10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period endedMARCH 31, 2017

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.)

7501 STATE HIGHWAY 185 NORTH, SEADRIFT, TEXAS  77983

(Address of principal executive offices) (Zip Code)

 Registrant's telephone number, including area code:  361-553-2997

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.

þ 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).  

þ Yes    o No

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

Large accelerated filer o		Accelerated filer o
Non-accelerated filer   þ	(Do not check if a smaller reporting company)	Smaller reporting company o
		Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    o

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

o Yes    þ No

At March 31, 2017, 935.51 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 March 31, 2017

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

Throughout this Quarterly Report on Form 10-Q, except as otherwise indicated by the context, the terms "Corporation" or "UCC" as used herein mean Union Carbide Corporation and its 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," "outlook," "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, 2016). 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
In millions (Unaudited)	Mar 31, 2017			Mar 31, 2016
Net trade sales	$	57		$	26
Net sales to related companies	1,266			1,186
Total Net Sales	1,323			1,212
Cost of sales	1,041			833
Research and development expenses	2			4
Selling, general and administrative expenses	2			2
Equity in earnings of nonconsolidated affiliate	—			2
Sundry income (expense) - net	(12		)	(13		)
Interest income	4			3
Interest expense and amortization of debt discount	7			6
Income Before Income Taxes	263			359
Provision for income taxes	90			119
Net Income Attributable to Union Carbide Corporation	$	173		$	240
Depreciation	$	45		$	40
Capital Expenditures	$	50		$	53

See Notes to the Consolidated Financial Statements.

4

Union Carbide Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income

	Three Months Ended
In millions (Unaudited)	Mar 31, 2017		Mar 31, 2016
Net Income Attributable to Union Carbide Corporation	$	173	$	240
Other Comprehensive Income, Net of Tax
Cumulative translation adjustments	1		—
Pension and other postretirement benefit plan adjustments	12		11
Total other comprehensive income	13		11
Comprehensive Income Attributable to Union Carbide Corporation	$	186	$	251

See Notes to the Consolidated Financial Statements.

5

Union Carbide Corporation and Subsidiaries

Consolidated Balance Sheets

In millions, except share amounts (Unaudited)	Mar 31, 2017			Dec 31, 2016
Assets
Current Assets
Cash and cash equivalents	$	15		$	11
Accounts receivable:
Trade (net of allowance for doubtful receivables 2017: $-; 2016: $-)	45			15
Related companies	946			843
Other	51			36
Income taxes receivable	258			275
Notes receivable from related companies	1,162			1,411
Inventories	306			307
Other current assets	29			39
Total current assets	2,812			2,937
Investments
Investments in related companies	639			639
Investment in nonconsolidated affiliate	15			14
Other investments	27			30
Noncurrent receivables	52			52
Noncurrent receivables from related companies	56			57
Total investments	789			792
Property
Property	7,195			7,144
Less accumulated depreciation	5,795			5,750
Net property	1,400			1,394
Other Assets
Intangible assets (net of accumulated amortization 2017: $79; 2016: $78)	26			25
Deferred income tax assets	849			928
Deferred charges and other assets	44			70
Total other assets	919			1,023
Total Assets	$	5,920		$	6,146
Liabilities and Equity
Current Liabilities
Notes payable to related companies	$	28		$	25
Long-term debt due within one year	1			1
Accounts payable:
Trade	251			249
Related companies	501			521
Other	11			7
Income taxes payable	21			23
Asbestos-related liabilities - current	123			126
Accrued and other current liabilities	162			181
Total current liabilities	1,098			1,133
Long-Term Debt	475			475
Other Noncurrent Liabilities
Pension and other postretirement benefits - noncurrent	993			1,170
Asbestos-related liabilities - noncurrent	1,337			1,364
Other noncurrent obligations	202			206
Total other noncurrent liabilities	2,532			2,740
Stockholder's Equity
Common stock (authorized: 1,000 shares of $0.01 par value each; issued: 935.51 shares)	—			—
Additional paid-in capital	138			138
Retained earnings	2,984			2,980
Accumulated other comprehensive loss	(1,307		)	(1,320		)
Union Carbide Corporation's stockholder's equity	1,815			1,798
Total Liabilities and Equity	$	5,920		$	6,146

See Notes to the Consolidated Financial Statements.

6

Union Carbide Corporation and Subsidiaries

Consolidated Statements of Cash Flows

	Three Months Ended
In millions (Unaudited)	Mar 31, 2017			Mar 31, 2016
Operating Activities
Net Income Attributable to Union Carbide Corporation	$	173		$	240
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	50			45
Provision for deferred income tax	72			28
Pension contributions	(161		)	(51		)
Other, net	—			(1		)
Changes in assets and liabilities:
Accounts and notes receivable	(21		)	(13		)
Related company receivables	146			57
Inventories	1			(32		)
Accounts payable	7			(19		)
Related company payables	(17		)	(18		)
Asbestos-related payments	(30		)	(14		)
Other assets and liabilities	(1		)	31
Cash provided by operating activities	219			253
Investing Activities
Capital expenditures	(50		)	(53		)
Change in noncurrent receivable from related company	1			—
Proceeds from sales of investments	3			2
Cash used in investing activities	(46		)	(51		)
Financing Activities
Dividends paid to stockholder	(169		)	(200		)
Cash used in financing activities	(169		)	(200		)
Summary
Increase in cash and cash equivalents	4			2
Cash and cash equivalents at beginning of year	11			23
Cash and cash equivalents at end of period	$	15		$	25

See Notes to the Consolidated Financial Statements.

7

Union Carbide Corporation and Subsidiaries

Consolidated Statements of Equity

	Three Months Ended
In millions (Unaudited)	Mar 31, 2017			Mar 31, 2016
Common Stock
Balance at beginning of year and end of period	$	—		$	—
Additional Paid-in Capital
Balance at beginning of year and end of period	138			138
Retained Earnings
Balance at beginning of year	2,980			3,391
Net Income Attributable to Union Carbide Corporation	173			240
Dividends declared	(169		)	(200		)
Balance at end of period	2,984			3,431
Accumulated Other Comprehensive Loss, Net of Tax
Balance at beginning of year	(1,320		)	(1,228		)
Other comprehensive income	13			11
Balance at end of period	(1,307		)	(1,217		)
Union Carbide Corporation's Stockholder's Equity	$	1,815		$	2,352

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	Inventories	12
4	Intangible Assets	12
5	Financial Instruments	12
6	Commitments and Contingent Liabilities	13
7	Pension and Other Postretirement Benefits	15
8	Related Party Transactions	15
9	Accumulated Other Comprehensive Loss	16
10	Planned Merger with DuPont	16

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 8 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, 2016.

In the first quarter of 2017, the Corporation made a change to the consolidated statements of cash flows to include a new line under "Operating Activities" entitled "Asbestos-related payments." The new line captures cash payments made for asbestos-related claim and resolution activity as well as asbestos-related defense and processing costs (effective as of the fourth quarter of 2016 as a result of an accounting policy change). Prior periods have been updated to conform with the current year presentation.

NOTE 2 - RECENT ACCOUNTING GUIDANCE

Accounting Guidance Issued But Not Yet Adopted as of March 31, 2017

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("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. ASU 2015-14, "Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date," which was issued in August 2015, revised the effective date for this ASU to annual and interim periods beginning on or after December 15, 2017, with early adoption permitted, but not earlier

9

Union Carbide Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

(Unaudited)

than the original effective date of annual and interim periods beginning on or after December 15, 2016, for public entities. Entities will have the option of using either a full retrospective approach or a modified approach to adopt the guidance in ASU 2014-09.

