-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Gk5IjhYrTYNqsvMnnjxxAHheFfqwlfh3Q/EXXUcMjSlqoLAZaRdro4F9RwswDCoF fizeR3oWmA8uNiWNWNwWKA== 0000100790-99-000060.txt : 19991026 0000100790-99-000060.hdr.sgml : 19991026 ACCESSION NUMBER: 0000100790-99-000060 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19991025 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19991025 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNION CARBIDE CORP /NEW/ CENTRAL INDEX KEY: 0000100790 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL ORGANIC CHEMICALS [2860] IRS NUMBER: 131421730 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-01463 FILM NUMBER: 99732975 BUSINESS ADDRESS: STREET 1: 39 OLD RIDGEBURY RD CITY: DANBURY STATE: CT ZIP: 06817-0001 BUSINESS PHONE: 2037942000 MAIL ADDRESS: STREET 1: 39 OLD RIDGEBURY RD CITY: DANBURY STATE: CT ZIP: 06817-0001 FORMER COMPANY: FORMER CONFORMED NAME: UNION CARBIDE CORP DATE OF NAME CHANGE: 19890806 FORMER COMPANY: FORMER CONFORMED NAME: UNION CARBIDE & CARBON CORP DATE OF NAME CHANGE: 19710317 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________ FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) October 25, 1999 UNION CARBIDE CORPORATION (Exact name of registrant as specified in its charter) New York 1-1463 13-1421730 (State or other (Commission File Number) (IRS Employer jurisdiction of Identification No.) incorporation) 39 Old Ridgebury Rd, Danbury, CT 06817-0001 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code 203-794-2000 Total number of sequentially numbered pages in this filing, including exhibits thereto: 11 Item 5. OTHER EVENTS. See Union Carbide Corporation's press release dated October 25, 1999 accompanying this report as Exhibit 99. Item 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits. 99. Press release, October 25, 1999. - 2 - Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: October 25, 1999 UNION CARBIDE CORPORATION By /s/J. Macdonald J. Macdonald Assistant Secretary - 3 - EXHIBIT INDEX Exhibits 99. Press release, dated October 25, 1999. - 4 - EX-99 2 PRESS RELEASE DATED OCTOBER 25, 1999 UNION CARBIDE CORPORATION NEWS RELEASE CONTACT: Sean S. Clancy (203) 794-6976 UNION CARBIDE REPORTS 3rd QUARTER EARNINGS DANBURY, Conn., Oct. 25 -- Union Carbide Corporation (UCC) today reported third quarter 1999 earnings of $0.57 per diluted share, including a $0.21 per share gain from a litigation settlement, compared to $0.55 per diluted share in the third quarter of 1998. The 1998 third quarter earnings included a net loss of $0.28 per diluted share related to the corporation's Aspell partnership and a net gain of $0.53 per diluted share from a litigation settlement. In addition, the corporation reported that it has restated net earnings for the first and second quarters of 1999 upward by $6 million ($0.04 per diluted share) and $7 million ($0.05 per diluted share), respectively. The fourth quarter of 1998 earnings were also understated by $2 million, after tax ($0.01 per diluted share), the adjustment for which has been included in the third quarter of 1999. These adjustments correct an overstatement of cost of sales of $22 million ($15 million, after tax). The overstatement was the result of human error associated with a work process change in conjunction with Union Carbide's enterprise-wide information systems implementation. The overstatement did not impact cash flow. As restated, diluted earnings per share for the second quarter of 1999 were $0.46, including a net gain of $0.06 from a litigation settlement. Net income for the quarter totaled $77 million, compared to $76 million for last year's third quarter and $63 million, as restated, for the second quarter of this year. Sales in the third quarter totaled $1.498 billion, compared to $1.350 billion for the third quarter of 1998 and $1.418 billion for the second quarter of 1999. "Earnings continue to be affected by higher feedstock prices that substantially offset higher selling prices. Licensing income declined from second quarter levels, exclusive of litigation gains reported in both quarters," said UCC Chairman and CEO William H. Joyce. "On the positive side, volumes remained high. We benefited from improved performance of corporate investments carried at equity versus the second quarter, marking the best quarterly equity company profit since 1995." - MORE - 1999 P3-01-017 Page 2 of 7 Partnership income increased primarily because of earnings improvement at UOP, the corporation's joint venture with AlliedSignal. While Asia