Exhibit 99
UNION CARBIDE
NEWS RELEASE
CONTACT: David N. Kernis
(203) 794-6929
UNION CARBIDE REPORTS 4th QUARTER EARNINGS
DANBURY, Conn., Jan. 25 - Union Carbide Corporation (UCC) today reported
fourth quarter 1998 earnings of $0.49 per diluted common share, compared to
$0.55 in the third quarter of 1998 and $1.04 for the same period in 1997
before the cumulative effect of a change in accounting principle.
Fourth quarter earnings benefited from an after-tax net gain of $43
million ($71 million before tax), or $0.31 per diluted common share, from
proceeds of a litigation settlement in connection with the company's UNIPOL
systems business. Earnings in the prior quarter included an after-tax net
gain of $72 million ($118 million before tax), or $0.53 per diluted common
share, from a separate litigation settlement in connection with the UNIPOL
systems business.
Earnings in the 1998 fourth quarter were hurt by maintenance turnaround
costs at the company's Taft, La., and Texas City, Tex., plants, and by excess
costs during the transition to new information technology for the purpose of
integrating Carbide's major work processes.
Union Carbide Chairman and Chief Executive Officer William H. Joyce said
the company's consolidated results, as well as results of its joint ventures
and partnerships, reflected continuing market weakness, particularly in Asia.
He said prices of certain basic chemicals were at prior trough levels and that
several businesses also had experienced normal seasonal declines in the fourth
quarter.
Dr. Joyce said he expected weak chemical markets, particularly in Asia,
to affect earnings through most of 1999, and perhaps longer. "On the plus
side," he said, "several developments
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1999
P3-01-002
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should benefit earnings beginning in 1999, including the return to normal
operation of our Gulf Coast ethylene plants; the start up of our EPR
(ethylene/propylene rubber) plant; the full operation of our Kuwait joint
venture and the further progress of our cost reduction initiatives."
Net income available to common stockholders for the quarter totaled $67
million, compared to $76 million in the 1998 third quarter and $147 million
(before the effect of an accounting change) for the same period a year ago.
Sales in the fourth quarter totaled $1.289 billion, compared to $1.350 billion
in the prior quarter and $1.539 billion for the same period in 1997.
UCC's Specialties & Intermediates segment reported operating profit of
$232 million, compared to $233 million in the third quarter of 1998 and $122
million in the fourth quarter of 1997. The segment accounted for 75 percent
of total net sales for the quarter. Segment operating profit included the
above-mentioned gain of $71 million from a litigation settlement. Third
quarter operating profit included the above-mentioned gain of $118 million
from a separate litigation settlement and a before-tax loss of $53 million
related to the company's Aspell partnership.
Carbide's Basic Chemicals & Polymers segment reported an operating loss
of $45 million, compared to a loss of $13 million in the third quarter of 1998
and operating profit of $98 million in the fourth quarter of 1997.
Union Carbide repurchased 463,400 common shares (under its 60-million-
share repurchase authorization) during the quarter, at a net cost of $19
million. Repurchases under the plan for the year ended Dec. 31, 1998 totaled
6.1 million shares, at a net cost of $273 million. Since inception of the
common share buy back program in 1993, UCC has repurchased 55.4 million shares
and reduced the net total of common shares outstanding by 34.7 million,
excluding conversion in 1997 of 15.4 million ESOP preferred shares into common
shares.
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For the full year 1998, UCC reported net income available to common
stockholders of $403 million, or $2.91 per diluted common share. Prior year
earnings available to common stockholders before the cumulative effect of a
change in accounting principle were $669 million, or $4.53 per diluted common
share. Worldwide sales for 1998 were $5.659 billion, compared to
$6.502 billion in 1997.
