Cover Page
Cover Page | 3 Months Ended |
Mar. 31, 2021shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Mar. 31, 2021 |
Document Transition Report | false |
Entity File Number | 1-1463 |
Entity Registrant Name | Union Carbide Corporation |
Entity Incorporation, State or Country Code | NY |
Entity Tax Identification Number | 13-1421730 |
Entity Address, Address Line One | 7501 STATE HIGHWAY 185 NORTH |
Entity Address, City or Town | SEADRIFT |
Entity Address, State or Province | TX |
Entity Address, Postal Zip Code | 77983 |
City Area Code | 361 |
Local Phone Number | 553-2997 |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 935.51 |
Entity Central Index Key | 0000100790 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2021 |
Document Fiscal Period Focus | Q1 |
Amendment Flag | false |
Title of 12(b) Security | None |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||
Revenue from Contract with Customer, Including Assessed Tax | $ 34 | $ 29 |
Net sales to related companies | 969 | 1,013 |
Net trade sales | 1,003 | 1,042 |
Cost of sales | 1,037 | 826 |
Research and development expenses | 6 | 6 |
Selling, general and administrative expenses | 3 | 2 |
Restructuring and asset related charges - net | 0 | 2 |
Sundry income (expense) - net | (15) | (18) |
Interest Income, Other | 1 | 7 |
Interest expense and amortization of debt discount | 7 | 8 |
Income before income taxes | (64) | 187 |
Provision for income taxes | (15) | 41 |
Net Income Attributable to Union Carbide Corporation | $ (49) | $ 146 |
Consolidated Statements of In_2
Consolidated Statements of Income - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Supplemental Income Statement Elements [Abstract] | ||
Depreciation | $ 41 | $ 45 |
Capital expenditures | $ 23 | $ 33 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) attributable to Union Carbide Corporation | $ (49) | $ 146 |
Cumulative translation adjustments | 0 | 3 |
Pension and other postretirement benefit plans | 84 | 20 |
Total other comprehensive income | 84 | 23 |
Comprehensive income attributable to Union Carbide Corporation | $ 35 | $ 169 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Cash and Cash Equivalents, at Carrying Value | $ 11 | $ 11 |
Trade (net of allowance for doubtful receivables 2020: $-; 2019: $-) | 24 | 26 |
Related companies | 709 | 698 |
Other | 35 | 27 |
Income taxes receivable | 375 | 337 |
Notes receivable from related companies | 1,055 | 1,660 |
Inventories | 248 | 223 |
Other current assets | 19 | 17 |
Total current assets | 2,476 | 2,999 |
Investments in related companies | 237 | 237 |
Other investments | 22 | 22 |
Noncurrent receivables | 129 | 124 |
Noncurrent receivables from related companies | 68 | 66 |
Total investments | 456 | 449 |
Property | 7,111 | 7,089 |
Less accumulated depreciation | 5,865 | 5,824 |
Net property | 1,246 | 1,265 |
Intangible assets (net of accumulated amortization 2020: $92; 2019: $90) | 15 | 16 |
Operating lease right-of-use assets | 119 | 123 |
Deferred Tax Assets, Deferred Income | 472 | 494 |
Deferred charges and other assets | 38 | 29 |
Total other assets | 644 | 662 |
Total Assets | 4,822 | 5,375 |
Notes payable - related companies | 29 | 33 |
Long-term debt due within one year | 2 | 2 |
Trade | 260 | 229 |
Related companies | 533 | 409 |
Other | 16 | 28 |
Operating lease liabilities - current | 19 | 19 |
Income taxes payable | 22 | 23 |
Asbestos-related liabilities - current | 85 | 85 |
Accrued and other current liabilities | 127 | 139 |
Total current liabilities | 1,093 | 967 |
Long-Term Debt | 391 | 391 |
Pension and other postretirement benefits - noncurrent | 680 | 1,340 |
Asbestos-related liabilities - noncurrent | 995 | 1,013 |
Operating lease liabilities - noncurrent | 101 | 105 |
Other noncurrent obligations | 209 | 201 |
Liabilities, Other than Long-term Debt, Noncurrent | 1,985 | 2,659 |
Common stock (authorized: 1,000 shares of $0.01 par value each; issued: 935.51 shares) | 0 | 0 |
Additional paid-in capital | 141 | 141 |
Retained earnings | 2,898 | 2,987 |
Accumulated other comprehensive loss | (1,686) | (1,770) |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 1,353 | 1,358 |
Total Liabilities and Equity | $ 4,822 | $ 5,375 |
Consolidated Balance Sheets Par
Consolidated Balance Sheets Parentheticals - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 0 | $ 0 |
Finite-Lived Intangible Assets, Accumulated Amortization | $ 99 | $ 97 |
Common stock, shares authorized | 1,000 | 1,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares issued | 935.51 | 935.51 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Cash Flows [Abstract] | ||
Net income (loss) attributable to Union Carbide Corporation | $ (49) | $ 146 |
Depreciation and amortization | 51 | 52 |
Provision (credit) for deferred income tax | (4) | 1 |
Gain (Loss) on Disposition of Property Plant Equipment, Excluding Oil and Gas Property and Timber Property | (1) | (1) |
Restructuring and asset related charges - net | 0 | 2 |
Net periodic pension benefit cost | (1) | 14 |
Pension contributions | (547) | (1) |
Other Noncash Income | (1) | (1) |
Accounts and notes receivable | (6) | 1 |
Related company receivables | 594 | (48) |
