10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2020

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________to___________

Commission File Number: 1-1463

Union Carbide Corporation

(Exact name of registrant as specified in its charter)

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

7501 STATE HIGHWAY 185 NORTH, SEADRIFT, TX  77983

(Address of principal executive offices) (Zip Code)

 Registrant's telephone number, including area code:  361-553-2997

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☑ Yes  ☐  No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  

☑ Yes ☐  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☑	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes ☑  No

At March 31, 2020, 935.51 shares of common stock were outstanding, all of which were held by the registrant’s parent, The Dow Chemical Company.

The registrant meets the conditions set forth in General Instruction H(1)(a) and (b) for Form 10-Q and is therefore filing this form with a reduced disclosure format.

Union Carbide Corporation

QUARTERLY REPORT ON FORM 10-Q

For the quarterly period ended March 31, 2020

TABLE OF CONTENTS

		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.	17
	Results of Operations.	19
	Other Matters.	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	21
Item 4.	Controls and Procedures.	21
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings.	22
Item 1A.	Risk Factors.	22
Item 4.	Mine Safety Disclosures.	22
Item 6.	Exhibits.	23
SIGNATURES		24

2

Union Carbide Corporation and Subsidiaries

Throughout this Quarterly Report on Form 10-Q, except as otherwise indicated by the context, the terms "Corporation" or "UCC" as used herein mean Union Carbide Corporation and its subsidiaries.

FORWARD-LOOKING STATEMENTS

Certain statements in this report, other than purely historical information, including estimates, projections, statements relating to business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are "forward-looking statements" within the meaning of federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements may appear throughout this report, including without limitation, the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations." These forward-looking statements often address expected future business and financial performance and financial condition, including the potential impacts of the coronavirus disease 2019 pandemic and the recent excess oil supply and related drop in oil prices, and often contain words or phrases such as "anticipate," "believe," "estimate," "expect," "intend," "may," "opportunity," "outlook," "plan," "project," "seek," "should," "strategy," "target," "will," "will be," "will continue," "will likely result," "would," and similar expressions and variations or negatives of these words. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements.

A detailed discussion of principal risks and uncertainties which may cause actual results and events to differ materially from those projected, anticipated or implied in such forward-looking statements is included in the section titled "Risk Factors" contained in Part II, Item 1A of this Quarterly Report on Form 10-Q and in Part I, Item 1A of the Corporation's Annual Report on Form 10-K for the fiscal year ended December 31, 2019. UCC assumes no obligation to update or revise publicly any forward-looking statements whether because of new information, future events, or otherwise, except as required by securities and other applicable laws.

3

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Union Carbide Corporation and Subsidiaries

Consolidated Statements of Income

	Three Months Ended
In millions (Unaudited)	Mar 31, 2020		Mar 31, 2019
Net trade sales	$	29	$	28
Net sales to related companies	1,013		1,250
Total net sales	1,042		1,278
Cost of sales	826		950
Research and development expenses	6		6
Selling, general and administrative expenses	2		2
Restructuring charges	2		1
Integration and separation costs	—		1
Sundry income (expense) - net	(18)		(21)
Interest income	7		9
Interest expense and amortization of debt discount	8		7
Income before income taxes	187		299
Provision for income taxes	41		54
Net income attributable to Union Carbide Corporation	$	146	$	245
Depreciation	$	45	$	43
Capital expenditures	$	33	$	60

See Notes to the Consolidated Financial Statements.

4

Union Carbide Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income

	Three Months Ended
In millions (Unaudited)	Mar 31, 2020		Mar 31, 2019
Net income attributable to Union Carbide Corporation	$	146	$	245
Other comprehensive income, net of tax
Cumulative translation adjustments	3		—
Pension and other postretirement benefit plans	20		15
Total other comprehensive income	23		15
Comprehensive income attributable to Union Carbide Corporation	$	169	$	260

See Notes to the Consolidated Financial Statements.

5

Union Carbide Corporation and Subsidiaries

Consolidated Balance Sheets

In millions, except share amounts (Unaudited)	Mar 31, 2020		Dec 31, 2019
Assets
Current Assets
Cash and cash equivalents	$	11	$	11
Accounts receivable:
Trade (net of allowance for doubtful receivables 2020: $—; 2019: $—)	26		26
Related companies	712		658
Other	17		17
Income taxes receivable	287		337
Notes receivable from related companies	1,499		1,505
Inventories	243		247
Other current assets	13		20
Total current assets	2,808		2,821
Investments
Investments in related companies	238		238
Other investments	21		22
Noncurrent receivables	119		118
Noncurrent receivables from related companies	67		66
Total investments	445		444
Property
Property	7,279		7,247
Less accumulated depreciation	5,922		5,878
Net property	1,357		1,369
Other Assets
Intangible assets (net of accumulated amortization 2020: $92; 2019: $90)	21		22
Operating lease right-of-use assets	86		89
Deferred income tax assets	499		507
Deferred charges and other assets	24		26
Total other assets	630		644
Total Assets	$	5,240	$	5,278
Liabilities and Equity
Current Liabilities
Notes payable to related companies	$	31	$	32
Notes payable - other	8		6
Long-term debt due within one year	1		1
Accounts payable:
Trade	207		218
Related companies	293		386
Other	21		10
Operating lease liabilities - current	15		16
Income taxes payable	25		25
Asbestos-related liabilities - current	100		105
Accrued and other current liabilities	130		126
Total current liabilities	831		925
Long-Term Debt	472		473
Other Noncurrent Liabilities
Pension and other postretirement benefits - noncurrent	1,140		1,154
Asbestos-related liabilities - noncurrent	1,048		1,060
Operating lease liabilities - noncurrent	72		74
Other noncurrent obligations	191		194
Total other noncurrent liabilities	2,451		2,482
Stockholder's Equity
Common stock (authorized: 1,000 shares of $0.01 par value each; issued: 935.51 shares)	—		—
Additional paid-in capital	141		141
Retained earnings	2,987		2,922
Accumulated other comprehensive loss	(1,642)		(1,665)
Union Carbide Corporation's stockholder's equity	1,486		1,398
Total Liabilities and Equity	$	5,240	$	5,278