In May 2014, the FASB and International Accounting Standards Board formed The Joint Transition Resource Group for Revenue Recognition ("TRG"), consisting of financial statement preparers, auditors and users, to seek feedback on potential issues related to the implementation of the new revenue standard. As a result of feedback from the TRG, the FASB has issued additional guidance to provide clarification, implementation guidance and practical expedients to address some of the challenges of implementation. In March 2016, the FASB issued ASU 2016-08, "Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)," which is an amendment on assessing whether an entity is a principal or an agent in a revenue transaction. This amendment addresses issues to clarify the principal versus agent assessment and lead to more consistent application. In April 2016, the FASB issued ASU 2016-10, "Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing," which contains amendments to the new revenue recognition standard on identifying performance obligations and accounting for licenses of intellectual property. The amendments related to identifying performance obligations clarify when a promised good or service is separately identifiable and allows entities to disregard items that are immaterial in the context of a contract. The licensing implementation amendments clarify how an entity should evaluate the nature of its promise in granting a license of intellectual property, which will determine whether revenue is recognized over time or at a point in time. In May 2016, the FASB issued ASU 2016-12, "Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients," which provides clarity and implementation guidance on assessing collectibility, presentation of sales taxes, noncash consideration, and completed contracts and contract modifications at transition. The new standards have the same effective date and transition requirements as ASU 2014-09.

The Corporation has a team in place to analyze the impact of ASU 2014-09 and the related ASU's across all revenue streams to evaluate the impact of the new standard on revenue contracts. This includes reviewing current accounting policies and practices to identify potential differences that would result from applying the requirements under the new standard. The Corporation is currently completing contract evaluations and validating the results of applying the new revenue guidance. The Corporation has also started drafting its accounting policies and evaluating the new disclosure requirements and expects to complete its evaluation of the impact of the accounting and disclosure requirements on its business processes, controls and systems by the end of the second quarter of 2017. Full implementation will be completed by the end of 2017. Based on analysis completed to date, the Corporation expects the potential impact on the recognition of revenue for product sales and licensing arrangements to remain substantially unchanged. The Corporation expects to adopt the new standard using the modified retrospective approach, under which the cumulative effect of initially applying the new guidance is recognized as an adjustment to the opening balance of retained earnings in the first quarter of 2018.

In January 2016, the FASB issued ASU 2016-01, "Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities," which amends the guidance in U.S. GAAP on the classification and measurement of financial instruments. Changes to the current guidance primarily affects the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the ASU clarifies guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The new standard is effective for fiscal years and interim periods beginning after December 15, 2017, and upon adoption, an entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. Early adoption is not permitted except for the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income. The Corporation is currently evaluating the impact of adopting this guidance.

In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)," which requires organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. The new guidance requires that a lessee recognize assets and liabilities for leases with lease terms of more than twelve months and recognition, presentation and measurement in the financial statements will depend on its classification as a finance or operating lease. In addition, the new guidance will require disclosures to help investors and other financial statement users better understand the amount, timing and uncertainty of cash flows arising from leases. Lessor accounting remains largely unchanged from current U.S. GAAP but does contain some targeted improvements to align with the new revenue recognition guidance issued in 2014. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018,

10

Union Carbide Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

(Unaudited)

using a modified retrospective approach, and early adoption is permitted. The Corporation is currently evaluating the impact of adopting this guidance.

In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments," which addresses diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows with respect to eight specific cash flow issues. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The amendments should be applied using a retrospective transition method to each period presented, if practicable. Early adoption is permitted, including adoption in an interim period, and any adjustments should be reflected as of the beginning of the fiscal year that includes the interim period. All amendments must be adopted in the same period. The Corporation is currently evaluating the impact of adopting this guidance.

In October 2016, the FASB issued ASU 2016-16, "Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory," which requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, and should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings at the beginning of the period of adoption. Early adoption is permitted in the first interim period of an annual reporting period for which financial statements have not been issued. The Corporation is currently evaluating the impact of adopting this guidance.

In February 2017, the FASB issued ASU 2017-05, "Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets," which clarifies the scope of guidance on nonfinancial asset derecognition in Accounting Standards Codification 610-20 and the accounting for partial sales of nonfinancial assets. The new guidance also conforms the derecognition guidance for nonfinancial assets with the model in the new revenue standard (ASU 2014-09). The new standard is effective for annual reporting periods, and interim periods within those fiscal years, beginning after December 15, 2017, and an entity is required to apply the amendments at the same time that it applies the amendments in ASU 2014-09. The Corporation is currently evaluating the impact of adopting this guidance.

In March 2017, the FASB issued ASU 2017-07, "Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost," which amends the requirements related to the income statement presentation of the components of net periodic benefit cost for employer sponsored defined benefit pension and other postretirement benefit plans. Under the new guidance, an entity must disaggregate and present the service cost component of the net periodic benefit cost in the same income statement line item(s) as other employee compensation costs arising from services rendered during the period, and only the service cost component will be eligible for capitalization. Other components of net periodic benefit cost will be presented separately from the line item(s) that includes the service cost. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted at the beginning of an annual period in which the financial statements have not been issued. Entities must use a retrospective transition method to adopt the requirement for separate presentation of the income statement service cost and other components, and a prospective transition method to adopt the requirement to limit the capitalization of benefit cost to the service component. The Corporation is currently evaluating the impact of adopting this guidance.

11

Union Carbide Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

(Unaudited)

NOTE 3 - INVENTORIES

The following table provides a breakdown of inventories:

Inventories In millions	Mar 31, 2017			Dec 31, 2016
Finished goods	$	193		$	186
Work in process	44			38
Raw materials	51			50
Supplies	90			87
Total FIFO inventories	$	378		$	361
Adjustment of inventories to a LIFO basis	(72		)	(54		)
Total inventories	$	306		$	307

NOTE 4 - INTANGIBLE ASSETS

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

Intangible Assets	At March 31, 2017							At December 31, 2016
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	72		(46		)	26		70		(45		)	25
Total intangible assets	$	105	$	(79	)	$	26	$	103	$	(78	)	$	25

Total estimated amortization expense for 2017 and the five succeeding fiscal years is as follows:

Estimated Amortization Expense In millions
2017	$	4
2018	$	6
2019	$	6
2020	$	5
2021	$	3
2022	$	2

NOTE 5 - FINANCIAL INSTRUMENTS

Investments

The Corporation's investments in marketable securities are classified as available-for-sale. Proceeds from sales of available-for-sale securities were $2 million for the three-month period ended March 31, 2017 ($2 million for the three-month period ended March 31, 2016).

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.

12

Union Carbide Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

(Unaudited)

Fair Value of Financial Instruments
	At March 31, 2017											At December 31, 2016
In millions	Cost			Gain		Loss			Fair Value			Cost			Gain		Loss			Fair Value
Cash equivalents	$	9		$	—	$	—		$	9		$	7		$	—	$	—		$	7
Debt securities (1)	$	—		$	—	$	—		$	—		$	2		$	—	$	—		$	2
Long-term debt including debt due within one year	$	(476	)	$	4	$	(78	)	$	(550	)	$	(476	)	$	—	$	(95	)	$	(571	)

(1) Marketable securities are included in "Other investments" in the consolidated balance sheets.

For all other financial instruments, cost approximates fair value.

NOTE 6 - 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 March 31, 2017, the Corporation had accrued obligations of $143 million for probable environmental remediation and restoration costs, including $21 million for the remediation of Superfund sites. These obligations are included in "Accrued and other current liabilities" and "Other noncurrent obligations" in the consolidated balance sheets. 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 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, 2016, the Corporation had accrued obligations of $145 million for probable environmental remediation and restoration costs, including $20 million for the remediation of Superfund sites.

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

A description of asbestos-related matters can be found in Note 13 to the Consolidated Financial Statements included in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2016.

Introduction

The Corporation is and has been involved in a large number of asbestos-related suits filed primarily in state courts during the past four 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.

13

Union Carbide Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

(Unaudited)

Estimating the Asbestos-Related Liability

Since 2003, the Corporation has engaged Ankura Consulting Group, LLC ("Ankura"), a third party actuarial specialist, to review the Corporation's historical asbestos-related claim and resolution activity in order to assist UCC management in estimating the Corporation's asbestos-related liability. Each year, Ankura has reviewed the claim and resolution activity to determine the appropriateness of updating the most recent Ankura study. Historically, every other year beginning in October, Ankura has completed a full review and formal update to the most recent Ankura study.

Based on the December 2016 Ankura study and the Corporation's own review of the data, and taking into account the change in accounting policy that occurred in the fourth quarter of 2016, the Corporation's total asbestos-related liability through the terminal year of 2049, including asbestos-related defense and processing costs, was $1,490 million at December 31, 2016, and was included in “Asbestos-related liabilities - current” and “Asbestos-related liabilities - noncurrent” in the consolidated balance sheets.

