Other Lease Information
Nine Months Ended
Sep 30, 2019
In millions
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases $ 18
Financing cash flows for finance leases $ 1

~~Union Carbide Corporation and Subsidiaries~~

~~Notes to the Consolidated Financial Statements~~



~~(Unaudited)~~

The following table summarizes the lease-related assets and liabilities recorded in the consolidated balance sheets at ~~September 30,~~March 31, 2020 and December 31, 2019:

Lease Position Balance Sheet Classification Sep 30, 2019
In millions
Right-of-use assets obtained in exchange for lease obligations:
Operating leases ¹
$ 105
Assets
Operating lease assets Operating lease right-of-use assets $ 93
Finance lease assets Property 12
Finance lease amortization Accumulated depreciation (6 )
Total lease assets $ 99
Liabilities
Current
Operating Operating lease liabilities - current $ 18
Finance Long-term debt due within one year 1
Noncurrent
Operating Operating lease liabilities - noncurrent 75
Finance Long-Term Debt 5
Total lease liabilities $ 99


1.	~~Includes $99 million related to the adoption of Topic 842. See Note 2 for additional information.~~



~~Lease Term and Discount Rate~~	~~Sep 30, 2019~~
~~Weighted-average remaining lease term~~
~~Operating leases~~	~~6.4 years~~
~~Finance leases~~	~~4.8 years~~
~~Weighted-average discount rate~~
~~Operating leases~~	~~4.23~~	%
~~Finance leases~~	~~4.22~~	%


Lease Position	Balance Sheet Classification	Mar 31, 2020		Dec 31, 2019
In millions
Right-of-use assets obtained in exchange for lease obligations:
Operating leases ¹		$	3	$	105
Assets
Operating lease assets	Operating lease right-of-use assets	$	86	$	89
Finance lease assets	Property	12		12
Finance lease amortization	Accumulated depreciation	(7)		(6)
Total lease assets		$	91	$	95
Liabilities
Current
Operating	Operating lease liabilities - current	$	15	$	16
Finance	Long-term debt due within one year	1		1
Noncurrent
Operating	Operating lease liabilities - noncurrent	72		74
Finance	Long-Term Debt	4		5
Total lease liabilities		$	92	$	96

1. Includes $99 million for the period ended December 31, 2019 related to the adoption of ASU 2016-02, "Leases (Topic 842)," and the associated ASUs, in the first quarter of 2019.


Lease Term and Discount Rate	Mar 31, 2020		Dec 31, 2019
Weighted-average remaining lease term
Operating leases	6.4 years		6.3 years
Finance leases	4.3 years		4.5 years
Weighted-average discount rate
Operating leases	4.13	%	4.13	%
Finance leases	4.22	%	4.22	%

The following table provides the maturities of lease liabilities at ~~September 30, 2019:~~March 31, 2020:

Maturities of Lease Liabilities at Sep 30, 2019 Operating Leases Finance Leases
In millions
2019 $ 5
$ —
2020 20
2
2021 16
2
2022 15
1
2023 13
1
2024 and thereafter 37
1
Total future undiscounted lease payments $ 106
$ 7
Less imputed interest 13
1
Total present value of lease liabilities $ 93
$ 6


Maturities of Lease Liabilities	Mar 31, 2020
	Operating Leases		Finance Leases
In millions
2020	$	13	$	1
2021	16		2
2022	16		1
2023	14		1
2024	13		1
2025 and thereafter	27		—
Total future undiscounted lease payments	$	99	$	6
Less imputed interest	12		1
Total present value of lease liabilities	$	87	$	5

At ~~September 30, 2019,~~March 31, 2020, the Corporation had an additional ~~lease~~leases of approximately ~~$15~~$16 million for equipment and a rail yard, which ~~has~~had not yet commenced. ~~This lease is~~These leases are expected to commence in 2020 and 2021, with a lease ~~term~~terms of up to 20 years.

Table of Contents

~~Union Carbide Corporation and Subsidiaries~~

~~Notes to the Consolidated Financial Statements~~



~~(Unaudited)~~

~~Future minimum lease payments for operating leases accounted for under ASC 840, "Leases," with remaining non-cancelable terms in excess of one year at December 31, 2018 were as follows:~~

Minimum Lease Commitments at Dec 31, 2018
In millions
2019 $ 18
2020 16
2021 14
2022 13
2023 13
2024 and thereafter 37
Total $ 111

NOTE 109 - ACCUMULATED OTHER COMPREHENSIVE LOSS

The changes in the balances for each component of ~~AOCL~~accumulated other comprehensive loss ("AOCL") for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 2019 ~~and 2018~~ were as follows:

Accumulated Other Comprehensive Loss Three Months Ended Nine Months Ended
In millions Sep 30, 2019 Sep 30, 2018 Sep 30, 2019 Sep 30, 2018
Cumulative Translation Adjustment
Beginning balance $ (57 ) $ (58 ) $ (57 ) $ (59 )
Gains (losses) on foreign currency translation 1
2
1
2
(Gains) losses reclassified from AOCL to net income ¹
—
(1 ) —
—
Other comprehensive income (loss), net of tax 1
1
1
2
Ending balance $ (56 ) $ (57 ) $ (56 ) $ (57 )
Pension and Other Postretirement Benefits

Beginning balance $ (1,475 ) $ (1,514 ) $ (1,504 ) $ (1,293 )
Amortization and recognition of net loss ²
18
21
56
64
Less: Tax expense (benefit) ³
(4 ) (5 ) (13 ) (15 )
Other comprehensive income (loss), net of tax 14
16
43
49
Reclassification of stranded tax effects ⁴
—
—
—
(254 )
Ending balance $ (1,461 ) $ (1,498 ) $ (1,461 ) $ (1,498 )
Total AOCL ending balance $ (1,517 ) $ (1,555 ) $ (1,517 ) $ (1,555 )


1.	~~Reclassified to "Sundry income (expense) - net."~~


2.	These AOCL components are included in the computation of net periodic benefit cost of the Company's defined benefit pension and other postretirement benefit plans. See Note 11 for additional information.