See Notes to the Consolidated Financial Statements.

6

Union Carbide Corporation and Subsidiaries

Consolidated Statements of Cash Flows

	Three Months Ended
In millions (Unaudited)	Mar 31, 2020		Mar 31, 2019
Operating Activities
Net income attributable to Union Carbide Corporation	$	146	$	245
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	52		49
Provision (credit) for deferred income tax	1		(1)
Net gain on sales of property and investments	(1)		—
Restructuring charges	2		1
Net periodic pension benefit cost	14		13
Pension contributions	(1)		(1)
Other, net	(1)		—
Changes in assets and liabilities:
Accounts and notes receivable	1		2
Related company receivables	(48)		(40)
Inventories	4		(17)
Accounts payable	3		7
Related company payables	(95)		(124)
Asbestos-related payments	(18)		(17)
Other assets and liabilities	53		99
Cash provided by operating activities	112		216
Investing Activities
Capital expenditures	(33)		(60)
Change in noncurrent receivable from related company	—		1
Proceeds from sales of investments	—		2
Cash used for investing activities	(33)		(57)
Financing Activities
Dividends paid to parent	(81)		(160)
Changes in short-term notes payable	2		1
Cash used for financing activities	(79)		(159)
Summary
Increase in cash and cash equivalents	—		—
Cash and cash equivalents at beginning of period	11		13
Cash and cash equivalents at end of period	$	11	$	13

See Notes to the Consolidated Financial Statements.

7

Union Carbide Corporation and Subsidiaries

Consolidated Statements of Equity

	Three Months Ended
In millions (Unaudited)	Mar 31, 2020		Mar 31, 2019
Common Stock
Balance at beginning and end of period	$	—	$	—
Additional Paid-in Capital
Balance at beginning and end of period	141		138
Retained Earnings
Balance at beginning of period	2,922		3,338
Net income attributable to Union Carbide Corporation	146		245
Dividends declared	(81)		(632)
Balance at end of period	2,987		2,951
Accumulated Other Comprehensive Loss, Net of Tax
Balance at beginning of period	(1,665)		(1,561)
Other comprehensive income	23		15
Balance at end of period	(1,642)		(1,546)
Union Carbide Corporation's Stockholder's Equity	$	1,486	$	1,543

See Notes to the Consolidated Financial Statements.

8

Union Carbide Corporation and Subsidiaries

(Unaudited)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Table of Contents

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

NOTE 1 - 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, 2019.

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 separable reportable business segments for UCC under the accounting guidance related to segment reporting and no detailed business information is provided to a chief operating decision maker regarding the Corporation’s stand-alone operations, the Corporation’s results are reported as a single operating segment.

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 and its consolidated subsidiaries. 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. 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. See Note 3 for additional information.

9

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 12 for additional information.

NOTE 2 - RECENT ACCOUNTING GUIDANCE

Accounting Guidance Issued But Not Adopted at March 31, 2020

In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 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 new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted, with the amendments to be applied on a retrospective, modified retrospective or prospective basis, depending on the specific amendment. The Corporation is currently evaluating the impact of adopting this guidance.

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The amendments provide optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments are intended to ease the potential burden in accounting for, or recognizing the effects of, reference rate reform on financial reporting. The new standard is effective March 12, 2020 through December 31, 2022, with the adoption date being dependent upon the Corporation’s election. The Corporation is currently evaluating the impact of adopting this guidance.

NOTE 3 - BUSINESS SEPARATION

On April 1, 2019, DowDuPont completed the separation of its materials science business and Dow Inc. became the direct parent company of TDCC. UCC remains a wholly owned subsidiary of TDCC.

In the first quarter of 2019, in anticipation of DowDuPont's intended separation of its materials science business, UCC's assets and liabilities aligned with TDCC's specialty products business were transferred to TDCC as part of the internal reorganization steps to align TDCC's specialty products business to DowDuPont. In order to align entity ownership under TDCC, UCC distributed shares and assets to TDCC through dividends or asset distributions. As a result, in February 2019, UCC issued to TDCC a dividend of 1,067 shares of common stock of Dow International Holdings Company (“DIHC”), a cost method investment, resulting in a reduction in "Investments in related companies" of $401 million. UCC also transferred, as an asset distribution, the assets and liabilities aligned with TDCC's specialty products business for an additional dividend of $71 million to TDCC. The results of these transactions are reflected in “Investments in related companies” and “Retained earnings” in the consolidated balance sheets. See Note 12 for additional information.

