UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

R QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period endedJUNE 30, 2014

or

oTRANSITION 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

(Exact name of registrant as specified in its charter)

New York (State or other jurisdiction of
     incorporation or organization) 13-1421730 (I.R.S. Employer Identification No.)

1254 ENCLAVE PARKWAY, HOUSTON, TEXAS  77077

(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code:  281-966-2727

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.

R Yes    o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  

R Yes    o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer o
Non-accelerated filer   R	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

o Yes    R No

At June 30, 2014, 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) for Form 10-Q and is therefore filing this form with a reduced disclosure format.

Union Carbide Corporation

QUARTERLY REPORT ON FORM 10-Q

For the quarterly period ended June 30, 2014

TABLE OF CONTENTS

		PAGE
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements	4
	Consolidated Statements of Income	4
	Consolidated Statements of Comprehensive Income	5
	Consolidated Balance Sheets	6
	Consolidated Statements of Cash Flows	7
	Consolidated Statements of Equity	8
	Notes to the Consolidated Financial Statements	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	18
	Results of Operations	18
	Other Matters	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21
Item 4.	Controls and Procedures	21
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	21
Item 1A.	Risk Factors	21
Item 4.	Mine Safety Disclosures	21
Item 6.	Exhibits	21
SIGNATURES		22
EXHIBIT INDEX		23

2

Union Carbide Corporation and Subsidiaries

FORWARD-LOOKING STATEMENTS

Certain statements in this report, other than purely historical information, including estimates, projections, statements relating to business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may appear throughout this report, including without limitation, the following sections: “Management's Discussion and Analysis,” and “Risk Factors.” These forward-looking statements are generally identified by the words or phrases “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “may,” “opportunity,” “plan,” “project,” “should,” “strategy,” “will,” “would,” “will be,” “will continue,” “will likely result” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. A detailed discussion of principal risks and uncertainties which may cause actual results and events to differ materially from such forward-looking statements is included in the section titled “Risk Factors” (see Part I, Item 1A of the Corporation's Annual Report on Form 10-K for the year ended December 31, 2013). Union Carbide Corporation undertakes no obligation to update or revise publicly any forward-looking statements whether because of new information, future events, or otherwise, except as required by securities and other applicable laws.

3

PART I - FINANCIAL INFORMATION

ITEM 1. Financial Statements

Union Carbide Corporation and Subsidiaries

Consolidated Statements of Income

	Three Months Ended						Six Months Ended
In millions (Unaudited)	Jun 30, 2014			Jun 30, 2013			Jun 30, 2014			Jun 30, 2013
Net trade sales	$	24		$	52		$	50		$	92
Net sales to related companies	1,766			1,670			3,398			3,345
Total Net Sales	1,790			1,722			3,448			3,437
Cost of sales	1,534			1,630			3,059			3,202
Research and development expenses	5			5			11			13
Selling, general and administrative expenses	3			3			5			6
Equity in earnings of nonconsolidated affiliates	4			28			4			60
Sundry income (expense) - net	(3		)	(11		)	(12		)	(27		)
Interest income	3			2			6			5
Interest expense and amortization of debt discount	8			8			15			15
Income Before Income Taxes	244			95			356			239
Provision for income taxes	77			15			114			107
Net Income Attributable to Union Carbide Corporation	$	167		$	80		$	242		$	132
Depreciation	$	44		$	50		$	88		$	101
Capital Expenditures	$	39		$	29		$	64		$	47

See Notes to the Consolidated Financial Statements.

4

Union Carbide Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income

	Three Months Ended					Six Months Ended
In millions (Unaudited)	Jun 30, 2014			Jun 30, 2013		Jun 30, 2014			Jun 30, 2013
Net Income Attributable to Union Carbide Corporation	$	167		$	80	$	242		$	132
Other Comprehensive Income, Net of Tax
Translation adjustments	(1		)	—		(1		)	—
Pension and other postretirement benefit plans adjustments	10			15		20			29
Total other comprehensive income	9			15		19			29
Comprehensive Income Attributable to Union Carbide Corporation	$	176		$	95	$	261		$	161

See Notes to the Consolidated Financial Statements.

5

Union Carbide Corporation and Subsidiaries

Consolidated Balance Sheets

In millions (Unaudited)	Jun 30, 2014			Dec 31, 2013
Assets
Current Assets
Cash and cash equivalents	$	28		$	33
Accounts receivable:
Trade (net of allowance for doubtful receivables 2014: $-; 2013: $-)	26			25
Related companies	353			390
Other	86			80
Notes receivable from related companies	1,919			2,404
Inventories	427			404
Deferred income taxes and other current assets	102			101
Total current assets	2,941			3,437
Investments
Investments in related companies	823			823
Investments in nonconsolidated affiliates	10			6
Other investments	8			9
Noncurrent receivables	34			30
Noncurrent receivables from related companies	139			166
Total investments	1,014			1,034
Property
Property	7,124			7,079
Less accumulated depreciation	5,913			5,840
Net property	1,211			1,239
Other Assets
Intangible assets (net of accumulated amortization 2014: $73; 2013: $72)	12			10
Deferred income tax assets - noncurrent	707			692
Asbestos-related insurance receivables - noncurrent	78			86
Deferred charges and other assets	48			51
Total other assets	845			839
Total Assets	$	6,011		$	6,549
Liabilities and Equity
Current Liabilities
Notes payable - related companies	$	36		$	34
Accounts payable:
Trade	258			215
Related companies	387			398
Other	29			21
Income taxes payable	73			213
Asbestos-related liabilities - current	123			91
Accrued and other current liabilities	173			182
Total current liabilities	1,079			1,154
Long-Term Debt	471			471
Other Noncurrent Liabilities
Pension and other postretirement benefits - noncurrent	664			684
Asbestos-related liabilities - noncurrent	389			434
Other noncurrent obligations	93			95
Total other noncurrent liabilities	1,146			1,213
Stockholder's Equity
Common stock (authorized and issued: 1,000 shares of $0.01 par value each)	—			—
Additional paid-in capital	312			312
Retained earnings	4,029			4,442
Accumulated other comprehensive loss	(1,026		)	(1,045		)
Union Carbide Corporation's stockholder's equity	3,315			3,709
Noncontrolling interests	—			2
Total equity	3,315			3,711
Total Liabilities and Equity	$	6,011		$	6,549

See Notes to the Consolidated Financial Statements.