Accumulated Other Comprehensive Loss	Three Months Ended
In millions	Mar 31, 2020		Mar 31, 2019
Cumulative Translation Adjustment
Beginning balance	$	(56)	$	(57)
Gains on foreign currency translation	3		—




Ending balance	$	(53)	$	(57)
Pension and Other Postretirement Benefits
Beginning balance	$	(1,609)	$	(1,504)



Amortization and recognition of net loss ¹	26		19
Less: Tax expense (benefit) ²	(6)		(4)
Other comprehensive income, net of tax	20		15

Ending balance	$	(1,589)	$	(1,489)
Total AOCL ending balance	$	(1,642)	$	(1,546)

1. These AOCL components are included in the computation of net periodic benefit cost of the Corporation's defined benefit pension and other postretirement benefit plans. See Note 10 for additional information.

2. Reclassified to "Provision ~~(credit)~~ for income taxes."


4.	~~Amounts reclassified to retained earnings as a result of the adoption of ASU 2018-02.~~

~~Table of Contents~~

~~Union Carbide Corporation and Subsidiaries~~

~~Notes to the Consolidated Financial Statements~~



~~(Unaudited)~~

NOTE 1110 - PENSION ~~PLANS~~ AND OTHER POSTRETIREMENT ~~BENEFITS~~BENEFIT PLANS

A summary of the Corporation's pension ~~plans~~ and other postretirement ~~benefits~~benefit plans can be found in Note 1517 to the Consolidated Financial Statements included in the Corporation's Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019. The following table provides the components of the Corporation's 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,
2019 Sep 30,
2018 Sep 30,
2019 Sep 30,
2018
Defined Benefit Pension Plans:
Service cost $ 9
$ 10
$ 27
$ 30
Interest cost 36
32
108
96
Expected return on plan assets (52 ) (55 ) (158 ) (164 )
Amortization of net loss 20
24
62
71
Net periodic benefit cost $ 13
$ 11
$ 39
$ 33

Other Postretirement Benefits:
Interest cost $ 2
$ 2
$ 6
$ 5
Amortization of net gain (2 ) (3 ) (6 ) (7 )
Net periodic benefit cost $ —
$ (1 ) $ —
$ (2 )


Net Periodic Benefit Cost for All Significant Plans	Three Months Ended
In millions	Mar 31, 2020		Mar 31, 2019
Defined Benefit Pension Plans:
Service cost	$	9	$	9
Interest cost	28		36
Expected return on plan assets	(50)		(53)
Amortization of net loss	27		21
Net periodic benefit cost	$	14	$	13

Other Postretirement Benefit Plan:
Interest cost	$	1	$	2
Amortization of net gain	(1)		(2)
Net periodic benefit cost	$	—	$	—

Net periodic benefit cost, other than the service cost component, is included in "Sundry income (expense) - net" in the consolidated statements of income.

Table of Contents

NOTE 1211 - 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/quality checks.

The following table summarizes the fair value of the Corporation's financial instruments at ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018:~~2019:

Fair Value of Financial Instruments Sep 30, 2019 Dec 31, 2018
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 $ (474 ) $ —
$ (115 ) $ (589 ) $ (474 ) $ —
$ (67 ) $ (541 )


Fair Value of Financial Instruments	Mar 31, 2020														Dec 31, 2019
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	$	(473)	$	—	$	(51)	$	(524)	$	(474)	$	—	$	(115)	$	(589)

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.

~~Fair Value Measurements on a Nonrecurring Basis~~

In the third quarter of 2019, the Corporation recognized an impairment charge of $75 million resulting from the planned divestiture of its acetone derivatives product line to ALTIVIA Ketones & Additives, LLC. The divestiture includes the Corporation's acetone derivatives related inventory and production assets located in Institute, West Virginia, in addition to the site infrastructure, land and utilities. The assets, classified as Level 3 measurements and valued using unobservable inputs, were written down to zero in the third quarter of 2019, except for inventory, which will be sold at the lower of cost or market. The impairment charge was included in "Restructuring and asset related charges - net" in the consolidated statements of income. See Note 5 for additional information.

~~Table of Contents~~

~~Union Carbide Corporation and Subsidiaries~~

~~Notes to the Consolidated Financial Statements~~



~~(Unaudited)~~

NOTE 1312 - RELATED PARTY TRANSACTIONS

The Corporation sells its products to TDCC to simplify the customer interface process. Products are sold to and purchased from TDCC at market-based prices in accordance with the terms of ~~TDCC’s intercompany pricing policies.~~an agreement between UCC and TDCC. After each quarter, the Corporation and TDCC 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 TDCC subsidiary and pays a commission to that TDCC subsidiary based on the volume and type of commodities and raw materials purchased. The commission expense iswas included in "Sundry income (expense) - net" in the consolidated statements of income. Purchases from that TDCC subsidiary were ~~$247~~$231 million in the ~~third~~first quarter of ~~2019~~2020 ($~~407~~334 million in the ~~third~~first quarter of ~~2018) and $861 million during the first nine months of 2019 ($1,219 million during the first nine months of 2018)~~2019). The decrease in purchase costs ~~for~~in the ~~three and nine months ended 2019~~first quarter of 2020 when compared with the same period last year was primarily due to lower feedstock and energy ~~costs, lower demand and the impact of the separation of the specialty products business. See Note 3 for additional information.~~costs.

The Corporation has a master services agreement with TDCC, whereby TDCC provides services including, but not limited ~~to, accounting, legal,~~to: accounting; legal; treasury (investments, cash management, risk management, insurance)~~, procurement,~~; procurement; human ~~resources, environmental,~~resources; environmental; health and ~~safety~~safety; and business management for UCC. Under the master services agreement with TDCC, general administrative and overhead type services that TDCC 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 $6$8 million in the ~~third~~first quarter of ~~2019~~2020 ($86 million in the ~~third~~first quarter of ~~2018) and $18 million for the first nine months of 2019 ($22 million for the first nine months of 2018)~~2019) 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 ~~$21~~$23 million in the ~~third~~first quarter of ~~2019~~2020 ($23 million in the ~~third~~first quarter of ~~2018) and $65 million for the first nine months of 2019 ($67 million for the first nine months of 2018)~~2019), and were included in "Cost of sales" in the consolidated statements of income.

