Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended |
Mar. 31, 2015 | |
Document and Entity Information | |
Entity Registrant Name | UNION CARBIDE CORP /NEW/ |
Entity Central Index Key | 100790 |
Current Fiscal Year End Date | -19 |
Entity Filer Category | Non-accelerated Filer |
Document Type | 10-Q |
Document Period End Date | 31-Mar-15 |
Document Fiscal Year Focus | 2015 |
Document Fiscal Period Focus | Q1 |
Amendment Flag | FALSE |
Entity Common Stock, Shares Outstanding | 1,000 |
Consolidated_Statements_of_Inc
Consolidated Statements of Income (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Income Statement [Abstract] | ||
Net trade sales | $23 | $26 |
Net sales to related companies | 1,523 | 1,632 |
Total Net Sales | 1,546 | 1,658 |
Cost of sales | 1,227 | 1,525 |
Research and development expenses | 5 | 6 |
Selling, general and administrative expenses | 2 | 2 |
Equity in earnings of nonconsolidated affiliates | 1 | 0 |
Sundry income (expense) - net | -14 | -9 |
Interest income | 2 | 3 |
Interest expense and amortization of debt discount | 8 | 7 |
Income Before Income Taxes | 293 | 112 |
Provision for income taxes | 98 | 37 |
Net Income Attributable to Union Carbide Corporation | 195 | 75 |
Depreciation | 39 | 44 |
Capital Expenditures | $50 | $25 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Statement of Comprehensive Income [Abstract] | ||
Net Income Attributable to Union Carbide Corporation | $195 | $75 |
Other Comprehensive Income, Net of Tax | ||
Translation adjustments | 1 | 0 |
Adjustments to pension and other postretirement benefit plans | 12 | 10 |
Total other comprehensive income | 13 | 10 |
Comprehensive Income Attributable to Union Carbide Corporation | $208 | $85 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Current Assets | ||
Cash and cash equivalents | $22 | $23 |
Accounts receivable: | ||
Trade (net of allowance for doubtful receivables - 2015: $-; 2014: $-) | 30 | 29 |
Related companies | 1,251 | 1,285 |
Other | 56 | 67 |
Income taxes receivable | 375 | 476 |
Notes receivable from related companies | 1,059 | 1,292 |
Inventories | 436 | 378 |
Deferred income taxes and other current assets | 124 | 139 |
Total current assets | 3,353 | 3,689 |
Investments | ||
Investments in related companies | 813 | 813 |
Investments in nonconsolidated affiliates | 11 | 13 |
Other investments | 7 | 8 |
Noncurrent receivables | 44 | 44 |
Noncurrent receivables from related companies | 98 | 131 |
Total investments | 973 | 1,009 |
Property | ||
Property | 6,878 | 6,831 |
Less accumulated depreciation | 5,717 | 5,679 |
Net property | 1,161 | 1,152 |
Other Assets | ||
Intangible assets (net of accumulated amortization 2015: $74; 2014: $73) | 16 | 15 |
Deferred income tax assets - noncurrent | 442 | 441 |
Asbestos-related insurance receivables - noncurrent | 54 | 62 |
Deferred charges and other assets | 43 | 45 |
Total other assets | 555 | 563 |
Total Assets | 6,042 | 6,413 |
Current Liabilities | ||
Notes payable - related companies | 48 | 43 |
Long-term debt due within one year | 1 | 1 |
Accounts payable: | ||
Trade | 250 | 248 |
Related companies | 531 | 872 |
Other | 22 | 17 |
Income taxes payable | 19 | 20 |
Asbestos-related liabilities - current | 109 | 105 |
Accrued and other current liabilities | 177 | 192 |
Total current liabilities | 1,157 | 1,498 |
Long-Term Debt | 480 | 481 |
Other Noncurrent Liabilities | ||
Pension and other postretirement benefits - noncurrent | 1,046 | 1,051 |
Asbestos-related liabilities - noncurrent | 425 | 438 |
Other noncurrent obligations | 137 | 136 |
Total other noncurrent liabilities | 1,608 | 1,625 |
Stockholder's Equity | ||
Common stock (authorized and issued: 1,000 shares of $0.01 par value each) | 0 | 0 |
Additional paid-in capital | 312 | 312 |
Retained earnings | 3,715 | 3,740 |
Accumulated other comprehensive loss | -1,230 | -1,243 |
Union Carbide Corporation's stockholder's equity | 2,797 | 2,809 |
Total Liabilities and Equity | $6,042 | $6,413 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parentheticals) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, except Share data, unless otherwise specified | ||
Allowance for doubtful accounts | $0 | $0 |
Accumulated Amortization | $74 | $73 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 1,000 | 1,000 |
Common stock, shares issued | 1,000 | 1,000 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Operating Activities | ||
Net Income | $195 | $75 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 46 | 49 |