6

Union Carbide Corporation and Subsidiaries

Consolidated Statements of Cash Flows

	Six Months Ended
In millions (Unaudited)	Jun 30, 2014			Jun 30, 2013
Operating Activities
Net Income Attributable to Union Carbide Corporation	$	242		$	132
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	98			110
Provision (credit) for deferred income tax	(22		)	6
Earnings of nonconsolidated affiliates in excess of dividends received	(4		)	(33		)
Net gain on sales of property	(3		)	—
Pension contributions	(1		)	(79		)
Other gains, net	(1		)	—
Changes in assets and liabilities:
Accounts and notes receivable	(2		)	(13		)
Related company receivables	522			330
Inventories	(23		)	(12		)
Accounts payable	53			(16		)
Related company payables	(9		)	(50		)
Other assets and liabilities	(171		)	(165		)
Cash provided by operating activities	679			210
Investing Activities
Capital expenditures	(64		)	(47		)
Change in noncurrent receivable from related company	27			18
Proceeds from sales of property	8			—
Cash used in investing activities	(29		)	(29		)
Financing Activities
Dividends paid to stockholder	(655		)	(169		)
Cash used in financing activities	(655		)	(169		)
Summary
Increase (decrease) in cash and cash equivalents	(5		)	12
Cash and cash equivalents at beginning of year	33			18
Cash and cash equivalents at end of period	$	28		$	30

See Notes to the Consolidated Financial Statements.

7

Union Carbide Corporation and Subsidiaries

Consolidated Statements of Equity

	Six Months Ended
In millions (Unaudited)	Jun 30, 2014			Jun 30, 2013
Common Stock
Balance at beginning of year and end of period	$	—		$	—
Additional Paid-in Capital
Balance at beginning of year and end of period	312			312
Retained Earnings
Balance at beginning of year	4,442			4,355
Net Income Attributable to Union Carbide Corporation	242			132
Dividends declared	(655		)	(169		)
Balance at end of period	4,029			4,318
Accumulated Other Comprehensive Loss, Net of Tax
Balance at beginning of year	(1,045		)	(1,345		)
Other comprehensive income	19			29
Balance at end of period	(1,026		)	(1,316		)
Union Carbide Corporation's Stockholder's Equity	3,315			3,314
Noncontrolling Interests	—			2
Total Equity	$	3,315		$	3,316

See Notes to the Consolidated Financial Statements.

8

Union Carbide Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

(Unaudited)

Table of Contents

Note		Page
1	Consolidated Financial Statements	9
2	Recent Accounting Guidance	9
3	Restructuring	10
4	Inventories	11
5	Intangible Assets	11
6	Financial Instruments	12
7	Commitments and Contingent Liabilities	12
8	Pension and Other Postretirement Benefits	15
9	Related Party Transactions	15
10	Income Taxes	17
11	Accumulated Other Comprehensive Income (Loss)	17

NOTE 1 - CONSOLIDATED FINANCIAL STATEMENTS

The unaudited interim consolidated financial statements of Union Carbide Corporation and its subsidiaries (the “Corporation” or “UCC”) were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and reflect all adjustments (including normal recurring accruals) which, in the opinion of management, are considered necessary for the fair presentation of the results for the periods presented.

The Corporation is a wholly owned subsidiary of The Dow Chemical Company (“Dow”). In accordance with the accounting guidance for earnings per share, the presentation of earnings per share is not required in financial statements of wholly owned subsidiaries.

The Corporation’s business activities comprise components of Dow’s global operations rather than stand-alone operations. Dow conducts its worldwide operations through global businesses. Because there are no separable reportable business segments for UCC under the accounting guidance related to segment reporting and no detailed business information is provided to a chief operating decision maker regarding the Corporation’s stand-alone operations, the Corporation’s results are reported as a single operating segment.

Intercompany transactions and balances are eliminated in consolidation. Transactions with the Corporation’s parent company, Dow, and other Dow subsidiaries have been reflected as related company transactions in the consolidated financial statements. See Note 9 for further discussion.

These statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2013.

NOTE 2 - RECENT ACCOUNTING GUIDANCE

Recently Adopted Accounting Guidance

During the first quarter of 2014, the Corporation adopted Accounting Standards Update ("ASU") 2013-04, "Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date," which defines how entities measure obligations from joint and several liability arrangements for which the total amount of the obligation is fixed at the reporting date and for which no guidance existed, except for obligations addressed within existing guidance in U.S. GAAP. The guidance also requires entities to disclose the nature and amount of the obligation as well as other information about those obligations. The adoption of this standard did not have a material impact on the consolidated financial statements.

During the first quarter of 2014, the Corporation adopted ASU 2013-05, "Foreign Currency Matters (Topic 830): Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity," which defines the treatment of the release of cumulative translation

9

Union Carbide Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

(Unaudited)

adjustments upon derecognition of certain subsidiaries or groups of assets within a foreign entity or of an investment in a foreign entity. The adoption of this standard did not have a material impact on the consolidated financial statements.

During the first quarter of 2014, the Corporation adopted ASU 2013-11, "Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists," which defines the presentation requirements of an unrecognized tax benefit, or a portion of an unrecognized tax benefit, in the financial statements, impacting the classification of unrecognized tax benefit between "Deferred income taxes" and "Income taxes payable" in the consolidated balance sheets. The adoption of this standard did not have a material impact on the consolidated financial statements.