Management believes the method used for determining expenses charged by TDCC is reasonable. TDCC 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 TDCC’s risk management philosophy, are provided as a service to UCC.

As part of TDCC’s cash management process, UCC is a party to revolving loans with TDCC that have interest rates based on LIBOR (London Interbank Offered Rate) with varying maturities. At ~~September 30, 2019,~~March 31, 2020, the Corporation had a note receivable of $1.5 billion ($~~1.3~~1.5 billion at December 31, ~~2018)~~2019) from TDCC 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.

Table of Contents

The Corporation also has a separate revolving credit agreement with TDCC that allows the Corporation to borrow or obtain credit enhancements up to an aggregate of $1 billion that matures on December 30, ~~2019.~~2020. TDCC 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, 2019,~~March 31, 2020, $936 million was available under the revolving credit agreement ($~~949~~937 million at December 31, ~~2018)~~2019). The cash collateral iswas reported as “Noncurrent receivables from related companies” in the consolidated balance sheets.

On a quarterly basis, the Corporation's ~~board~~Board of ~~directors~~Directors (the "Board") reviews and determines if there will be a dividend distribution to its parent company and sole shareholder, TDCC. 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~~first quarter of 2019, the Corporation declared a cash dividend of $112 million to TDCC, which was paid on October 3, 2019; cash dividends paid to TDCC totaled $338 million for the first nine months of 2019. In the third quarter of 2018,2020, the Corporation declared and paid a cash dividend of ~~$177~~$81 million to ~~TDCC; cash dividends to TDCC totaled $423 million for~~TDCC. In the first ~~nine months~~quarter of ~~2018.~~2019, the Corporation declared and paid a cash dividend of $160 million to TDCC.

~~Also, in~~In the first quarter of 2019, in anticipation of the business separation activities to align ~~the~~TDCC's specialty products business with DowDuPont, UCC issued a stock dividend to TDCC for 63.4 percent of its ownership interest in DIHC, a cost method investment, which totaled $401 million. UCC also distributed assets and liabilities aligned with ~~the~~TDCC's specialty products business for an additional dividend to TDCC of $71 million. See Note 3 for additional information.

~~Table of Contents~~



~~Union Carbide Corporation and Subsidiaries~~

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Pursuant to General Instruction H(1)(a) and (b) for Form 10-Q "Omission of Information by Certain Wholly-Owned Subsidiaries," the Corporation is filing this Form 10-Q with a reduced disclosure format.

References to "TDCC" refer to The Dow Chemical Company and its consolidated subsidiaries, except as otherwise indicated by the context. Union Carbide Corporation (the "Corporation" or "UCC") has been a wholly owned subsidiary of TDCC since 2001. On April 1, 2019, DowDuPont Inc. (“DowDuPont” and effective June 3, 2019, n/k/a DuPont de Nemours, Inc.) completed the separation of its materials science business and Dow Inc. became the direct parent company of TDCC. The separation was contemplated by the merger of equals transaction effective August 31, 2017, under the Agreement and Plan of Merger, dated as of December 11, 2015, as amended on March 31, 2017. TDCC and E. I. du Pont de Nemours and Company and its consolidated subsidiaries ("Historical DuPont") each merged with subsidiaries of DowDuPont, and, as a result, TDCC and Historical DuPont became subsidiaries of DowDuPont (the “Merger”). Subsequent to the Merger, TDCC and Historical DuPont engaged in a series of internal reorganization and realignment steps to realign their businesses into three subgroups: agriculture, materials science and specialty products. This included transferring certain Corporation assets and liabilities aligned with the specialty products business to TDCC (the "Business Separation"). Dow Inc. was formed as a wholly owned subsidiary of DowDuPont to serve as the holding company for the materials science business. UCC remains a wholly owned subsidiary of TDCC.

TDCC conducts its worldwide operations through global businesses. UCC's business activities comprise components of TDCC’s global businesses rather than stand-alone operations. Because there are no separable reportable business segments for UCC and no detailed business information is provided to a chief operating decision maker regarding the Corporation’s stand-alone operations, the Corporation’s results are reported as a single operating segment.

Statement on COVID-19 and Global Oil Supply

The pandemic caused by coronavirus disease 2019 ("COVID-19") was first reported in Wuhan, China in December 2019 and has since spread to all geographic regions where UCC’s products are produced or sold. Financial markets have been volatile in 2020, primarily due to uncertainty with respect to the severity and duration of the pandemic, coupled with a significant drop in oil prices that began in early March 2020, driven by a collapse in demand due to the global spread of COVID-19 combined with increased supply from oil producers.

Dow Inc. (together, with TDCC and its consolidated subsidiaries, “Dow”) directs global safety, crisis management and security protocols for all of Dow’s assets and workforce, which includes the assets and workforce of UCC. UCC’s primary manufacturing operations are in the United States, where efforts to contain the spread of COVID-19 have resulted in significant mitigation measures, including social distancing and stay-at-home mandates, travel restrictions and/or bans, and restricted access to certain corporate facilities and manufacturing sites. The Corporation’s manufacturing facilities in the United States have been designated essential operations by state and local governments and all of UCC’s manufacturing sites and facilities, including its smaller sites in Asia Pacific, continue to operate and are doing so safely, having implemented social distancing and enhanced health, safety and sanitization protocols as directed by Dow’s Crisis Management Teams (“CMTs”). The CMTs

Table of Contents

continue to work closely with site leadership to address the rapidly evolving situation and are adjusting alert levels as warranted on a site by site basis. UCC has also implemented necessary procedures to enable the workforce not essential to site operations to work remotely.

