Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2017shares | |
Document and Entity Information | |
Entity Registrant Name | UNION CARBIDE CORP /NEW/ |
Entity Central Index Key | 100,790 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Non-accelerated Filer |
Document Type | 10-Q |
Document Period End Date | Sep. 30, 2017 |
Document Fiscal Year Focus | 2,017 |
Document Fiscal Period Focus | Q3 |
Amendment Flag | false |
Entity Common Stock, Shares Outstanding | 935.51 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Net trade sales | $ 31 | $ 27 | $ 113 | $ 77 |
Net sales to related companies | 1,184 | 1,221 | 3,722 | 3,644 |
Total Net Sales | 1,215 | 1,248 | 3,835 | 3,721 |
Cost of sales | 991 | 957 | 3,056 | 2,726 |
Research and development expenses | 4 | 5 | 14 | 14 |
Selling, general and administrative expenses | 1 | 1 | 4 | 5 |
Restructuring and asset related charges - net | 8 | 0 | 10 | 2 |
Integration and separation costs | 1 | 0 | 1 | 0 |
Equity in earnings of nonconsolidated affiliate | 0 | 0 | 0 | 3 |
Sundry income (expense) - net | (8) | (10) | 6 | 20 |
Interest expense and amortization of debt discount | 6 | 7 | 20 | 18 |
Income Before Income Taxes | 196 | 268 | 736 | 979 |
Provision for income taxes | 152 | 82 | 337 | 380 |
Net Income Attributable to Union Carbide Corporation | 44 | 186 | 399 | 599 |
Depreciation | 45 | 39 | 132 | 120 |
Capital Expenditures | $ 47 | $ 55 | $ 145 | $ 173 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Net Income Attributable to Union Carbide Corporation | $ 44 | $ 186 | $ 399 | $ 599 |
Other Comprehensive Income, Net of Tax | ||||
Cumulative translation adjustments | 1 | 0 | 4 | 0 |
Pension and other postretirement benefit plans | 12 | 11 | 36 | 32 |
Other comprehensive income | 13 | 11 | 40 | 32 |
Comprehensive Income Attributable to Union Carbide Corporation | $ 57 | $ 197 | $ 439 | $ 631 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Current Assets | ||
Cash and cash equivalents | $ 13 | $ 11 |
Accounts receivable: | ||
Trade (net of allowance for doubtful receivables 2017: $-; 2016: $-) | 20 | 15 |
Related companies | 893 | 843 |
Other | 48 | 36 |
Income taxes receivable | 242 | 275 |
Notes receivable from related companies | 1,257 | 1,411 |
Inventories | 299 | 307 |
Other current assets | 18 | 39 |
Total current assets | 2,790 | 2,937 |
Investments | ||
Investments in related companies | 639 | 639 |
Investments in nonconsolidated affiliate | 0 | 14 |
Other investments | 25 | 30 |
Noncurrent receivables | 58 | 52 |
Noncurrent receivables from related companies | 54 | 57 |
Total investments | 776 | 792 |
Property | ||
Property | 7,243 | 7,144 |
Less accumulated depreciation | 5,837 | 5,750 |
Net property | 1,406 | 1,394 |
Other Assets | ||
Intangible assets (net of accumulated amortization 2017: $80; 2016: $78) | 26 | 25 |
Deferred income tax assets - noncurrent | 797 | 928 |
Deferred charges and other assets | 39 | 70 |
Total other assets | 862 | 1,023 |
Total Assets | 5,834 | 6,146 |
Current Liabilities | ||
Notes payable - related companies | 27 | 25 |
Notes Payable to Bank | 2 | 0 |
Long-term debt due within one year | 1 | 1 |
Accounts payable: | ||
Trade | 253 | 249 |
Related companies | 537 | 521 |
Other | 15 | 7 |
Income taxes payable | 103 | 23 |
Asbestos-related liabilities - current | 132 | 126 |
Accrued and other current liabilities | 189 | 181 |
Total current liabilities | 1,259 | 1,133 |
Long-Term Debt | 474 | 475 |
Other Noncurrent Liabilities | ||
Pension and other postretirement benefits - noncurrent | 955 | 1,170 |
Asbestos-related liabilities - noncurrent | 1,266 | 1,364 |
Other noncurrent obligations | 174 | 206 |
Total other noncurrent liabilities | 2,395 | 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 | 2,848 | 2,980 |
Accumulated other comprehensive loss | (1,280) | (1,320) |
Union Carbide Corporation's stockholder's equity | 1,706 | 1,798 |
Total Liabilities and Equity | $ 5,834 | $ 6,146 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Allowance for doubtful accounts | $ 0 | $ 0 |
Accumulated Amortization | $ 80 | $ 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 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Operating Activities | ||
Net Income Attributable to Union Carbide Corporation | $ 399 | $ 599 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 148 | 138 |
Provision (credit) for deferred income tax | 109 | (306) |
Earnings of nonconsolidated affiliate in excess of dividends received | 0 | (2) |
Net gain on sales of property and investments | (26) | (50) |
Net gain on sale of ownership interest in nonconsolidated affiliate | (4) | 0 |
Restructuring charges | 10 | 2 |
Net periodic benefit cost | 21 | 21 |
Pension contributions | (162) | (52) |
Other, net | 0 | (1) |
Changes in assets and liabilities: | ||