Provision (credit) for deferred income tax | 2 | -9 |
Earnings of nonconsolidated affiliates in excess of dividends received | -1 | 0 |
Pension contributions | -1 | 0 |
Changes in assets and liabilities: | ||
Accounts and notes receivable | 3 | -9 |
Related company receivables | 267 | 370 |
Inventories | -58 | -50 |
Accounts payable | 7 | 58 |
Related company payables | -336 | 12 |
Other assets and liabilities | 112 | -159 |
Cash provided by operating activities | 236 | 337 |
Investing Activities | ||
Capital expenditures | -50 | -25 |
Change in noncurrent receivable from related company | 33 | 7 |
Cash used in investing activities | -17 | -18 |
Financing Activities | ||
Dividends paid to stockholder | -220 | -325 |
Cash used in financing activities | -220 | -325 |
Summary | ||
Decrease in cash and cash equivalents | -1 | -6 |
Cash and cash equivalents at beginning of year | 23 | 33 |
Cash and cash equivalents at end of period | $22 | $27 |
Consolidated_Statements_of_Equ
Consolidated Statements of Equity (USD $) | 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] |
In Millions, unless otherwise specified | ||||||
Union Carbide Corporation's stockholder's equity at Dec. 31, 2013 | $0 | $312 | $4,442 | ($1,045) | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 3,469 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net Income | 75 | 75 | ||||
Dividends declared | -325 | |||||
Other comprehensive income | 10 | 10 | ||||
Union Carbide Corporation's stockholder's equity at Mar. 31, 2014 | 0 | 312 | 4,192 | -1,035 | ||
Union Carbide Corporation's stockholder's equity at Dec. 31, 2014 | 0 | 312 | 3,740 | -1,243 | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 2,797 | 2,797 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net Income | 195 | 195 | ||||
Dividends declared | -220 | |||||
Other comprehensive income | 13 | 13 | ||||
Union Carbide Corporation's stockholder's equity at Mar. 31, 2015 | $0 | $312 | $3,715 | ($1,230) |
CONSOLIDATED_FINANCIAL_STATEME
CONSOLIDATED FINANCIAL STATEMENTS | 3 Months Ended |
Mar. 31, 2015 | |
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, 2014. |
RECENT_ACCOUNTING_GUIDANCE
RECENT ACCOUNTING GUIDANCE | 3 Months Ended |
Mar. 31, 2015 | |
Recent Accounting Guidance [Abstract] | |
RECENT ACCOUNTING GUIDANCE | RECENT ACCOUNTING GUIDANCE |
Accounting Guidance Issued But Not Yet Adopted as of March 31, 2015 | |
In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards 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. The tentative revised effective date for this ASU is for annual and interim periods beginning on or after December 15, 2017, and early adoption will be permitted. Entities will have the option of using either a full retrospective approach or a modified approach to adopt the guidance in the ASU. The Corporation is currently evaluating the impact of adopting this guidance. | |
In April 2015, the FASB issued ASU 2015-03, "Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs," which requires debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of the associated debt liability, and amortization of those costs should be reported as interest expense. This ASU is effective for financial statements issued for annual and interim periods beginning after December 15, 2015, and early adoption is permitted for financial statements that have not been previously issued. The new guidance should be applied on a retrospective basis for each period presented in the balance sheet. The Corporation is currently evaluating the impact of adopting this guidance. |
INVENTORIES
INVENTORIES | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Inventory Disclosure [Abstract] | ||||||||
INVENTORIES | INVENTORIES | |||||||
The following table provides a breakdown of inventories: | ||||||||
Inventories | Mar 31, | Dec 31, | ||||||
In millions | 2015 | 2014 | ||||||
Finished goods | $ | 249 | $ | 205 | ||||
Work in process | 45 | 30 | ||||||
Raw materials | 51 | 45 | ||||||
Supplies | 91 | 98 | ||||||
Total inventories | $ | 436 | $ | 378 | ||||
The reserves reducing inventories from the first-in, first-out (“FIFO”) basis to the last-in, first-out (“LIFO”) basis amounted to $106 million at March 31, 2015 and $125 million at December 31, 2014. |
INTANGIBLE_ASSETS
INTANGIBLE ASSETS | 3 Months Ended | |||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||
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, 2015 | At December 31, 2014 | ||||||||||||||||||||||