Inventories | (34) | 4 |
Accounts payable | 19 | 3 |
Related company payables | 120 | (95) |
Asbestos-related payments | (18) | (18) |
Increase (Decrease) in Other Operating Assets and Liabilities, Net | (58) | 53 |
Cash provided by operating activities | 65 | 112 |
Capital expenditures | (23) | (33) |
Change in noncurrent receivable from related company | (2) | 0 |
Cash used for investing activities | (25) | (33) |
Dividends paid to parent | (40) | (81) |
Changes in short-term notes payable | 0 | 2 |
Cash used for financing activities | (40) | (79) |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect, Total | 0 | 0 |
Cash and cash equivalents at beginning of period | 11 | 11 |
Cash and cash equivalents at end of period | $ 11 | $ 11 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) $ in Millions | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ 0 | $ 141 | $ 2,922 | $ (1,665) | |
Net income (loss) attributable to Union Carbide Corporation | $ 146 | 146 | |||
Dividends, Common Stock | (81) | ||||
Other Comprehensive Income (Loss), Net of Tax | (23) | 23 | |||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 1,486 | 0 | 141 | 2,987 | (1,642) |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 1,358 | 0 | 141 | 2,987 | (1,770) |
Net income (loss) attributable to Union Carbide Corporation | (49) | (49) | |||
Dividends, Common Stock | (40) | ||||
Other Comprehensive Income (Loss), Net of Tax | (84) | 84 | |||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ 1,353 | $ 0 | $ 141 | $ 2,898 | $ (1,686) |
CONSOLIDATED FINANCIAL STATEMEN
CONSOLIDATED FINANCIAL STATEMENTS | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | 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. 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, 2020 ("2020 10-K"). The Corporation is a wholly owned subsidiary of The Dow Chemical Company ("TDCC"). 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 TDCC’s global operations rather than stand-alone operations. TDCC conducts its worldwide operations through global businesses. Because there are no separate 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, TDCC, and other subsidiaries of TDCC, have been reflected as related company transactions in the consolidated financial statements. See Note 11 for additional information. |
RECENT ACCOUNTING GUIDANCE
RECENT ACCOUNTING GUIDANCE | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Changes and Error Corrections [Abstract] | |
Accounting Standards Update and Change in Accounting Principle | RECENT ACCOUNTING GUIDANCE Recently Adopted Accounting Guidance In the first quarter of 2021, the Corporation adopted Accounting Standards Update 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes." The amendments simplify the accounting for income taxes by removing certain exceptions to the general principles of Topic 740, "Income Taxes" and improve consistent application by clarifying and amending existing guidance. The adoption of this guidance did not have a material impact on the consolidated financial statements. |
REVENUE FROM CONTRACT WITH CUST
REVENUE FROM CONTRACT WITH CUSTOMERS | 3 Months Ended |
Mar. 31, 2021 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Revenue from Contract with Customer [Text Block] | REVENUE Substantially all of the Corporation's revenue is generated by sales to TDCC. Products are sold to and purchased from TDCC at prices determined in accordance with the terms of an agreement between UCC and TDCC. The Corporation's revenue related to sales of product was approximately 99 percent for the three months ended March 31, 2021 (99 percent for the three months ended March 31, 2020); the remaining revenue primarily related to the licensing of patents and technology. The Corporation sells its products to TDCC to simplify the customer interface process. The Corporation’s contract liabilities include payments received in advance of performance under long-term contracts for product sales and royalties with remaining contract terms that range up to 20 years. Amounts are recognized in revenue when the performance obligations for the contract are met. The Corporation has rights to additional consideration when product is delivered to the customer. The balance of contract liabilities was $40 million at March 31, 2021 ($40 million at December 31, 2020), of which $5 million ($5 million at December 31, 2020) was included in "Accrued and other current liabilities" and $35 million ($35 million at December 31, 2020) was included in "Other noncurrent obligations" in the consolidated balance sheets. The Corporation disaggregates its revenue from contracts with customers by type of customer (sales to related parties and sales to trade customers) as presented in the consolidated statements of income and believes this disaggregation best depicts the nature, amount, timing and uncertainty of its revenue and cash flows. Substantially all of the product sales are made to the Corporation's parent company, TDCC, and there are no unique economic factors that affect revenue recognition and cash flows associated with these product sales. |
INVENTORIES
INVENTORIES | 3 Months Ended |