The Corporation evaluated the impact of the specialty products product line transfer and determined it did not represent a strategic shift that had a major effect on the Corporation’s operations and financial results and did not qualify as an individually significant component of the Corporation. As a result, this transfer was not reported as discontinued operations.

NOTE 4 - REVENUE

Substantially all of the Corporation's revenue is generated by sales to TDCC. Products are sold to and purchased from TDCC at market-based prices in accordance with the terms of an agreement between UCC and TDCC. Approximately 99 percent of the Corporation's revenue for the three months ended March 31, 2020, related to sales of product (98 percent for the three months ended March 31, 2019); 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 21 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 $39 million at March 31, 2020 ($41 million at December 31, 2019), of which $3 million ($4 million at December 31, 2019) was included in "Accrued and other current liabilities" and $36 million ($37 million at December 31, 2019) was included in "Other noncurrent obligations" in the consolidated balance sheets.

10

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.

NOTE 5 - INVENTORIES

The following table provides a breakdown of inventories:

Inventories	Mar 31, 2020		Dec 31, 2019
In millions
Finished goods	$	154	$	162
Work in process	25		31
Raw materials	47		47
Supplies	90		92
Total	$	316	$	332
Adjustment of inventories to a LIFO basis	(73)		(85)
Total inventories	$	243	$	247

NOTE 6 - INTANGIBLE ASSETS

The following table provides information regarding the Corporation’s intangible assets:

Intangible Assets	Mar 31, 2020						Dec 31, 2019
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		(59)		21		79		(57)		22
Total intangible assets	$	113	$	(92)	$	21	$	112	$	(90)	$	22

Total estimated amortization expense for 2020 and the five succeeding fiscal years, including amounts for intangible assets not yet placed in service, is as follows:

Estimated Amortization Expense
In millions
2020	$	8
2021	$	6
2022	$	5
2023	$	3
2024	$	1
2025	$	—

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NOTE 7 - COMMITMENTS AND CONTINGENT LIABILITIES

Environmental Matters

Accruals for environmental matters are recorded when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated, based on current law and existing technologies. At March 31, 2020, the Corporation had accrued obligations of $131 million for probable environmental remediation and restoration costs, including $18 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, 2019, the Corporation had accrued obligations of $132 million for probable environmental remediation and restoration costs, including $20 million for the remediation of Superfund sites.

Litigation

Asbestos-Related Matters

A summary of asbestos-related matters can be found in Note 14 to the Consolidated Financial Statements included in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2019.

Introduction

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

Estimating the Asbestos-Related Liability

Since 2003, the Corporation has engaged Ankura Consulting Group, LLC ("Ankura"), a third party actuarial specialist, to review the Corporation's historical asbestos-related claim and resolution activity in order to assist UCC management in estimating the asbestos-related liability. Each year, the Corporation requests Ankura to review its claim and resolution activity, including asbestos-related defense and processing costs, to determine the appropriateness of updating the most recent Ankura study.

Based on the review completed by Ankura in December 2019 and the Corporation's internal review process, the Corporation's total asbestos-related liability through the terminal year of 2049, including asbestos-related defense and processing costs, was $1,165 million at December 31, 2019, and was included in “Asbestos-related liabilities - current” and “Asbestos-related liabilities - noncurrent” in the consolidated balance sheets.

Each quarter, the Corporation reviews claims filed, settled and dismissed, as well as average settlement and resolution costs by disease category. The Corporation also considers additional quantitative and qualitative factors such as the nature of pending claims, trial experience of the Corporation and other asbestos defendants, current spending for defense and processing costs, significant appellate rulings and legislative developments, trends in the tort system, and their respective effects on expected future resolution costs. UCC management considers these factors in conjunction with the most recent Ankura study and determines whether a change in the estimate is warranted. Based on the Corporation's review of 2020 activity, it was determined that no adjustment to the accrual was required at March 31, 2020.

The Corporation’s asbestos-related liability for pending and future claims and defense and processing costs was $1,148 million at March 31, 2020, and approximately 19 percent of the recorded claim liability related to pending claims and approximately 81 percent related to future claims.

12

Summary

The Corporation's management believes the amounts recorded for the asbestos-related liability, including defense and processing costs, reflect reasonable and probable estimates of the liability based on current, known facts. However, future events, such as the number of new claims to be filed and/or received each year and the average cost of defending and disposing of each such claim, as well as the numerous uncertainties surrounding asbestos litigation in the United States over a significant period of time, could cause the actual costs for the Corporation to be higher or lower than those projected or those recorded. Any such event could result in an increase or decrease in the recorded liability.

Because of the uncertainties described above, the Corporation cannot estimate the full range of the cost of resolving pending and future asbestos-related claims facing UCC and Amchem. As a result, it is reasonably possible that an additional cost of disposing of asbestos-related claims, including future defense and processing costs, could have a material impact on the Corporation's results of operations and cash flows for a particular period and on the consolidated financial position.