During this public health crisis, UCC is focused on the health and safety of its employees, customers and suppliers around the world and maintaining safe and reliable operations of its manufacturing sites. As many of UCC’s products are essential to critical global infrastructure, it is imperative that the Corporation continues to supply materials science solutions used in vital applications, including medical equipment and infrastructure, such as IV components; medical supplies and hand sanitizer; disposable non-woven plastics, surgical masks, tubing and vials and medical supply packaging; as well as personal and home hygiene and sanitization such as hard surface disinfectants, laundry detergent and hand soaps; and food supply and packaging. While the Corporation’s manufacturing sites have largely continued to operate during the COVID-19 pandemic, with no significant impact to manufacturing whether through shutdowns or shortages in labor, raw materials or personal protective equipment, supply chain disruptions and related logistical issues have posed challenges across all modes of transportation. Supply chain and logistical challenges are expected to continue in the second quarter of 2020.

Global markets have also been impacted by reduced demand for oil caused by the economic impact of the COVID-19 pandemic and a lack of support by oil producing nations to cut supply. These factors resulted in significant declines in crude oil prices in March 2020 that have extended through April. Prices are expected to remain volatile until supply/demand conditions become more balanced. Declines in crude oil prices impact the pace of oil drilling in the U.S. and Canada, which makes natural gas, a significant by-product of oil drilling and the primary feedstock used in the U.S. by UCC and other ethylene producers, less cost advantaged. However, the Corporation has feedstock flexibility, driven by manufacturing assets that have the ability to produce ethylene from natural gas liquids or crude oil-based feedstocks and benefits from Dow’s comprehensive financial and physical hedging programs. Therefore, although a continuation of suppressed crude oil prices could result in additional margin compression, the Corporation’s feedstock flexibility and fully-integrated feedstock position places the Corporation in position to proactively respond to the current challenges.

The Corporation experienced mixed sales results in the first quarter as global demand has been dynamic as a result of the pandemic and suppressed oil prices. While demand has remained strong for products utilized in consumer applications, such as cleaning and detergent ingredients and food, health and hygiene packaging, the Corporation has noted reduced demand for products used in durable goods applications, such as automotive. These demand patterns are expected to continue in the second quarter of 2020. Local prices also declined in the first quarter of 2020, largely impacted by lower global energy prices. In response, with the Corporation's primary focus being the safety of its workforce and reliable operation of its assets, the Corporation reduced capital expenditure targets for the year by 20 percent and may delay planned maintenance turnaround spending, where appropriate, without compromising safety, while also ensuring ability to serve the needs of UCC and/or Dow customers, in line with Dow's global mitigation measures during the COVID-19 pandemic. In addition, the Corporation will temporarily idle one of the Corporation's polyethylene production assets in the U.S. to balance production to demand across markets more severely impacted by restrained economic activity. See Results of Operations for additional discussion on first quarter results.

At the time of this filing, the ultimate severity and duration of the COVID-19 pandemic and suppressed oil prices cannot be reasonably estimated. The Corporation acknowledges that a prolonged pandemic, suppressed oil prices and corresponding market volatility could have a materially adverse affect on the Corporation’s results of operations, financial condition and cash flows. The risks associated with these conditions are more fully discussed in this report in Part II, Item 1A, Risk Factors. The Corporation is actively monitoring for potential financial impacts from the pandemic and suppressed oil prices, including, but not limited to: evaluating the recoverability of its assets; enhancing cyber security monitoring; and evaluating the ongoing appropriateness of its estimates.

The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted on March 27, 2020 in the U.S. The Corporation continues to assess the potential impacts of this legislation on its financial position and results of operations.

Table of Contents

RESULTS OF OPERATIONS

Net Sales

Total net sales were ~~$1,059~~$1,042 million in the ~~third~~first quarter of ~~2019~~2020 compared with ~~$1,424~~$1,278 million in the ~~third~~first quarter of ~~2018, a decrease of 26 percent. Total net sales were $3,376 million for the first nine months of~~ 2019, ~~compared with $4,103 million for the first nine months of 2018,~~ a decrease of 18 percent. Net sales to related companies, principally to TDCC, and based on market prices for the related products, were ~~$1,028 million in the third quarter of 2019 compared with $1,385 million in the third quarter of 2018, a decrease of 26 percent. Net sales to related companies were $3,270~~$1,013 million in the first ~~nine months~~quarter of ~~2019~~2020 compared with ~~$3,998~~$1,250 million in the first ~~nine months~~quarter of ~~2018,~~2019, a decrease of 1819 percent.

Average selling ~~prices~~price decreased 19 percent in the ~~third~~first quarter of ~~2019~~2020 compared with the same quarter last year. Price decreased across ~~most~~all products, primarily in response to lower feedstock and other raw material costs, with the largest decreases in polyethylene, oxo alcohols, glycol ethers and ethanolamines. Volume was up 1 percent in the first quarter of 2020 compared with the first quarter of 2019. Volume increased across most product lines, with the most significant increases in ethylene oxide/ethylene glycol, ~~("EO/EG"). Volume was down 7 percent~~driven by demand growth in the ~~third~~first quarter of ~~2019 compared with~~2020, and polyethylene, which was impacted by railcar shortages in the ~~third~~first quarter of ~~2018, as lower demand for vinyl acetate monomers and~~2019. These volume increases were partially offset by decreases in plastics used for wire and cable applications as ~~well as lower volume resulting from the Business Separation more than offset increases~~a result of planned maintenance turnaround activity and other equipment maintenance in ~~polyethylene and surfactants.~~

~~For~~ the first ~~nine months~~quarter of ~~2019, average selling prices decreased 14 percent compared with the first nine months of 2018, with price decreases across all products, driven by lower feedstock~~2020, and other raw material costs, with the largest decreases in polyethylene, oxo alcohols and EO/EG. Volume for the first nine months of 2019 was down 4 percent compared with the first nine months of 2018, as lower demand in plastics for wire and cable applications and acrylic monomers andvolume decreases resulting from the Business Separation ~~more than offset demand growth~~and the divestiture of the Corporation's acetone derivatives product line in ~~polyethylene and ethyleneamines. Volume was also negatively impacted by planned maintenance turnaround activity at multiple production facilities during~~ the ~~first nine months~~fourth quarter of 2019.