In millions | Gross | Accumulated Amortization | Net | Gross | Accumulated Amortization | Net | ||||||||||||||||||
Carrying Amount | Carrying Amount | |||||||||||||||||||||||
Intangible assets with finite lives: | ||||||||||||||||||||||||
Licenses and intellectual property | $ | 33 | $ | (33 | ) | $ | — | $ | 33 | $ | (33 | ) | $ | — | ||||||||||
Software | 57 | (41 | ) | 16 | 55 | (40 | ) | 15 | ||||||||||||||||
Total intangible assets | $ | 90 | $ | (74 | ) | $ | 16 | $ | 88 | $ | (73 | ) | $ | 15 | ||||||||||
Total estimated amortization expense for 2015 and the five succeeding fiscal years is as follows: | ||||||||||||||||||||||||
Estimated Amortization Expense | ||||||||||||||||||||||||
In millions | ||||||||||||||||||||||||
2015 | $ | 2 | ||||||||||||||||||||||
2016 | $ | 3 | ||||||||||||||||||||||
2017 | $ | 3 | ||||||||||||||||||||||
2018 | $ | 3 | ||||||||||||||||||||||
2019 | $ | 3 | ||||||||||||||||||||||
2020 | $ | 2 | ||||||||||||||||||||||
FINANCIAL_INSTRUMENTS
FINANCIAL INSTRUMENTS | 3 Months Ended |
Mar. 31, 2015 | |
Financial Instruments [Abstract] | |
Financial Instruments Disclosure [Text Block] | FINANCIAL INSTRUMENTS |
Investments | |
The Corporation's investments in marketable securities include debt securities which are classified as available-for-sale. At March 31, 2015, the Corporation held $5 million in debt securities ($5 million at December 31, 2014), which had contractual maturities of less than 10 years. These securities are recorded at fair value, which approximates cost, and are included in “Other investments” in the consolidated balance sheets and classified as Level 2 measurements. There were no proceeds from sales of marketable securities for the three-month periods ended March 31, 2015 and March 31, 2014. | |
For securities frequently traded in less active markets, fair value is based on the closing price at the end of the period; where the security is less frequently traded, fair value is based on the price a dealer would pay for the security or similar securities, adjusted for any terms specific to that asset or liability, or by using observable market data points of similar, more liquid securities to imply the price. Market inputs are obtained from well-established and recognized vendors of market data and subjected to tolerance/quality checks. | |
Long-Term Debt | |
The Corporation has long-term debt of $481 million in the consolidated balance sheets at March 31, 2015 ($482 million at December 31, 2014). At March 31, 2015, the fair value of this long-term debt was $616 million ($601 million at December 31, 2014) and is classified as a Level 2 measurement. Fair value is determined in a manner similar to the methods described above for investments. | |
Cost approximates fair value for all other financial instruments. |
COMMITMENTS_AND_CONTINGENT_LIA
COMMITMENTS AND CONTINGENT LIABILITIES | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
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, 2015, the Corporation had accrued obligations of $136 million for probable environmental remediation and restoration costs, including $23 million for the remediation of Superfund sites, and is 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, however, that the possibility is remote that costs in excess of the range disclosed will have a material impact on the Corporation’s results of operations, financial condition and cash flows. Inherent uncertainties exist in these estimates primarily due to unknown environmental conditions, changing governmental regulations and legal standards regarding liability, and emerging remediation technologies for handling site remediation and restoration. At December 31, 2014, the Corporation had accrued obligations of $132 million for probable environmental remediation and restoration costs, including $22 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 | ||||||||
Separately, 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 Liability | ||||||||
Based on a study completed by Analysis, Research & Planning Corporation (“ARPC”) in January 2003, the Corporation increased its December 31, 2002 asbestos-related liability for pending and future claims for the 15-year period ending in 2017 to $2.2 billion, excluding future defense and processing costs. Since then, the Corporation has compared current asbestos claim and resolution activity to the results of the most recent ARPC study at each balance sheet date to determine whether the accrual continues to be appropriate. In addition, the Corporation has requested ARPC to review the Corporation’s historical asbestos claim and resolution activity each year since 2004 to determine the appropriateness of updating the most recent ARPC study. | ||||||||