Accounting Guidance Issued But Not Yet Adopted as of June 30, 2014

In April 2014, the Financial Accounting Standards Board ("FASB") issued ASU 2014-08, "Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity," which changes the criteria for determining which disposals can be presented as discontinued operations and modifies related disclosure requirements. This ASU is effective for fiscal years beginning on or after December 15, 2014, and interim periods within those years. Early adoption is permitted, but only for disposals (or classifications as held for sale) that have not been reported in the financial statements previously issued or available for issuance. The Corporation is currently evaluating the impact of adopting this guidance.

In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)," which is the new comprehensive revenue recognition standard that will supersede all existing revenue recognition guidance under U.S. GAAP. The standard's core principle is that a company will recognize revenue when it transfers promised goods or services to a customer in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. This ASU is effective for annual and interim periods beginning on or after December 15, 2016, and early adoption is not permitted. Entities will have the option of using either a full retrospective approach or a modified approach to adopt the guidance in the ASU. The Corporation is currently evaluating the impact of adopting this guidance.

In June 2014, the FASB issued ASU 2014-11, "Transfers and Servicing (Topic 860): Repurchase-to-Maturity Transactions, Repurchase Financing, and Disclosures," which amends the accounting guidance for repurchase-to-maturity transactions and repurchase agreements executed as repurchase financings and introduces additional disclosure requirements. The new guidance is effective for annual and interim reporting periods beginning on or after December 15, 2014, and early adoption is not permitted. The Corporation is currently evaluating the impact of adopting this guidance.

NOTE 3 - RESTRUCTURING

On October 22, 2012, the Board of Directors of the Corporation approved a restructuring plan to improve the cost effectiveness of the Corporation's global operations. The restructuring plan will affect approximately 100 positions and result in the shutdown of certain manufacturing facilities. These actions are expected to be completed primarily by March 31, 2015.

As a result of the restructuring activities, the Corporation recorded pretax restructuring charges of $71 million in the fourth quarter of 2012 consisting of costs associated with exit or disposal activities of $13 million, severance costs of $10 million and asset write-downs and write-offs of $48 million. The impact of these charges was shown as "Restructuring charges" in the consolidated statements of operations.

Severance

The restructuring charges in the fourth quarter of 2012 included severance of $10 million for the separation of approximately 100 employees under the terms of the Corporation's ongoing benefit arrangements, primarily by March 31, 2015. At December 31, 2013, severance of $6 million was paid and a liability of $4 million remained for 21 employees. In the first six months of 2014, severance of $1 million was paid leaving a liability of $3 million for approximately 14 employees at June 30, 2014.

10

Union Carbide Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

(Unaudited)

The following table summarizes the activities related to the Corporation's restructuring reserve:

Restructuring Activities	Costs Associated with Exit or Disposal Activities			Severance Costs
In millions							Total
Reserve balance at December 31, 2013	$	11		$	4		$	15
Cash payments	—			(1		)	(1		)
Reserve balance at March 31, 2014	$	11		$	3		$	14
Cash payments	(1		)	—			(1		)
Reserve balance at June 30, 2014	$	10		$	3		$	13

The reserve balance is included in the consolidated balance sheets as "Accrued and other current liabilities" and "Other noncurrent obligations."

The Corporation expects to incur additional costs in the future related to its restructuring activities, as UCC continually looks for ways to enhance the efficiency and cost effectiveness of its operations. Future costs are expected to include demolition costs related to closed facilities; these will be recognized as incurred. The Corporation also expects to incur additional employee-related costs, including involuntary termination benefits, related to its other optimization activities. These costs cannot be reasonably estimated at this time.

NOTE 4 - INVENTORIES

The following table provides a breakdown of inventories:

Inventories In millions	Jun 30, 2014		Dec 31, 2013
Finished goods	$	264	$	233
Work in process	32		31
Raw materials	38		50
Supplies	93		90
Total inventories	$	427	$	404

The reserves reducing inventories from the first-in, first-out (“FIFO”) basis to the last-in, first-out (“LIFO”) basis amounted to $145 million at June 30, 2014 and $132 million at December 31, 2013.

NOTE 5 - INTANGIBLE ASSETS

The following table provides information regarding the Corporation’s intangible assets:

Intangible Assets	At June 30, 2014							At December 31, 2013
In millions	Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net
Intangible assets with finite lives:
Licenses and intellectual property	$	33	$	(33	)	$	—	$	33	$	(33	)	$	—
Software	52		(40		)	12		49		(39		)	10
Total intangible assets	$	85	$	(73	)	$	12	$	82	$	(72	)	$	10

11

Union Carbide Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

(Unaudited)

Total estimated amortization expense for 2014 and the five succeeding fiscal years is as follows:

Estimated Amortization Expense In millions
2014	$	2
2015	$	2
2016	$	3
2017	$	2
2018	$	2
2019	$	1

NOTE 6 - FINANCIAL INSTRUMENTS

Investments

The Corporation's investments in marketable securities include debt securities which are classified as available-for-sale. At June 30, 2014, the Corporation held $5 million in debt securities ($5 million at December 31, 2013), which had contractual maturities of less than 10 years. These securities are recorded at fair value, which approximates cost, and are included in “Other investments” in the consolidated balance sheets and classified as Level 2 measurements. There were no proceeds from sales of marketable securities for the six-month periods ended June 30, 2014 and June 30, 2013.

For securities frequently traded in less active markets, fair value is based on the closing price at the end of the period; where the security is less frequently traded, fair value is based on the price a dealer would pay for the security or similar securities, adjusted for any terms specific to that asset or liability, or by using observable market data points of similar, more liquid securities to imply the price. Market inputs are obtained from well-established and recognized vendors of market data and subjected to tolerance/quality checks.