Accounts and notes receivable | 10 | (3) |
Related company receivables | 104 | (82) |
Inventories | 8 | (24) |
Accounts payable | 15 | (25) |
Related company payables | 18 | 114 |
Asbestos-related payments | (92) | (39) |
Other assets and liabilities | 67 | 272 |
Cash provided by operating activities | 625 | 562 |
Investing Activities | ||
Capital expenditures | (145) | (173) |
Change in noncurrent receivable from related company | 3 | 7 |
Proceeds from sale of ownership interest in nonconsolidated affiliate | 22 | 0 |
Proceeds from sales of property | 18 | 58 |
Proceeds from sales of investments | 9 | 3 |
Cash used in investing activities | (93) | (105) |
Financing Activities | ||
Dividends paid to stockholder | (531) | (455) |
Proceeds from (Repayments of) Notes Payable | 2 | 0 |
Payments on long-term debt | (1) | (1) |
Cash used in financing activities | (530) | (456) |
Summary | ||
Increase in cash and cash equivalents | 2 | 1 |
Cash and cash equivalents at beginning of year | 11 | 23 |
Cash and cash equivalents at end of period | $ 13 | $ 24 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) $ in Millions | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive (Loss) [Member] |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Union Carbide Corporation's stockholder's equity | $ 2,301 | $ 0 | $ 138 | $ 3,391 | $ (1,228) |
Net income attributable to Union Carbide Corporation | 599 | 599 | |||
Other comprehensive income | 32 | 32 | |||
Dividends declared | (455) | (455) | |||
Other | 1 | 1 | |||
Union Carbide Corporation's stockholder's equity | 2,478 | 0 | 138 | 3,536 | (1,196) |
Union Carbide Corporation's stockholder's equity | 1,798 | 0 | 138 | 2,980 | (1,320) |
Net income attributable to Union Carbide Corporation | 399 | 399 | |||
Other comprehensive income | 40 | 40 | |||
Dividends declared | (531) | (531) | |||
Union Carbide Corporation's stockholder's equity | $ 1,706 | $ 0 | $ 138 | $ 2,848 | $ (1,280) |
CONSOLIDATED FINANCIAL STATEMEN
CONSOLIDATED FINANCIAL STATEMENTS | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
CONSOLIDATED FINANCIAL STATEMENTS | CONSOLIDATED FINANCIAL STATEMENTS Basis of Presentation 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 11 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 . Effective August 31, 2017, pursuant to the merger of equals transaction contemplated by the Agreement and Plan of Merger, dated as of December 11, 2015, as amended on March 31, 2017, Dow and E. I. du Pont de Nemours and Company ("DuPont") each merged with subsidiaries of DowDuPont Inc. ("DowDuPont") and, as a result, Dow and DuPont became subsidiaries of DowDuPont (the "Merger"). See Note 12 for additional information. Significant Accounting Policy Update Integration and Separation Costs The Corporation classifies expenses related to the Merger as integration and separation costs. Merger-related costs include: costs incurred to prepare for and close the Merger, post-Merger integration expenses and costs incurred to prepare for the separation of Dow’s agriculture business, specialty products business and materials science business. Changes in Financial Statement Presentation Consolidated Statements of Cash Flows 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). In the third quarter of 2017, the Corporation changed the presentation to the consolidated statements of cash flows to conform to the presentation that was adopted for DowDuPont. "Net period pension benefit cost" are now separately reported and have been reclassified from "Other assets and liabilities." Prior periods have been updated to conform to the current year presentation and are summarized below: Summary of Changes to the Consolidated Statements of Cash Flows Nine Months Ended Sep 30, 2016 In millions As filed Updated Operating Activities Net periodic pension benefit cost $ — $ 21 Asbestos-related payments $ — $ (39 ) Other assets and liabilities $ 254 $ 272 Consolidated Statements of Income In the third quarter of 2017, the Corporation changed the presentation of certain line items on the face of the consolidated statements of income to conform to the presentation that was adopted for DowDuPont. Costs associated with integration and separation activities are now separately reported as “Integration and separation costs” and “Interest income” has been reclassified to “Sundry income (expense) - net.” The changes were retrospectively applied and are summarized below: Summary of Changes to the Consolidated Statements of Income Three Months Ended Nine Months Ended Sep 30, 2016 Sep 30, 2016 Sep 30, 2016 Sep 30, 2016 In millions As Filed Updated As Filed Updated Sundry income (expense) - net $ (14 ) $ (10 ) $ 10 $ 20 Interest income $ 4 $ — $ 10 $ — |
RECENT ACCOUNTING GUIDANCE
RECENT ACCOUNTING GUIDANCE | 9 Months Ended |