Other Litigation Matters

The Corporation is also involved in a number of legal proceedings and claims with both private and governmental parties. These cover a wide range of matters, including, but not limited to: product liability; trade regulation; governmental tax and regulatory disputes; health, safety and environmental matters; employment matters; patent infringement; contracts; and commercial litigation. While it is not possible at this time to determine with certainty the ultimate outcome of any of the legal proceedings and claims referred to in this filing, management believes that the possibility is remote that the aggregate of all such other claims and lawsuits will have a material adverse impact on the results of operations, cash flows and financial position of the Corporation.

NOTE 8 - LEASES

For additional information on the Corporation's leases, see Note 15 to the Consolidated Financial Statements included in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2019.

The components of lease cost for operating and finance leases for the three months ended March 31, 2020 and 2019 were as follows:

Lease Cost	Three Months Ended
In millions	Mar 31, 2020		Mar 31, 2019
Operating lease cost	$	5	$	6
Short-term lease cost	6		7
Variable lease cost	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, 2020		Mar 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	5	$	6

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

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 March 31, 2020:

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 March 31, 2020, the Corporation had additional leases of approximately $16 million for equipment and a rail yard, which had not yet commenced. These leases are expected to commence in 2020 and 2021, with lease terms of up to 20 years.

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NOTE 9 - 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, 2020 and 2019 were as follows:

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 for income taxes."

NOTE 10 - 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 Corporation's Annual Report on Form 10-K for the year ended December 31, 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
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.

15

NOTE 11 - 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 March 31, 2020 and December 31, 2019:

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.

NOTE 12 - 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 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 was included in "Sundry income (expense) - net" in the consolidated statements of income. Purchases from that TDCC subsidiary were $231 million in the first quarter of 2020 ($334 million in the first quarter of 2019). The decrease in purchase costs in the first quarter of 2020 when compared with the same period last year was primarily due to lower feedstock and energy costs.

The Corporation has a master services agreement with TDCC, whereby TDCC provides services including, but not limited to: accounting; legal; treasury (investments, cash management, risk management, insurance); procurement; human resources; environmental; health and safety; and business management for UCC. Under the master services agreement with 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 $8 million in the first quarter of 2020 ($6 million in the first quarter of 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 $23 million in the first quarter of 2020 ($23 million in the first quarter of 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 March 31, 2020, the Corporation had a note receivable of $1.5 billion ($1.5 billion at December 31, 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.

16

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, 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 March 31, 2020, $936 million was available under the revolving credit agreement ($937 million at December 31, 2019). The cash collateral was reported as “Noncurrent receivables from related companies” in the consolidated balance sheets.

On a quarterly basis, the Corporation's Board of 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 first quarter of 2020, the Corporation declared and paid a cash dividend of $81 million to TDCC. In the first quarter of 2019, the Corporation declared and paid a cash dividend of $160 million to TDCC.

In the first quarter of 2019, in anticipation of the business separation activities to align 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 TDCC's specialty products business for an additional dividend to TDCC of $71 million. See Note 3 for additional information.

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

17

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.

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RESULTS OF OPERATIONS

Net Sales

Total net sales were $1,042 million in the first quarter of 2020 compared with $1,278 million in the first quarter of 2019, a decrease of 18 percent. Net sales to related companies, principally to TDCC, and based on market prices for the related products, were $1,013 million in the first quarter of 2020 compared with $1,250 million in the first quarter of 2019, a decrease of 19 percent.

Average selling price decreased 19 percent in the first quarter of 2020 compared with the same quarter last year. Price decreased across 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, driven by demand growth in the first quarter of 2020, and polyethylene, which was impacted by railcar shortages in the first quarter of 2019. These volume increases were partially offset by decreases in plastics used for wire and cable applications as a result of planned maintenance turnaround activity and other equipment maintenance in the first quarter of 2020, and volume decreases resulting from the Business Separation and the divestiture of the Corporation's acetone derivatives product line in the fourth quarter of 2019.

Cost of Sales

Cost of sales was $826 million in the first quarter of 2020 compared with $950 million in the first quarter of 2019, a decrease of 13 percent. The decline in cost of sales was driven primarily by lower feedstock and other raw material costs, the impact from the Business Separation 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 and SG&A expenses were $2 million, both flat compared with the first quarter of 2019.

Restructuring Charges

In September and November 2017, the Corporation approved restructuring actions that were aligned with DowDuPont’s synergy targets. As part of the 2017 restructuring program, the Corporation recorded pretax restructuring charges of $2 million for severance and related benefit costs in the first quarter of 2020, compared with $1 million in the first quarter of 2019.

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 first quarter of 2020 was expense of $18 million compared with expense of $21 million in the same quarter last year.

Interest Income

Interest income was $7 million in the first quarter of 2020 compared with $9 million in the first quarter of 2019. The decrease in interest income primarily resulted from the impact of lower interest rates 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 first quarter of 2019.

Provision for Income Taxes

The Corporation reported a tax provision of $41 million in the 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 18.1 percent. The effective tax rate fluctuates based on, among other factors, where income is earned. The tax rate in the first quarter of 2019 was favorably impacted by a deduction in the U.S. related to certain sales to foreign customers.