continues to improve, the corporation believes it may take a couple of years for UOP to fully recover to the record earnings level it had reached prior to the Asian crisis and problems in other countries. "Looking into the fourth quarter, price increases are scheduled for products in our Basic Chemicals & Polymers (BC&P) business. We see ethylene continuing to be tight, with industry inventory levels rising slowly but not reaching normal levels before the end of the year. At this point, it appears that feedstock costs could go somewhat higher. While forecasting feedstock prices correctly remains difficult, I believe margins will expand and income will improve for BC&P in the fourth quarter," Dr. Joyce said. "We expect margins in our Specialties & Intermediates (S&I) businesses will continue to suffer as cost increases cannot be fully passed along quickly through increased selling prices. Excluding litigation gains, licensing should increase slightly from third quarter levels. Partnership income should decline, particularly because of expenses associated with cost reduction programs at UOP, while the equity companies continue to show improved profitability. On balance, the combination of improved BC&P and equity company earnings should more than offset any decline in S&I for an improved Fourth Quarter, excluding litigation gains." The BC&P segment reported an operating loss of $7 million for the third quarter of 1999, compared to an operating loss of $42 million, after restatement, in the prior quarter and an operating loss of $13 million in the 1998 third quarter. Price increases from the first half of the year began to take hold and led to the improved financial performance. The S&I segment reported an operating profit of $134 million for the third quarter of 1999, including the previously cited litigation gain of $38 million, compared to $188 million, after restatement, in the prior quarter and $233 million in the same period a year ago. Dr. Joyce cited price increases that were insufficient to fully offset increased raw material costs as a contributor to the decline in operating profit versus the second quarter of 1999. Furthermore, the BC&P margin improvements affected S&I revenues because that segment acquires raw materials from BC&P at market-based transfer prices. - MORE - Page 3 of 7 Net income for the first nine months of 1999 was $197 million, or $1.45 per diluted share. This compares to $336 million, or $2.41 per diluted share, for the same period a year ago. Worldwide net sales for the first nine months of 1999 were $4.318 billion, compared to $4.370 billion for the first nine months of 1998. Union Carbide is a worldwide chemicals company with advanced process technologies and large-scale chemical production facilities. - Specialties & Intermediates -- Union Carbide is the leading North American supplier of solvents and intermediates to the paint and coatings industry; the leading licensor of several technologies; and a leading supplier of specialty chemicals, polymers and services used in the personal care products, pharmaceuticals, automotive, wire and cable, oil and gas and industrial lubricants industries. - Basic Chemicals & Polymers -- Union Carbide is among the largest manufacturers of polyethylene, the world's most widely used plastic, and the technology leader in this industry; and a large manufacturer of polypropylene, one of the world's fastest-growing, large-volume plastics. UCC is also the world's largest producer of ethylene oxide and its derivative ethylene glycol, used for polyester fiber, resin and film, automotive antifreeze and other products. Cautionary Statement for Purposes of the "Safe Harbor" Provisions Of the Private Securities Litigation Act of 1995 Those statements in the preceding pages that do not reflect historical information are forward-looking statements. Forward-looking statements include statements concerning anticipated future events or performance, product prices, cost improvements, raw material costs, volume increases, inventory levels, margins and earnings expectations. Naturally, such forward-looking statements are subject to risks and uncertainties. In addition to all specific assumptions cited, important factors that could cause actual results to differ materially from those discussed in such forward-looking statements include: the supply/demand balance for the corporation's products; customer inventory levels; competitive pricing pressures; feedstock availability and costs; changes in industry production capacities and operating rates; currency exchange rates; interest rates; global economic conditions; disruption in transportation facilities; competitive technology positions; failure by the corporation to achieve technology objectives, achieve cost reduction targets or complete projects on schedule and on budget; and an inability to obtain new customers or retain existing ones. - MORE - Page 4 of 7 UNION CARBIDE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF INCOME