Sep. 30, 2017 | |
Recent Accounting Guidance [Abstract] | |
RECENT ACCOUNTING GUIDANCE | RECENT ACCOUNTING GUIDANCE Accounting Guidance Issued But Not Yet Adopted at September 30, 2017 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. ASU 2015-14, "Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date," 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 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 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 completing contract evaluations and validating the results of applying the new revenue guidance. The Corporation is in the process of finalizing its accounting policies, drafting the new disclosures, quantifying the potential financial adjustment and completing its evaluation of the impact of the accounting and disclosure requirements on business processes, controls and systems. 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 from 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 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 (ASU 2014-09). 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 has a team in place to evaluate the new guidance and is in the process of implementing a software solution to facilitate the development of business processes and controls around leases to meet the new accounting and disclosure requirements upon adoption in the first quarter of 2019. 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 will adopt the new guidance in the first quarter of 2018 and the adoption of this guidance will not have a material impact on the Consolidated Financial Statements. 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 planning to apply the new guidance with the implementation of the new revenue standard in the first quarter of 2018. 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. |
Restructuring and Asset Related
Restructuring and Asset Related Charges - Net | 9 Months Ended |
Sep. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Activities Disclosure [Text Block] | In September 2017, the Corporation approved restructuring actions that are aligned with DowDuPont’s synergy targets. As a result of these actions, the Corporation recorded a pretax restructuring charge for severance and related benefit costs of $8 million in the third quarter of 2017. The impact of this charge is shown as “Restructuring and asset related charges - net” in the consolidated statements of income. These actions are expected to be substantially completed by September 30, 2019. At September 30, 2017, severance of $1 million was paid, leaving a liability of $7 million . The Corporation expects to incur additional costs in the future related to restructuring activities, as UCC continually looks for ways to enhance the efficiency and cost effectiveness of its operations. The Corporation expects to incur additional employee-related costs, including involuntary termination benefits, related to its other optimization activities. These costs cannot be reasonably estimated at this time. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | INCOME TAXES A transaction for the sale of stock between the Corporation and Dow in 2014 created a gain that was initially deferred for tax purposes. This deferred gain became taxable as a result of activities executed in anticipation of the intended separation of DowDuPont into three publicly traded companies. As a result, in the third quarter of 2017, the Corporation increased “Income taxes payable” in the consolidated balance sheets and recorded a charge to “Provision for income taxes” in the consolidated statements of income of $97 million . The total amount of gross unrecognized tax benefits for uncertain tax positions, including positions impacting only the timing of tax benefits, was $1 million at September 30, 2017 and $1 million at December 31, 2016. The amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate was $1 million at September 30, 2017 and $1 million at December 31, 2016. In the second quarter of 2016, an adjustment was made to a reserve for a tax matter regarding a historical change in the legal ownership structure of a former nonconsolidated affiliate. The adjustment arose due to legal proceedings and the Corporation’s ongoing assessment of the unrecognized tax benefits, which resulted in an unfavorable impact of $57 million to “Provision for income taxes” in the consolidated statements of income. Interest and penalties associated with uncertain tax positions are recognized as components of "Provision for income taxes" in the consolidated statements of income which totaled an insignificant amount for the three months ended September 30, 2017 and 2016. In the nine months ended September 30, 2017 , the Corporation recognized a benefit of $2 million for interest and penalties (a charge of $82 