Mar. 31, 2021 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES The following table provides a breakdown of inventories: Inventories Mar 31, 2021 Dec 31, 2020 In millions Finished goods $ 216 $ 157 Work in process 29 23 Raw materials 45 38 Supplies 86 98 Total $ 376 $ 316 Adjustment of inventories to a LIFO basis (128) (93) Total inventories $ 248 $ 223 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2021 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
INTANGIBLE ASSETS DISCLOSURE | INTANGIBLE ASSETS The following table provides information regarding the Corporation’s intangible assets: Intangible Assets Mar 31, 2021 Dec 31, 2020 In millions Gross Accum Amort Net Gross Accum Amort Net Intangible assets with finite lives: Developed technology $ 33 $ (33) $ — $ 33 $ (33) $ — Software 81 (66) 15 80 (64) 16 Total intangible assets $ 114 $ (99) $ 15 $ 113 $ (97) $ 16 Total estimated amortization expense for 2021 and the five succeeding fiscal years, including amounts expected to be capitalized, is as follows: Estimated Amortization Expense In millions 2021 $ 6 2022 $ 5 2023 $ 3 2024 $ 1 2025 $ 1 2026 $ — |
COMMITMENTS AND CONTINGENT LIAB
COMMITMENTS AND CONTINGENT LIABILITIES | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES DISCLOSURE | COMMITMENTS AND CONTINGENT LIABILITIES A summary of the Corporation's commitments and contingent liabilities can be found in Note 14 to the Consolidated Financial Statements included in the 2020 10-K, which is incorporated by reference herein. 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, 2021, the Corporation had accrued obligations of $142 million for probable environmental remediation and restoration costs, including $19 million for the remediation of Superfund sites. These obligations are included in "Accrued and other current liabilities" and "Other noncurrent obligations" in the consolidated balance sheets. This is management’s best estimate of the costs for remediation and restoration with respect to environmental matters for which the Corporation has accrued liabilities, although it is reasonably possible that the ultimate cost with respect to these particular matters could range up to approximately two and a half times that amount. Consequently, it is reasonably possible that environmental remediation and restoration costs in excess of amounts accrued could have a material impact on the Corporation's results of operations, financial condition and cash flows. It is the opinion of the Corporation’s management that the possibility is remote that costs in excess of the range disclosed will have a material impact on the Corporation’s results of operations, financial condition and cash flows. Inherent uncertainties exist in these estimates primarily due to unknown environmental conditions, changing governmental regulations and legal standards regarding liability, and emerging remediation technologies for handling site remediation and restoration. As new or additional information becomes available and/or certain spending trends become known, management will evaluate such information in determination of the current estimate of the environmental liability. At December 31, 2020, the Corporation had accrued obligations of $133 million for probable environmental remediation and restoration costs, including $18 million for the remediation of Superfund sites. Litigation Asbestos-Related Matters 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 these factors in conjunction with the most recent actuarial study and determines whether a change in the estimate is warranted. Based on the Corporation's review of 2021 activity, it was determined that no adjustment to the accrual was required at March 31, 2021. The Corporation’s total asbestos-related liability for pending and future claims and defense and processing costs was $1,080 million at March 31, 2021 ($1,098 million at December 31, 2020), and was included in “Asbestos-related liabilities - current” and “Asbestos-related liabilities - noncurrent” in the consolidated balance sheets. At March 31, 2021, approximately 24 percent of the recorded claim liability related to pending claims and approximately 76 percent related to future claims. |
LEASES (Notes)
LEASES (Notes) | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Leases | LEASES For additional information on the Corporation's leases, see Note 15 to the Consolidated Financial Statements included in the 2020 10-K. The components of lease cost for operating and finance leases for the three months ended March 31, 2021 and 2020 were as follows: Lease Cost Three Months Ended In millions Mar 31, 2021 Mar 31, 2020 Operating lease cost $ 5 $ 5 Short-term lease cost 6 6 Variable lease cost 2 2 Total lease cost $ 13 $ 13 The following table provides supplemental cash flow information related to leases: Other Lease Information Three Months Ended In millions Mar 31, 2021 Mar 31, 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 5 $ 5 The following table summarizes the lease-related assets and liabilities recorded in the consolidated balance sheets at March 31, 2021 and December 31, 2020: Lease Position Balance Sheet Classification