Long-Term Debt

The Corporation has long-term debt of $471 million in the consolidated balance sheets at June 30, 2014 ($471 million at December 31, 2013). At June 30, 2014, the fair value of this long-term debt was $599 million ($556 million at December 31, 2013) and is classified as a Level 2 measurement. Fair value is determined in a manner similar to the methods described above for investments.

Cost approximates fair value for all other financial instruments.

NOTE 7 - COMMITMENTS AND CONTINGENT LIABILITIES

Environmental Matters

Accruals for environmental matters are recorded when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated, based on current law and existing technologies.

At June 30, 2014, the Corporation had accrued obligations of $126 million for probable environmental remediation and restoration costs, including $25 million for the remediation of Superfund sites. This is management’s best estimate of the costs for remediation and restoration with respect to environmental matters for which the Corporation has accrued liabilities, although it is reasonably possible that the ultimate cost with respect to these particular matters could range up to approximately two and a half times that amount. Consequently, it is reasonably possible that environmental remediation and restoration costs in excess of amounts accrued could have a material impact on the Corporation’s results of operations, financial condition and cash flows. It is the opinion of the Corporation’s management, however, that the possibility is remote that costs in excess of the range disclosed will have a material impact on the Corporation’s results of operations, financial condition and cash flows. Inherent uncertainties exist in these estimates primarily due to unknown environmental conditions, changing governmental regulations and legal standards regarding liability, and emerging remediation technologies for handling site remediation and restoration. At December 31, 2013, the Corporation had accrued obligations of $126 million for probable environmental remediation and restoration costs, including $23 million for the remediation of Superfund sites.

12

Union Carbide Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

(Unaudited)

Litigation

The Corporation is 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.

Asbestos-Related Matters

Separately, the Corporation is and has been involved in a large number of asbestos-related suits filed primarily in state courts during the past three decades. These suits principally allege personal injury resulting from exposure to asbestos-containing products and frequently seek both actual and punitive damages. The alleged claims primarily relate to products that UCC sold in the past, alleged exposure to asbestos-containing products located on UCC’s premises and UCC’s responsibility for asbestos suits filed against a former UCC subsidiary, Amchem Products, Inc. (“Amchem”). In many cases, plaintiffs are unable to demonstrate that they have suffered any compensable loss as a result of such exposure, or that injuries incurred in fact resulted from exposure to the Corporation’s products.

The Corporation expects more asbestos-related suits to be filed against UCC and Amchem in the future, and will aggressively defend or reasonably resolve, as appropriate, both pending and future claims.

Estimating the Liability

Based on a study completed by Analysis, Research & Planning Corporation (“ARPC”) in January 2003, the Corporation increased its December 31, 2002 asbestos-related liability for pending and future claims for the 15-year period ending in 2017 to $2.2 billion, excluding future defense and processing costs. Since then, the Corporation has compared current asbestos claim and resolution activity to the results of the most recent ARPC study at each balance sheet date to determine whether the accrual continues to be appropriate. In addition, the Corporation has requested ARPC to review the Corporation’s historical asbestos claim and resolution activity each year since 2004 to determine the appropriateness of updating the most recent ARPC study.

In October 2012, the Corporation requested ARPC to review its historical asbestos claim and resolution activity and determine the appropriateness of updating its December 2010 study. In response to that request, ARPC reviewed and analyzed data through September 30, 2012. In December 2012, based upon ARPC's December 2012 study and the Corporation's own review of the asbestos claim and resolution activity for 2012, it was determined that no adjustment to the accrual was required at December 31, 2012. The Corporation's asbestos-related liability for pending and future claims was $602 million at December 31, 2012.

In October 2013, the Corporation requested ARPC to review its historical asbestos claim and resolution activity and determine the appropriateness of updating its December 2012 study. In response to that request, ARPC reviewed and analyzed data through September 30, 2013. In December 2013, ARPC stated that an update of its study would not provide a more likely estimate of future events than the estimate reflected in its December 2012 study and, therefore, the estimate in that study

remained applicable. Based on the Corporation's own review of the asbestos claim and resolution activity and ARPC's response, the Corporation determined that no change to the accrual was required. The Corporation's asbestos-related liability for pending and future claims was $501 million at December 31, 2013 and approximately 19 percent of the recorded liability related to pending claims and approximately 81 percent related to future claims.

Based on the Corporation’s review of 2014 activity, it was determined that no adjustment to the accrual was required at June 30, 2014. The Corporation’s asbestos-related liability for pending and future claims was $474 million at June 30, 2014. Approximately 22 percent of the recorded liability related to pending claims and approximately 78 percent related to future claims.

Insurance Receivables

At December 31, 2002, the Corporation increased the receivable for insurance recoveries related to its asbestos liability to $1.35 billion, substantially exhausting its asbestos product liability coverage. The insurance receivable related to the asbestos liability was determined by the Corporation after a thorough review of applicable insurance policies and the 1985 Wellington Agreement, to which the Corporation and many of its liability insurers are signatory parties, as well as other insurance settlements, with due consideration given to applicable deductibles, retentions and policy limits, and taking into account the solvency and historical payment experience of various insurance carriers. The Wellington Agreement and other agreements with insurers are designed to facilitate an orderly resolution and collection of the Corporation’s insurance policies and to resolve issues that the insurance carriers may raise.

13

Union Carbide Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

(Unaudited)

In September 2003, the Corporation filed a comprehensive insurance coverage case, now proceeding in the Supreme Court of the State of New York, County of New York, seeking to confirm its rights to insurance for various asbestos claims and to facilitate an orderly and timely collection of insurance proceeds (the “Insurance Litigation”). The Insurance Litigation was filed against insurers that were not signatories to the Wellington Agreement and/or do not otherwise have agreements in place with the Corporation regarding their asbestos-related insurance coverage, in order to facilitate an orderly resolution and collection of such insurance policies and to resolve issues that the insurance carriers may raise. Since the filing of the case, the Corporation has reached settlements with several of the carriers involved in the Insurance Litigation and continues to pursue a settlement with the remaining carrier. The Corporation’s receivable for insurance recoveries related to its asbestos liability was $23 million at June 30, 2014 and $25 million at December 31, 2013.