million in the nine months ended September 30, 2016 ). The Corporation is included in Dow's consolidated federal income tax group and consolidated tax return. Current and deferred tax expenses are calculated for the Corporation as a stand-alone group and are allocated to the group from the consolidated totals. UCC is currently under examination in a number of tax jurisdictions, including the U.S. federal and various state jurisdictions. Positions challenged by the tax authorities may be settled or appealed by the Corporation. As a result, there is an uncertainty in income taxes recognized in the Corporation’s financial statements in accordance with accounting for income taxes and accounting for uncertainty in income taxes. Net reductions to the Corporation’s global unrecognized tax benefits are not expected to be material within the next twelve months. |
INVENTORIES
INVENTORIES | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES The following table provides a breakdown of inventories: Inventories Sep 30, Dec 31, In millions Finished goods $ 210 $ 186 Work in process 44 38 Raw materials 53 50 Supplies 79 87 Total $ 386 $ 361 Adjustment of inventories to a LIFO basis (87 ) (54 ) Total inventories $ 299 $ 307 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 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 Sep 30, 2017 Dec 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 73 (47 ) 26 70 (45 ) 25 Total intangible assets $ 106 $ (80 ) $ 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 $ 6 2021 $ 4 2022 $ 2 |
COMMITMENTS AND CONTINGENT LIAB
COMMITMENTS AND CONTINGENT LIABILITIES | 9 Months Ended |
Sep. 30, 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 September 30, 2017 , the Corporation had accrued obligations of $119 million for probable environmental remediation and restoration costs, including $20 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 three 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 September 30, 2017 . The Corporation’s asbestos-related liability for pending and future claims and defense and processing costs was $1,398 million at September 30, 2017 , and approximately 15 percent of the recorded liability related to pending claims and approximately 85 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 over a significant period of time, 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. Because of the uncertainties described above, the Corporation cannot estimate the full range of the cost of resolving pending and future asbestos-related claims facing UCC and Amchem. As a result, it is reasonably possible that an additional cost of disposing of asbestos-related claims, including future defense and processing 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. 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. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 9 Months Ended |
Sep. 30, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | ACCUMULATED OTHER COMPREHENSIVE LOSS The following table summarizes the changes and after-tax balances of each component of accumulated other comprehensive loss for the nine months ended September 30, 2017 and 2016 : Accumulated Other Comprehensive Loss Cumulative Translation Adj Pension and Other Postretire Benefits Accum Other Comp Loss In millions Balance at Jan 1, 2016 $ (61 ) $ (1,167 ) $ (1,228 ) Amounts reclassified from accumulated other comprehensive income — 32 32 Net other comprehensive income — 32 32 Balance at Sep 30, 2016 $ (61 ) $ (1,135 ) $ (1,196 ) Balance at Jan 1, 2017 $ (62 ) $ (1,258 ) $ (1,320 ) Other comprehensive income before reclassifications 1 — 1 Amounts reclassified from accumulated other comprehensive income 3 36 39 Net other comprehensive income 4 36 40 Balance at Sep 30, 2017 $ (58 ) $ (1,222 ) $ (1,280 ) The tax effects on the net activity related to each component of accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2017 and 2016 were as follows: Tax Benefit Three Months Ended Nine Months Ended In millions Sep 30, 2017 Sep 30, 2016 Sep 30, 2017 Sep 30, 2016 Pension and other postretirement benefits $ 6 $ 6 $ 22 $ 20 A summary of the reclassifications out of accumulated other comprehensive loss for the three and nine months ended September 30, 2017 and 2016 is provided as follows: Reclassifications Out of Accumulated Other Comprehensive Loss Three Months Ended Nine Months Ended Consolidated Statements of Income Classification Sep 30, 2017 Sep 30, 2016 Sep 30, 2017 Sep 30, 2016 In millions Cumulative translation adjustments $ — $ — $ 3 $ — See (1) below Pension and other postretirement benefits 18 17 58 52 See (2) below Tax benefit (6 ) (6 ) (22 ) (20 ) See (3) below After-tax 12 11 36 32 Total reclassifications for the period, after-tax $ 12 $ 11 $ 39 $ 32 1. "Sundry income (expense) - net." 2. Included in the computation of net periodic benefit cost of the Corporation's pension and other postretirement plans. See Note 9 for additional information. 3. "Provision for income taxes." |