Mar 31, 2021 Dec 31, 2020 In millions Right-of-use assets obtained in exchange for lease obligations: Operating leases $ — $ 48 Finance leases $ — $ 3 Assets Operating lease assets Operating lease right-of-use assets $ 119 $ 123 Finance lease assets Property 15 15 Finance lease amortization Accumulated depreciation (9) (8) Total lease assets $ 125 $ 130 Liabilities Current Operating Operating lease liabilities - current $ 19 $ 19 Finance Long-term debt due within one year 2 2 Noncurrent Operating Operating lease liabilities - noncurrent 101 105 Finance Long-term debt 4 5 Total lease liabilities $ 126 $ 131 The weighted-average remaining lease term and discount rate for leases recorded in the consolidated balance sheets at March 31, 2021 and December 31, 2020 are provided below: Lease Term and Discount Rate Mar 31, 2021 Dec 31, 2020 Weighted-average remaining lease term Operating leases 7.3 years 7.5 years Finance leases 3.2 years 3.4 years Weighted-average discount rate Operating leases 3.27 % 3.28 % Finance leases 3.62 % 3.62 % The following table provides the maturities of lease liabilities at March 31, 2021: Maturities of Lease Liabilities Mar 31, 2021 Operating Leases Finance Leases In millions 2021 $ 17 $ 2 2022 22 2 2023 20 2 2024 20 1 2025 18 — 2026 and thereafter 38 — Total future undiscounted lease payments $ 135 $ 7 Less: Imputed interest 15 1 Total present value of lease liabilities $ 120 $ 6 |
AOCL
AOCL | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | ACCUMULATED OTHER COMPREHENSIVE LOSS The changes in the balances for each component of accumulated other comprehensive loss ("AOCL") for the three months ended March 31, 2021 and 2020 were as follows: Accumulated Other Comprehensive Loss Three Months Ended In millions Mar 31, 2021 Mar 31, 2020 Cumulative Translation Adjustment Beginning balance $ (55) $ (56) Unrealized gains (losses) on foreign currency translation — 3 Ending balance $ (55) $ (53) Pension and Other Postretirement Benefits Beginning balance $ (1,715) $ (1,609) Gains (losses) arising during the period 1 87 — Less: Tax (expense) benefit (20) — Net gains (losses) arising during the period 67 — Amortization and recognition of net loss 2 22 26 Less: Tax expense (benefit) 3 (5) (6) Net loss reclassified from AOCL to net income (loss) 17 20 Other comprehensive income (loss), net of tax 84 20 Ending balance $ (1,631) $ (1,589) Total AOCL ending balance $ (1,686) $ (1,642) 1. See Note 9 for additional information. 2. These AOCL components are included in the computation of net periodic benefit cost (credit) of the Corporation's defined benefit pension and other postretirement benefit plans. See Note 9 for additional information. 3. Reclassified to "Provision (credit) for income taxes." |
PENSION PLANS AND OTHER POSTRET
PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS | 3 Months Ended |
Mar. 31, 2021 | |
Retirement Benefits [Abstract] | |
Pension and Other Postretirement Benefits Disclosure [Text Block] | PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS A summary of the Corporation's pension and other postretirement benefit plans can be found in Note 17 to the Consolidated Financial Statements included in the 2020 10-K. On March 4, 2021, TDCC announced changes to the design of its U.S. tax-qualified and non-qualified pension plans, including the plans of the Corporation (the “UCC Plans”). Effective December 31, 2023 (“Effective Date”), the Corporation will freeze the pensionable compensation and credited service amounts used to calculate pension benefits for employees who participate in the UCC Plans. As a result, at the Effective Date and subject to any bargaining obligations required by law, active participants of the UCC Plans will not accrue additional benefits for future service and compensation. Additionally, contributions to U.S. tax-qualified and non-qualified defined contribution plans will be harmonized across the U.S. eligible employee population of TDCC and its consolidated subsidiaries. The new matching contribution, beginning January 1, 2022, will allow all eligible U.S. employees to receive matching contributions of up to 5 percent of their eligible compensation. In addition, beginning on January 1, 2024, all eligible U.S. employees will receive an automatic non-elective contribution of 4 percent of eligible compensation to their respective defined contribution plans. The Corporation's funding policy is to contribute to pension plans when pension laws and/or economics either require or encourage funding. On March 4, 2021, the Corporation elected to contribute $545 million to its tax-qualified pension plan, funded by the Corporation's notes receivable from TDCC, and, as a result, increased its estimated total 2021 pension contributions to approximately $550 million, of which $547 million has been contributed through March 31, 2021. In connection with the foregoing plan amendments, the Corporation remeasured the UCC Plans effective February 28, 2021, which resulted in a pretax actuarial gain of $87 million, reflected in other comprehensive income and inclusive of a $14 million reduction in the projected benefit obligation resulting from the