work in process 555 557 Materials and supplies 161 193 Deferred income tax assets - current 589 142 Other current assets 170 113 Total current assets 2,687 2,176 Investments Investment in nonconsolidated affiliates 933 1,008 Other investments 96 97 Noncurrent receivables 173 154 Total investments 1,202 1,259 Property Property 9,322 9,361 Less accumulated depreciation 5,316 4,840 Net property 4,006 4,521 Other Assets Goodwill (net of accumulated amortization - 2001: $56; 2000: $54) 40 41 Deferred income tax assets - noncurrent 2 - Deferred charges and other assets 367 349 Total other assets 409 390 Total assets $ 8,304 $ 8,346 See Notes to Consolidated Financial Statements.
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Union Carbide Corporation and Subsidiaries Consolidated Balance Sheets March 31, Dec. 31, In millions (Unaudited) 2001 2000 Liabilities and Stockholders' Equity Current Liabilities Notes payable: Related companies $ 1,308 $ - Other 219 1,171 Long-term debt due within one year 1 7 Accounts payable: Trade 562 703 Other 122 67 Income taxes payable 15 - Accrued and other current liabilities 361 352 Total current liabilities 2,588 2,300 Long-Term Debt 1,748 1,748 Other Noncurrent Liabilities Deferred income tax liabilities - noncurrent 528 278 Pension and other postretirement benefits - noncurrent 682 492 Other noncurrent obligations 1,031 834 Total other noncurrent liabilities 2,241 1,604 Minority Interest in Subsidiaries 41 40 Stockholders' Equity Common stock - issued - 1,000 shares (158,994,683 shares in 2000) - 159 Additional paid-in capital - 217 Unearned ESOP shares (50) (50) Retained earnings 2,040 3,572 Accumulated other comprehensive loss (304) (224) Treasury stock, at cost - no shares (23,431,939 shares in 2000) - (1,020) Total stockholders' equity 1,686 2,654 Total Liabilities and Stockholders' Equity $ 8,304 $ 8,346 See Notes to Consolidated Financial Statements.
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Union Carbide Corporation and Subsidiaries Consolidated Statements of Cash Flows Three Months Ended March 31, In millions (Unaudited) 2001 2000 Operating Activities Net income (loss) $ (871) $ 97 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 103 102 Provision (credit) for deferred income taxes (422) 22 Undistributed earnings of nonconsolidated affiliates (9) (20) Minority interests' share in income 1 2 Other net gain (24) (23) Merger-related expenses and restructuring 1,176 - Tax benefit-nonqualified stock options exercises 4 5 Changes in assets and liabilities that provided (used) cash: Accounts and notes receivable (56) (3) Inventories 34 (7) Accounts payable (64) 54 Other assets and liabilities (153) 5 Cash provided by (used in) operating activities (281) 234 Investing Activities Capital expenditures (34) (195) Proceeds from sales of property - 8 Investments in nonconsolidated affiliates (31) (65) Proceeds from the sale of investments 22 12 Purchase of investments (22) (16) Cash used in investing activities (65) (256) Financing Activities Change in short-term notes payable (952) 64 Change in notes payable to related companies 1,308 - Repayments of long-term debt (5) - Purchases of treasury stock (1) - Proceeds from sales of common stock 6 10 Dividends paid to stockholders (28) (30) Cash provided by financing activities 328 44 Effect of Exchange Rate Changes on Cash and Cash Equivalents 1 - Summary Increase (decrease) in cash and cash equivalents (17) 22 Cash and cash equivalents, beginning-of-period 63 41 Cash and cash equivalents, end-of-period $ 46 $ 63 See Notes to Consolidated Financial Statements.
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Union Carbide Corporation and Subsidiaries Consolidated Statements of Comprehensive Income Three Months Ended March 31, In millions (Unaudited) 2001 2000 Net income (loss) $(871) $ 97 Other comprehensive income (loss), net of tax: Unrealized gains and losses on investments (1) 4 Cumulative translation adjustments (79) (10) Comprehensive income (loss) $(951) $ 91 See Notes to Consolidated Financial Statements.