In October 2014, the Corporation requested ARPC to review its historical asbestos claim and resolution activity and determine the appropriateness of updating its December 2012 study. In response to that request, ARPC reviewed and analyzed data through September 30, 2014. The resulting study, completed by ARPC in December 2014, estimates that the undiscounted cost of disposing of pending and future claims against UCC and Amchem, excluding future defense and processing costs, to be between $540 million and $640 million through 2029 based on the data as of September 30, 2014. As in earlier studies, ARPC provided longer periods of time in its December 2014 study, but also reaffirmed that forecasts for shorter periods of time are more accurate than those for longer periods of time. | ||||||||
In December 2014, based on ARPC's December 2014 study and the Corporation's own review of the asbestos claim and resolution activity, the Corporation determined that an adjustment to the accrual was required due to the increase in mesothelioma claim activity compared with what had been forecasted in the December 2012 study. Accordingly, the Corporation increased its asbestos-related liability for pending and future claims by $78 million. The Corporation's asbestos-related liability for pending and future claims was $513 million at December 31, 2014, and approximately 22 percent of the recorded liability related to pending claims and approximately 78 percent related to future claims. | ||||||||
Based on the Corporation’s review of 2015 activity, it was determined that no adjustment to the accrual was required at March 31, 2015. The Corporation’s asbestos-related liability for pending and future claims was $500 million at March 31, 2015. Approximately 20 percent of the recorded liability related to pending claims and approximately 80 percent related to future claims. | ||||||||
Insurance Receivables | ||||||||
At December 31, 2002, the Corporation increased the receivable for insurance recoveries related to its asbestos liability to $1.35 billion, substantially exhausting its asbestos product liability coverage. The insurance receivable related to the asbestos liability was determined by the Corporation after a thorough review of applicable insurance policies and the 1985 Wellington Agreement, to which the Corporation and many of its liability insurers are signatory parties, as well as other insurance settlements, with due consideration given to applicable deductibles, retentions and policy limits, and taking into account the solvency and historical payment experience of various insurance carriers. The Wellington Agreement and other agreements with insurers are designed to facilitate an orderly resolution and collection of the Corporation’s insurance policies and to resolve issues that the insurance carriers may raise. | ||||||||
In September 2003, the Corporation filed a comprehensive insurance coverage case, now proceeding in the Supreme Court of the State of New York, County of New York, seeking to confirm its rights to insurance for various asbestos claims and to facilitate an orderly and timely collection of insurance proceeds (the “Insurance Litigation”). The Insurance Litigation was filed against insurers that were not signatories to the Wellington Agreement and/or do not otherwise have agreements in place with the Corporation regarding their asbestos-related insurance coverage, in order to facilitate an orderly resolution and collection of such insurance policies and to resolve issues that the insurance carriers may raise. Since the filing of the case, the Corporation has reached settlements with most of the carriers involved in the Insurance Litigation and continues to pursue a settlement with the remaining carrier. The Corporation’s receivable for insurance recoveries related to its asbestos liability was $10 million at March 31, 2015 and December 31, 2014. | ||||||||
In addition to the receivable for insurance recoveries related to its asbestos liability, the Corporation had receivables for defense and resolution costs submitted to insurance carriers that have settlement agreements in place regarding their asbestos-related insurance coverage. The following table summarizes the Corporation’s receivables related to its asbestos-related liability: | ||||||||