plan amendments, and a pretax curtailment gain of $7 million, recognized in the first quarter of 2021. The following table provides the components of the Corporation's net periodic benefit cost (credit) for all significant plans: Net Periodic Benefit Cost (Credit) for All Significant Plans Three Months Ended In millions Mar 31, 2021 Mar 31, 2020 Defined Benefit Pension Plans Service cost $ 8 $ 9 Interest cost 19 28 Expected return on plan assets (51) (50) Amortization of net loss 30 27 Curtailment gain (7) — Net periodic benefit cost (credit) $ (1) $ 14 Other Postretirement Benefit Plan Interest cost $ 1 $ 1 Amortization of net gain (1) (1) Net periodic benefit cost $ — $ — Net periodic benefit cost (credit), other than the service cost component, is included in "Sundry income (expense) - net" in the consolidated statements of income. |
Fair Value Measures and Disclos
Fair Value Measures and Disclosures | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments Disclosure [Text Block] | FAIR VALUE MEASUREMENTS The Corporation's financial instruments are classified as Level 2 measurements. For assets and liabilities classified as Level 2 measurements, where the security is 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 and quality checks. The following table summarizes the fair value of the Corporation's financial instruments at March 31, 2021 and December 31, 2020: Fair Value of Financial Instruments Mar 31, 2021 Dec 31, 2020 In millions Cost Gain Loss Fair Value Cost Gain Loss Fair Value Cash equivalents 1 $ 10 $ — $ — $ 10 $ 10 $ — $ — $ 10 Long-term debt including debt due within one year $ (393) $ — $ (114) $ (507) $ (393) $ — $ (120) $ (513) 1. Money market fund is included in "Cash and cash equivalents" in the consolidated balance sheets and held at amortized cost, which approximates fair value. Cost approximates fair value for all other financial instruments. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS DISCLOSURE | RELATED PARTY TRANSACTIONS A summary of the Corporation's related party transactions can be found in Note 19 to the Consolidated Financial Statements included in the 2020 10-K. Product and Services Agreements The following table summarizes UCC’s transactions with TDCC and a TDCC subsidiary related to product and services agreements for the three months ended March 31, 2021 and 2020: Product and Services Agreements Transactions Three Months Ended Mar 31, 2021 Mar 31, 2020 Income Statement Classification In millions TDCC Subsidiary: Commodity and raw materials purchases 1 $ 483 $ 231 Cost of sales Commission expense $ 6 $ 5 Sundry income (expense) - net TDCC: General administrative and overhead type services and service fee 2 $ 17 $ 8 Sundry income (expense) - net Activity-based costs $ 19 $ 23 Cost of sales 1. Period-end balances on hand are included in inventory. The increase in purchase costs was primarily due to higher feedstock and energy costs, which reflect the impacts of Winter Storm Uri. 2. The increase in services and fees resulted from TDCC's periodic review of the actual cost of services provided to UCC in accordance with related agreements. Dividends The following table summarizes cash dividends declared and paid to TDCC for the three months ended March 31, 2021 and 2020: Cash Dividends Declared and Paid Three Months Ended Mar 31, 2021 Mar 31, 2020 In millions Cash dividends declared and paid $ 40 $ 81 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current [Table Text Block] | The following table provides a breakdown of inventories: Inventories Mar 31, 2021 Dec 31, 2020 In millions Finished goods $ 216 $ 157 Work in process 29 23 Raw materials 45 38 Supplies 86 98 Total $ 376 $ 316 Adjustment of inventories to a LIFO basis (128) (93) Total inventories $ 248 $ 223 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Intangible Assets | The following table provides information regarding the Corporation’s intangible assets: Intangible Assets Mar 31, 2021 Dec 31, 2020 In millions Gross Accum Amort Net Gross Accum Amort Net Intangible assets with finite lives: Developed technology $ 33 $ (33) $ — $ 33 $ (33) $ — Software 81 (66) 15 80 (64) 16 Total intangible assets $ 114 $ (99) $ 15 $ 113 $ (97) $ 16 |
Schedule of Expected Amortization Expense [Table Text Block] | Total estimated amortization expense for 2021 and the five succeeding fiscal years, including amounts expected to be capitalized, is as follows: Estimated Amortization Expense In millions 2021 $ 6 2022 $ 5 2023 $ 3 2024 $ 1 2025 $ 1 2026 $ — |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Lease, Cost [Table Text Block] | The components of lease cost for operating and finance leases for the three months ended March 31, 2021 and 2020 were as follows: Lease Cost Three Months Ended In millions Mar 31, 2021 Mar 31, 2020 Operating lease cost $ 5 $ 5 Short-term lease cost 6 6 Variable lease cost 2 2 Total lease cost $ 13 $ 13 |
Schedule of Supplemental Cash Flow Information Related to Leases [Table Text Block] | The following table provides supplemental cash flow information related to leases: Other Lease Information Three Months Ended In millions Mar 31, 2021 Mar 31, 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 5 $ 5 |