In addition to the receivable for insurance recoveries related to its asbestos liability, the Corporation had receivables for defense and resolution costs submitted to insurance carriers that have settlement agreements in place regarding their asbestos-related insurance coverage. The following table summarizes the Corporation’s receivables related to its asbestos-related liability:

Receivables for Asbestos-Related Costs In millions	Jun 30, 2014		Dec 31, 2013
Receivables for defense and resolution costs - carriers with settlement agreements	$	65	$	66
Receivables for insurance recoveries - carriers without settlement agreements	23		25
Total	$	88	$	91

The Corporation expenses defense costs as incurred. The pretax impact for defense and resolution costs was $29 million for the second quarter of 2014 ($29 million in the second quarter of 2013), $54 million for the first six months of 2014 ($51 million for the first six months of 2013) and reflected in “Cost of sales” in the consolidated statements of income.

After a review of its insurance policies, with due consideration given to applicable deductibles, retentions and policy limits, and after taking into account the solvency and historical payment experience of various insurance carriers; existing insurance settlements; and the advice of outside counsel with respect to the applicable insurance coverage law relating to the terms and conditions of its insurance policies, the Corporation continues to believe that its recorded receivable for insurance recoveries from all insurance carriers is probable of collection.

Summary

The amounts recorded by the Corporation for the asbestos-related liability and related insurance receivable described above were based upon current, known facts. However, future events, such as the number of new claims to be filed and/or received each year, the average cost of disposing of each such claim, coverage issues among insurers and the continuing solvency of various insurance companies, as well as the numerous uncertainties surrounding asbestos litigation in the United States, could cause the actual costs and insurance recoveries for the Corporation to be higher or lower than those projected or those recorded.

Because of the uncertainties described above, the Corporation's management cannot estimate the full range of the cost of resolving pending and future asbestos-related claims facing UCC and Amchem. The Corporation's management believes that it is reasonably possible that the cost of disposing of the Corporation’s asbestos-related claims, including future defense costs, could have a material impact on the Corporation's results of operations and cash flows for a particular period and on the consolidated financial position of the Corporation.

While it is not possible at this time to determine with certainty the ultimate outcome of any of the legal proceedings and claims referred to in this filing, management believes that adequate provisions have been made for probable losses with respect to pending claims and proceedings, and that, except for the asbestos-related matters described above, the ultimate outcome of all known and future claims, after provisions for insurance, will not have a material adverse impact on the results of operations, cash flows and financial position of the Corporation. Should any losses be sustained in connection with any of such legal proceedings and claims in excess of provisions provided and available insurance, they will be charged to income when determinable.

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Notes to the Consolidated Financial Statements

(Unaudited)

Purchase Commitments

At June 30, 2014, the Corporation had various outstanding commitments for take-or-pay agreements, with remaining terms extending from two to fourteen years. Such commitments were not in excess of current market prices. The fixed and determinable portion of obligations under purchase commitments at June 30, 2014 is presented in the table below:

Annual Fixed and Determinable Portion of Take-or-Pay Obligations at June 30, 2014 In millions
2014	$	26
2015	24
2016	22
2017	22
2018	20
2019 and beyond	76
Total	$	190

NOTE 8 - PENSION AND OTHER POSTRETIREMENT BENEFITS

Net Periodic Benefit Cost for All Significant Plans	Three Months Ended						Six Months Ended
In millions	Jun 30, 2014			Jun 30, 2013			Jun 30, 2014			Jun 30, 2013
Defined Benefit Pension Plans:
Service cost	$	8		$	8		$	16		$	16
Interest cost	46			41			92			82
Expected return on plan assets	(58		)	(58		)	(116		)	(116		)
Amortization of prior service cost	1			2			2			4
Amortization of net loss	17			22			34			44
Net periodic benefit cost	$	14		$	15		$	28		$	30
Other Postretirement Benefits:
Interest cost	$	3		$	4		$	6		$	8
Amortization of net gain	(2		)	—			(4		)	—
Net periodic benefit cost	$	1		$	4		$	2		$	8

NOTE 9 - RELATED PARTY TRANSACTIONS

The Corporation sells its products to Dow to simplify the customer interface process. Products are sold to and purchased from Dow at market-based prices in accordance with the terms of Dow’s intercompany pricing policies. Beginning in 2013, after each quarter, the Corporation and Dow analyze the pricing used for the sales in that quarter and reach agreement on any necessary adjustments, at which point the prices are final. The Corporation also procures certain commodities and raw materials through a Dow subsidiary and pays a commission to that Dow subsidiary based on the volume and type of commodities and raw materials purchased. The commission expense is included in “Sundry income (expense) - net” in the consolidated statements of income. Purchases from that Dow subsidiary were $668 million in the second quarter of 2014 ($732 million in the second quarter of 2013) and $1,431 million during the first six months of 2014 ($1,514 million during the first six months of 2013).

The Corporation has a master services agreement with Dow whereby Dow provides services including, but not limited to, accounting, legal, treasury (investments, cash management, risk management, insurance), procurement, human resources, environmental, health and safety and business management for UCC. Under the master services agreement with Dow, general administrative and overhead type services that Dow routinely allocates to various businesses are charged to UCC. The master services agreement cost allocation basis is headcount and includes a 10 percent service fee. 