Each quarter, the Corporation reviews claims filed, settled and dismissed, as well as average settlement and resolution costs by disease category. The Corporation also considers additional quantitative and qualitative factors such as the nature of pending claims, trial experience of the Corporation and other asbestos defendants, current spending for defense and processing costs, significant appellate rulings and legislative developments, trends in the tort system, and their respective effects on expected future resolution costs. UCC management considers all these factors in conjunction with the most recent Ankura study and determines whether a change in the estimate is warranted. Based on the Corporation's review of 2017 activity, it was determined that no adjustment to the accrual was required at March 31, 2017.

The Corporation’s asbestos-related liability for pending and future claims and defense and processing costs was $1,460 million at March 31, 2017. Approximately 14 percent of the recorded liability for pending and future claims related to pending claims and approximately 86 percent related to future claims.

Summary

The Corporation's management believes the amounts recorded for the asbestos-related liability (including defense and processing costs) reflect reasonable and probable estimates of the liability based on current, known facts. However, future events, such as the number of new claims to be filed and/or received each year and the average cost of defending and disposing of each such claim, as well as the numerous uncertainties surrounding asbestos litigation in the United States, could cause the actual costs for the Corporation to be higher or lower than those projected or those recorded. Any such event could result in an increase or decrease in the recorded liability.

Other Litigation

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 the possibility is remote that the aggregate of all such other claims and lawsuits will have a material adverse impact on the results of operations, cash flows and financial position of the Corporation.

Purchase Commitments

A summary of the Corporation's purchase commitments can be found in Note 13 to the Consolidated Financial Statements included in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2016. There have been no material changes to purchase commitments since December 31, 2016.

14

Union Carbide Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

(Unaudited)

NOTE 7 - PENSION AND OTHER POSTRETIREMENT BENEFITS

Net Periodic Benefit Cost for All Significant Plans	Three Months Ended
In millions	Mar 31, 2017			Mar 31, 2016
Defined Benefit Pension Plans:
Service cost	$	9		$	9
Interest cost	32			33
Expected return on plan assets	(55		)	(54		)
Amortization of net loss	21			19
Net periodic benefit cost	$	7		$	7
Other Postretirement Benefits:
Interest cost	$	2		$	2
Amortization of net gain	(1		)	(2		)
Net periodic benefit cost	$	1		$	—

NOTE 8 - 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. 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 $430 million in the first quarter of 2017 ($285 million in the first quarter of 2016). The increase in purchase costs in the first three months of 2017 when compared with the same period last year is due to higher feedstock and energy costs.

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. This agreement resulted in expense of $8 million in the first quarter of 2017 ($7 million in the first quarter of 2016) 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 $17 million in the first quarter of 2017 ($16 million in the first quarter of 2016), 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 March 31, 2017, the Corporation had a note receivable of $1.1 billion ($1.4 billion at December 31, 2016) 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, 2017. 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

15

Union Carbide Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

(Unaudited)

certain existing pledged assets, primarily equity interests in various subsidiaries and a joint venture, with cash collateral. At March 31, 2017, $948 million ($947 million at December 31, 2016) 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 determines if there will be 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 first quarter of 2017, the Corporation declared and paid a cash dividend of $169 million to Dow ($200 million declared and paid to Dow in the first quarter of 2016).

NOTE 9 - ACCUMULATED OTHER COMPREHENSIVE LOSS

The following table provides an analysis of the changes in accumulated other comprehensive loss for the three-month periods ended March 31, 2017 and 2016:

Accumulated Other Comprehensive Loss	Three Months Ended
In millions	Mar 31, 2017			Mar 31, 2016
Cumulative Translation Adjustments at beginning of year	$	(62	)	$	(61	)
Translation adjustments	1			—
Balance at end of period	$	(61	)	$	(61	)
Pension and Other Postretirement Benefit Plans at beginning of year	$	(1,258	)	$	(1,167	)
Adjustments to pension and other postretirement benefit plans (net of tax of $8, $6) (1) (2)	12			11
Balance at end of period	$	(1,246	)	$	(1,156	)
Total Accumulated Other Comprehensive Loss	$	(1,307	)	$	(1,217	)

(1) Included in "Net periodic benefit cost." See Note 7 for additional information.

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

NOTE 10 - PLANNED MERGER WITH DUPONT

On December 11, 2015, Dow and E. I. du Pont de Nemours and Company ("DuPont") entered into an Agreement and Plan of Merger, as amended on March 31, 2017 (the "Merger Agreement"), to effect an all-stock, merger of equals strategic combination resulting in a newly formed corporation named DowDuPont Inc. ("DowDuPont"). Pursuant to the terms of the Merger Agreement, Dow and DuPont will each merge with wholly owned subsidiaries of DowDuPont (the "Mergers") and, as a result of the Mergers, will become subsidiaries of DowDuPont (collectively, the "Merger Transaction"). Following the consummation of the Mergers, Dow and DuPont intend to pursue, subject to the receipt of any required regulatory approvals and approval by the board of directors of DowDuPont, the separation of the combined company’s agricultural business, specialty products business and materials science business through one or more tax-efficient transactions.

On March 27, 2017, Dow and DuPont announced that the European Commission ("EC") granted conditional approval in Europe of the companies' proposed merger of equals. The EC's approval was conditioned on DuPont and Dow fulfilling certain divestiture commitments given to the EC in connection with the clearance. Specifically, DuPont will divest its Cereal Broadleaf Herbicides and Chewing Insecticides portfolios as well as its Crop Protection research and development pipeline and organization (excluding seed treatment, nematicides, late-stage research and development ("R&D") programs and certain personnel needed to support marketed products and R&D programs that will remain with DuPont) (collectively, the "DuPont Divested Assets"). Dow will divest its global Ethylene Acrylic Acid ("EAA") copolymers and ionomers business to SK Global Chemical Co., Ltd., as announced on February 2, 2017. Dow's divestiture of the EAA business is conditioned on Dow and DuPont closing the Merger Transaction, in addition to other customary closing conditions, including the receipt of certain required regulatory approvals, local employment law and governance obligations.

On March 31, 2017, in connection with the commitments given to the EC with respect to its conditional approval of the Merger Transaction, DuPont entered into an agreement with FMC Corporation ("FMC") whereby FMC will acquire the DuPont Divested Assets and DuPont will acquire FMC's Health and Nutrition business segment, excluding its Omega-3 products (the "H&N Business"). DuPont's transaction with FMC is expected to close in the fourth quarter of 2017, subject to the closing of

16

Union Carbide Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

(Unaudited)

the Merger Transaction, in addition to the waiver or satisfaction of other customary closing conditions, including approval by the EC of FMC as the buyer of the DuPont Divested Assets and the receipt of other required regulatory approvals.

In connection with DuPont's proposed transaction with FMC, on March 31, 2017 Dow and DuPont amended the Merger Agreement to, among other things, extend the outside date from June 15, 2017 to August 31, 2017 and to provide that DuPont cannot take certain specified actions to obtain regulatory approvals with respect to its acquisition of the H&N Business if those actions would reasonably be likely to result in the one-year loss of revenues to Dow, DuPont, DowDuPont, their subsidiaries or the H&N Business in excess of $350 million in the aggregate (based on fiscal year 2016 annual revenues). In addition, the amendment of the Merger Agreement also amended the form of bylaws for DowDuPont to reflect that Dow and DuPont currently intend that the first step in the intended separation process will be the spin-off of the post-merger materials science business (assuming that such sequencing would allow for the completion of all of the intended spin-offs within 18 months following closing of the Merger Transaction and would not adversely impact the value of the intended spin-off transaction to DowDuPont's shareholders).

Dow and DuPont remain focused on closing the Merger Transaction and continue to work constructively with regulatory agencies to obtain required clearances in all relevant jurisdictions. The Merger Transaction is anticipated to close no earlier than August 1, 2017.

17

Union Carbide Corporation and Subsidiaries

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 three-month period ended March 31, 2017, the most recent period, compared with the three-month period ended March 31, 2016, the corresponding period in the preceding fiscal year.

References 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

Net Sales

Total net sales were $1,323 million in the first quarter of 2017 compared with $1,212 million in the first quarter of 2016, an increase of 9 percent. Net sales to related companies, principally to Dow, and based on market prices for the related products, were $1,266 million in the first quarter of 2017 compared with $1,186 million in the first quarter of 2016, an increase of 7 percent.