-7- Union Carbide Corporation and Subsidiaries Notes to Consolidated Financial Statements Note A - Consolidated Financial Statements The unaudited interim financial statements reflect all adjustments (consisting of normal recurring accruals) which, in the opinion of management, are considered necessary for a fair presentation of the results for the periods covered. Certain reclassifications of prior period amounts have been made to conform to the current period's presentation. These statements should be read in conjunction with the audited Notes to Financial Statements of Union Carbide Corporation and Subsidiaries (the "corporation" or "UCC") in the 2000 Annual Report on Form 10-K. Condensed Summary of Significant Accounting Policies: Business and Geographic Segment Information - Effective with the Dow Merger, the corporation's business activities were fully integrated with those of Dow and are no longer operated as separate business units. Dow conducts its worldwide operations through global businesses which extend beyond the boundaries of both geography and legal entities. This results in the corporation's business activities comprising fully integrated components of Dow's global businesses rather than stand-alone operations. Because there are no separable reportable business segments for the corporation under Statement of Financial Accounting Standards ("Statement") No. 131, "Disclosures about Segments of an Enterprise and Related Information," and the information used by the chief operating decision maker regarding the corporation's operations relates to the corporation in its entirety, the corporation's results are reported as a single operating segment. Prior to the Dow Merger, the corporation was managed as two separate business segments, Specialties and Intermediates and Basic Chemicals and Polymers, as well as a non-operating segment ("Other"). Prior periods have been restated to conform to the current period's presentation. Research and Development - Research and development costs are charged to expense as incurred. Depreciation expense applicable to research and development facilities and equipment is included in "Research and development expenses" in the Consolidated Statements of Income. Related Companies - Significant transactions with the corporation's parent company, Dow, or other Dow subsidiaries have been characterized as related company transactions in the consolidated financial statements. Earnings Per Share - In accordance with Statement No. 128, "Earnings Per Share," the presentation of earnings per share is not required in financial statements of wholly owned subsidiaries. -8- Note B - The Dow Merger and Merger-related Expenses and Restructuring On February 6, 2001, the corporation merged with a wholly owned subsidiary of Dow. As a result of the merger, each share of Union Carbide common stock outstanding immediately prior to the merger was exchanged for 1.611 shares of Dow common stock, and Union Carbide became a wholly owned subsidiary of Dow. Contemporaneous with the merger, certain rights vested and stock units equivalent to Union Carbide common stock were converted into stock units equivalent of Dow common stock under various employee benefit and incentive plans, such as the ESOP Plan, the 1997 Union Carbide Long-Term Incentive Plan and the deferred compensation plan. On February 23, 2001, the corporation cancelled its unused $1 billion major bank credit agreement. In order to satisfy the European Commission's condition for approval of the merger, the corporation divested its 50- percent interest in Polimeri Europa S.r.l. ("Polimeri Europa") to EniChem S.p.A. in April 2001. On March 29, 2001, Dow's management made certain decisions relative to employment levels, duplicate assets and facilities and excess capacity resulting from the merger of the corporation into a subsidiary of Dow. These decisions were based on Dow management's assessment of the actions necessary to achieve synergies as the result of the merger. The economic effects of these decisions, combined with merger- related transaction costs and certain asset impairments, resulted in a pretax special charge in the first quarter of $1,275 million. The following table shows the major components of the special charge:
In millions Transaction costs $ 41 Labor-related costs 629 Write-down of assets and facilities 605 Total $1,275
Transaction costs of $41 million consisted primarily of investment banking, legal and accounting fees, all of which had been paid at March 31, 2001. Employee-related costs consisted predominantly of provisions for employee severance, change of control obligations, medical and retirement benefits, and outplacement services. Dow's integration plans include a combined workforce reduction of approximately 4,500 people, primarily from the corporation's administrative, marketing, purchasing, research and development, and manufacturing workforce. The charge for severance was based upon the severance plan provisions communicated to employees. Headcount reductions began in the second quarter of 2001. Approximately one-half of the reductions will be completed by the end of September; approximately 80 percent will be completed by the end of the first 12 months following the merger. The corporation expects that approximately 66 percent of the employee-related costs will be expended in cash within the next two years, though the timing of severance payments is dependent upon employee elections. Expenditures with respect to employee-related costs associated with pension and postretirement benefit plans will occur over a much more extended period that is not currently determinable. -9- The special charge included $605 million for the write-down of duplicate assets and facilities directly related to the merger, the loss on divestitures required to obtain regulatory approval for the merger, asset impairments and lease abandonment reserves. Duplicate assets consist principally of capitalized software costs, information technology equipment, research and development facilities and equipment, all of which were written off during the first quarter. The fair values of the impaired assets, which include production facilities and transportation equipment, were determined based on discounted cash flows and an appraisal, respectively. These components of the special charge will require limited future cash outlays, and will result in a decrease in annual depreciation of approximately $65 million. The following table summarizes the activity in the special charge reserve for the three months ended March 31, 2001:
In millions Opening Additions Charges Against Balance at Balance to Reserve Reserve Period End - $1,275 $ (646) $ 629
Note C - Commitments and Contingencies The corporation has two major agreements for the purchase of ethylene-related products and two other purchase agreements in the U.S. and Canada. The net present value of the fixed and determinable portion of obligations under these purchase commitments at March 31, 2001 totaled $170 million including one contract for the purchase of ethylene with Dow representing $132 million of this obligation. The corporation is subject to loss contingencies resulting from environmental laws and regulations, which include obligations to remove or remediate the effects on the environment of the disposal or release of certain wastes and substances at various sites. The corporation has established accruals in current dollars for those hazardous waste sites where it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. The reliability and precision of the loss estimates are affected by numerous factors, such as different stages of site evaluation, the allocation of responsibility among potentially responsible parties and the assertion of additional claims. The corporation adjusts its accruals as new remediation requirements are defined, as information becomes available permitting reasonable estimates to be made, and to reflect new and changing facts. At March 31, 2001, the corporation had established environmental remediation accruals in the amount of $180 million. These accruals have two components, estimated future expenditures for site investigation and cleanup and estimated future expenditures for closure and postclosure activities. In addition, the corporation had environmental loss contingencies of $67 million. -10- The corporation has sole responsibility for the remediation of approximately 40 percent of its environmental sites for which accruals have been established. These sites are well advanced in the investigation and cleanup stage. The corporation's environmental accruals at March 31, 2001 included $148 million for these sites, of which $38 million was for estimated future expenditures for site investigation and cleanup and $110 million was for estimated future expenditures for closure and postclosure activities. In addition, $51 million of the corporation's environmental loss contingencies related to these sites. The three sites with the largest total potential cost to the corporation are nonoperating sites. Of the above accruals, these sites accounted for $48 million, of which $10 million was for estimated future expenditures for site investigation and cleanup and $38 million was for estimated future expenditures for closure and postclosure activities. In addition, $34 million of the above environmental loss contingencies related to these sites. The corporation does not have sole responsibility at the remainder of its environmental sites for which accruals have been established. All of these sites are in the investigation and cleanup stage. The corporation's environmental accruals at March 31, 2001 included $32 million for estimated future expenditures for site investigation and cleanup at these sites. In addition, $16 million of the corporation's environmental loss contingencies related to these sites. The largest two of these sites are also nonoperating sites. Of the above accruals, these sites accounted for $10 million for estimated future expenditures for site investigation and cleanup. In addition, $2 million of the above environmental loss contingencies related to these sites. In 2000, worldwide expenses related to environmental protection for compliance with federal, state and local laws regulating solid and hazardous wastes and discharge of materials to air and water, as well as for waste site remedial activities, totaled $104 million. Expenses in 1999 and 1998 were $118 million and $91 million, respectively. While estimates of the costs of environmental protection for 2001 are necessarily imprecise, the corporation estimates that these expenses will approximate the average of the last three years. The corporation severally guaranteed up to approximately $122 million at March 31, 2001 of EQUATE Petrochemical Company K.S.C.'s ("EQUATE") debt and working capital financing needs. The corporation has also severally guaranteed certain sales volume targets until EQUATE's sales capabilities are proved. In addition, the corporation has pledged its shares in EQUATE as security for EQUATE's debt. The corporation has political risk insurance coverage for its equity investment and a majority of its guarantee of EQUATE's debt. The corporation had additional contingent obligations at March 31, 2001 totaling $69 million, of which $26 million related to guarantees of debt. The corporation and its consolidated subsidiaries are involved in a number of legal proceedings and claims with both private and