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Notes to the Consolidated Financial Statements

(Unaudited)

This agreement resulted in expense of approximately $7 million in the second quarter of 2014 ($6 million in the second quarter of 2013) and $13 million for the first six months of 2014 ($13 million for the first six months of 2013) for general administrative and overhead type services and the 10 percent service fee, included in “Sundry income (expense) - net” in the consolidated statements of income. The remaining activity-based costs were approximately $12 million in the second quarter of 2014 ($13 million in the second quarter of 2013) and $24 million in the first six months of 2014 ($24 million in the first six months of 2013), and were included in “Cost of sales” in the consolidated statements of income.

Management believes the method used for determining expenses charged by Dow is reasonable. Dow provides these services by leveraging its centralized functional service centers to provide services at a cost that management believes provides an advantage to the Corporation.

The monitoring and execution of risk management policies related to interest rate and foreign currency risks, which are based on Dow’s risk management philosophy, are provided as a service to UCC.

As part of Dow’s cash management process, UCC is a party to revolving loans with Dow that have interest rates based on LIBOR (London Interbank Offered Rate) with varying maturities. At June 30, 2014, the Corporation had a note receivable of $1.9 billion ($2.4 billion at December 31, 2013) from Dow under a revolving loan agreement. The Corporation may draw from this note receivable in support of its daily working capital requirements and, as such, the net effect of cash inflows and outflows under this revolving loan agreement is presented in the consolidated statements of cash flows as an operating activity.

The Corporation also has a separate revolving credit agreement with Dow that allows the Corporation to borrow or obtain credit enhancements up to an aggregate of $1 billion that matures December 30, 2014. Dow may demand repayment with a 30-day written notice to the Corporation, subject to certain restrictions. A related collateral agreement provides for the replacement of certain existing pledged assets, primarily equity interests in various subsidiaries and joint ventures, with cash collateral. At June 30, 2014, $867 million ($843 million at December 31, 2013) was available under the revolving credit agreement. The cash collateral is reported as “Noncurrent receivables from related companies” in the consolidated balance sheets.

On a quarterly basis, the Corporation's Board of Directors reviews and approves a dividend distribution to its parent company and sole shareholder, Dow. The Board takes into consideration the level of earnings and cash flows, among other factors, in determining the amount of the dividend distribution. In the second quarter of 2014, the Corporation declared and paid a cash dividend of $330 million to Dow; dividends to Dow totaled $655 million for the first six months of 2014. In the second quarter of 2013, the Corporation declared and paid a dividend of $69 million to Dow; dividends to Dow totaled $169 million in the first six months of 2013.

The Corporation received $4 million of cash dividends from its related company investments in the second quarter of 2014 and $9 million during the first six months of 2014 ($5 million in the second quarter of 2013 and during the first six months of 2013). These dividends are included in “Sundry income (expense) – net” in the consolidated statements of income.

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Notes to the Consolidated Financial Statements

(Unaudited)

NOTE 10 - INCOME TAXES

During the first quarter of 2013, the U.S. Supreme Court denied certiorari in UCC's research tax credit case. Through the denial of certiorari, the U.S. Court of Appeals decision denying UCC's tax credit claim for supplies used in process-related research and development at its manufacturing facilities became final. As a result of this ruling, UCC reversed the uncertain tax positions related to this matter, which resulted in a decrease to "Other noncurrent obligations" and an increase to "Income taxes payable" in the consolidated balance sheets in accordance with the Tax Sharing Agreement between the Corporation and Dow. In addition, UCC recognized a tax charge of $41 million in the first quarter of 2013 included in "Provision for income taxes" in the consolidated statements of income. An audit settlement in the second quarter of 2013 resulted in a tax benefit of $22 million, included in "Provision for income taxes" in the consolidated statements of income and various balance sheet reclassifications from noncurrent to current accruals and receivables.

The Corporation's accrual for interest and penalties associated with uncertain tax positions, including the matters that resulted in the adjustment of uncertain tax positions, are recognized as components of "Provision for income taxes" in the consolidated statements of income and were insignificant for the three months ended June 30, 2014 (a benefit of $14 million for the three months ended June 30, 2013). During the six months ended June 30, 2014, the Corporation recognized a benefit of $3 million for the interest and penalties associated with uncertain tax positions (a benefit of $14 million for the six months ended June 30, 2013).

NOTE 11 - ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table provides an analysis of the changes in accumulated other comprehensive income (loss) for the six-month periods ended June 30, 2014 and 2013:

Accumulated Other Comprehensive Income (Loss)	Six Months Ended
In millions	Jun 30, 2014			Jun 30, 2013
Cumulative Translation Adjustments at beginning of year	$	(78	)	$	(56	)
Reclassification to earnings - Sundry income (expense) - net	(1		)	—
Balance at end of period	$	(79	)	$	(56	)
Pension and Other Postretirement Benefit Plans at beginning of year	(967		)	(1,289		)
Adjustments to pension and other postretirement benefit plans (net of tax of $12, $18) (1) (2)	20			29
Balance at end of period	$	(947	)	$	(1,260	)
Total Accumulated Other Comprehensive Loss	$	(1,026	)	$	(1,316	)

(1) Included in "Net periodic benefit cost." See Note 8 for additional information.

(2) Tax amounts are included in "Provision for income taxes" in the consolidated statements of income.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Pursuant to General Instruction H of Form 10-Q “Omission of Information by Certain Wholly-Owned Subsidiaries,” this section includes only management's narrative analysis of the results of operations for the six-month period ended June 30, 2014, the most recent period, compared with the six-month period ended June 30, 2013, the corresponding period in the preceding fiscal year.

References below to “Dow” refer to The Dow Chemical Company and its consolidated subsidiaries, except as otherwise indicated by the context.

Dow conducts its worldwide operations through global businesses. Union Carbide Corporation’s (the “Corporation” or “UCC”) business activities comprise components of Dow’s global operations rather than stand-alone operations. Because there are no separable reportable business segments for UCC and no detailed business information is provided to a chief operating decision maker regarding the Corporation’s stand-alone operations, the Corporation’s results are reported as a single operating segment.