Average selling prices increased 5 percent in the first quarter of 2017 compared with the same quarter last year. Price increases were primarily driven by higher feedstock, energy and other raw material prices, with the largest increases in polyethylene, acrylic monomers, ethylene oxide/ethylene glycol and vinyl acetate monomers. Total sales volume was up 4 percent in the first quarter of 2017 compared with the first quarter of 2016. Increases in sales volume in vinyl acetate monomers, acrylic monomers, glycol ethers and glutaraldehydes were partially offset by lower sales volume in electrical and telecommunications and oxo alcohols.

Cost of Sales

Cost of sales were $1,041 million in the first quarter of 2017 compared with $833 million in the first quarter of 2016, an increase of 25 percent. The increase in cost of sales was primarily driven by higher feedstock, energy and other raw material costs as well as increased sales volume when compared with the same period last year.

Research and Development, Selling, General and Administrative Expenses

Research and development expenses were $2 million in the first quarter of 2017 compared with $4 million in the first quarter of 2016. Selling, general and administrative expenses were $2 million in the first quarter of 2017, flat compared with $2 million in the first quarter of 2016.

Equity in Earnings of Nonconsolidated Affiliate

Equity in earnings of a nonconsolidated affiliate was zero in the first quarter of 2017, down from $2 million in the first quarter of 2016.

Sundry Income (Expense) - Net

Sundry income (expense) – net includes a variety of income and expense items such as the gain or loss on foreign currency exchange, commissions, charges for management services provided by Dow, and gains and losses on sales of investments and assets. Sundry income (expense) - net for the first quarter of 2017 was net expense of $12 million compared with net expense of $13 million for the same quarter last year.

Interest Income and Expense

Interest income was $4 million in the first quarter of 2017 compared with $3 million in the first quarter of 2016. Interest expense and amortization of debt discount was $7 million in the first quarter of 2017 compared with $6 million in the first quarter of 2016.

18

Union Carbide Corporation and Subsidiaries

Provision for Income Taxes

The Corporation reported a tax provision of $90 million in the first quarter of 2017, which resulted in an effective tax rate of 34.2 percent. This compared with a tax provision of $119 million in the first quarter of 2016, which resulted in an effective tax rate of 33.1 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.

Net Income Attributable to UCC

The Corporation reported net income of $173 million in the first quarter of 2017 compared with $240 million in the first quarter of 2016. When compared with the same quarter last year, the impact of higher feedstock, energy and other raw material costs more than offset higher selling prices and increased sales volume.

Capital Expenditures

Capital spending in the first quarter of 2017 was $50 million compared with $53 million in the first quarter of 2016, reflecting spending for U.S. Gulf Coast projects and site infrastructure projects in both periods.

Subsequent Events

Texas City, Texas, Land Sale

On June 27, 2016, UCC signed agreements for the sale of excess land at the Texas City, Texas, manufacturing site. As a result, in the second quarter of 2016, UCC recorded a pretax gain of $46 million on the sale of one parcel of land. In addition, a down payment of $8 million was received for the sale of a second parcel of land which is included in "Accrued and other current liabilities" in the consolidated balance sheets. On April 3, 2017, the sale of the second parcel of land was completed which also included terminal assets and ancillary agreements for the supply of energy and site and terminal services. In the second quarter of 2017, a pretax gain of $23 million will be recorded on the sale and will be included in "Sundry income (expense) - net" in the consolidated statements of income.

Sale in Ownership of a Nonconsolidated Affiliate

On March 16, 2017, UCC entered into a share sale and purchase agreement to sell it ownership interest in Asian Acetyls Co., Ltd. ("ASACCO"), a nonconsolidated affiliate accounted for under the equity method of accounting. ASACCO agreed to purchase all of the shares of registered common stock owned by UCC. On April 24, 2017, the sale was completed for $22 million. In the second quarter of 2017, the Corporation expects to record a pretax gain of $4 million on the sale and will be included in "Sundry income (expense) - net" in the consolidated statements of income.

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, 2016 ("2016 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 2016 10-K. Since December 31, 2016, 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 four 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 UCC’s products.

19

Union Carbide Corporation and Subsidiaries

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

Asbestos-Related Claim Activity	2017		2016
Claims unresolved at January 1	16,141		18,778
Claims filed	1,907		2,355
Claims settled, dismissed or otherwise resolved	(1,566	)	(1,361	)
Claims unresolved at March 31	16,482		19,772
Claimants with claims against both UCC and Amchem	(5,779	)	(7,169	)
Individual claimants at March 31	10,703		12,603

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 6 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 March 31, 2017.

Dividends

On a quarterly basis, the Corporation's Board of Directors reviews and determines if there will be 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 first quarter of 2017, the Corporation declared and paid a cash dividend of $169 million to Dow. In the first quarter of 2016, the Corporation declared and paid a cash dividend of $200 million to Dow. On April 25, 2017, the UCC Board of Directors approved a dividend to Dow of $181 million, payable on June 23, 2017.

20

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 and 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 and 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 in the first quarter of 2017. For a current status of asbestos-related matters, see Note 6 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 first quarter of 2017.

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.

21

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: April 27, 2017
	By:	/s/ RONALD C. EDMONDS
		Ronald C. Edmonds
		Controller and Vice President
		of Controllers and Tax
		The Dow Chemical Company
		Authorized Representative of
		Union Carbide Corporation
	By:	/s/ IGNACIO MOLINA
		Ignacio Molina
		Vice President, Treasurer and
		Chief Financial Officer

22

Union Carbide Corporation and Subsidiaries

Exhibit Index

EXHIBIT NO.	DESCRIPTION
23	Ankura Consulting Group, LLC'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.

23

EX-23

EXHIBIT 23

Ankura Consulting Group, LLC's Consent

Union Carbide Corporation:

Ankura Consulting Group, LLC ("Ankura") hereby consents to the use of Ankura's name and the reference to Ankura's reports appearing in this Quarterly Report on Form 10-Q of Union Carbide Corporation for the quarter ended March 31, 2017.

/s/ B. THOMAS FLORENCE

B. Thomas Florence

Senior Managing Director

Ankura Consulting Group, LLC

April 27, 2017

24

EX-31.1

EXHIBIT 31.1

Union Carbide Corporation and Subsidiaries

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Richard A. Wells, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Union Carbide Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: April 27, 2017

/s/ RICHARD A. WELLS

Richard A. Wells

President and Chief Executive Officer

25

EX-31.2

EXHIBIT 31.2

Union Carbide Corporation and Subsidiaries

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Ignacio Molina, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Union Carbide Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: April 27, 2017

/s/ IGNACIO MOLINA

Ignacio Molina

Vice President, Treasurer and

Chief Financial Officer

26

EX-32.1

EXHIBIT 32.1

Union Carbide Corporation and Subsidiaries

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

I, Richard A. Wells, President and Chief Executive Officer of Union Carbide Corporation (the "Corporation"), certify that:

1. the Quarterly Report on Form 10-Q of the Corporation for the quarter ended March 31, 2017 as filed with the Securities and Exchange Commission (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

/s/ RICHARD A. WELLS

Richard A. Wells

President and Chief Executive Officer

Date: April 27, 2017

27

EX-32.2

EXHIBIT 32.2

Union Carbide Corporation and Subsidiaries

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

I, Ignacio Molina, Vice President, Treasurer and Chief Financial Officer of Union Carbide Corporation (the "Corporation"), certify that:

1. the Quarterly Report on Form 10-Q of the Corporation for the quarter ended March 31, 2017 as filed with the Securities and Exchange Commission (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

/s/ IGNACIO MOLINA

Ignacio Molina

Vice President, Treasurer and

Chief Financial Officer

Date: April 27, 2017

28

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Document and Entity Information
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Entity Central Index Key	0000100790
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding	935.51

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Consolidated Statements of Income - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Net trade sales	$ 57	$ 26
Net sales to related companies	1,266	1,186
Total Net Sales	1,323	1,212
Cost of sales	1,041	833
Research and development expenses	2	4
Selling, general and administrative expenses	2	2
Equity in earnings of nonconsolidated affiliate	0	2
Sundry income (expense) - net	(12)	(13)
Interest income	4	3
Interest expense and amortization of debt discount	7	6
Income Before Income Taxes	263	359
Provision for income taxes	90	119
Net Income Attributable to Union Carbide Corporation	173	240
Depreciation	45	40
Capital Expenditures	$ 50	$ 53