Schedule of Lease Assets and Liabilities [Table Text Block] | The following table summarizes the lease-related assets and liabilities recorded in the consolidated balance sheets at March 31, 2021 and December 31, 2020: Lease Position Balance Sheet Classification Mar 31, 2021 Dec 31, 2020 In millions Right-of-use assets obtained in exchange for lease obligations: Operating leases $ — $ 48 Finance leases $ — $ 3 Assets Operating lease assets Operating lease right-of-use assets $ 119 $ 123 Finance lease assets Property 15 15 Finance lease amortization Accumulated depreciation (9) (8) Total lease assets $ 125 $ 130 Liabilities Current Operating Operating lease liabilities - current $ 19 $ 19 Finance Long-term debt due within one year 2 2 Noncurrent Operating Operating lease liabilities - noncurrent 101 105 Finance Long-term debt 4 5 Total lease liabilities $ 126 $ 131 |
Lease Terms and Discount Rates [Table Text Block] | The weighted-average remaining lease term and discount rate for leases recorded in the consolidated balance sheets at March 31, 2021 and December 31, 2020 are provided below: Lease Term and Discount Rate Mar 31, 2021 Dec 31, 2020 Weighted-average remaining lease term Operating leases 7.3 years 7.5 years Finance leases 3.2 years 3.4 years Weighted-average discount rate Operating leases 3.27 % 3.28 % Finance leases 3.62 % 3.62 % |
Maturities of Lease Liabilities [Table Text Block] | The following table provides the maturities of lease liabilities at March 31, 2021: Maturities of Lease Liabilities Mar 31, 2021 Operating Leases Finance Leases In millions 2021 $ 17 $ 2 2022 22 2 2023 20 2 2024 20 1 2025 18 — 2026 and thereafter 38 — Total future undiscounted lease payments $ 135 $ 7 Less: Imputed interest 15 1 Total present value of lease liabilities $ 120 $ 6 |
AOCL (Tables)
AOCL (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Schedule of Components of Other Comprehensive Income (Loss) | The changes in the balances for each component of accumulated other comprehensive loss ("AOCL") for the three months ended March 31, 2021 and 2020 were as follows: Accumulated Other Comprehensive Loss Three Months Ended In millions Mar 31, 2021 Mar 31, 2020 Cumulative Translation Adjustment Beginning balance $ (55) $ (56) Unrealized gains (losses) on foreign currency translation — 3 Ending balance $ (55) $ (53) Pension and Other Postretirement Benefits Beginning balance $ (1,715) $ (1,609) Gains (losses) arising during the period 1 87 — Less: Tax (expense) benefit (20) — Net gains (losses) arising during the period 67 — Amortization and recognition of net loss 2 22 26 Less: Tax expense (benefit) 3 (5) (6) Net loss reclassified from AOCL to net income (loss) 17 20 Other comprehensive income (loss), net of tax 84 20 Ending balance $ (1,631) $ (1,589) Total AOCL ending balance $ (1,686) $ (1,642) 1. See Note 9 for additional information. 2. These AOCL components are included in the computation of net periodic benefit cost (credit) of the Corporation's defined benefit pension and other postretirement benefit plans. See Note 9 for additional information. 3. Reclassified to "Provision (credit) for income taxes." |
PENSION PLANS AND OTHER POSTR_2
PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Retirement Benefits [Abstract] | |
Net Periodic Benefit Cost for All Significant Plans | The following table provides the components of the Corporation's net periodic benefit cost (credit) for all significant plans: Net Periodic Benefit Cost (Credit) for All Significant Plans Three Months Ended In millions Mar 31, 2021 Mar 31, 2020 Defined Benefit Pension Plans Service cost $ 8 $ 9 Interest cost 19 28 Expected return on plan assets (51) (50) Amortization of net loss 30 27 Curtailment gain (7) — Net periodic benefit cost (credit) $ (1) $ 14 Other Postretirement Benefit Plan Interest cost $ 1 $ 1 Amortization of net gain (1) (1) Net periodic benefit cost $ — $ — |
Fair Value Measures and Discl_2
Fair Value Measures and Disclosures (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value, by Balance Sheet Grouping [Table Text Block] | The following table summarizes the fair value of the Corporation's financial instruments at March 31, 2021 and December 31, 2020: Fair Value of Financial Instruments Mar 31, 2021 Dec 31, 2020 In millions Cost Gain Loss Fair Value Cost Gain Loss Fair Value Cash equivalents 1 $ 10 $ — $ — $ 10 $ 10 $ — $ — $ 10 Long-term debt including debt due within one year $ (393) $ — $ (114) $ (507) $ (393) $ — $ (120) $ (513) 1. Money market fund is included in "Cash and cash equivalents" in the consolidated balance sheets and held at amortized cost, which approximates fair value. |
Related Party Disclosures (Tabl