Net Income Attributable to UCC

The Corporation reported net income of $146 million in the first quarter of 2020 compared with $245 million in the first quarter of 2019.

Capital Expenditures

Capital spending in the first quarter of 2020 was $33 million compared with $60 million in the first quarter of 2019, as spending for U.S. Gulf Coast projects and site infrastructure projects continues to trend down.

19

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, 2019 ("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 2019 10-K. Since December 31, 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:

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

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 7 to the Consolidated Financial Statements and Part II, Item 1. Legal Proceedings.

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 March 31, 2020.

20

Dividends

On a quarterly basis, the Corporation's Board of 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 first quarter of 2020, the Corporation declared and paid a cash dividend of $81 million to TDCC ($160 million in the first quarter of 2019). On April 27, 2020, the Board approved a dividend to TDCC of $81 million, payable on or before June 26, 2020.

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

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.

21

Union Carbide Corporation and Subsidiaries

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

Litigation

Asbestos-Related Matters

No material developments in asbestos-related matters occurred in the first quarter of 2020. For a current status of asbestos-related matters, see Note 7 to the Consolidated Financial Statements.

ITEM 1A.  RISK FACTORS

Since December 31, 2019, there have been no material changes to the Corporation's Risk Factors, except as noted below:

Public Health Crisis: A public health crisis or global outbreak of disease, including the pandemic caused by coronavirus disease 2019 (“COVID-19”) has had, and could continue to have, a negative effect on the Corporation's manufacturing operations, supply chain and workforce, creating disruptions that could have a material adverse impact on the Corporation’s financial condition, results of operations and cash flows.

UCC sells substantially all of its products to TDCC in order to simplify the worldwide customer interface process and, as a result, the Corporation is subject to many of the same global risk factors facing TDCC, including those presented by COVID-19. The pandemic caused by 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 and sold. The global, regional and local spread of COVID-19 has resulted in significant global mitigation measures, including government-directed quarantines, social distancing and shelter-in-place mandates, travel restrictions and/or bans, and restricted access to certain corporate facilities and manufacturing sites. 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, has contributed to the volatility of financial markets. While the severity and duration of the COVID-19 pandemic in key geographic regions and end-markets cannot be reasonably estimated at this time, impacts to the Corporation may include, but are not limited to: a decrease in demand for the Corporation’s products; reduced profitability; large-scale supply chain disruptions impeding the Corporation’s ability to ship and/or receive product; potential interruptions or limitations to manufacturing operations imposed by local, state or federal governments; shortages of key raw materials; workforce absenteeism and distraction; labor shortages; cyber security and data accessibility disruptions due to remote working arrangements; asset impairment charges; increased obligations related to the Corporation’s pension and other postretirement benefit plans; and deferred tax valuation allowances. Disruptions and market volatility resulting from the COVID-19 pandemic could have a material adverse impact on the Corporation’s results of operations, financial condition and cash flows.

ITEM 4.  MINE SAFETY DISCLOSURES

Not applicable.

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ITEM 6.  EXHIBITS

EXHIBIT NO.	DESCRIPTION
23 *	Ankura Consulting Group, LLC's Consent.
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 *	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.

* Filed herewith

23

 Union Carbide Corporation and Subsidiaries

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

UNION CARBIDE CORPORATION

Registrant

Date:	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

24

EX-23

EXHIBIT 23

Ankura Consulting Group, LLC's Consent

Union Carbide Corporation:

Ankura Consulting Group, LLC ("Ankura") hereby consents to the use of Ankura's name and the reference to Ankura's reports appearing in this Quarterly Report on Form 10-Q of Union Carbide Corporation for the quarter ended March 31, 2020.

/s/ AMY BROCKMAN

Amy Brockman
Senior Managing Director
Ankura Consulting Group, LLC
May 1, 2020

25

EX-31.1

EXHIBIT 31.1

Union Carbide Corporation and Subsidiaries

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Richard A. Wells, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Union Carbide Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):

a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 1, 2020

/s/ RICHARD A. WELLS

Richard A. Wells

President and Chief Executive Officer

26

EX-31.2

EXHIBIT 31.2

Union Carbide Corporation and Subsidiaries

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Ignacio Molina, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Union Carbide Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):

a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 1, 2020

/s/ IGNACIO MOLINA

Ignacio Molina

Vice President, Treasurer and

Chief Financial Officer

27

EX-32.1

EXHIBIT 32.1

Union Carbide Corporation and Subsidiaries

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

I, Richard A. Wells, President and Chief Executive Officer of Union Carbide Corporation (the "Corporation"), certify that:

1.the Quarterly Report on Form 10-Q of the Corporation for the quarter ended March 31, 2020 as filed with the Securities and Exchange Commission (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

/s/ RICHARD A. WELLS

Richard A. Wells

President and Chief Executive Officer

Date: May 1, 2020

28

EX-32.2

EXHIBIT 32.2

Union Carbide Corporation and Subsidiaries

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

I, Ignacio Molina, Vice President, Treasurer and Chief Financial Officer of Union Carbide Corporation (the "Corporation"), certify that:

1.the Quarterly Report on Form 10-Q of the Corporation for the quarter ended March 31, 2020 as filed with the Securities and Exchange Commission (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

/s/ IGNACIO MOLINA

Ignacio Molina

Vice President, Treasurer and

Chief Financial Officer

Date: May 1, 2020

29

XML

RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Feb. 15, 2019
Related Party Transaction [Line Items]
Payments of Dividends	$ 81	$ 160
The Dow Chemical Company [Member]
Related Party Transaction [Line Items]
Related Party Transaction, Expenses from Transactions with Related Party	$ 231	334
Service Fee with Parent	10.00%
Notes Receivable, Related Parties	$ 1,500		$ 1,500
Line of Credit Facility, Maximum Borrowing Capacity	1,000
Line of Credit Facility, Remaining Borrowing Capacity	936		$ 937
Payments of Dividends	81	160
Dividends, Paid-in-kind		71
The Dow Chemical Company [Member] | Sundry income (expense) [Member]
Related Party Transaction [Line Items]
Related Party Transaction, Expenses from Transactions with Related Party	8	6
The Dow Chemical Company [Member] | Cost of Sales [Member]
Related Party Transaction [Line Items]
Related Party Transaction, Expenses from Transactions with Related Party	$ 23	23
Dow International Holdings Company [Member]
Related Party Transaction [Line Items]
Stock Dividend Ownership Interest Percentage, Related Company				63.40%
The Dow Chemical Company [Member] | Dow International Holdings Company [Member]
Related Party Transaction [Line Items]
Dividends, Common Stock, Stock		$ 401

XML

LEASES (Details) - USD ($) $ in Millions		3 Months Ended		12 Months Ended
	Jan. 01, 2019	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Operating Lease Cost		$ 5	$ 6
Short-term Lease Cost		6	7
Variable Lease, Cost		2	0
Lease, Cost		13	13
Operating cash flows for operating leases		5	$ 6
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability	$ 99	3		$ 105
Operating lease right-of-use assets		86		89
Finance Lease, Right-of-Use Asset		12		12
Less accumulated depreciation		5,922		5,878
Total Lease Assets		91		95
Operating lease liabilities - current		15		16
Finance Lease, Liability, Current		1		1
Operating lease liabilities - noncurrent		72		74
Finance Lease, Liability, Noncurrent		4		5
Total Lease Liabilities		$ 92		$ 96
Operating Lease, Weighted Average Remaining Lease Term		6 years 4 months 24 days		6 years 3 months 18 days
Finance Lease, Weighted Average Remaining Lease Term		4 years 3 months 18 days		4 years 6 months
Operating Lease, Weighted Average Discount Rate, Percent		4.13%		4.13%
Finance Lease, Weighted Average Discount Rate, Percent		4.22%		4.22%
Lessee, Operating Lease, Liability, Payments, Remainder of 2020		$ 13
Finance Lease, Liability, Payments, Due 2020		1
Lessee, Operating Lease, Liability, Payments, Due 2021		16
Finance Lease, Liability, Payments, Due 2021		2
Lessee, Operating Lease, Liability, Payments, Due 2022		16
Finance Lease, Liability, Payments, Due 2022		1
Lessee, Operating Lease, Liability, Payments, Due 2023		14
Finance Lease, Liability, Payments, Due 2023		1
Lessee, Operating Lease, Liability, Payments, Due 2024		13
Finance Lease, Liability, Payments, Due 2024		1
Lessee, Operating Lease, Liability, Payments, Due 2025 and thereafter		27
Finance Lease, Liability, Payments, Due 2025 and thereafter		0
Lessee, Operating Lease, Liability, Payments, Due		99
Finance Lease, Liability, Payment, Due		6
Lessee, Operating Lease, Liability, Undiscounted Excess Amount		12
Finance Lease, Liability, Undiscounted Excess Amount		1
Operating Lease, Liability		87
Finance Lease, Liability		5
Lessee, Additional Leases Not yet Commenced, Assumptions and Judgment, Amount		$ 16
Lessee, Operating Lease, Lease Not yet Commenced, Term of Contract		20 years
finance leases [Member]
Less accumulated depreciation		$ 7		$ 6

XML

INTANGIBLE ASSETS

3 Months Ended

Mar. 31, 2020

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, 2020						Dec 31, 2019
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		(59)		21		79		(57)		22
Total intangible assets	$	113	$	(92)	$	21	$	112	$	(90)	$	22

Total estimated amortization expense for 2020 and the five succeeding fiscal years, including amounts for intangible assets not yet placed in service, is as follows:

Estimated Amortization Expense
In millions
2020	$	8
2021	$	6
2022	$	5
2023	$	3
2024	$	1
2025	$	—

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PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS

3 Months Ended

Mar. 31, 2020

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 Corporation's Annual Report on Form 10-K for the year ended December 31, 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
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

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Net income attributable to Union Carbide Corporation	$ 146	$ 245
Cumulative translation adjustments	3	0
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, after Tax	(20)	(15)
Other Comprehensive Income (Loss), Net of Tax	23	15
Comprehensive income attributable to Union Carbide Corporation	$ 169	$ 260

XML

CONSOLIDATED FINANCIAL STATEMENTS

3 Months Ended

Mar. 31, 2020

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, 2019.