Cost of Sales

During the third quarter of 2019, the Corporation recorded a pretax charge of $55 million related to environmental remediation matters at a number of current and historical locations. The charge primarily resulted from the culmination of long-standing negotiations and discussions with regulators and agencies, including technical studies supporting higher cost estimates for final or staged remediation plans, and the Corporation’s review of its closure strategies and obligations to monitor ongoing operations and maintenance activities.

~~Table of Contents~~



~~Union Carbide Corporation and Subsidiaries~~

Cost of sales was ~~$854 million in the third quarter of 2019 compared with $1,062 million in the third quarter of 2018, a decrease of 20 percent. Cost of sales decreased 13 percent from $3,102~~$826 million in the first ~~nine months~~quarter of ~~2018 to $2,706~~2020 compared with $950 million in the first ~~nine months~~quarter of ~~2019.~~2019, a decrease of 13 percent. The decline in cost of sales ~~for the three and nine months ended September 30, 2019,~~ was driven primarily by lower feedstock and other raw material costs, ~~lower volume and~~ the impact from the Business Separation ~~which more than offset charges for environmental remediation matters.~~and the divestiture of the Corporation's acetone derivatives product line in the fourth quarter of 2019.

Research and Development ("R&D"), Selling, General and Administrative ("SG&A") Expenses

In the first quarter of 2020, R&D expenses were $6 million in the third quarter of 2019, compared with $4 million in the same period last year. For the first nine months of 2019, R&D expenses were $19 million compared with $14 million in the first nine months of 2018.and SG&A expenses were $2 million, inboth flat compared with the ~~third~~first quarter of ~~2019 compared with $1 million in the third quarter of 2018. For the first nine months of 2019, SG&A expenses were $4 million compared with $5 million in the first nine months of 2018.~~2019.

Restructuring ~~and Asset Related~~ Charges ~~- Net~~

In September and November 2017, the Corporation approved restructuring actions that were aligned with DowDuPont’s synergy targets. ~~For~~As part of the ~~three months ended September 30, 2019,~~2017 restructuring program, the Corporation recorded pretax restructuring charges of $2 million for severance and related benefit costs ($1 million for the three months ended September 30, 2018). For the nine months ended September 30, 2019, the Corporation recorded pretax restructuring charges of $4 million for severance and related benefit costs ($3 million for the nine months ended September 30, 2018). See Note 5 to the Consolidated Financial Statements for additional information on the Corporation's restructuring activities.

On August 13, 2019, the Corporation entered into a definitive agreement to sell its acetone derivatives product line to ALTIVIA Ketones & Additives, LLC. The divestiture includes the Corporation's acetone derivatives related inventory and production assets located in Institute, West Virginia, in addition to the site infrastructure, land and utilities. The divestiture is expected to close in the ~~fourth~~first quarter of 2020, compared with $1 million in the first quarter of 2019. The Corporation will remain at the Institute site as a tenant. As a result of this planned divestiture, the Corporation recognized a pretax impairment charge of $75 million in the third quarter of 2019. The impairment charge was included in "Restructuring and asset related charges - net" in the consolidated statements of income.

Sundry Income (Expense) - Net

Sundry income (expense) – net includes a variety of income and expense items such as gains or losses on foreign currency exchange, commissions, charges for management services provided by TDCC, non-operating pension and other postretirement benefit plan credits or costs, and gains and losses on sales of investments and assets. Sundry income (expense) - net in the ~~third~~first quarter of ~~2019~~2020 was an expense of ~~$19~~$18 million compared with an expense of ~~$20~~$21 million in the same quarter last year. For the first nine months of 2019, sundry income (expense) - net was an expense of $58 million compared with an expense of $48 million in the first nine months of 2018. The increase in expense for the nine months ended September 30, 2019 was primarily a result of higher pension and other postretirement benefit plan costs compared with the same period last year.

Interest Income

Interest income was $7 million in the first quarter of 2020 compared with $9 million in the ~~third~~first quarter of ~~2019 ($28 million for the first nine months of 2019) compared with $8 million in the third quarter of 2018 ($20 million for the first nine months of 2018).~~2019. The ~~increase~~decrease in interest income ~~for~~primarily resulted from the ~~nine months ended September 30, 2019, was primarily the result~~impact of ~~higher~~lower interest rates ~~and~~due to the current interest rate environment, partially offset by an increase in notes receivable from related parties.

Interest Expense and Amortization of Debt Discount

Interest expense and amortization of debt discount was $8 million in the first quarter of 2020 compared with $7 million in the ~~third~~first quarter of 2019 compared with $9 million in the third quarter of 2018. For the first nine months of 2019, interest expense and amortization of debt discount was $21 million compared with $22 million in the first nine months of 2018.2019.

Provision ~~(Credit)~~ for Income Taxes

The Corporation reported a ~~credit for income taxes~~tax provision of ~~$19~~$41 million in the ~~third~~first quarter of 2020, which resulted in an effective tax rate of 21.9 percent, compared with a tax provision of $54 million in the first quarter of 2019, which resulted in an effective tax rate of negative 18.4 percent, compared with a tax provision of $62 million in the third quarter of 2018, which resulted in an effective tax rate of 18.6 percent. For the first nine months of 2019, the Corporation reported a tax provision of $38 million, which resulted in an effective tax rate of 7.4 percent. This compared with a tax provision of $184 million in the first nine months of 2018, which resulted in an effective tax rate of 19.818.1 percent. The effective tax rate fluctuates based on, among other factors, where income is earned. The ~~change in the effective~~ tax rate in the ~~three and nine months ended September 30,~~first quarter of 2019 ~~resulted from amended returns that reflect~~was favorably impacted by a ~~recent court judgment that did not involve~~deduction in the ~~Corporation and a tax accounting method change~~U.S. related to ~~depreciation of fixed assets, both resulting in a favorable adjustment~~certain sales to ~~the provision (credit) for income taxes.~~foreign customers.