Related Party Disclosures (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The following table summarizes UCC’s transactions with TDCC and a TDCC subsidiary related to product and services agreements for the three months ended March 31, 2021 and 2020: Product and Services Agreements Transactions Three Months Ended Mar 31, 2021 Mar 31, 2020 Income Statement Classification In millions TDCC Subsidiary: Commodity and raw materials purchases 1 $ 483 $ 231 Cost of sales Commission expense $ 6 $ 5 Sundry income (expense) - net TDCC: General administrative and overhead type services and service fee 2 $ 17 $ 8 Sundry income (expense) - net Activity-based costs $ 19 $ 23 Cost of sales 1. Period-end balances on hand are included in inventory. The increase in purchase costs was primarily due to higher feedstock and energy costs, which reflect the impacts of Winter Storm Uri. |
Dividends Declared | The following table summarizes cash dividends declared and paid to TDCC for the three months ended March 31, 2021 and 2020: Cash Dividends Declared and Paid Three Months Ended Mar 31, 2021 Mar 31, 2020 In millions Cash dividends declared and paid $ 40 $ 81 |
Revenue from Contract with Cu_2
Revenue from Contract with Customer (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Revenue from External Customer [Line Items] | |||
Revenue, Percentage from Products and Services Transferred to Customers | 99.00% | 99.00% | |
Contract with Customer, Liability | $ 40 | $ 40 | |
Accrued Liabilities [Member] | |||
Revenue from External Customer [Line Items] | |||
Contract with Customer, Liability, Current | 5 | 5 | |
Other Noncurrent Liabilities [Member] | |||
Revenue from External Customer [Line Items] | |||
Contract with Customer, Liability, Noncurrent | $ 35 | $ 35 | |
Maximum [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-01 | |||
Revenue from External Customer [Line Items] | |||
Revenue, Performance Obligation, Description of Timing | 20 years |
INVENTORIES (Schedule of Invent
INVENTORIES (Schedule of Inventories) (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 216 | $ 157 |
Work in process | 29 | 23 |
Raw materials | 45 | 38 |
Supplies | 86 | 98 |
Inventory, Gross | 376 | 316 |
Inventory Adjustments | (128) | (93) |
Total inventories | $ 248 | $ 223 |
INTANGIBLE ASSETS (Schedule of
INTANGIBLE ASSETS (Schedule of Amortization Expense of Intangible Assets) (Table and Narrative) (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Finite-Lived Intangible Assets, Gross | $ 114 | $ 113 |
Finite-Lived Intangible Assets, Accumulated Amortization | (99) | (97) |
Finite-Lived Intangible Assets, Net | 15 | 16 |
Developed Technology Rights | ||
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, Gross | 81 | 80 |
Finite-Lived Intangible Assets, Accumulated Amortization | (66) | (64) |
Finite-Lived Intangible Assets, Net | $ 15 | $ 16 |
INTANGIBLE ASSETS (Schedule o_2
INTANGIBLE ASSETS (Schedule of Future Amortization Expense of Intangible Assets) (Details) $ in Millions | Mar. 31, 2021USD ($) |
Estimated Amortization Expense, 2020 | $ 6 |
Estimated Amortization Expense, 2021 | 5 |
Estimated Amortization Expense, 2022 | 3 |
Estimated Amortization Expense, 2023 | 1 |
Estimated Amortization Expense, 2024 | 1 |
Estimated Amortization Expense, 2025 | $ 0 |
COMMITMENTS AND CONTINGENT LI_2
COMMITMENTS AND CONTINGENT LIABILITIES (Environmental Matters) (Narrative) (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Site Contingency [Line Items] | ||
Accrual for Environmental Loss Contingencies | $ 142 | $ 133 |
Super Fund Sites [Member] | ||
Site Contingency [Line Items] | ||
Accrual for Environmental Loss Contingencies | $ 19 | $ 18 |
COMMITMENTS AND CONTINGENT LI_3
COMMITMENTS AND CONTINGENT LIABILITIES (Asbestos-Related Matters of Union Carbide Corporation) (Table and Narrative) (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Loss Contingencies [Line Items] | ||
Liability for Asbestos Claims and Defense Costs Gross | $ 1,080 | $ 1,098 |
Percentage of recorded asbestos liability related to pending claims | 24.00% | |
Percentage of recorded asbestos liability related to future claims | 76.00% |
LEASES (Details)
LEASES (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Operating Lease Cost | $ 5 | $ 5 | |
Short-term Lease Cost | 6 | 6 | |
Variable Lease, Cost | 2 | 2 | |
Lease, Cost | 13 | 13 | |
Operating cash flows for operating leases | 5 | $ 5 | |
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | 0 | $ 48 | |
Right-of-Use Asset Obtained in Exchange for Finance Lease Liability | 0 | 3 | |
Operating lease right-of-use assets | 119 | 123 | |
Finance Lease, Right-of-Use Asset | 15 | 15 | |
Accumulated depreciation | (5,865) | (5,824) | |
Total Lease Assets | 125 | 130 | |
Operating lease liabilities - current | 19 | 19 | |
Finance Lease, Liability, Current | 2 | 2 | |
Operating lease liabilities - noncurrent | 101 | 105 | |
Finance Lease, Liability, Noncurrent | 4 | 5 | |
Total Lease Liabilities | $ 126 | $ 131 | |
Operating Lease, Weighted Average Remaining Lease Term | 7 years 3 months 18 days | 7 years 6 months | |
Finance Lease, Weighted Average Remaining Lease Term | 3 years 2 months 12 days | 3 years 4 months 24 days | |
Operating Lease, Weighted Average Discount Rate, Percent | 3.27% | 3.28% | |
Finance Lease, Weighted Average Discount Rate, Percent | 3.62% | 3.62% | |
Lessee, Operating Lease, Liability, Payments, Remainder of 2020 | $ 17 | ||
Finance Lease, Liability, Payments, Due 2020 | 2 | ||
Lessee, Operating Lease, Liability, Payments, Due 2021 | 22 | ||
Finance Lease, Liability, Payments, Due 2021 | 2 | ||