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 separable reportable business segments for UCC under the accounting guidance related to segment reporting and no detailed business information is provided to a chief operating decision maker regarding the Corporation’s stand-alone operations, the Corporation’s results are reported as a single operating segment.

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 and its consolidated subsidiaries. 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. 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. See Note 3 for additional information.

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 12 for additional information.

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INVENTORIES (Tables)

3 Months Ended

Mar. 31, 2020

Inventory Disclosure [Abstract]

Schedule of Inventory, Current [Table Text Block]

The following table provides a breakdown of inventories:

Inventories	Mar 31, 2020		Dec 31, 2019
In millions
Finished goods	$	154	$	162
Work in process	25		31
Raw materials	47		47
Supplies	90		92
Total	$	316	$	332
Adjustment of inventories to a LIFO basis	(73)		(85)
Total inventories	$	243	$	247

XML

Compensation Related Costs, Retirement Benefits (Tables)

3 Months Ended

Mar. 31, 2020

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 for all significant plans:

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	$	—	$	—

XML

INVENTORIES (Schedule of Inventories) (Details) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Inventory Disclosure [Abstract]
Finished goods	$ 154	$ 162
Work in process	25	31
Raw materials	47	47
Supplies	90	92
Inventory, Gross	316	332
Inventory Adjustments	73	85
Total inventories	$ 243	$ 247

XML

AOCL (Tables)

3 Months Ended

Mar. 31, 2020

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, 2020 and 2019 were as follows:

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 for income taxes."

XML

Revenue from Contract with Customer (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Revenue from External Customer [Line Items]
Revenue, Percentage from Products and Services Transferred to Customers	99.00%	98.00%
Contract with Customer, Liability	$ 39		$ 41
Accrued Liabilities [Member]
Revenue from External Customer [Line Items]
Contract with Customer, Liability, Current	3		4
Other Noncurrent Liabilities [Member]
Revenue from External Customer [Line Items]
Contract with Customer, Liability, Noncurrent	$ 36		$ 37
Maximum [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01
Revenue from External Customer [Line Items]
Revenue, Performance Obligation, Description of Timing	21 years

XML

AOCL (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Dec. 31, 2018
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive loss	$ (1,642)	$ (1,546)	$ (1,665)
Other Comprehensive Income (Loss), Net of Tax	23	15
Accumulated Foreign Currency Adjustment Attributable to Parent [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive loss	(53)	(57)	(56)	$ (57)
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax	3	0
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive loss	(1,589)	(1,489)	$ (1,609)	$ (1,504)
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax	26	19
Reclassification from AOCI, Current Period, Tax	(6)	(4)
Other Comprehensive Income (Loss), Net of Tax	$ 20	$ 15

XML

Consolidated Statements of Income - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Net trade sales	$ 29	$ 28
Net sales to related companies	1,013	1,250
Total Net Sales	1,042	1,278
Cost of sales	826	950
Research and development expenses	6	6
Selling, general and administrative expenses	2	2
Restructuring and asset related charges - net	2	1
Integration and separation costs	0	1
Sundry income (expense) - net	(18)	(21)
Interest Income, Other	7	9
Interest expense and amortization of debt discount	8	7
Income before income taxes	187	299
Provision for income taxes	41	54
Net Income Attributable to Union Carbide Corporation	146	245
Depreciation	45	43
Capital Expenditures	$ 33	$ 60

XML

Accounting Changes and Error Corrections (Policies)

3 Months Ended

Mar. 31, 2020

Accounting Changes and Error Corrections [Abstract]

RECENT ACCOUNTING GUIDANCE

RECENT ACCOUNTING GUIDANCE

Accounting Guidance Issued But Not Adopted at March 31, 2020

In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 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 new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted, with the amendments to be applied on a retrospective, modified retrospective or prospective basis, depending on the specific amendment. The Corporation is currently evaluating the impact of adopting this guidance.

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The amendments provide optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments are intended to ease the potential burden in accounting for, or recognizing the effects of, reference rate reform on financial reporting. The new standard is effective March 12, 2020 through December 31, 2022, with the adoption date being dependent upon the Corporation’s election. The Corporation is currently evaluating the impact of adopting this guidance.

XML

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	$ 138	$ 3,338	$ (1,561)
Net income attributable to Union Carbide Corporation	$ 245			245
Dividends, Common Stock				(632)
Other Comprehensive Income (Loss), Net of Tax	15				15
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	1,543	0	138	2,951	(1,546)
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	1,398	0	141	2,922	(1,665)
Net income 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)

XML

INVENTORIES

3 Months Ended

Mar. 31, 2020

Inventory Disclosure [Abstract]

INVENTORIES

INVENTORIES

The following table provides a breakdown of inventories:

Inventories	Mar 31, 2020		Dec 31, 2019
In millions
Finished goods	$	154	$	162
Work in process	25		31
Raw materials	47		47
Supplies	90		92
Total	$	316	$	332
Adjustment of inventories to a LIFO basis	(73)		(85)
Total inventories	$	243	$	247

XML

AOCL

3 Months Ended

Mar. 31, 2020

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, 2020 and 2019 were as follows:

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 for income taxes."