PENSION PLANS AND OTHER POSTRET
PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS | 9 Months Ended |
Sep. 30, 2017 | |
Retirement Benefits [Abstract] | |
PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS | PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS Net Periodic Benefit Cost for All Significant Plans Three Months Ended Nine Months Ended In millions Sep 30, Sep 30, Sep 30, Sep 30, Defined Benefit Pension Plans: Service cost $ 10 $ 9 $ 28 $ 27 Interest cost 33 33 97 99 Expected return on plan assets (56 ) (54 ) (166 ) (162 ) Amortization of net loss 20 19 62 57 Net periodic benefit cost $ 7 $ 7 $ 21 $ 21 Other Postretirement Benefits: Interest cost $ 2 $ 2 $ 6 $ 6 Amortization of net gain (2 ) (2 ) (4 ) (5 ) Net periodic benefit cost $ — $ — $ 2 $ 1 |
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 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 nine -month period ended September 30, 2017 ( $2 million in proceeds from the maturity of marketable securities for the nine -month period ended September 30, 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 Sep 30, 2017 Dec 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 $ (475 ) $ — $ (134 ) $ (609 ) $ (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. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 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 $377 million in the third quarter of 2017 ( $379 million in the third quarter of 2016) and $1,213 million in the first nine months of 2017 ( $1,011 million in the first nine months of 2016). The increase in purchase costs in the first nine 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 third quarter of 2017 ( $7 million in the third quarter of 2016) and $24 million in the first nine months of 2017 ( $21 million in the first nine months 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 $20 million in the third quarter of 2017 ( $19 million in the third quarter of 2016 ) and $60 million in the first nine months of 2017 ( $53 million in the first nine months 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 September 30, 2017 , the Corporation had a note receivable of $1.2 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, with cash collateral. At September 30, 2017 , $949 million was available under the revolving credit agreement ( $947 million at December 31, 2016 ). 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 third quarter of 2017 , the Corporation declared and paid a cash dividend of $181 million to Dow; dividends to Dow totaled $531 million in the first nine months of 2017. In the third quarter of 2016, the Corporation declared and paid a cash dividend of $55 million to Dow; dividends to Dow totaled $455 million in the first nine months of 2016. |
Merger with DuPont (Notes)
Merger with DuPont (Notes) | 9 Months Ended |
Sep. 30, 2017 | |
MERGER WITH DUPONT [Abstract] | |
Merger with DuPont [Text Block] | MERGER WITH DUPONT Effective August 31, 2017, Dow and DuPont completed the previously announced merger of equals transaction contemplated by the Agreement and Plan of Merger, dated as of December 11, 2015, as amended on March 31, 2017 (the "Merger Agreement"), by and among Dow, DuPont, DowDuPont, Diamond Merger Sub, Inc. and Orion Merger Sub, Inc. Pursuant to the Merger Agreement, (i) Diamond Merger Sub, Inc. was merged with and into Dow, with Dow surviving the merger as a subsidiary of DowDuPont (the "Diamond Merger") and (ii) Orion Merger Sub, Inc. was merged with and into DuPont, with DuPont surviving the merger as a subsidiary of DowDuPont (the "Orion Merger" and, together with the Diamond Merger, the "Mergers"). Following the consummation of the Mergers, each of Dow and DuPont became subsidiaries of DowDuPont (collectively, the "Merger"). Following the Merger, Dow and DuPont intend to pursue, subject to the receipt of regulatory approvals and approval by the board of directors of DowDuPont ("DowDuPont Board"), the separation of the combined company's agriculture business, specialty products business and materials science business through one or more tax-efficient transactions ("Intended Business Separations"). On August 31, 2017, following the Diamond Merger, Dow requested that the New York Stock Exchange ("NYSE") withdraw the shares of Dow Common Stock from listing on the NYSE and file a Form 25 with the U.S. Securities and Exchange Commission ("SEC") to report that the shares of Dow Common Stock are no longer listed on the NYSE. The shares of Dow Common Stock were suspended from trading on the NYSE prior to the open of trading on September 1, 2017. On September 