~~Table of Contents~~



~~Union Carbide Corporation and Subsidiaries~~

Net Income Attributable to UCC

The Corporation reported net income of ~~$122 million in the third quarter of 2019 compared with $272 million in the third quarter of 2018. Net income for the first nine months of 2019 was $477 million compared with $743~~$146 million in the first ~~nine months~~quarter of ~~2018.~~2020 compared with $245 million in the first quarter of 2019.

Capital Expenditures

Capital spending in the ~~third~~first quarter of ~~2019~~2020 was ~~$40~~$33 million ~~($145 million for the first nine months of 2019)~~ compared with ~~$73~~$60 million in the ~~third~~first quarter of ~~2018 ($174 million for the first nine months of 2018),~~2019, as spending for U.S. Gulf Coast projects and site infrastructure projects ~~winds~~continues to trend down.

Table of Contents

OTHER MATTERS

Recent Accounting Guidance

See Note 2 to the Consolidated Financial Statements for a summary of recent accounting guidance.

Critical Accounting Estimates

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, assumptions and estimates that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. Note 1 to the Consolidated Financial Statements in the Corporation’s Annual Report on Form 10-K for the year ended December 31, ~~2018~~2019 ("~~2018~~2019 10-K") describes the significant accounting policies and methods used in the preparation of the Consolidated Financial Statements. The Corporation’s critical accounting policies that are impacted by judgments, assumptions and estimates are described in Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Corporation’s ~~2018~~2019 10-K. Since December 31, ~~2018,~~2019, there have been no material changes in the Corporation’s accounting policies that are impacted by judgments, assumptions and estimates.

Asbestos-Related Matters

The Corporation is and has been involved in a large number of asbestos-related suits filed primarily in state courts during the past four decades. These suits principally allege personal injury resulting from exposure to asbestos-containing products and frequently seek both actual and punitive damages. The alleged claims primarily relate to products that UCC sold in the past, alleged exposure to asbestos-containing products located on UCC’s premises, and UCC’s responsibility for asbestos suits filed against a former UCC subsidiary, Amchem Products, Inc. ("Amchem"). In many cases, plaintiffs are unable to demonstrate that they have suffered any compensable loss as a result of such exposure, or that injuries incurred in fact resulted from exposure to UCC’s products.

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


Asbestos-Related Claim Activity	2020	2019
Claims unresolved at Jan 1	11,117	12,780
Claims filed	1,296	1,383
Claims settled, dismissed or otherwise resolved	(1,269)	(1,569)
Claims unresolved at Mar 31	11,144	12,594
Claimants with claims against both UCC and Amchem	(3,809)	(4,509)
Individual claimants at Mar 31	7,335	8,085

Asbestos-Related Claim Activity 2019 2018
Claims unresolved at Jan 1 12,780
15,427
Claims filed 4,396
5,279
Claims settled, dismissed or otherwise resolved (5,763 ) (7,861 )
Claims unresolved at Sep 30 11,413
12,845
Claimants with claims against both UCC and Amchem (3,935 ) (4,778 )
Individual claimants at Sep 30 7,478
8,067

Plaintiffs' lawyers often sue numerous defendants in individual lawsuits or on behalf of numerous claimants. As a result, the damages alleged are not expressly identified as to UCC, Amchem or any other particular defendant, even when specific damages are alleged with respect to a specific disease or injury. In fact, there are no personal injury cases in which only the Corporation and/or Amchem are the sole named defendants. For these reasons and based upon the Corporation's litigation and settlement experience, the Corporation does not consider the damages alleged against it and Amchem to be a meaningful factor in its determination of any potential asbestos-related liability.

For additional information, see Asbestos-Related Matters in Note 87 to the Consolidated Financial Statements and Part II, Item 1. Legal Proceedings.

~~Table of Contents~~



~~Union Carbide Corporation and Subsidiaries~~

~~Environmental Matters~~

The Corporation determines the costs of environmental remediation of its current and historical locations based on current law and existing technologies. Inherent uncertainties exist in such evaluations primarily due to unknown environmental conditions, changing governmental regulations and legal standards regarding liability, and emerging remediation technologies. The recorded liabilities are adjusted periodically as remediation efforts progress, or as additional technical or legal information becomes available. At September 30, 2019, the Corporation had accrued obligations of $141 million for probable environmental remediation and restoration costs, including $21 million for the remediation of Superfund sites. 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. For additional information see Environmental Matters in Note 8 to the Consolidated Financial Statements.

Debt Covenants and Default Provisions

The Corporation’s outstanding public debt has been issued under indentures which contain, among other provisions, covenants that the Corporation must comply with while the underlying notes are outstanding. Such covenants are typically based on the Corporation’s size and financial position and include, subject to the exceptions and qualifications contained in the indentures, obligations not to (i) allow liens on principal U.S. manufacturing facilities, (ii) enter into sale and lease-back transactions with respect to principal U.S. manufacturing facilities, or (iii) merge into or consolidate with any other entity or sell or convey all or substantially all of its assets. Failure of the Corporation to comply with any of these covenants could, after the passage of any applicable grace period, result in a default under the applicable indenture which would allow the note holders to accelerate the due date of the outstanding principal and accrued interest on the subject notes. Management believes the Corporation was in compliance with the covenants referred to above at ~~September 30, 2019.~~March 31, 2020.

Table of Contents

Dividends

In the ~~third~~first quarter of 2019, the Corporation declared a cash dividend of $112 million to TDCC, which was paid on October 3, 2019; cash dividends paid to TDCC totaled $338 million for the first nine months of 2019. In the third quarter of 2018,2020, the Corporation declared and paid a cash dividend of ~~$177~~$81 million to ~~TDCC; cash dividends paid~~TDCC ($160 million in the first quarter of 2019). On April 27, 2020, the Board approved a dividend to TDCC ~~totaled $423~~of $81 million, ~~for the first nine months of 2018. Also, in~~payable on or before June 26, 2020.