RESULTS OF OPERATIONS

Total net sales were $1,790 million in the second quarter of 2014 compared with $1,722 million for the second quarter of 2013, an increase of 4 percent. Total net sales were $3,448 million for the first six months of 2014 compared with $3,437 million for the first six months of 2013, essentially flat. Net sales to related companies, principally to Dow based on market prices for the related products, for the second quarter of 2014 were $1,766 million compared with $1,670 million for the second quarter of 2013, an increase of 6 percent. Net sales to related companies were $3,398 million for the first six months of 2014 compared with $3,345 million for the first six months of 2013, an increase of 2 percent.

Average selling prices for most products increased in the second quarter of 2014 compared with the second quarter of 2013. This increase was driven by higher feedstock and energy costs as well as competitive pricing strategies. Sales volume decreased in the second quarter of 2014 compared with the second quarter of 2013, primarily driven by lower demand for olefins, tight supply of oxo alcohols, which was impacted by a planned maintenance turnaround, and the impact of Dow's divestiture of the Polypropylene Licensing and Catalysts business in the fourth quarter of 2013, which were partially offset by increased demand for acrylates and gas phase polyethylene and higher operating rates.

For the first six months of 2014, average selling prices for most products increased compared with the first six months of 2013 in response to higher feedstock and energy costs as well as competitive pricing strategies. Sales volume for the first six months of 2014 decreased compared with the first six months of 2013, primarily due to tight supply of vinyl acetate monomers, which was impacted by planned maintenance turnarounds and unplanned outages, lower demand for olefins and ethylene glycols, and the impact of Dow's divestiture of the Polypropylene Licensing and Catalysts business in the fourth quarter of 2013, which were partially offset by increased demand for gas phase polyethylene and higher operating rates.

Cost of sales decreased 6 percent to $1,534 million in the second quarter of 2014 from $1,630 million in the second quarter of 2013. Cost of sales decreased 4 percent to $3,059 million in the first six months of 2014 from $3,202 million in the first six months of 2013. Decreases from the three- and six-month periods ended June 30, 2013 were driven by lower operating costs, including lower recommissioning costs, and lower feedstock and raw material costs. In addition, the Corporation continued to benefit from the restart of the ethylene facility in St. Charles, Louisiana, in late 2012.

Research and development expenses were $5 million in the second quarter of 2014, flat when compared with the second quarter of 2013. For the first six months of 2014, research and development expenses were $11 million compared with $13 million in the first six months of 2013. This decrease is a result of cost reduction initiatives as well as Dow's divestiture of the Polypropylene Licensing and Catalysts business in the fourth quarter of 2013.

Equity in earnings of nonconsolidated affiliates was $4 million in the second quarter of 2014 compared with $28 million in the second quarter of 2013. Equity in earnings of nonconsolidated affiliates was $4 million in the first six months of 2014 compared with $60 million in the first six months of 2013. In the third quarter of 2013, UCC declared a stock dividend to Dow of its 100 percent ownership interest in Union Carbide Subsidiary C, Inc., which included UCC's full ownership interest in Univation Technologies, LLC.

Sundry income (expense) – net includes a variety of income and expense items such as the gain or loss on foreign currency exchange, dividend income from investments, commissions, charges for management services provided by Dow, and gains and

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Union Carbide Corporation and Subsidiaries

losses on sales of investments and assets. Sundry income (expense) - net for the second quarter of 2014 was net expense of $3 million compared with net expense of $11 million for the second quarter of 2013. For the first six months of 2014, sundry income (expense) - net was net expense of $12 million compared with net expense of $27 million for the first six months of 2013. This decrease was primarily due to an increase in dividend income from related company investments, a reduction in commission expense from related companies and a gain on the sale of assets in the second quarter of 2014. See Note 9 to the Consolidated Financial Statements for additional information.

Interest income was $3 million in the second quarter of 2014 ($6 million for the first six months of 2014) compared with $2 million in the second quarter of 2013 ($5 million for the first six months of 2013). This increase is due to higher interest rates on notes receivable from related companies.

Interest expense and amortization of debt discount of $8 million for the second quarter of 2014 and $15 million for the first six months of 2014 was flat when compared with the same periods in 2013.

The Corporation reported a tax provision of $77 million in the second quarter of 2014, which resulted in an effective tax rate of 31.6 percent. This compared with a tax provision of $15 million in the second quarter of 2013, which resulted in an effective tax rate of 15.8 percent. For the first six months of 2014, the Corporation reported a tax provision of $114 million, which resulted in an effective tax rate of 32.0 percent. This compared with a tax provision of $107 million in the first six months of 2013, which resulted in an effective tax rate of 44.8 percent. The effective tax rate fluctuates based on, among other factors, where income is earned, dividends received from investments in related companies and the level of income relative to tax credits available. The increase in the second quarter of 2014 tax rate compared with the second quarter of 2013 tax rate was primarily due to a $22 million tax benefit from an audit settlement in the second quarter of 2013. The tax rate for the first six months of 2014 compared with the first six months of 2013 decreased due to a $41 million tax charge, recorded in the first quarter of 2013, related to a court ruling that resulted in a settlement of an uncertain tax position that was partially offset by the audit settlement benefit recorded in the second quarter of 2013. See Note 10 to the Consolidated Financial Statements for additional information.

The Corporation reported net income of $167 million for the second quarter of 2014 compared with $80 million in the second quarter of 2013, reflecting improved selling prices and the reduction in planned maintenance turnaround costs, which were partially offset by lower sales volume and decreased equity in earnings of nonconsolidated affiliates. Net income for the first six months of 2014 was $242 million compared with $132 million in the first six months of 2013. The increase in net income is attributable to improved selling prices and an improved tax rate, which were partially offset by a reduction in sales volume and decreased equity in earnings of nonconsolidated affiliates.