12, 2017, DowDuPont announced that the DowDuPont Board and management, with the assistance of independent advisors, completed their comprehensive review of the portfolio composition of the three intended independent companies. The DowDuPont Board unanimously concluded that, in light of knowledge gained since the announcement of the proposed merger of equals, certain targeted adjustments will be made between the materials science and specialty products businesses, which will enhance the competitive advantages of the intended resulting companies. As a result of this change, it is expected that a portion of UCC's business will move to the specialty products business as part of the intended spin-off transactions, and the Corporation does not expect the intended spin-off transactions to have a material impact on the Consolidated Financial Statements. |
CONSOLIDATED FINANCIAL STATEM20
CONSOLIDATED FINANCIAL STATEMENTS Summary of Changes to the Consolidated Statements of Income (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | Consolidated Statements of Cash Flows 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). In the third quarter of 2017, the Corporation changed the presentation to the consolidated statements of cash flows to conform to the presentation that was adopted for DowDuPont. "Net period pension benefit cost" are now separately reported and have been reclassified from "Other assets and liabilities." Prior periods have been updated to conform to the current year presentation and are summarized below: Summary of Changes to the Consolidated Statements of Cash Flows Nine Months Ended Sep 30, 2016 In millions As filed Updated Operating Activities Net periodic pension benefit cost $ — $ 21 Asbestos-related payments $ — $ (39 ) Other assets and liabilities $ 254 $ 272 Consolidated Statements of Income In the third quarter of 2017, the Corporation changed the presentation of certain line items on the face of the consolidated statements of income to conform to the presentation that was adopted for DowDuPont. Costs associated with integration and separation activities are now separately reported as “Integration and separation costs” and “Interest income” has been reclassified to “Sundry income (expense) - net.” The changes were retrospectively applied and are summarized below: Summary of Changes to the Consolidated Statements of Income Three Months Ended Nine Months Ended Sep 30, 2016 Sep 30, 2016 Sep 30, 2016 Sep 30, 2016 In millions As Filed Updated As Filed Updated Sundry income (expense) - net $ (14 ) $ (10 ) $ 10 $ 20 Interest income $ 4 $ — $ 10 $ — |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current [Table Text Block] | The following table provides a breakdown of inventories: Inventories Sep 30, Dec 31, In millions Finished goods $ 210 $ 186 Work in process 44 38 Raw materials 53 50 Supplies 79 87 Total $ 386 $ 361 Adjustment of inventories to a LIFO basis (87 ) (54 ) Total inventories $ 299 $ 307 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Intangible Assets | The following table provides information regarding the Corporation’s intangible assets: Intangible Assets Sep 30, 2017 Dec 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 73 (47 ) 26 70 (45 ) 25 Total intangible assets $ 106 $ (80 ) $ 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 $ 6 2021 $ 4 2022 $ 2 |
ACCUMULATED OTHER COMPREHENSI23
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Components of Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Loss Cumulative Translation Adj Pension and Other Postretire Benefits Accum Other Comp Loss In millions Balance at Jan 1, 2016 $ (61 ) $ (1,167 ) $ (1,228 ) Amounts reclassified from accumulated other comprehensive income — 32 32 Net other comprehensive income — 32 32 Balance at Sep 30, 2016 $ (61 ) $ (1,135 ) $ (1,196 ) Balance at Jan 1, 2017 $ (62 ) $ (1,258 ) $ (1,320 ) Other comprehensive income before reclassifications 1 — 1 Amounts reclassified from accumulated other comprehensive income 3 36 39 Net other comprehensive income 4 36 40 Balance at Sep 30, 2017 $ (58 ) $ (1,222 ) $ (1,280 ) The tax effects on the net activity related to each component of accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2017 and 2016 were as follows: Tax Benefit Three Months Ended Nine Months Ended In millions Sep 30, 2017 Sep 30, 2016 Sep 30, 2017 Sep 30, 2016 Pension and other postretirement benefits $ 6 $ 6 $ 22 $ 20 |