Receivables for Asbestos-Related Costs | Mar 31, | Dec 31, | ||||||
In millions | 2015 | 2014 | ||||||
Receivables for defense and resolution costs - carriers with settlement agreements | $ | 54 | $ | 69 | ||||
Receivables for insurance recoveries - carriers without settlement agreements | 10 | 10 | ||||||
Total | $ | 64 | $ | 79 | ||||
After a review of its insurance policies, with due consideration given to applicable deductibles, retentions and policy limits, and after taking into account the solvency and historical payment experience of various insurance carriers; existing insurance settlements; and the advice of outside counsel with respect to the applicable insurance coverage law relating to the terms and conditions of its insurance policies, the Corporation continues to believe that its recorded receivable for insurance recoveries from all insurance carriers is probable of collection. | ||||||||
The Corporation expenses defense costs as incurred. The pretax impact for defense and resolution costs, net of insurance, was $24 million for the first quarter of 2015 ($25 million in the first quarter of 2014), and reflected in “Cost of sales” in the consolidated statements of income. | ||||||||
Summary | ||||||||
The amounts recorded by the Corporation for the asbestos-related liability and related insurance receivable described above were based upon current, known facts. However, future events, such as the number of new claims to be filed and/or received each year, the average cost of disposing of each such claim, coverage issues among insurers and the continuing solvency of various insurance companies, as well as the numerous uncertainties surrounding asbestos litigation in the United States, could cause the actual costs and insurance recoveries for the Corporation to be higher or lower than those projected or those recorded. | ||||||||
Because of the uncertainties described above, the Corporation's management cannot estimate the full range of the cost of resolving pending and future asbestos-related claims facing UCC and Amchem. The Corporation's management believes that it is reasonably possible that the cost of disposing of the Corporation’s asbestos-related claims, including future defense costs, could have a material impact on the Corporation's results of operations and cash flows for a particular period and on the consolidated financial position of the Corporation. | ||||||||
While it is not possible at this time to determine with certainty the ultimate outcome of any of the legal proceedings and claims referred to in this filing, management believes that adequate provisions have been made for probable losses with respect to pending claims and proceedings, and that, except for the asbestos-related matters described above, the ultimate outcome of all known and future claims, after provisions for insurance, will not have a material adverse impact on the results of operations, cash flows and financial position of the Corporation. Should any losses be sustained in connection with any of such legal proceedings and claims in excess of provisions provided and available insurance, they will be charged to income when determinable. | ||||||||
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, 2014. There have been no material changes to purchase commitments since December 31, 2014. | ||||||||
PENSION_PLANS_AND_OTHER_POSTRE
PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
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, | Mar 31, | ||||||
2015 | 2014 | |||||||
Defined Benefit Pension Plans: | ||||||||
Service cost | $ | 11 | $ | 8 | ||||
Interest cost | 41 | 46 | ||||||
Expected return on plan assets | (57 | ) | (58 | ) | ||||
Amortization of prior service cost | — | 1 | ||||||
Amortization of net loss | 22 | 17 | ||||||
Net periodic benefit cost | $ | 17 | $ | 14 | ||||
Other Postretirement Benefits: | ||||||||
Interest cost | $ | 3 | $ | 3 | ||||
Amortization of net gain | (3 | ) | (2 | ) | ||||
Net periodic benefit cost | $ | — | $ | 1 | ||||
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2015 | |
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 $515 million in the first quarter of 2015 ($763 million in the first quarter of 2014). | |