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Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Net Income Attributable to Union Carbide Corporation	$ 173	$ 240
Other Comprehensive Income, Net of Tax
Cumulative translation adjustments	1	0
Pension and other postretirement benefit plan adjustments	12	11
Total other comprehensive income	13	11
Comprehensive Income Attributable to Union Carbide Corporation	$ 186	$ 251

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Consolidated Balance Sheets - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Current Assets
Cash and cash equivalents	$ 15	$ 11
Accounts receivable:
Trade (net of allowance for doubtful receivables 2017: $-; 2016: $-)	45	15
Related companies	946	843
Other	51	36
Income taxes receivable	258	275
Notes receivable from related companies	1,162	1,411
Inventories	306	307
Other current assets	29	39
Total current assets	2,812	2,937
Investments
Investments in related companies	639	639
Investments in nonconsolidated affiliate	15	14
Other investments	27	30
Noncurrent receivables	52	52
Noncurrent receivables from related companies	56	57
Total investments	789	792
Property
Property	7,195	7,144
Less accumulated depreciation	5,795	5,750
Net property	1,400	1,394
Other Assets
Intangible assets (net of accumulated amortization 2017: $79; 2016: $78)	26	25
Deferred income tax assets - noncurrent	849	928
Deferred charges and other assets	44	70
Total other assets	919	1,023
Total Assets	5,920	6,146
Current Liabilities
Notes payable - related companies	28	25
Long-term debt due within one year	1	1
Accounts payable:
Trade	251	249
Related companies	501	521
Other	11	7
Income taxes payable	21	23
Asbestos-related liabilities - current	123	126
Accrued and other current liabilities	162	181
Total current liabilities	1,098	1,133
Long-Term Debt	475	475
Other Noncurrent Liabilities
Pension and other postretirement benefits - noncurrent	993	1,170
Asbestos-related liabilities - noncurrent	1,337	1,364
Other noncurrent obligations	202	206
Total other noncurrent liabilities	2,532	2,740
Stockholder's Equity
Common stock (authorized: 1,000 shares of $0.01 par value each; issued: 935.51 shares)	0	0
Additional paid-in capital	138	138
Retained earnings	2,984	2,980
Accumulated other comprehensive loss	(1,307)	(1,320)
Union Carbide Corporation's stockholder's equity	1,815	1,798
Total Liabilities and Equity	$ 5,920	$ 6,146

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Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Allowance for doubtful accounts	$ 0	$ 0
Accumulated Amortization	$ 79	$ 78
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	1,000	1,000
Common stock, shares issued	935.51	935.51

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Consolidated Statements of Cash Flows - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Operating Activities
Net Income Attributable to Union Carbide Corporation	$ 173	$ 240
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	50	45
Provision for deferred income tax	72	28
Pension contributions	(161)	(51)
Other, net	0	(1)
Changes in assets and liabilities:
Accounts and notes receivable	(21)	(13)
Related company receivables	146	57
Inventories	1	(32)
Accounts payable	7	(19)
Related company payables	(17)	(18)
Asbestos-related payments	(30)	(14)
Other assets and liabilities	(1)	31
Cash provided by operating activities	219	253
Investing Activities
Capital expenditures	(50)	(53)
Change in noncurrent receivable from related company	1	0
Proceeds from sales of investments	3	2
Cash used in investing activities	(46)	(51)
Financing Activities
Dividends paid to stockholder	(169)	(200)
Cash used in financing activities	(169)	(200)
Summary
Increase in cash and cash equivalents	4	2
Cash and cash equivalents at beginning of year	11	23
Cash and cash equivalents at end of period	$ 15	$ 25

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Consolidated Statements of Equity - USD ($) $ in Millions	Total	Union Carbide Corporation's Stockholder's Equity [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive (Loss), Net of Tax [Member]
Balance at beginning of year at Dec. 31, 2015			$ 0	$ 138	$ 3,391	$ (1,228)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income Attributable to Union Carbide Corporation	$ 240				240
Dividends declared					(200)
Other Comprehensive Income (Loss), Net of Tax	11					11
Balance at end of period at Mar. 31, 2016			0	138	3,431	(1,217)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest		$ 2,352
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	1,798
Balance at beginning of year at Dec. 31, 2016			0	138	2,980	(1,320)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income Attributable to Union Carbide Corporation	173				173
Dividends declared					(169)
Other Comprehensive Income (Loss), Net of Tax	13					13
Balance at end of period at Mar. 31, 2017			$ 0	$ 138	$ 2,984	$ (1,307)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	$ 1,815	$ 1,815

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CONSOLIDATED FINANCIAL STATEMENTS

3 Months Ended

Mar. 31, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

CONSOLIDATED FINANCIAL STATEMENTS

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 8 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, 2016.

In the first quarter of 2017, the Corporation made a change to the consolidated statements of cash flows to include a new line under "Operating Activities" entitled "Asbestos-related payments." The new line captures cash payments made for asbestos-related claim and resolution activity as well as asbestos-related defense and processing costs (effective as of the fourth quarter of 2016 as a result of an accounting policy change). Prior periods have been updated to conform with the current year presentation.

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RECENT ACCOUNTING GUIDANCE

3 Months Ended

Mar. 31, 2017

Recent Accounting Guidance [Abstract]

RECENT ACCOUNTING GUIDANCE

RECENT ACCOUNTING GUIDANCE

Accounting Guidance Issued But Not Yet Adopted as of March 31, 2017

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("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. ASU 2015-14, "Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date," which was issued in August 2015, revised the effective date for this ASU to annual and interim periods beginning on or after December 15, 2017, with early adoption permitted, but not earlier than the original effective date of annual and interim periods beginning on or after December 15, 2016, for public entities. Entities will have the option of using either a full retrospective approach or a modified approach to adopt the guidance in ASU 2014-09.

In May 2014, the FASB and International Accounting Standards Board formed The Joint Transition Resource Group for Revenue Recognition ("TRG"), consisting of financial statement preparers, auditors and users, to seek feedback on potential issues related to the implementation of the new revenue standard. As a result of feedback from the TRG, the FASB has issued additional guidance to provide clarification, implementation guidance and practical expedients to address some of the challenges of implementation. In March 2016, the FASB issued ASU 2016-08, "Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)," which is an amendment on assessing whether an entity is a principal or an agent in a revenue transaction. This amendment addresses issues to clarify the principal versus agent assessment and lead to more consistent application. In April 2016, the FASB issued ASU 2016-10, "Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing," which contains amendments to the new revenue recognition standard on identifying performance obligations and accounting for licenses of intellectual property. The amendments related to identifying performance obligations clarify when a promised good or service is separately identifiable and allows entities to disregard items that are immaterial in the context of a contract. The licensing implementation amendments clarify how an entity should evaluate the nature of its promise in granting a license of intellectual property, which will determine whether revenue is recognized over time or at a point in time. In May 2016, the FASB issued ASU 2016-12, "Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients," which provides clarity and implementation guidance on assessing collectibility, presentation of sales taxes, noncash consideration, and completed contracts and contract modifications at transition. The new standards have the same effective date and transition requirements as ASU 2014-09.

The Corporation has a team in place to analyze the impact of ASU 2014-09 and the related ASU's across all revenue streams to evaluate the impact of the new standard on revenue contracts. This includes reviewing current accounting policies and practices to identify potential differences that would result from applying the requirements under the new standard. The Corporation is currently completing contract evaluations and validating the results of applying the new revenue guidance. The Corporation has also started drafting its accounting policies and evaluating the new disclosure requirements and expects to complete its evaluation of the impact of the accounting and disclosure requirements on its business processes, controls and systems by the end of the second quarter of 2017. Full implementation will be completed by the end of 2017. Based on analysis completed to date, the Corporation expects the potential impact on the recognition of revenue for product sales and licensing arrangements to remain substantially unchanged. The Corporation expects to adopt the new standard using the modified retrospective approach, under which the cumulative effect of initially applying the new guidance is recognized as an adjustment to the opening balance of retained earnings in the first quarter of 2018.