In the first quarter of 2019, in ~~preparation for~~anticipation of the business separation activities to align ~~the~~TDCC's specialty products business with DowDuPont, UCC issued a stock dividend to TDCC for 63.4 percent of its ownership interest in ~~DIHC,~~Dow International Holdings Company, a cost method investment, which totaled $401 million. UCC also distributed assets and liabilities aligned with ~~the~~TDCC's specialty products business for an additional dividend to TDCC of $71 million. ~~On October 23, 2019, the UCC Board of Directors approved a dividend to TDCC of $120 million, payable on or before December 27, 2019.~~

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Omitted pursuant to General Instruction H of Form 10-Q.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report on Form 10-Q, the Corporation carried out an evaluation, under the supervision and with the participation of the Corporation's Disclosure Committee and the Corporation's management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of the Corporation's disclosure controls and procedures pursuant to paragraph (b) of Exchange Act Rules 13a-15 and 15d-15. Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Corporation's disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

There were no changes in the Corporation's internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 and 15d-15 that was conducted during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Corporation's internal control over financial reporting.

Table of Contents



Union Carbide Corporation and Subsidiaries PART II - OTHER INFORMATION



New York						13-1421730
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)



~~Title of each class~~	~~Trading Symbol(s)~~	~~Name of each exchange on which registered~~
~~N/A~~	~~N/A~~	~~N/A~~


		PAGE

			~~PAGE~~

PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements.	4

	Consolidated Statements of Income.	4

	Consolidated Statements of Comprehensive Income.	5

	Consolidated Balance Sheets.	6

	Consolidated Statements of Cash Flows.	7

	Consolidated Statements of Equity.	8

	Notes to the Consolidated Financial Statements.	9

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations.	2017

	Results of Operations.	2019

	Other Matters.	2220

Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	2321

Item 4.	Controls and Procedures.	2321

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings.	2422

Item 1A.	Risk Factors.	2422

Item 4.	Mine Safety Disclosures.	2422

Item 6.	Exhibits.	2423

SIGNATURES				2524


In millions, except share amounts (Unaudited)	Sep 30, 2019			Dec 31, 2018			In millions, except share amounts (Unaudited)	Mar 31, 2020		Dec 31, 2019
Assets							Assets
Current Assets							Current Assets
Cash and cash equivalents	$	13		$	13		Cash and cash equivalents	$	11	$	11
Accounts receivable:							Accounts receivable:
Trade (net of allowance for doubtful receivables 2019: $-; 2018: $-)	30			21
Trade (net of allowance for doubtful receivables 2020: $—; 2019: $—)							Trade (net of allowance for doubtful receivables 2020: $—; 2019: $—)	26		26
Related companies	745			1,029			Related companies	712		658
Other	19			31			Other	17		17
Income taxes receivable	299			330			Income taxes receivable	287		337
Notes receivable from related companies	1,485			1,281			Notes receivable from related companies	1,499		1,505
Inventories	250			304			Inventories	243		247
Other current assets	25			15			Other current assets	13		20
Total current assets	2,866			3,024			Total current assets	2,808		2,821
Investments							Investments
Investments in related companies	238			639			Investments in related companies	238		238

Other investments	21			23			Other investments	21		22
Noncurrent receivables	96			67			Noncurrent receivables	119		118
Noncurrent receivables from related companies	67			54			Noncurrent receivables from related companies	67		66
Total investments	422			783			Total investments	445		444
Property							Property
Property	7,410			7,430			Property	7,279		7,247
Less accumulated depreciation	6,040			5,982			Less accumulated depreciation	5,922		5,878
Net property	1,370			1,448			Net property	1,357		1,369
Other Assets							Other Assets
Intangible assets (net of accumulated amortization 2019: $90; 2018: $87)	23			25
Intangible assets (net of accumulated amortization 2020: $92; 2019: $90)							Intangible assets (net of accumulated amortization 2020: $92; 2019: $90)	21		22
Operating lease right-of-use assets	93			—			Operating lease right-of-use assets	86		89
Deferred income tax assets	474			463			Deferred income tax assets	499		507

Deferred charges and other assets	26			34			Deferred charges and other assets	24		26
Total other assets	616			522			Total other assets	630		644
Total Assets	$	5,274		$	5,777		Total Assets	$	5,240	$	5,278
Liabilities and Equity							Liabilities and Equity
Current Liabilities							Current Liabilities
Notes payable to related companies	$	32		$	28		Notes payable to related companies	$	31	$	32
Notes payable - other	2			1			Notes payable - other	8		6
Long-term debt due within one year	1			1			Long-term debt due within one year	1		1
Accounts payable:							Accounts payable:
Trade	207			247			Trade	207		218
Related companies	313			515			Related companies	293		386
Other	11			39			Other	21		10
Dividends payable to parent	112			—

Operating lease liabilities - current	18			—			Operating lease liabilities - current	15		16
Income taxes payable	24			24			Income taxes payable	25		25
Asbestos-related liabilities - current	105			118			Asbestos-related liabilities - current	100		105
Accrued and other current liabilities	169			163			Accrued and other current liabilities	130		126
Total current liabilities	994			1,136			Total current liabilities	831		925
Long-Term Debt	472			473			Long-Term Debt	472		473
Other Noncurrent Liabilities							Other Noncurrent Liabilities
Pension and other postretirement benefits - noncurrent	949			979			Pension and other postretirement benefits - noncurrent	1,140		1,154
Asbestos-related liabilities - noncurrent	1,087			1,142			Asbestos-related liabilities - noncurrent	1,048		1,060
Operating lease liabilities - noncurrent	75			—			Operating lease liabilities - noncurrent	72		74
Other noncurrent obligations	184			132			Other noncurrent obligations	191		194
Total other noncurrent liabilities	2,295			2,253			Total other noncurrent liabilities	2,451		2,482
Stockholder's Equity							Stockholder's Equity
Common stock (authorized: 1,000 shares of $0.01 par value each; issued: 935.51 shares)	—			—			Common stock (authorized: 1,000 shares of $0.01 par value each; issued: 935.51 shares)	—		—
Additional paid-in capital	138			138			Additional paid-in capital	141		141
Retained earnings	2,892			3,338			Retained earnings	2,987		2,922
Accumulated other comprehensive loss	(1,517		)	(1,561		)	Accumulated other comprehensive loss	(1,642)		(1,665)
Union Carbide Corporation's stockholder's equity	1,513			1,915			Union Carbide Corporation's stockholder's equity	1,486		1,398