Union Carbide is a worldwide chemicals company with advanced process
technologies and large-scale chemical production facilities.
o Specialties & Intermediates -- Union Carbide is the leading North
American supplier of solvents and intermediates to the paint and coatings
industry; the leading licensor of several technologies; and a leading supplier
of specialty chemicals, polymers and services used in the personal care
products, pharmaceuticals, automotive, wire and cable, oil and gas and
industrial lubricants industries.
o Basic Chemicals & Polymers -- Union Carbide is among the largest
manufacturers of polyethylene, the world's most widely used plastic, and the
technology leader in this industry; and a large manufacturer of polypropylene,
one of the world's fastest-growing, large-volume plastics. UCC is also the
world's largest producer of ethylene oxide and its derivative ethylene glycol,
used for polyester fiber, resin and film, automotive antifreeze and other
products.
Cautionary Statement for Purposes of the "Safe Harbor" Provisions
Of the Private Securities Litigation Act of 1995
Those statements in the preceding pages that do not reflect historical
information are forward looking statements. Naturally, such forward looking
statements are subject to risks and uncertainties. In addition to all
specific assumptions cited, important factors affecting Union Carbide that
could cause results to differ materially from those the corporation is looking
forward to include: the supply/demand balance for the corporation's products,
customer inventory levels, competitive pricing pressures, feedstock costs,
changes in industry production capacities and operating rates, currency
exchange rates, interest rates, global economic conditions, particularly in
Asia, disruption in railroad and other transportation facilities, competitive
technology positions, and failure by the corporation to achieve technology
objectives, cost reduction targets, or complete projects on schedule.
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UNION CARBIDE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
Quarter Ended
Dec. 31, Sept. 30, Dec. 31,
Millions of Dollars,
Except Per Share Amounts 1998 1998 1997
NET SALES $ 1,289 $ 1,350 $ 1,539
Cost of sales, exclusive of depreciation
and amortization 1,010 1,036 1,156
Research and development 36 34 39
Selling, administration and
other expenses (a) 70 78 87
Depreciation and amortization 101 95 84
Partnership income (loss) 15 (46) 33
Net gains from settlements of UNIPOL
Systems business litigations 71 118 -
Other income - net 20 11 10
INCOME BEFORE INTEREST EXPENSE AND PROVISION
FOR INCOME TAXES 178 190 216
Interest expense 30 28 22
INCOME BEFORE PROVISION FOR INCOME TAXES 148 162 194
Provision for income taxes 49 58 51
INCOME OF CONSOLIDATED COMPANIES AND
PARTNERSHIPS 99 104 143
Minority interest 1 - 1
Income (loss) from corporate investments
carried at equity (31) (28) 5
INCOME BEFORE CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE 67 76 147
Cumulative effect of change in
accounting principle - - (17)
NET INCOME 67 76 130
Preferred stock dividends,
net of income taxes - - -
NET INCOME - COMMON STOCKHOLDERS $ 67 $ 76 $ 130
Earnings per common share
Basic - Income before cumulative effect of
change in accounting principle $ 0.50 $ 0.56 $ 1.07
- Cumulative effect of change in
accounting principle - - (0.13)
- Net income - common stockholders $ 0.50 $ 0.56 $ 0.94
Based on the indicated number
of shares 132,869,126 134,286,957 137,612,493
Diluted - Income before cumulative effect of
change in accounting principle $ 0.49 $ 0.55 $ 1.04
- Cumulative effect of change in
accounting principle - - (0.12)
- Net income - common stockholders $ 0.49 $ 0.55 $ 0.92
Based on the indicated number
of shares 135,830,721 137,545,375 141,421,582
(a) Selling $ 25 $ 25 $ 31
Administration 23 26 32
Other expenses 22 27 24
Total $ 70 $ 78 $ 87
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UNION CARBIDE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