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 approximately $7 million in the first quarter of 2015 ($6 million in the first quarter of 2014) for general administrative and overhead type services and the 10 percent service fee, included in “Sundry income (expense) - net” in the consolidated statements of income. The remaining activity-based costs were approximately $14 million in the first quarter of 2015 ($12 million in the first quarter of 2014), 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, 2015, the Corporation had a note receivable of $1.0 billion ($1.2 billion at December 31, 2014) 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, 2015. Dow may demand repayment with a 30-day written notice to the Corporation, subject to certain restrictions. A related collateral agreement provides for the replacement of certain existing pledged assets, primarily equity interests in various subsidiaries and joint ventures, with cash collateral. At March 31, 2015, $907 million ($875 million at December 31, 2014) was available under the revolving credit agreement. The cash collateral is reported as “Noncurrent receivables from related companies” in the consolidated balance sheets. | |
On a quarterly basis, the Corporation's Board of Directors reviews and approves a dividend distribution to its parent company and sole shareholder, Dow. The Board takes into consideration the level of earnings and cash flows, among other factors, in determining the amount of the dividend distribution. In the first quarter of 2015, the Corporation declared and paid a cash dividend of $220 million to Dow. In the first quarter of 2014, the Corporation declared and paid a dividend of $325 million to Dow. | |
The Corporation received no cash dividends from its related company investments in the first quarter of 2015 ($5 million in the first quarter of 2014). These dividends are included in “Sundry income (expense) – net” in the consolidated statements of income. |
ACCUMULATED_OTHER_COMPREHENSIV
ACCUMULATED OTHER COMPREHENSIVE LOSS | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
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, 2015 and 2014: | ||||||||
Accumulated Other Comprehensive Loss | Three Months Ended | |||||||
In millions | Mar 31, 2015 | Mar 31, 2014 | ||||||
Cumulative Translation Adjustments at beginning of year | $ | (63 | ) | $ | (78 | ) | ||
Translation adjustments | 1 | — | ||||||
Balance at end of period | $ | (62 | ) | $ | (78 | ) | ||
Pension and Other Postretirement Benefit Plans at beginning of year | $ | (1,180 | ) | $ | (967 | ) | ||
Adjustments to pension and other postretirement benefit plans (net of tax of $7, $6) (1) (2) | 12 | 10 | ||||||
Balance at end of period | $ | (1,168 | ) | $ | (957 | ) | ||
Total Accumulated Other Comprehensive Loss | $ | (1,230 | ) | $ | (1,035 | ) | ||
-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. |
INVENTORIES_Tables
INVENTORIES (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Inventory Disclosure [Abstract] | ||||||||
Schedule of Inventory, Current [Table Text Block] | ||||||||
Inventories | Mar 31, | Dec 31, | ||||||
In millions | 2015 | 2014 | ||||||
Finished goods | $ | 249 | $ | 205 | ||||
Work in process | 45 | 30 | ||||||
Raw materials | 51 | 45 | ||||||
Supplies | 91 | 98 | ||||||
Total inventories | $ | 436 | $ | 378 | ||||
INTANGIBLE_ASSETS_Tables
INTANGIBLE ASSETS (Tables) | 3 Months Ended | |||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||||||||||||||||||||||||
Intangible Assets | ||||||||||||||||||||||||
Intangible Assets | At March 31, 2015 | At December 31, 2014 | ||||||||||||||||||||||
In millions | Gross | Accumulated Amortization | Net | Gross | Accumulated Amortization | Net | ||||||||||||||||||
Carrying Amount | Carrying Amount | |||||||||||||||||||||||
Intangible assets with finite lives: | ||||||||||||||||||||||||
Licenses and intellectual property | $ | 33 | $ | (33 | ) | $ | — | $ | 33 | $ | (33 | ) | $ | — | ||||||||||
Software | 57 | (41 | ) | 16 | 55 | (40 | ) | 15 | ||||||||||||||||
Total intangible assets | $ | 90 | $ | (74 | ) | $ | 16 | $ | 88 | $ | (73 | ) | $ | 15 | ||||||||||
Schedule of Expected Amortization Expense [Table Text Block] | ||||||||||||||||||||||||
Estimated Amortization Expense | ||||||||||||||||||||||||
In millions | ||||||||||||||||||||||||
2015 | $ | 2 | ||||||||||||||||||||||
2016 | $ | 3 | ||||||||||||||||||||||
2017 | $ | 3 | ||||||||||||||||||||||
2018 | $ | 3 | ||||||||||||||||||||||
2019 | $ | 3 | ||||||||||||||||||||||
2020 | $ | 2 | ||||||||||||||||||||||
COMMITMENTS_AND_CONTINGENT_LIA1
COMMITMENTS AND CONTINGENT LIABILITIES (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||