Quarter Ended Sept. 30, June 30, Sept. 30, Millions of Dollars, Except Per Share Amounts 1999 1999 1998 (Restated) NET SALES $1,498 $1,418 $1,350 Cost of sales, exclusive of depreciation and amortization 1,232 1,105 1,036 Research and development 38 39 34 Selling, administration and other expenses (a) 72 57 78 Depreciation and amortization 103 95 95 Partnership income (loss) 18 (4) (46) Other income - net 52 27 129 INCOME BEFORE INTEREST EXPENSE AND PROVISION FOR INCOME TAXES 123 145 190 Interest expense 32 35 28 INCOME BEFORE PROVISION FOR INCOME TAXES 91 110 162 Provision for income taxes 24 28 58 INCOME OF CONSOLIDATED COMPANIES AND PARTNERSHIPS 67 82 104 Minority interest 2 1 - Income (loss) from corporate investments carried at equity 12 (18) (28) NET INCOME $ 77 $ 63 $ 76 Earnings per common share Basic - $ 0.58 $ 0.47 $ 0.56 Based on the indicated number of shares 133,464,524 133,088,173 134,286,957 Diluted - $ 0.57 $ 0.46 $ 0.55 Based on the indicated number of shares 136,898,772 136,453,663 137,545,375 (a) Selling $ 24 $ 23 $ 25 Administration 28 16 26 Other expenses 20 18 27 Total $ 72 $ 57 $ 78
- MORE - Page 5 of 7 UNION CARBIDE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF INCOME
Nine Months Ended Sept. 30, Millions of Dollars, Except Per Share Amounts 1999 1998 NET SALES $4,318 $4,370 Cost of sales, exclusive of depreciation and amortization 3,369 3,284 Research and development 114 107 Selling, administration and other expenses (a) 199 234 Depreciation and amortization 302 288 Partnership income 20 18 Other income - net 93 150 INCOME BEFORE INTEREST EXPENSE AND PROVISION FOR INCOME TAXES 447 625 Interest expense 98 84 INCOME BEFORE PROVISION FOR INCOME TAXES 349 541 Provision for income taxes 90 168 INCOME OF CONSOLIDATED COMPANIES AND PARTNERSHIPS 259 373 Minority interest 4 2 Loss from corporate investments carried at equity 38 35 INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE 217 336 Cumulative effect of change in accounting principle (20) - NET INCOME $ 197 $ 336 Earnings per common share Basic - Income before cumulative effect of change in accounting principle $ 1.63 $ 2.47 - Cumulative effect of change in accounting principle (0.15) - - Net income $ 1.48 $ 2.47 Based on the indicated number of shares 133,135,986 135,755,666 Diluted - Income before cumulative effect of change in accounting principle $ 1.59 $ 2.41 - Cumulative effect of change in accounting principle (0.14) - - Net income $ 1.45 $ 2.41 Based on the indicated number of shares 136,356,408 139,277,527 (a) Selling $ 70 $ 74 Administration 69 84 Other expenses 60 76 Total $ 199 $ 234
- MORE - Page 6 of 7 UNION CARBIDE CORPORATION AND SUBSIDIARIES SEGMENT DATA
Quarter Ended Sept. 30, June 30, Sept. 30, Millions of dollars 1999 1999 1998 SALES Specialties & Intermediates $1,057 $1,036 $ 995 Basic Chemicals & Polymers 522 436 421 Intersegment Eliminations (81) (54) (66) Total $1,498 $1,418 $1,350 OPERATING PROFIT (LOSS) (Restated Quarter Ended June 30, 1999) Specialties & Intermediates $ 134 $ 188 $ 233 Basic Chemicals & Polymers (7) (42) (13) Other (4) (1) (30) Total $ 123 $ 145 $ 190 DEPRECIATION AND AMORTIZATION Specialties & Intermediates $ 67 $ 62 $ 61 Basic Chemicals & Polymers 36 33 34 Total $ 103 $ 95 $ 95 CAPITAL EXPENDITURES Specialties & Intermediates $ 58 $ 93 $ 111 Basic Chemicals & Polymers 120 115 103 Total $ 178 $ 208 $ 214
- MORE - Page 7 of 7 UNION CARBIDE CORPORATION AND SUBSIDIARIES SEGMENT DATA
Nine Months Ended Sept. 30, Millions of dollars 1999 1998 SALES Specialties & Intermediates $3,127 $3,175 Basic Chemicals & Polymers 1,379 1,419 Intersegment Eliminations (188) (224) Total $4,318 $4,370 OPERATING PROFIT (LOSS) Specialties & Intermediates $ 530 $ 601 Basic Chemicals & Polymers (82) 65 Other (1) (41) Total $ 447 $ 625 DEPRECIATION AND AMORTIZATION Specialties & Intermediates $ 192 $ 182 Basic Chemicals & Polymers 110 106 Total $ 302 $ 288 CAPITAL EXPENDITURES Specialties & Intermediates $ 220 $ 332 Basic Chemicals & Polymers 339 239 Total $ 559 $ 571
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