Year Ended
Dec. 31,
Millions of Dollars, Except Per Share Amounts 1998 1997
NET SALES $ 5,659 $ 6,502
Cost of sales, exclusive of depreciation
and amortization 4,294 4,806
Research and development 143 157
Selling, administration and other expenses (a) 304 324
Depreciation and amortization 389 340
Partnership income 33 133
Net gains from settlements of UNIPOL Systems
business litigations 189 -
Other income - net 52 37
INCOME BEFORE INTEREST EXPENSE AND PROVISION
FOR INCOME TAXES 803 1,045
Interest expense 114 79
INCOME BEFORE PROVISION FOR INCOME TAXES 689 966
Provision for income taxes 217 279
INCOME OF CONSOLIDATED COMPANIES AND PARTNERSHIPS 472 687
Minority interest 3 14
Income (loss) from corporate investments
carried at equity (66) 3
INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE 403 676
Cumulative effect of change in accounting principle - (17)
NET INCOME 403 659
Preferred stock dividends, net of income taxes - 7
NET INCOME - COMMON STOCKHOLDERS $ 403 $ 652
Earnings per common share
Basic - Income before cumulative effect of change in
accounting principle $ 2.98 $ 5.02
- Cumulative effect of change in
accounting principle - (0.13)
- Net income - common stockholders $ 2.98 $ 4.89
Based on the indicated number of shares 135,028,100 128,185,093
Diluted - Income before cumulative effect of
change in accounting principle $ 2.91 $ 4.53
- Cumulative effect of change in
accounting principle - (0.12)
- Net income - common stockholders $ 2.91 $ 4.41
Based on the indicated number of shares 138,409,895 143,959,098
(a) Selling $ 99 $ 124
Administration 107 126
Other expenses 98 74
Total $ 304 $ 324
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UNION CARBIDE CORPORATION AND SUBSIDIARIES
SEGMENT DATA
Quarter Ended
Dec. 31, Sept. 30, Dec. 31,
Millions of dollars 1998 1998 1997
NET SALES
Specialties & Intermediates $ 964 $ 995 $1,051
Basic Chemicals & Polymers 383 421 600
Intersegment Eliminations (58) (66) (112)
Total $1,289 $1,350 $1,539
OPERATING PROFIT (LOSS)
Specialties & Intermediates $ 232 $ 233 $ 122
Basic Chemicals & Polymers (45) (13) 98
Other (9) (30) (4)
Total $ 178 $ 190 $ 216
DEPRECIATION AND AMORTIZATION
Specialties & Intermediates $ 65 $ 61 $ 53
Basic Chemicals & Polymers 36 34 31
Total $ 101 $ 95 $ 84
CAPITAL EXPENDITURES
Specialties & Intermediates $ 106 $ 111 $ 137
Basic Chemicals & Polymers 105 103 75
Total $ 211 $ 214 $ 212
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UNION CARBIDE CORPORATION AND SUBSIDIARIES
SEGMENT DATA
Year Ended Dec. 31,
Millions of dollars 1998 1997
NET SALES
Specialties & Intermediates $4,139 $4,453
Basic Chemicals & Polymers 1,802 2,420
Intersegment Eliminations (282) (371)
Total $5,659 $6,502
OPERATING PROFIT (LOSS)
Specialties & Intermediates $ 833 $ 667
Basic Chemicals & Polymers 20 386
Other (50) (8)
Total $ 803 $1,045
DEPRECIATION AND AMORTIZATION
Specialties & Intermediates $ 247 $ 214
Basic Chemicals & Polymers 142 126
Total $ 389 $ 340
CAPITAL EXPENDITURES
Specialties & Intermediates $ 438 $ 458
Basic Chemicals & Polymers 344 297
Total $ 782 $ 755
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UNION CARBIDE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
Millions of Dollars
at December 31,
1998 1997
(Note)
ASSETS
Cash and cash equivalents $ 49 $ 20
Notes and accounts receivable 933 993
Inventories 667 604
Other current assets 257 249
Current assets 1,906 1,866
Net fixed assets 4,181 3,780
Investments and other assets 1,204 1,318
Total Assets $7,291 $6,964
LIABILITIES AND STOCKHOLDERS' EQUITY
Short-term debt and current portion of
long-term debt $ 426 $ 429
Other current liabilities 1,044 1,075
Current liabilities 1,470 1,504
Long-term debt 1,796 1,458
Other long-term obligations 1,576 1,654
Stockholders' equity 2,449 2,348
Total Liabilities and Stockholders' Equity $7,291 $6,964
<FN>
Note: Marketable Securities have been reclassified from "Cash and cash
equivalents" to "Other current assets" to conform with the current
year's presentation.
</FN>
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