governmental parties. These cover a wide range of matters, including, but not limited to: product liability; trade regulation; governmental regulatory proceedings; health, safety and environmental matters; employment; patents; contracts; taxes; and commercial disputes. In some of these legal proceedings and claims, the cost of remedies that may be sought or damages claimed is substantial. -11- The corporation has recorded nonenvironmental litigation accruals of $164 million and related insurance recovery receivables of $142 million. At March 31, 2001, the corporation had nonenvironmental litigation loss contingencies of $69 million. While it is impossible at this time to determine with certainty the ultimate outcome of any of the legal proceedings and claims referred to in this note, management believes that adequate provisions have been made for probable losses with respect thereto and that such ultimate outcome, after provisions therefor, will not have a material adverse effect on the consolidated financial position of the corporation, but could have a material effect on consolidated results of operations in a given quarter or year. Should any losses be sustained in connection with any of such legal proceedings and claims in excess of provisions therefor, they will be charged to income when determinable. Note D - Accounting Changes In 1998, the Financial Accounting Standards Board issued Statement No. 133, "Accounting for Derivative Instruments and Hedging Activities." It requires that an entity recognize all derivative instruments as either assets or liabilities in the statement of financial position and measure those instruments at fair value. Changes in the fair value of those derivatives will be reported in earnings or accumulated other comprehensive loss, depending on the uses of the derivatives and whether they qualify for hedge accounting. This Statement, as amended by Statement No. 137, "Accounting for Derivative Instruments and Hedging Activities - Deferral of the Effective Date of FASB Statement No. 133," and Statement No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities - an amendment of FASB Statement No. 133," is effective for all fiscal quarters of fiscal years beginning after June 15, 2000. The corporation adopted the provisions of Statement No. 133, as amended, on January 1, 2001. Due to the corporation's limited use of financial instruments to manage its exposure to market risks, primarily related only to changes in foreign currency exchange rates, the adoption of Statement No. 133 on January 1, 2001 did not have a material effect on the corporation's financial position or results of operations. In 1999, the Securities and Exchange Commission issued Staff Accounting Bulletin ("SAB") 101, "Revenue Recognition in Financial Statements," which summarizes the staff's views regarding the application of generally accepted accounting principles to selected revenue recognition issues. The corporation adopted the provisions of SAB 101 on October 1, 2000, the effect of which was not material to the corporation's financial position or results of operations. -12- Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations Pursuant to General Instruction H of Form 10-Q, this section includes only management's narrative analysis of the results of operations for the three months ended March 31, 2001, the most recent period, and the three months ended March 31, 2000, the same period in the year immediately preceding it. On February 6, 2001, the corporation merged with a wholly owned subsidiary of Dow. As a result of the merger, each share of Union Carbide common stock outstanding immediately prior to the merger was exchanged for 1.611 shares of Dow common stock and Union Carbide became a wholly owned subsidiary of Dow. The merger received clearance from the U.S. Federal Trade Commission, the European Commission and the Canadian Competition Bureau, subject to the divestiture of certain assets and the contribution of UNIPOL (trademark symbol) polyethylene technology licensing and polyethylene conventional catalyst businesses of the corporation to its joint venture Univation Technologies, LLC. The transaction is intended to qualify as a tax-free reorganization for U.S. federal income tax purposes and has been accounted for under the pooling-of-interests method of accounting. Results of Operations The corporation reported a first quarter net loss of $871 million. Results of operations were impacted by a special charge of $1,275 million ($838 million after tax) related to the merger of the corporation into a subsidiary of Dow. Net income for the first quarter of 2000 was $97 million. Consolidated net sales for the first three months of 2001 were $1,536 million, a decrease of 5 percent compared with net sales of $1,617 million for the same three months of 2000. The decline in net sales reflects a 4 percent increase in average selling prices coupled with a 9 percent decrease in volume. Throughout 2000, the chemical industry slowly increased average selling prices in response to a dramatic increase in raw material costs. Volume declines occurred in most businesses including ethylene oxide/glycol, where weak volume and high ethylene costs led to the temporary shutdown of production at the corporation's ethylene glycol facility in Prentiss, Alberta, Canada, and butanol and vinyl acetate, where low demand and negative product margins caused the corporation to temporarily cease production. Although net sales declined 5 percent in the first quarter of 2001 compared with the first quarter of 2000, cost of sales increased by $74 million, or 5 percent. This was the result of a continued increase in the cost of oil and natural gas-related raw materials and energy which