OTHER MATTERS

Recent Accounting Guidance

See Note 2 to the Consolidated Financial Statements for a summary of recent accounting guidance.

Critical Accounting Policies

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, assumptions and estimates that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. Note 1 to the Consolidated Financial Statements in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2013 (“2013 10-K”) describes the significant accounting policies and methods used in the preparation of the Consolidated Financial Statements. The Corporation’s critical accounting policies that are impacted by judgments, assumptions and estimates are described in Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Corporation’s 2013 10-K. Since December 31, 2013, there have been no material changes in the Corporation’s critical accounting policies.

Asbestos-Related Matters

The Corporation is and has been involved in a large number of asbestos-related suits filed primarily in state courts during the past three decades. These suits principally allege personal injury resulting from exposure to asbestos-containing products and frequently seek both actual and punitive damages. The alleged claims primarily relate to products that UCC sold in the past, alleged exposure to asbestos-containing products located on UCC’s premises, and UCC’s responsibility for asbestos suits filed against a former UCC subsidiary, Amchem Products, Inc. (“Amchem”). In many cases, plaintiffs are unable to demonstrate that they have suffered any compensable loss as a result of such exposure, or that injuries incurred in fact resulted from exposure to the Corporation’s products.

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Union Carbide Corporation and Subsidiaries

It is the opinion of UCC's management that it is reasonably possible that the costs of disposing of its asbestos-related claims, including future defense costs, could have a material impact on the Corporation's results of operations and cash flows for a particular period and on the consolidated financial position of the Corporation.

The table below provides information regarding asbestos-related claims pending against the Corporation and Amchem, based on criteria developed by Union Carbide and its external consultants:

	2014		2013
Claims unresolved at January 1	29,005		33,449
Claims filed	4,740		5,972
Claims settled, dismissed or otherwise resolved	(4,333	)	(5,381	)
Claims unresolved at June 30	29,412		34,040
Claimants with claims against both UCC and Amchem	(8,309	)	(10,092	)
Individual claimants at June 30	21,103		23,948

Plaintiffs' lawyers often sue numerous defendants in individual lawsuits or on behalf of numerous claimants. As a result, the damages alleged are not expressly identified as to UCC, Amchem or any other particular defendant, even when specific damages are alleged with respect to a specific disease or injury. In fact, there are no personal injury cases in which only the Corporation and/or Amchem are the sole named defendants. For these reasons and based upon the Corporation's litigation and settlement experience, the Corporation does not consider the damages alleged against it and Amchem to be a meaningful factor in its determination of any potential asbestos-related liability.

For additional information see Asbestos-Related Matters in Note 7 to the Consolidated Financial Statements and Part II, Item 1. Legal Proceedings.

Debt Covenants and Default Provisions

The Corporation’s outstanding public debt has been issued under indentures which contain, among other provisions, covenants that the Corporation must comply with while the underlying notes are outstanding. Such covenants are typically based on the Corporation’s size and financial position and include, subject to the exceptions and qualifications contained in the indentures, obligations not to (i) allow liens on principal U.S. manufacturing facilities, (ii) enter into sale and lease-back transactions with respect to principal U.S. manufacturing facilities, or (iii) merge into or consolidate with any other entity or sell or convey all or substantially all of its assets. Failure of the Corporation to comply with any of these covenants could, after the passage of any applicable grace period, result in a default under the applicable indenture which would allow the note holders to accelerate the due date of the outstanding principal and accrued interest on the subject notes. Management believes the Corporation was in compliance with the covenants referred to above at June 30, 2014.

Dividends

On a quarterly basis, the Corporation's Board of Directors reviews and approves a dividend distribution to its parent company and sole shareholder, Dow. The Board takes into consideration the level of earnings and cash flows, among other factors, in determining the amount of the dividend distribution.

The Corporation declared and paid a cash dividend of $330 million to Dow in the second quarter of 2014; dividends to Dow totaled $655 million for the first six months of 2014. In the second quarter of 2013, the Corporation declared and paid a dividend of $69 million to Dow; dividends to Dow totaled $169 million in the first six months of 2013.

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Union Carbide Corporation and Subsidiaries

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Omitted pursuant to General Instruction H of Form 10-Q.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report on Form 10-Q, the Corporation carried out an evaluation, under the supervision and with the participation of the Corporation's Disclosure Committee and the Corporation's management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of the Corporation's disclosure controls and procedures pursuant to paragraph (b) of Exchange Act Rules 13a-15 or 15d-15. Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Corporation's disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting  

There were no changes in the Corporation's internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that was conducted during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Corporation's internal control over financial reporting. 

PART II – OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

No material developments in asbestos-related matters occurred during the second quarter of 2014. For a summary of the history and current status of asbestos-related matters, see Note 7 to the Consolidated Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations, Asbestos-Related Matters.

ITEM 1A.  RISK FACTORS

There were no material changes in the Corporation's risk factors in the second quarter of 2014.

ITEM 4.  MINE SAFETY DISCLOSURES

Not applicable.

ITEM 6.  EXHIBITS

See the Exhibit Index of this Quarterly Report on Form 10-Q for exhibits filed with this report.

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Union Carbide Corporation and Subsidiaries

Signatures

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: July 29, 2014
	By:	/s/ RONALD C. EDMONDS
		Ronald C. Edmonds
		Vice President and Controller
		The Dow Chemical Company
		Authorized Representative of
		Union Carbide Corporation
	By:	/s/ IGNACIO MOLINA
		Ignacio Molina
		Vice President, Treasurer and
		Chief Financial Officer

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Union Carbide Corporation and Subsidiaries

Exhibit Index

EXHIBIT NO.	DESCRIPTION
23	Analysis, Research & Planning Corporation’s Consent.
31.1	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.

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