In January 2016, the FASB issued ASU 2016-01, "Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities," which amends the guidance in U.S. GAAP on the classification and measurement of financial instruments. Changes to the current guidance primarily affects the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the ASU clarifies guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The new standard is effective for fiscal years and interim periods beginning after December 15, 2017, and upon adoption, an entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. Early adoption is not permitted except for the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income. The Corporation is currently evaluating the impact of adopting this guidance.

In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)," which requires organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. The new guidance requires that a lessee recognize assets and liabilities for leases with lease terms of more than twelve months and recognition, presentation and measurement in the financial statements will depend on its classification as a finance or operating lease. In addition, the new guidance will require disclosures to help investors and other financial statement users better understand the amount, timing and uncertainty of cash flows arising from leases. Lessor accounting remains largely unchanged from current U.S. GAAP but does contain some targeted improvements to align with the new revenue recognition guidance issued in 2014. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, using a modified retrospective approach, and early adoption is permitted. The Corporation is currently evaluating the impact of adopting this guidance.

In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments," which addresses diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows with respect to eight specific cash flow issues. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The amendments should be applied using a retrospective transition method to each period presented, if practicable. Early adoption is permitted, including adoption in an interim period, and any adjustments should be reflected as of the beginning of the fiscal year that includes the interim period. All amendments must be adopted in the same period. The Corporation is currently evaluating the impact of adopting this guidance.

In October 2016, the FASB issued ASU 2016-16, "Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory," which requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, and should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings at the beginning of the period of adoption. Early adoption is permitted in the first interim period of an annual reporting period for which financial statements have not been issued. The Corporation is currently evaluating the impact of adopting this guidance.

In February 2017, the FASB issued ASU 2017-05, "Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets," which clarifies the scope of guidance on nonfinancial asset derecognition in Accounting Standards Codification 610-20 and the accounting for partial sales of nonfinancial assets. The new guidance also conforms the derecognition guidance for nonfinancial assets with the model in the new revenue standard (ASU 2014-09). The new standard is effective for annual reporting periods, and interim periods within those fiscal years, beginning after December 15, 2017, and an entity is required to apply the amendments at the same time that it applies the amendments in ASU 2014-09. The Corporation is currently evaluating the impact of adopting this guidance.

In March 2017, the FASB issued ASU 2017-07, "Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost," which amends the requirements related to the income statement presentation of the components of net periodic benefit cost for employer sponsored defined benefit pension and other postretirement benefit plans. Under the new guidance, an entity must disaggregate and present the service cost component of the net periodic benefit cost in the same income statement line item(s) as other employee compensation costs arising from services rendered during the period, and only the service cost component will be eligible for capitalization. Other components of net periodic benefit cost will be presented separately from the line item(s) that includes the service cost. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted at the beginning of an annual period in which the financial statements have not been issued. Entities must use a retrospective transition method to adopt the requirement for separate presentation of the income statement service cost and other components, and a prospective transition method to adopt the requirement to limit the capitalization of benefit cost to the service component. The Corporation is currently evaluating the impact of adopting this guidance.

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INVENTORIES

3 Months Ended

Mar. 31, 2017

Inventory Disclosure [Abstract]

INVENTORIES

INVENTORIES

The following table provides a breakdown of inventories:

Inventories In millions	Mar 31, 2017			Dec 31, 2016
Finished goods	$	193		$	186
Work in process	44			38
Raw materials	51			50
Supplies	90			87
Total FIFO inventories	$	378		$	361
Adjustment of inventories to a LIFO basis	(72		)	(54		)
Total inventories	$	306		$	307

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INTANGIBLE ASSETS

3 Months Ended

Mar. 31, 2017

Intangible Assets, Net (Excluding Goodwill) [Abstract]

INTANGIBLE ASSETS DISCLOSURE

INTANGIBLE ASSETS

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

Intangible Assets	At March 31, 2017							At December 31, 2016
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	72		(46		)	26		70		(45		)	25
Total intangible assets	$	105	$	(79	)	$	26	$	103	$	(78	)	$	25

Total estimated amortization expense for 2017 and the five succeeding fiscal years is as follows:

Estimated Amortization Expense In millions
2017	$	4
2018	$	6
2019	$	6
2020	$	5
2021	$	3
2022	$	2

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FINANCIAL INSTRUMENTS

3 Months Ended

Mar. 31, 2017

Financial Instruments [Abstract]

Financial Instruments Disclosure [Text Block]

FINANCIAL INSTRUMENTS

Investments

The Corporation's investments in marketable securities are classified as available-for-sale. Proceeds from sales of available-for-sale securities were $2 million for the three-month period ended March 31, 2017 ($2 million for the three-month period ended March 31, 2016).

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.

Fair Value of Financial Instruments
	At March 31, 2017											At December 31, 2016
In millions	Cost			Gain		Loss			Fair Value			Cost			Gain		Loss			Fair Value
Cash equivalents	$	9		$	—	$	—		$	9		$	7		$	—	$	—		$	7
Debt securities (1)	$	—		$	—	$	—		$	—		$	2		$	—	$	—		$	2
Long-term debt including debt due within one year	$	(476	)	$	4	$	(78	)	$	(550	)	$	(476	)	$	—	$	(95	)	$	(571	)

(1) Marketable securities are included in "Other investments" in the consolidated balance sheets.

For all other financial instruments, cost approximates fair value.

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COMMITMENTS AND CONTINGENT LIABILITIES

3 Months Ended

Mar. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES DISCLOSURE

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 March 31, 2017, the Corporation had accrued obligations of $143 million for probable environmental remediation and restoration costs, including $21 million for the remediation of Superfund sites. These obligations are included in "Accrued and other current liabilities" and "Other noncurrent obligations" in the consolidated balance sheets. 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 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, 2016, the Corporation had accrued obligations of $145 million for probable environmental remediation and restoration costs, including $20 million for the remediation of Superfund sites.

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

A description of asbestos-related matters can be found in Note 13 to the Consolidated Financial Statements included in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2016.

Introduction

The Corporation is and has been involved in a large number of asbestos-related suits filed primarily in state courts during the past four 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 Asbestos-Related Liability

Since 2003, the Corporation has engaged Ankura Consulting Group, LLC ("Ankura"), a third party actuarial specialist, to review the Corporation's historical asbestos-related claim and resolution activity in order to assist UCC management in estimating the Corporation's asbestos-related liability. Each year, Ankura has reviewed the claim and resolution activity to determine the appropriateness of updating the most recent Ankura study. Historically, every other year beginning in October, Ankura has completed a full review and formal update to the most recent Ankura study.

Based on the December 2016 Ankura study and the Corporation's own review of the data, and taking into account the change in accounting policy that occurred in the fourth quarter of 2016, the Corporation's total asbestos-related liability through the terminal year of 2049, including asbestos-related defense and processing costs, was $1,490 million at December 31, 2016, and was included in “Asbestos-related liabilities - current” and “Asbestos-related liabilities - noncurrent” in the consolidated balance sheets.

Each quarter, the Corporation reviews claims filed, settled and dismissed, as well as average settlement and resolution costs by disease category. The Corporation also considers additional quantitative and qualitative factors such as the nature of pending claims, trial experience of the Corporation and other asbestos defendants, current spending for defense and processing costs, significant appellate rulings and legislative developments, trends in the tort system, and their respective effects on expected future resolution costs. UCC management considers all these factors in conjunction with the most recent Ankura study and determines whether a change in the estimate is warranted. Based on the Corporation's review of 2017 activity, it was determined that no adjustment to the accrual was required at March 31, 2017.

The Corporation’s asbestos-related liability for pending and future claims and defense and processing costs was $1,460 million at March 31, 2017. Approximately 14 percent of the recorded liability for pending and future claims related to pending claims and approximately 86 percent related to future claims.

Summary

The Corporation's management believes the amounts recorded for the asbestos-related liability (including defense and processing costs) reflect reasonable and probable estimates of the liability based on current, known facts. However, future events, such as the number of new claims to be filed and/or received each year and the average cost of defending and disposing of each such claim, as well as the numerous uncertainties surrounding asbestos litigation in the United States, could cause the actual costs for the Corporation to be higher or lower than those projected or those recorded. Any such event could result in an increase or decrease in the recorded liability.