began in the early part of 2000 and continued into the first quarter of 2001. Due to competitive pressures, the corporation was unable to increase average selling prices in order to totally offset the effect of these rising raw material costs. Therefore, the corporation's gross margin, as a percent of sales, declined to 3.9 percent for the first quarter of 2001 compared with a gross margin of 13.3 percent for the same quarter of 2000. Declines of $12 million and $9 million in research and development and selling, general and administrative expenses, respectively, are primarily the result of decreases in accruals for employee incentive plans coupled with synergies associated with the integration into Dow. In the first quarter of 2001, pretax costs of $1,275 million were recorded for merger-related expenses and restructuring. These costs included transaction costs, employee severance, and the write-down of duplicate assets and facilities. For further details, see Note B to the corporation's consolidated financial statements included in this Quarterly Report on Form 10-Q. -13- Equity in earnings of nonconsolidated affiliates decreased from $42 million in the first quarter of 2000 to $12 million in the same quarter of 2001. This decline primarily related to decreased earnings at UOP LLC ("UOP") and EQUATE coupled with additional pre-operating expenses related to the corporation's Malaysian joint ventures, the OPTIMAL Group, offset by lower losses for the Aspell Polymere SNC joint venture in France. Additionally, the first quarter of 2001 was affected by the absence of earnings from Polimeri Europa, which was required to be divested as part of the merger clearance from the European Union. UOP's earnings continue to be negatively impacted by the slowdown of projects in the oil and gas industry which the venture services. Additionally, temporary outages at EQUATE's facility in Kuwait resulted in lower than anticipated production thereby causing a decrease in sales volume for the first quarter of 2001 compared with the sales volume in the first quarter of 2000. Interest income of $2 million in the first quarter of 2001 declined $14 million from the $16 million reported for the first quarter of 2000. This was primarily the result of $15 million in interest income associated with a tax refund which was received in the first quarter of 2000. Interest expense increased $14 million for the three month period ended March 31, 2001 as compared with the same three month period of 2000. This increase was primarily the result of greater average short-term debt outstanding during 2001 compared with 2000 combined with decreases in capitalized interest from the prior year's first quarter. Capitalized interest for the first quarter of 2000 related primarily to the corporation's olefins and polyethylene projects in Canada, both of which were completed in the second half of 2000. Environmental Estimates of future expenses related to environmental protection for compliance with federal, state and local laws regulating solid and hazardous wastes and discharge of materials to air and water, as well as for waste site remedial activities, have not changed materially since December 31, 2000. The reliability and precision of the loss estimates are affected by numerous factors, such as different stages of site evaluation, the allocation of responsibility among potentially responsible parties and the assertion of additional claims. The corporation's environmental exposures are discussed in more detail in Note C to the consolidated financial statements included in this Quarterly Report on Form 10-Q. Accounting Changes See Note D to the consolidated financial statements included in this Quarterly Report on Form 10-Q. Item 3: Qualitative and Quantitative Disclosure About Market Risk Omitted pursuant to General Instruction H of Form 10-Q. -14- Part II. Other Information Item 1. Legal Proceedings See Note C to the corporation's consolidated financial statements included in this Quarterly Report on Form 10-Q. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits. No exhibits are filed pursuant to this item. (b) The corporation filed the following current reports on Form 8-K for the three months ended March 31, 2001: 1. Current Report on Form 8-K dated January 18, 2001, contained the corporation's January 18, 2001 press release announcing the corporation's anticipated earnings for the fourth quarter and year ended December 31, 2000. 2. Current Report on Form 8-K dated January 29, 2001, contained the corporation's January 29, 2001 press release announcing the corporation's complete earnings statement for the fourth quarter and year ended December 31, 2000. 3. Current Report on Form 8-K dated February 6, 2001, contained the corporation's February 6, 2001 press release announcing it had completed the merger with a wholly owned subsidiary of The Dow Chemical Company. Additionally, the companies announced the amounts, record dates and payable dates of the pro rata dividends that would be paid to shareholders of The Dow Chemical Company and the corporation. 4. Current Report on Form 8-K dated February 20, 2001, contained a description required under Item 1 of Form 8-K regarding the corporation's change of control with regard to its merger into a subsidiary of The Dow Chemical Company. 5. Current Report on Form 8-K dated March 15, 2001, contained requirements under Item 4 of Form 8-K regarding the corporation's change in Independent Auditors. -15- SIGNATURE 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. Union Carbide Corporation (Registrant) Date: May 15, 2001 By: /s/ Frank H. Brod Frank H. Brod Vice President & Controller The Dow Chemical Company Authorized Representative of Union Carbide Corporation -16-