Receivables for Asbestos-Related Costs | ||||||||
Receivables for Asbestos-Related Costs | Mar 31, | Dec 31, | ||||||
In millions | 2015 | 2014 | ||||||
Receivables for defense and resolution costs - carriers with settlement agreements | $ | 54 | $ | 69 | ||||
Receivables for insurance recoveries - carriers without settlement agreements | 10 | 10 | ||||||
Total | $ | 64 | $ | 79 | ||||
Unrecorded Unconditional Purchase Obligations Disclosure [Table Text Block] | ||||||||
PENSION_PLANS_AND_OTHER_POSTRE1
PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
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, | Mar 31, | ||||||
2015 | 2014 | |||||||
Defined Benefit Pension Plans: | ||||||||
Service cost | $ | 11 | $ | 8 | ||||
Interest cost | 41 | 46 | ||||||
Expected return on plan assets | (57 | ) | (58 | ) | ||||
Amortization of prior service cost | — | 1 | ||||||
Amortization of net loss | 22 | 17 | ||||||
Net periodic benefit cost | $ | 17 | $ | 14 | ||||
Other Postretirement Benefits: | ||||||||
Interest cost | $ | 3 | $ | 3 | ||||
Amortization of net gain | (3 | ) | (2 | ) | ||||
Net periodic benefit cost | $ | — | $ | 1 | ||||
ACCUMULATED_OTHER_COMPREHENSIV1
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||||||
Accumulated Other Comprehensive Loss | ||||||||
Accumulated Other Comprehensive Loss | Three Months Ended | |||||||
In millions | Mar 31, 2015 | Mar 31, 2014 | ||||||
Cumulative Translation Adjustments at beginning of year | $ | (63 | ) | $ | (78 | ) | ||
Translation adjustments | 1 | — | ||||||
Balance at end of period | $ | (62 | ) | $ | (78 | ) | ||
Pension and Other Postretirement Benefit Plans at beginning of year | $ | (1,180 | ) | $ | (967 | ) | ||
Adjustments to pension and other postretirement benefit plans (net of tax of $7, $6) (1) (2) | 12 | 10 | ||||||
Balance at end of period | $ | (1,168 | ) | $ | (957 | ) | ||
Total Accumulated Other Comprehensive Loss | $ | (1,230 | ) | $ | (1,035 | ) | ||
-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. |
INVENTORIES_Schedule_of_Invent
INVENTORIES (Schedule of Inventories) (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Inventory Disclosure [Abstract] | ||
Finished goods | $249 | $205 |
Work in process | 45 | 30 |
Raw materials | 51 | 45 |
Supplies | 91 | 98 |
Total inventories | 436 | 378 |
Inventory, LIFO Reserve | $106 | $125 |
INTANGIBLE_ASSETS_Schedule_of_
INTANGIBLE ASSETS (Schedule of Amortization Expense of Intangible Assets) (Table and Narrative) (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $90 | $88 |
Finite-Lived Intangible Assets, Accumulated Amortization | -74 | -73 |
Finite-Lived Intangible Assets, Net | 16 | 15 |
Licensing Agreements [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 | 57 | 55 |
Finite-Lived Intangible Assets, Accumulated Amortization | -41 | -40 |
Finite-Lived Intangible Assets, Net | $16 | $15 |
INTANGIBLE_ASSETS_Schedule_of_1
INTANGIBLE ASSETS (Schedule of Future Amortization Expense of Intangible Assets) (Details) (USD $) | Mar. 31, 2015 |
In Millions, unless otherwise specified | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Estimated Amortization Expense, 2015 | $2 |
Estimated Amortization Expense, 2016 | 3 |
Estimated Amortization Expense, 2017 | 3 |
Estimated Amortization Expense, 2018 | 3 |
Estimated Amortization Expense, 2019 | 3 |
Estimated Amortization Expense, 2020 | $2 |
FINANCIAL_INSTRUMENTS_Investme
FINANCIAL INSTRUMENTS (Investments) (Details) (USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Investment Holdings [Line Items] | |||
Document Period End Date | 31-Mar-15 | ||
Available-for-sale Securities, Gross Realized Gains (Losses), Sale Proceeds | $0 | $0 | |
Debt Securities Maturity | less than 10 years | ||
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | Debt Securities [Member] | |||
Investment Holdings [Line Items] | |||
Available-for-sale Securities, Fair Value Disclosure | $5 | $5 |
FINANCIAL_INSTRUMENTS_FINANCIA
FINANCIAL INSTRUMENTS FINANCIAL INSTRUMENTS (Long-Term Debt) (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Long-term Debt [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt | $481 | $482 |
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | Long-term Debt [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Fair Value | $616 | $601 |
COMMITMENTS_AND_CONTINGENT_LIA2
COMMITMENTS AND CONTINGENT LIABILITIES (Environmental Matters) (Narrative) (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Loss Contingencies [Line Items] | ||