Schedule of Reclassifications Out of Accumulated Other Comprehensive Income | Reclassifications Out of Accumulated Other Comprehensive Loss Three Months Ended Nine Months Ended Consolidated Statements of Income Classification Sep 30, 2017 Sep 30, 2016 Sep 30, 2017 Sep 30, 2016 In millions Cumulative translation adjustments $ — $ — $ 3 $ — See (1) below Pension and other postretirement benefits 18 17 58 52 See (2) below Tax benefit (6 ) (6 ) (22 ) (20 ) See (3) below After-tax 12 11 36 32 Total reclassifications for the period, after-tax $ 12 $ 11 $ 39 $ 32 1. "Sundry income (expense) - net." 2. Included in the computation of net periodic benefit cost of the Corporation's pension and other postretirement plans. See Note 9 for additional information. 3. "Provision for income taxes." |
PENSION PLANS AND OTHER POSTR24
PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Retirement Benefits [Abstract] | |
Net Periodic Benefit Cost for All Significant Plans | Net Periodic Benefit Cost for All Significant Plans Three Months Ended Nine Months Ended In millions Sep 30, Sep 30, Sep 30, Sep 30, Defined Benefit Pension Plans: Service cost $ 10 $ 9 $ 28 $ 27 Interest cost 33 33 97 99 Expected return on plan assets (56 ) (54 ) (166 ) (162 ) Amortization of net loss 20 19 62 57 Net periodic benefit cost $ 7 $ 7 $ 21 $ 21 Other Postretirement Benefits: Interest cost $ 2 $ 2 $ 6 $ 6 Amortization of net gain (2 ) (2 ) (4 ) (5 ) Net periodic benefit cost $ — $ — $ 2 $ 1 |
FINANCIAL INSTRUMENTS FINANCIAL
FINANCIAL INSTRUMENTS FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Financial Instruments [Abstract] | |
Fair Value, by Balance Sheet Grouping [Table Text Block] | Fair Value of Financial Instruments Sep 30, 2017 Dec 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 $ (475 ) $ — $ (134 ) $ (609 ) $ (476 ) $ — $ (95 ) $ (571 ) 1. Marketable securities are included in "Other investments" in the consolidated balance sheets. |
CONSOLIDATED FINANCIAL STATEM26
CONSOLIDATED FINANCIAL STATEMENTS Summary of Changes in Financial Statement Presentation (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Business Acquisition [Line Items] | ||||
Net periodic benefit cost | $ 21 | $ 21 | ||
Asbestos-related payments | (92) | (39) | ||
Other assets and liabilities | (67) | (272) | ||
Sundry income (expense) - net | $ (8) | $ (10) | $ 6 | 20 |
Interest income | 0 | 0 | ||
Scenario, Previously Reported [Member] | ||||
Business Acquisition [Line Items] | ||||
Net periodic benefit cost | 0 | |||
Asbestos-related payments | 0 | |||
Other assets and liabilities | (254) | |||
Sundry income (expense) - net | (14) | 10 | ||
Interest income | $ 4 | $ 10 |
Restructuring and Asset Relat27
Restructuring and Asset Related Charges - Net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and asset related charges - net | $ 8 | $ 0 | $ 10 | $ 2 |
Employee Severance [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Payments for Restructuring | (1) | |||
Restructuring Reserve | 7 | $ 7 | ||
Restructuring and asset related charges - net | $ 8 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | |||||
Income Tax Expense (Benefit), Continuing Operations, Adjustment of Deferred Tax (Asset) Liability | $ 97 | ||||
Unrecognized Tax Benefits | 1 | $ 1 | $ 1 | ||
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | $ 1 | 1 | $ 1 | ||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense | $ (2) | $ 82 | |||
Provision (Credit) for income taxes [Member] | |||||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | |||||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense | $ 57 |
INVENTORIES (Schedule of Invent
INVENTORIES (Schedule of Inventories) (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 210 | $ 186 |
Work in process | 44 | 38 |
Raw materials | 53 | 50 |
Supplies | 79 | 87 |
Total | 386 | 361 |
Adjustment of inventories to a LIFO basis | (87) | (54) |
Total inventories | $ 299 | $ 307 |
INTANGIBLE ASSETS (Schedule of
INTANGIBLE ASSETS (Schedule of Amortization Expense of Intangible Assets) (Table and Narrative) (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $ 106 | $ 103 |
Finite-Lived Intangible Assets, Accumulated Amortization | (80) | (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 | 73 | 70 |
Finite-Lived Intangible Assets, Accumulated Amortization | (47) | (45) |
Finite-Lived Intangible Assets, Net | $ 26 | $ 25 |
INTANGIBLE ASSETS (Schedule o31
INTANGIBLE ASSETS (Schedule of Future Amortization Expense of Intangible Assets) (Details) $ in Millions | Sep. 30, 2017USD ($) |
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 | 6 |
Estimated Amortization Expense, 2021 | 4 |
Estimated Amortization Expense, 2022 | $ 2 |
COMMITMENTS AND CONTINGENT LI32
COMMITMENTS AND CONTINGENT LIABILITIES (Environmental Matters) (Narrative) (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Site Contingency [Line Items] | ||
Accrual for Environmental Loss Contingencies | $ 119 | $ 145 |
Super Fund Sites [Member] | ||
Site Contingency [Line Items] | ||
Accrual for Environmental Loss Contingencies | $ 20 | $ 20 |
COMMITMENTS AND CONTINGENT LI33