Other Litigation

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 the possibility is remote that the aggregate of all such other claims and lawsuits will have a material adverse impact on the results of operations, cash flows and financial position of the Corporation.

Purchase Commitments

A summary of the Corporation's purchase commitments can be found in Note 13 to the Consolidated Financial Statements included in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2016. There have been no material changes to purchase commitments since December 31, 2016.

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PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS

3 Months Ended

Mar. 31, 2017

Compensation and Retirement Disclosure [Abstract]

PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS

PENSION AND OTHER POSTRETIREMENT BENEFITS

Net Periodic Benefit Cost for All Significant Plans	Three Months Ended
In millions	Mar 31, 2017			Mar 31, 2016
Defined Benefit Pension Plans:
Service cost	$	9		$	9
Interest cost	32			33
Expected return on plan assets	(55		)	(54		)
Amortization of net loss	21			19
Net periodic benefit cost	$	7		$	7
Other Postretirement Benefits:
Interest cost	$	2		$	2
Amortization of net gain	(1		)	(2		)
Net periodic benefit cost	$	1		$	—

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RELATED PARTY TRANSACTIONS

3 Months Ended

Mar. 31, 2017

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS DISCLOSURE

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. 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 $430 million in the first quarter of 2017 ($285 million in the first quarter of 2016). The increase in purchase costs in the first three months of 2017 when compared with the same period last year is due to higher feedstock and energy costs.

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. This agreement resulted in expense of $8 million in the first quarter of 2017 ($7 million in the first quarter of 2016) 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 $17 million in the first quarter of 2017 ($16 million in the first quarter of 2016), 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 March 31, 2017, the Corporation had a note receivable of $1.1 billion ($1.4 billion at December 31, 2016) 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, 2017. 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 a joint venture, with cash collateral. At March 31, 2017, $948 million ($947 million at December 31, 2016) 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 determines if there will be 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 first quarter of 2017, the Corporation declared and paid a cash dividend of $169 million to Dow ($200 million declared and paid to Dow in the first quarter of 2016).

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ACCUMULATED OTHER COMPREHENSIVE LOSS

3 Months Ended

Mar. 31, 2017

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

ACCUMULATED OTHER COMPREHENSIVE LOSS

ACCUMULATED OTHER COMPREHENSIVE LOSS

The following table provides an analysis of the changes in accumulated other comprehensive loss for the three-month periods ended March 31, 2017 and 2016:

Accumulated Other Comprehensive Loss	Three Months Ended
In millions	Mar 31, 2017			Mar 31, 2016
Cumulative Translation Adjustments at beginning of year	$	(62	)	$	(61	)
Translation adjustments	1			—
Balance at end of period	$	(61	)	$	(61	)
Pension and Other Postretirement Benefit Plans at beginning of year	$	(1,258	)	$	(1,167	)
Adjustments to pension and other postretirement benefit plans (net of tax of $8, $6) (1) (2)	12			11
Balance at end of period	$	(1,246	)	$	(1,156	)
Total Accumulated Other Comprehensive Loss	$	(1,307	)	$	(1,217	)

(1) Included in "Net periodic benefit cost." See Note 7 for additional information.

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

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Planned Merger with DuPont (Notes)

3 Months Ended

Mar. 31, 2017

PLANNED MERGER WITH DUPONT [Abstract]

Proposed Merger with DuPont [Text Block]

PLANNED MERGER WITH DUPONT

On December 11, 2015, Dow and E. I. du Pont de Nemours and Company ("DuPont") entered into an Agreement and Plan of Merger, as amended on March 31, 2017 (the "Merger Agreement"), to effect an all-stock, merger of equals strategic combination resulting in a newly formed corporation named DowDuPont Inc. ("DowDuPont"). Pursuant to the terms of the Merger Agreement, Dow and DuPont will each merge with wholly owned subsidiaries of DowDuPont (the "Mergers") and, as a result of the Mergers, will become subsidiaries of DowDuPont (collectively, the "Merger Transaction"). Following the consummation of the Mergers, Dow and DuPont intend to pursue, subject to the receipt of any required regulatory approvals and approval by the board of directors of DowDuPont, the separation of the combined company’s agricultural business, specialty products business and materials science business through one or more tax-efficient transactions.

On March 27, 2017, Dow and DuPont announced that the European Commission ("EC") granted conditional approval in Europe of the companies' proposed merger of equals. The EC's approval was conditioned on DuPont and Dow fulfilling certain divestiture commitments given to the EC in connection with the clearance. Specifically, DuPont will divest its Cereal Broadleaf Herbicides and Chewing Insecticides portfolios as well as its Crop Protection research and development pipeline and organization (excluding seed treatment, nematicides, late-stage research and development ("R&D") programs and certain personnel needed to support marketed products and R&D programs that will remain with DuPont) (collectively, the "DuPont Divested Assets"). Dow will divest its global Ethylene Acrylic Acid ("EAA") copolymers and ionomers business to SK Global Chemical Co., Ltd., as announced on February 2, 2017. Dow's divestiture of the EAA business is conditioned on Dow and DuPont closing the Merger Transaction, in addition to other customary closing conditions, including the receipt of certain required regulatory approvals, local employment law and governance obligations.

On March 31, 2017, in connection with the commitments given to the EC with respect to its conditional approval of the Merger Transaction, DuPont entered into an agreement with FMC Corporation ("FMC") whereby FMC will acquire the DuPont Divested Assets and DuPont will acquire FMC's Health and Nutrition business segment, excluding its Omega-3 products (the "H&N Business"). DuPont's transaction with FMC is expected to close in the fourth quarter of 2017, subject to the closing of the Merger Transaction, in addition to the waiver or satisfaction of other customary closing conditions, including approval by the EC of FMC as the buyer of the DuPont Divested Assets and the receipt of other required regulatory approvals.

In connection with DuPont's proposed transaction with FMC, on March 31, 2017 Dow and DuPont amended the Merger Agreement to, among other things, extend the outside date from June 15, 2017 to August 31, 2017 and to provide that DuPont cannot take certain specified actions to obtain regulatory approvals with respect to its acquisition of the H&N Business if those actions would reasonably be likely to result in the one-year loss of revenues to Dow, DuPont, DowDuPont, their subsidiaries or the H&N Business in excess of $350 million in the aggregate (based on fiscal year 2016 annual revenues). In addition, the amendment of the Merger Agreement also amended the form of bylaws for DowDuPont to reflect that Dow and DuPont currently intend that the first step in the intended separation process will be the spin-off of the post-merger materials science business (assuming that such sequencing would allow for the completion of all of the intended spin-offs within 18 months following closing of the Merger Transaction and would not adversely impact the value of the intended spin-off transaction to DowDuPont's shareholders).

Dow and DuPont remain focused on closing the Merger Transaction and continue to work constructively with regulatory agencies to obtain required clearances in all relevant jurisdictions. The Merger Transaction is anticipated to close no earlier than August 1, 2017.

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INVENTORIES (Tables)

3 Months Ended

Mar. 31, 2017

Inventory Disclosure [Abstract]

Schedule of Inventory, Current [Table Text Block]

The following table provides a breakdown of inventories:

Inventories In millions	Mar 31, 2017			Dec 31, 2016
Finished goods	$	193		$	186
Work in process	44			38
Raw materials	51			50
Supplies	90			87
Total FIFO inventories	$	378		$	361
Adjustment of inventories to a LIFO basis	(72		)	(54		)
Total inventories	$	306		$	307

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INTANGIBLE ASSETS (Tables)

3 Months Ended

Mar. 31, 2017

Intangible Assets, Net (Excluding Goodwill) [Abstract]

Intangible Assets

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

Intangible Assets	At March 31, 2017							At December 31, 2016
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	72		(46		)	26		70		(45		)	25
Total intangible assets	$	105	$	(79	)	$	26	$	103	$	(78	)	$	25

Schedule of Expected Amortization Expense [Table Text Block]

Total estimated amortization expense for 2017 and the five succeeding fiscal years is as follows:

Estimated Amortization Expense In millions
2017	$	4
2018	$	6
2019	$	6
2020	$	5
2021	$	3
2022	$	2

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FINANCIAL INSTRUMENTS FINANCIAL INSTRUMENTS (Tables)

3 Months Ended

Mar. 31, 2017

Financial Instruments [Abstract]

Fair Value, by Balance Sheet Grouping [Table Text Block]

Fair Value of Financial Instruments
	At March 31, 2017											At December 31, 2016
In millions	Cost			Gain		Loss			Fair Value			Cost			Gain		Loss			Fair Value
Cash equivalents	$	9		$	—	$	—		$	9		$	7		$	—	$	—		$	7
Debt securities (1)	$	—		$	—	$	—		$	—		$	2		$	—	$	—		$	2
Long-term debt including debt due within one year	$	(476	)	$	4	$	(78	)	$	(550	)	$	(476	)	$	—	$	(95	)	$	(571	)

(1) Marketable securities are included in "Other investments" in the consolidated balance sheets.