Lessee, Operating Lease, Liability, Payments, Due 2022 | 20 | ||
Finance Lease, Liability, Payments, Due 2022 | 2 | ||
Lessee, Operating Lease, Liability, Payments, Due 2023 | 20 | ||
Finance Lease, Liability, Payments, Due 2023 | 1 | ||
Lessee, Operating Lease, Liability, Payments, Due 2024 | 18 | ||
Finance Lease, Liability, Payments, Due 2024 | 0 | ||
Lessee, Operating Lease, Liability, Payments, Due 2025 and thereafter | 38 | ||
Finance Lease, Liability, Payments, Due 2025 and thereafter | 0 | ||
Lessee, Operating Lease, Liability, Payments, Due | 135 | ||
Finance Lease, Liability, Payment, Due | 7 | ||
Lessee, Operating Lease, Liability, Undiscounted Excess Amount | 15 | ||
Finance Lease, Liability, Undiscounted Excess Amount | 1 | ||
Operating Lease, Liability | 120 | ||
Finance Lease, Liability | 6 | ||
finance leases [Member] | |||
Accumulated depreciation | $ (9) | $ (8) |
AOCL (Details)
AOCL (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Accumulated other comprehensive loss | $ (1,686) | $ (1,642) | $ (1,770) | |
Other Comprehensive Income (Loss), Net of Tax | (84) | (23) | ||
Accumulated Foreign Currency Adjustment Attributable to Parent [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Accumulated other comprehensive loss | (55) | (53) | (55) | $ (56) |
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | 0 | 3 | ||
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Accumulated other comprehensive loss | (1,631) | (1,589) | $ (1,715) | $ (1,609) |
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | 67 | 0 | ||
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | 22 | 26 | ||
Reclassification from AOCI, Current Period, Tax | (5) | (6) | ||
Other Comprehensive Income (Loss), Net of Tax | 84 | 20 | ||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 17 | 20 | ||
Other Comprehensive Income (Loss), before Reclassifications, before Tax | 87 | 0 | ||
Other Comprehensive Income (Loss) before Reclassifications, Tax | $ (20) | $ 0 |
PENSION PLANS AND OTHER POSTR_3
PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS (Details) - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended | |
Feb. 28, 2021 | Mar. 31, 2021 | Mar. 31, 2020 | |
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay | 5.00% | ||
Qualified Plan | |||
Defined Benefit Plan, Plan Assets, Contributions by Employer | $ 545 | ||
Automatic Non-Elective Contribution | |||
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay | 4.00% | ||
Defined Benefit Pension Plans [Member] | |||
Defined Benefit Plan, Plan Assets, Contributions by Employer | $ 547 | ||
Defined Benefit Plan, Expected Future Employer Contributions, Next Fiscal Year | 550 | ||
Defined Benefit Plan, Benefit Obligation, Actuarial Gain (Loss) | $ 87 | ||
Increase (Decrease) in Obligation, Pension Benefits | (14) | ||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Gain (Loss) Due to Settlement and Curtailment | $ 7 | 7 | $ 0 |
Service cost | 8 | 9 | |
Interest cost | 19 | 28 | |
Defined Benefit Plan, Expected Return (Loss) on Plan Assets | 51 | 50 | |
Defined Benefit Plan, Amortization of Gain (Loss) | (30) | (27) | |
Net periodic benefit cost | (1) | 14 | |
Other Postretirement Benefits [Member] | |||
Interest cost | 1 | 1 | |
Defined Benefit Plan, Amortization of Gain (Loss) | 1 | 1 | |
Net periodic benefit cost | $ 0 | $ 0 |
Fair Value Measures and Discl_3
Fair Value Measures and Disclosures (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Long-term Debt | $ (393) | $ (393) |
Long-term Debt, Fair Value | (507) | (513) |
Long-term Debt [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Financial Instruments Gross Unrealized Gains | 0 | 0 |
Financial Instruments Gross Unrealized Loss | (114) | (120) |
Money Market Funds [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Cash Equivalents, at Carrying Value | 10 | 10 |
Financial Instruments Gross Unrealized Gains | 0 | 0 |
Financial Instruments Gross Unrealized Loss | 0 | 0 |
Cash Equivalents, Fair Value | $ 10 | $ 10 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Related Party Transaction [Line Items] | ||
Payments of Dividends | $ 40 | $ 81 |
The Dow Chemical Company [Member] | ||
Related Party Transaction [Line Items] | ||
Payments of Dividends | 40 | 81 |
Commodity And Raw Material Purchases | Cost of Sales [Member] | The Dow Chemical Company [Member] | ||
Related Party Transaction [Line Items] | ||
Related Party Transaction, Expenses from Transactions with Related Party | 483 | 231 |
Net Commission Expense | Sundry Income (Expense), Net [Member] | The Dow Chemical Company [Member] | ||
Related Party Transaction [Line Items] | ||
Related Party Transaction, Expenses from Transactions with Related Party | 6 | 5 |
General and Administrative Expense | Sundry Income (Expense), Net [Member] | The Dow Chemical Company [Member] | ||
Related Party Transaction [Line Items] | ||
Related Party Transaction, Expenses from Transactions with Related Party | 17 | 8 |
Activity Based Costs | Cost of Sales [Member] | The Dow Chemical Company [Member] | ||
Related Party Transaction [Line Items] | ||
Related Party Transaction, Expenses from Transactions with Related Party | $ 19 | $ 23 |