Accrual for environmental loss contingencies | $136 | $132 |
Accrual For Environmental Loss Contingencies Superfund Sites [Member] | ||
Loss Contingencies [Line Items] | ||
Accrual for environmental loss contingencies | $23 | $22 |
COMMITMENTS_AND_CONTINGENT_LIA3
COMMITMENTS AND CONTINGENT LIABILITIES (Asbestos-Related Matters of Union Carbide Corporation) (Table and Narrative) (Details) (USD $) | 3 Months Ended | |||
In Millions, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2002 |
Loss Contingencies [Line Items] | ||||
Liability for asbestos claims, gross | $500 | $513 | $2,200 | |
Asbestos Related Loss Contingency, Range of Possible Loss, Minimum | 540 | |||
Asbestos Related Loss Contingency, Range of Possible Loss, Maximum | 640 | |||
Asbestos Related Charges Credit | 78 | |||
Percentage of recorded asbestos liability related to pending claims | 20.00% | 22.00% | ||
Percentage of recorded asbestos liability related to future claims | 80.00% | 78.00% | ||
Document Period End Date | 31-Mar-15 | |||
Receivables for asbestos-related costs | 64 | 79 | 1,350 | |
Defense and resolution costs for asbestos related claims | 24 | 25 | ||
Estimated Insurance Recoveries of Defense and Resolution Costs [Member] [Domain] | ||||
Loss Contingencies [Line Items] | ||||
Receivables for asbestos-related costs | 54 | 69 | ||
Receivables for insurance recoveries - carriers without settlement agreements | ||||
Loss Contingencies [Line Items] | ||||
Receivables for asbestos-related costs | $10 | $10 |
PENSION_PLANS_AND_OTHER_POSTRE2
PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Defined Benefit Pension Plans [Member] | ||
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract] | ||
Service cost | $11 | $8 |
Interest cost | 41 | 46 |
Expected return on plan assets | -57 | -58 |
Amortization of prior service cost | 0 | 1 |
Amortization of net (gain) loss | 22 | 17 |
Net periodic benefit cost | 17 | 14 |
Other Postretirement Benefits [Member] | ||
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract] | ||
Interest cost | 3 | 3 |
Amortization of net (gain) loss | -3 | -2 |
Net periodic benefit cost | $0 | $1 |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Related Party Transaction [Line Items] | |||
Payments of Dividends | $220,000,000 | $325,000,000 | |
Proceeds from Dividends Received | 0 | 5,000,000 | |
The Dow Chemical Company [Member] | |||
Related Party Transaction [Line Items] | |||
Related Party Transaction, Expenses from Transactions with Related Party | 515,000,000 | 763,000,000 | |
Service Fee with Parent | 10.00% | ||
Notes Receivable, Related Parties | 1,000,000,000 | 1,200,000,000 | |
Line of Credit Facility, Maximum Borrowing Capacity | 1,000,000,000 | ||
Notes Receivable, Related Parties, Noncurrent | 907,000,000 | 875,000,000 | |
Payments of Dividends | 220,000,000 | 325,000,000 | |
Sundry income (expense) [Member] | The Dow Chemical Company [Member] | |||
Related Party Transaction [Line Items] | |||
Related Party Transaction, Expenses from Transactions with Related Party | 7,000,000 | 6,000,000 | |
Cost of Sales [Member] | The Dow Chemical Company [Member] | |||
Related Party Transaction [Line Items] | |||
Related Party Transaction, Expenses from Transactions with Related Party | $14,000,000 | $12,000,000 |
ACCUMULATED_OTHER_COMPREHENSIV2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) (USD $) | 3 Months Ended | |||||
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Translation adjustments | $1 | $0 | ||||
Adjustments to pension and other postretirement benefit plans | 12 | 10 | ||||
Accumulated Other Comprehensive Income (Loss) [Member] | ||||||
Union Carbide Corporation's stockholder's equity | -1,230 | -1,035 | -1,243 | -1,045 | ||
Accumulated Translation Adjustment [Member] | ||||||
Translation adjustments | 1 | 0 | ||||
Union Carbide Corporation's stockholder's equity | -62 | -78 | -63 | -78 | ||
Accumulated Defined Benefit Plans and Other Post Retirement Adjustment [Member] | ||||||
Adjustments to pension and other postretirement benefit plans | 12 | [1],[2] | 10 | [1],[2] | ||
Adjustments to pension and other postretirement benefit plans, tax | -7 | [1] | -6 | [1] | ||
Union Carbide Corporation's stockholder's equity | ($1,168) | ($957) | ($1,180) | ($967) | ||
[1] | Tax amounts are included in "Provision for income taxes" in the consolidated statements of income. | |||||
[2] | Included in "Net periodic benefit cost." See Note 7 for additional information. |