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PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS (Tables)

3 Months Ended

Mar. 31, 2017

Compensation and Retirement Disclosure [Abstract]

Net Periodic Benefit Cost for All Significant Plans

Net Periodic Benefit Cost for All Significant Plans	Three Months Ended
In millions	Mar 31, 2017			Mar 31, 2016
Defined Benefit Pension Plans:
Service cost	$	9		$	9
Interest cost	32			33
Expected return on plan assets	(55		)	(54		)
Amortization of net loss	21			19
Net periodic benefit cost	$	7		$	7
Other Postretirement Benefits:
Interest cost	$	2		$	2
Amortization of net gain	(1		)	(2		)
Net periodic benefit cost	$	1		$	—

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ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables)

3 Months Ended

Mar. 31, 2017

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss	Three Months Ended
In millions	Mar 31, 2017			Mar 31, 2016
Cumulative Translation Adjustments at beginning of year	$	(62	)	$	(61	)
Translation adjustments	1			—
Balance at end of period	$	(61	)	$	(61	)
Pension and Other Postretirement Benefit Plans at beginning of year	$	(1,258	)	$	(1,167	)
Adjustments to pension and other postretirement benefit plans (net of tax of $8, $6) (1) (2)	12			11
Balance at end of period	$	(1,246	)	$	(1,156	)
Total Accumulated Other Comprehensive Loss	$	(1,307	)	$	(1,217	)

(1) Included in "Net periodic benefit cost." See Note 7 for additional information.

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

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INVENTORIES (Schedule of Inventories) (Details) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Inventory Disclosure [Abstract]
Finished goods	$ 193	$ 186
Work in process	44	38
Raw materials	51	50
Supplies	90	87
Total FIFO inventories	378	361
Adjustment of inventories to a LIFO basis	(72)	(54)
Total inventories	$ 306	$ 307

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INTANGIBLE ASSETS (Schedule of Amortization Expense of Intangible Assets) (Table and Narrative) (Details) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross	$ 105	$ 103
Finite-Lived Intangible Assets, Accumulated Amortization	(79)	(78)
Finite-Lived Intangible Assets, Net	26	25
Licenses and intellectual property [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross	33	33
Finite-Lived Intangible Assets, Accumulated Amortization	(33)	(33)
Finite-Lived Intangible Assets, Net	0	0
Software [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross	72	70
Finite-Lived Intangible Assets, Accumulated Amortization	(46)	(45)
Finite-Lived Intangible Assets, Net	$ 26	$ 25

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INTANGIBLE ASSETS (Schedule of Future Amortization Expense of Intangible Assets) (Details) $ in Millions	Mar. 31, 2017 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Estimated Amortization Expense, 2017	$ 4
Estimated Amortization Expense, 2018	6
Estimated Amortization Expense, 2019	6
Estimated Amortization Expense, 2020	5
Estimated Amortization Expense, 2021	3
Estimated Amortization Expense, 2022	$ 2

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FINANCIAL INSTRUMENTS (Investments) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Financial Instruments [Abstract]
Available-for-sale Securities, Gross Realized Gains (Losses), Sale Proceeds	$ 2	$ 2

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FINANCIAL INSTRUMENTS FINANCIAL INSTRUMENTS (Fair Value of Financial Instruments) (Details) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Schedule of Available-for-sale Securities [Line Items]
Long-term Debt, Fair Value	$ 550	$ 571
Long-term Debt	476	476
Long-term Debt [Member]
Schedule of Available-for-sale Securities [Line Items]
Financial Instruments Gross Unrealized Gains	4	0
Financial Instruments Gross Unrealized Loss	78	95
Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Amortized Cost Basis	0	2
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax	0	0
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax	0	0
Available-for-sale Securities	0	2
Money Market Funds [Member]
Schedule of Available-for-sale Securities [Line Items]
Cash Equivalents, at Carrying Value	9	7
Financial Instruments Gross Unrealized Gains	0	0
Financial Instruments Gross Unrealized Loss	$ 0	$ 0

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COMMITMENTS AND CONTINGENT LIABILITIES (Environmental Matters) (Narrative) (Details) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Loss Contingencies [Line Items]
Accrual for environmental loss contingencies	$ 143	$ 145
Accrual For Environmental Loss Contingencies Superfund Sites [Member]
Loss Contingencies [Line Items]
Accrual for environmental loss contingencies	$ 21	$ 20

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COMMITMENTS AND CONTINGENT LIABILITIES (Asbestos-Related Matters of Union Carbide Corporation) (Table and Narrative) (Details) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Loss Contingencies [Line Items]
Liability for Asbestos Claims and Defense Costs Gross	$ 1,460	$ 1,490
Percentage of recorded asbestos liability related to pending claims	14.00%
Percentage of recorded asbestos liability related to future claims	86.00%

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PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Defined Benefit Pension Plans [Member]
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract]
Service cost	$ 9	$ 9
Interest cost	32	33
Expected return on plan assets	(55)	(54)
Amortization of net (gain) loss	21	19
Net periodic benefit cost	7	7
Other Postretirement Benefits [Member]
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract]
Interest cost	2	2
Amortization of net (gain) loss	(1)	(2)
Net periodic benefit cost	$ 1	$ 0

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RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Related Party Transaction [Line Items]
Payments of Dividends	$ 169	$ 200
The Dow Chemical Company [Member]
Related Party Transaction [Line Items]
Related Party Transaction, Expenses from Transactions with Related Party	$ 430	285
Service Fee with Parent	10.00%
Notes Receivable, Related Parties	$ 1,100		$ 1,400
Line of Credit Facility, Maximum Borrowing Capacity	1,000
Line of Credit Facility, Remaining Borrowing Capacity	948		$ 947
Payments of Dividends	169	200
Sundry income (expense) [Member] | The Dow Chemical Company [Member]
Related Party Transaction [Line Items]
Related Party Transaction, Expenses from Transactions with Related Party	8	7
Cost of Sales [Member] | The Dow Chemical Company [Member]
Related Party Transaction [Line Items]
Related Party Transaction, Expenses from Transactions with Related Party	$ 17	$ 16

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ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2017	Mar. 31, 2016
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax		$ 1	$ 0
Adjustments to pension and other postretirement benefit plans (net of tax of $8, $6) (1) (2)		(12)	(11)
Accumulated Other Comprehensive Income (Loss) [Member]
Balance at beginning of year		(1,320)	(1,228)
Balance at end of period		(1,307)	(1,217)
Accumulated Translation Adjustment [Member]
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax		1	0
Balance at beginning of year		(62)	(61)
Balance at end of period		(61)	(61)
Accumulated Defined Benefit Plans and Other Post Retirement Adjustment [Member]
Balance at beginning of year		(1,258)	(1,167)
Adjustments to pension and other postretirement benefit plans (net of tax of $8, $6) (1) (2)	[1],[2]	12	11
Adjustments to pension and other postretirement benefit plans, tax	[2]	8	6
Balance at end of period		$ (1,246)	$ (1,156)

[1] Included in "Net periodic benefit cost." See Note 7 for additional information.

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

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PLANNED MERGER WITH DUPONT PLANNED MERGER WITH DUPONT (Details) $ in Millions	3 Months Ended
	Mar. 31, 2017 USD ($) months
Business Acquisition [Line Items]
Planned Merger with DuPont, Maximum one-year loss of revenues to Dow for DuPont's proposed transaction with FMC | $	$ 350
Planned Merger with DuPont, expected number of months for completion of intended spins | months	18