Exhibit 12
Union Carbide Corporation and Subsidiaries
Computation of Ratio of Earnings to Fixed Charges
(Millions of dollars, except ratios)
Year Ended
1998 1997 1996 1995 1994
Fixed Charges:
Interest expensed 114 79 76 89 80
Interest capitalized 43 51 45 30 12
Amortized premiums/discounts
related to indebtedness - - - - -
Amortized capitalized expenses
related to indebtedness - - - - -
Estimate of the interest within rental expense 19 18 18 22 22
Preference security dividend requirements
of consolidated subsidiaries - 35 - - -
Charges arising from guarantees of equity
investees 67 58 13 - -
Total Fixed Charges 243 241 152 141 114
Earnings
Pre-tax income from continuing operations 689 966 845 1,259 471
Less:
Partnership income 33 133 144 152 98
Sub-total 656 833 701 1,107 373
Add:
Fixed charges 243 241 152 141 114
Amortization of capitalized interest 17 14 12 11 10
Distributed income of equity investees 123 126 141 97 128
UCC's share of pre-tax losses of equity
investees for which charges arising from
guarantees are included in fixed charges (62) (43) (22) - -
Less:
Interest capitalized 43 51 45 30 12
Preference security dividend requirements
of consolidated subsidiaries - 35 - - -
Minority interest in pre-tax income of
subsidiaries that have not incurred
fixed charges - - - - -
Total Earnings 934 1,085 939 1,326 613
Ratio of Earnings to Fixed Charges 3.8 4.5 6.2 9.4 5.4
<FN>
For the purpose of calculating the ratio of earnings to fixed charges, earnings consist of pre-tax
income of consolidated companies from continuing operations before adjustment for minority
interests in consolidated subsidiaries or income or loss from equity investees plus (a) fixed
charges, (b) amortization of capitalized interest, (c) distributed income of equity investees and
(d) Union Carbide's share of pre-tax losses of equity investees for which charges arising from
guarantees are included in fixed charges less (a) interest capitalized, (b) preference security
dividend requirements of consolidated subsidiaries, and (c) the minority interest in pre-tax
income of subsidiaries that have not incurred fixed charges. Fixed charges means the sum of (a)
interest expensed and capitalized, (b) amortized premiums, discounts and capitalized expenses
related to indebtedness, (c) an estimate of the interest within rental expense, and (d) preference
security dividend requirements of consolidated subsidiaries. Union Carbide has a 45 percent equity
investment in EQUATE Petrochemical Company ("EQUATE"). During 1998, 1997, and in the last quarter
of 1996, Union Carbide severally guaranteed 45 percent of EQUATE's long-term debt and working
capital financing needs. During the first three quarters of 1996, Union Carbide severally
guaranteed up to $225 million of EQUATE's interim debt. Interest charges on outstanding
borrowings guaranteed by Union Carbide totaled $67 million, $58 million and $13 million for the
years ended December 31, 1998, 1997 and 1996, respectively, and have been included, along with
Union Carbide's equity in EQUATE's pre-tax loss for the same periods, in the calculation of the
ratio of earnings to fixed charges.
</FN>