COMMITMENTS AND CONTINGENT LIABILITIES (Asbestos-Related Matters of Union Carbide Corporation) (Table and Narrative) (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Loss Contingencies [Line Items] | ||
Liability for Asbestos Claims and Defense Costs Gross | $ 1,398 | $ 1,490 |
Percentage of recorded asbestos liability related to pending claims | 15.00% | |
Percentage of recorded asbestos liability related to future claims | 85.00% |
ACCUMULATED OTHER COMPREHENSI34
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | $ 39 | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Union Carbide Corporation's stockholder's equity | $ 1,706 | $ 2,478 | 1,706 | $ 2,478 | $ 1,798 | $ 2,301 |
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | 1 | 32 | ||||
Other Comprehensive Income (Loss), Net of Tax | 13 | 11 | 40 | 32 | ||
AOCI Attributable to Parent [Member] | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Union Carbide Corporation's stockholder's equity | (1,280) | (1,196) | (1,280) | (1,196) | (1,320) | (1,228) |
Other Comprehensive Income (Loss), Net of Tax | 40 | 32 | ||||
Cumulative translation adjustments | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 3 | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Union Carbide Corporation's stockholder's equity | (58) | (61) | (58) | (61) | (62) | (61) |
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | 1 | 0 | ||||
Other Comprehensive Income (Loss), Net of Tax | 4 | 0 | ||||
Pension and other postretirement benefits | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 36 | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Union Carbide Corporation's stockholder's equity | (1,222) | (1,135) | (1,222) | (1,135) | $ (1,258) | $ (1,167) |
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | 0 | 32 | ||||
Other Comprehensive Income (Loss), Net of Tax | 36 | 32 | ||||
Other Comprehensive Income (Loss), Tax | 6 | 6 | 22 | 20 | ||
Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 12 | 11 | 39 | 32 | ||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Cumulative translation adjustments | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||||
Nonoperating Income (Expense) | 0 | 0 | 3 | 0 | ||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Pension and other postretirement benefits | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | 18 | 17 | 58 | 52 | ||
Reclassification from AOCI, Current Period, Tax | (6) | (6) | (22) | (20) | ||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | $ 12 | $ 11 | $ 36 | $ 32 |
PENSION PLANS AND OTHER POSTR35
PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Defined Benefit Pension Plans [Member] | ||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||||
Service cost | $ 10 | $ 9 | $ 28 | $ 27 |
Interest cost | 33 | 33 | 97 | 99 |
Expected return on plan assets | (56) | (54) | (166) | (162) |
Amortization of net (gain) loss | 20 | 19 | 62 | 57 |
Net periodic benefit cost | 7 | 7 | 21 | 21 |
Other Postretirement Benefits [Member] | ||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||||
Interest cost | 2 | 2 | 6 | 6 |
Amortization of net (gain) loss | (2) | (2) | (4) | (5) |
Net periodic benefit cost | $ 0 | $ 0 | $ 2 | $ 1 |
FINANCIAL INSTRUMENTS (Investme
FINANCIAL INSTRUMENTS (Investments) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Financial Instruments [Abstract] | ||
Available-for-sale Securities, Gross Realized Gains (Losses), Sale Proceeds | $ 2 | $ 2 |
FINANCIAL INSTRUMENTS FINANCI37
FINANCIAL INSTRUMENTS FINANCIAL INSTRUMENTS (Fair Value of Financial Instruments) (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Schedule of Available-for-sale Securities [Line Items] | ||
Long-term Debt, Fair Value | $ (609) | $ (571) |
Long-term Debt | (475) | (476) |
Long-term Debt [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Financial Instruments Gross Unrealized Gains | 0 | 0 |
Financial Instruments Gross Unrealized Loss | (134) | (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 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | |||||
Payments of Dividends | $ 531 | $ 455 | |||
The Dow Chemical Company [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related Party Transaction, Expenses from Transactions with Related Party | $ 377 | $ 379 | $ 1,213 | 1,011 | |
Service Fee with Parent | 10.00% | ||||
Notes Receivable, Related Parties | 1,200 | $ 1,200 | $ 1,400 | ||
Line of Credit Facility, Maximum Borrowing Capacity | 1,000 | 1,000 | |||
Line of Credit Facility, Remaining Borrowing Capacity | 949 | 949 | $ 947 | ||
Payments of Dividends | 181 | 55 | 531 | 455 | |
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 | 24 | 21 | |
Cost of Sales [Member] | The Dow Chemical Company [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related Party Transaction, Expenses from Transactions with Related Party | $ 20 | $ 19 | $ 60 | $ 53 |