Total Liabilities and Equity	$	5,274		$	5,777		Total Liabilities and Equity	$	5,240	$	5,278


	Nine Months Ended							Three Months Ended
In millions (Unaudited)	Sep 30, 2019			Sep 30, 2018			In millions (Unaudited)	Mar 31, 2020		Mar 31, 2019
Operating Activities							Operating Activities
Net income attributable to Union Carbide Corporation	$	477		$	743		Net income attributable to Union Carbide Corporation	$	146	$	245
Adjustments to reconcile net income to net cash provided by operating activities:							Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	148			157			Depreciation and amortization	52		49
Provision (credit) for deferred income tax	(23		)	28			Provision (credit) for deferred income tax	1		(1)
Net loss on sales of property and investments	1			—
Restructuring and asset related charges - net	79			3

Net gain on sales of property and investments							Net gain on sales of property and investments	(1)		—

Restructuring charges							Restructuring charges	2		1
Net periodic pension benefit cost	39			33			Net periodic pension benefit cost	14		13
Pension contributions	(2		)	(42		)	Pension contributions	(1)		(1)

Other, net							Other, net	(1)		—
Changes in assets and liabilities:							Changes in assets and liabilities:
Accounts and notes receivable	7			25			Accounts and notes receivable	1		2
Related company receivables	39			(86		)	Related company receivables	(48)		(40)
Inventories	34			(25		)	Inventories	4		(17)
Accounts payable	(58		)	12			Accounts payable	3		7
Related company payables	(195		)	(112		)	Related company payables	(95)		(124)
Asbestos-related payments	(68		)	(79		)	Asbestos-related payments	(18)		(17)
Other assets and liabilities	14			(63		)	Other assets and liabilities	53		99
Cash provided by operating activities	492			594			Cash provided by operating activities	112		216
Investing Activities							Investing Activities
Capital expenditures	(145		)	(174		)	Capital expenditures	(33)		(60)
Change in noncurrent receivable from related company	(13		)	—			Change in noncurrent receivable from related company	—		1
Proceeds from sales of property	1			—

Proceeds from sales of investments	3			—			Proceeds from sales of investments	—		2
Cash used for investing activities	(154		)	(174		)	Cash used for investing activities	(33)		(57)
Financing Activities							Financing Activities

Dividends paid to parent	(338		)	(423		)	Dividends paid to parent	(81)		(160)
Changes in short-term notes payable	1			4			Changes in short-term notes payable	2		1
Payments on long-term debt	(1		)	(1		)

Cash used for financing activities	(338		)	(420		)	Cash used for financing activities	(79)		(159)
Summary							Summary
Increase in cash and cash equivalents	—			—			Increase in cash and cash equivalents	—		—
Cash and cash equivalents at beginning of period	13			13			Cash and cash equivalents at beginning of period	11		13
Cash and cash equivalents at end of period	$	13		$	13		Cash and cash equivalents at end of period	$	11	$	13


Note		Page
1	Consolidated Financial Statements	9
2	Recent Accounting Guidance	10
3	Business Separation	10
4	Revenue	10
5	Inventories	11
6	Intangible Assets	11
7	Commitments and Contingent Liabilities	12
8	Leases	13
9	Accumulated Other Comprehensive Loss	15
10	Pension and Other Postretirement Benefit Plans	15
11	Fair Value Measurements	16
12	Related Party Transactions	16



Intangible Assets	Sep 30, 2019							Dec 31, 2018
In millions	Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net
Intangible assets with finite lives:
Licenses and developed technology	$	33	$	(33	)	$	—	$	33	$	(33	)	$	—
Software	80		(57		)	23		79		(54		)	25
Total intangible assets	$	113	$	(90	)	$	23	$	112	$	(87	)	$	25



Estimated Amortization Expense
In millions
2019	$	7
2020	$	8
2021	$	6
2022	$	4
2023	$	2
2024	$	1



Lease Cost	Three Months Ended Sep 30, 2019		Nine Months Ended Sep 30, 2019
In millions	Three Months Ended Sep 30, 2019		Nine Months Ended Sep 30, 2019
Operating lease cost	$	7	$	18
Short-term lease cost	6		20
Variable lease cost	1		3
Amortization of right-of-use assets - finance	—		1
Total lease cost	$	14	$	42


Other Lease Information	Three Months Ended
In millions	Mar 31, 2020		Mar 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	5	$	6



Asbestos-Related Claim Activity	2019		2018
Claims unresolved at Jan 1	12,780		15,427
Claims filed	4,396		5,279
Claims settled, dismissed or otherwise resolved	(5,763	)	(7,861	)
Claims unresolved at Sep 30	11,413		12,845
Claimants with claims against both UCC and Amchem	(3,935	)	(4,778	)
Individual claimants at Sep 30	7,478		8,067


	EXHIBIT NO.			DESCRIPTION

	~~EXHIBIT NO.~~	~~DESCRIPTION~~

23 *			Ankura Consulting Group, LLC's Consent.
	31.1 ~~31.1~~*			Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31.2 *			Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32.1 *			Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32.2 ~~32.2~~*			Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	101.INS			The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
	101.SCH			Inline XBRL Taxonomy Extension Schema Document.
	101.CAL			Inline XBRL Taxonomy Extension Calculation Linkbase Document.
	101.DEF			Inline XBRL Taxonomy Extension Definition Linkbase Document.
	101.LAB			Inline XBRL Taxonomy Extension Label Linkbase Document.
	101.PRE			Inline XBRL Taxonomy Extension Presentation Linkbase Document.
	104			Cover Page Interactive Data File. The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.



Date:	~~October 25, 2019~~May 1, 2020
		By:	/s/ RONALD C. EDMONDS
			Ronald C. Edmonds
			Controller and Vice President
			of Controllers and Tax
			The Dow Chemical Company
			Authorized Representative of
			Union Carbide Corporation


		By:	/s/ IGNACIO MOLINA
			Ignacio Molina
			Vice President, Treasurer and
			Chief Financial Officer