XML

INTANGIBLE ASSETS (Tables)

3 Months Ended

Mar. 31, 2020

Intangible Assets, Net (Excluding Goodwill) [Abstract]

Intangible Assets

The following table provides information regarding the Corporation’s intangible assets:

Intangible Assets	Mar 31, 2020						Dec 31, 2019
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		(59)		21		79		(57)		22
Total intangible assets	$	113	$	(92)	$	21	$	112	$	(90)	$	22

Schedule of Expected Amortization Expense [Table Text Block]

Total estimated amortization expense for 2020 and the five succeeding fiscal years, including amounts for intangible assets not yet placed in service, is as follows:

Estimated Amortization Expense
In millions
2020	$	8
2021	$	6
2022	$	5
2023	$	3
2024	$	1
2025	$	—

XML

Fair Value Measures and Disclosures (Tables)

3 Months Ended

Mar. 31, 2020

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, 2020 and December 31, 2019:

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.

XML

INTANGIBLE ASSETS (Schedule of Amortization Expense of Intangible Assets) (Table and Narrative) (Details) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Finite-Lived Intangible Assets, Gross	$ 113	$ 112
Finite-Lived Intangible Assets, Accumulated Amortization	92	90
Finite-Lived Intangible Assets, Net	21	22
Licenses and developed technology [Member]
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	80	79
Finite-Lived Intangible Assets, Accumulated Amortization	59	57
Finite-Lived Intangible Assets, Net	$ 21	$ 22

XML

Consolidated Balance Sheets - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Cash and cash equivalents	$ 11	$ 11
Trade (net of allowance for doubtful receivables 2020: $-; 2019: $-)	26	26
Allowance for doubtful accounts	0	0
Related companies	712	658
Other	17	17
Income taxes receivable	287	337
Notes receivable from related companies	1,499	1,505
Inventories	243	247
Other current assets	13	20
Total current assets	2,808	2,821
Investments in related companies	238	238
Other investments	21	22
Noncurrent receivables	119	118
Noncurrent receivables from related companies	67	66
Total investments	445	444
Property	7,279	7,247
Less accumulated depreciation	5,922	5,878
Net property	1,357	1,369
Intangible assets (net of accumulated amortization 2020: $92; 2019: $90)	21	22
Finite-Lived Intangible Assets, Accumulated Amortization	92	90
Operating lease right-of-use assets	86	89
Deferred Tax Assets, Deferred Income	499	507
Deferred charges and other assets	24	26
Total other assets	630	644
Total Assets	5,240	5,278
Notes payable - related companies	31	32
Notes Payable - Other	8	6
Long-term debt due within one year	1	1
Trade	207	218
Related companies	293	386
Other	21	10
Operating lease liabilities - current	15	16
Income taxes payable	25	25
Asbestos-related liabilities - current	100	105
Accrued and other current liabilities	130	126
Total current liabilities	831	925
Long-term Debt	473	474
Pension and other postretirement benefits - noncurrent	1,140	1,154
Asbestos-related liabilities - noncurrent	1,048	1,060
Operating lease liabilities - noncurrent	72	74
Other noncurrent obligations	191	194
Liabilities, Other than Long-term Debt, Noncurrent	2,451	2,482
Common stock (authorized: 1,000 shares of $0.01 par value each; issued: 935.51 shares)	$ 0	$ 0
Common stock, shares authorized	1,000	1,000
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares issued	935.51	935.51
Additional paid-in capital	$ 141	$ 141
Retained earnings	2,987	2,922
Accumulated other comprehensive loss	(1,642)	(1,665)
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	1,486	1,398
Total Liabilities and Equity	5,240	5,278
Long-Term Debt	$ 472	$ 473

XML

COMMITMENTS AND CONTINGENT LIABILITIES

3 Months Ended

Mar. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES DISCLOSURE

COMMITMENTS AND CONTINGENT LIABILITIES

Environmental Matters

Accruals for environmental matters are recorded when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated, based on current law and existing technologies. At March 31, 2020, the Corporation had accrued obligations of $131 million for probable environmental remediation and restoration costs, including $18 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, 2019, the Corporation had accrued obligations of $132 million for probable environmental remediation and restoration costs, including $20 million for the remediation of Superfund sites.

Litigation

Asbestos-Related Matters

A summary of asbestos-related matters can be found in Note 14 to the Consolidated Financial Statements included in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2019.

Introduction

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

Estimating the Asbestos-Related Liability

Since 2003, the Corporation has engaged Ankura Consulting Group, LLC ("Ankura"), a third party actuarial specialist, to review the Corporation's historical asbestos-related claim and resolution activity in order to assist UCC management in estimating the asbestos-related liability. Each year, the Corporation requests Ankura to review its claim and resolution activity, including asbestos-related defense and processing costs, to determine the appropriateness of updating the most recent Ankura study.

Based on the review completed by Ankura in December 2019 and the Corporation's internal review process, the Corporation's total asbestos-related liability through the terminal year of 2049, including asbestos-related defense and processing costs, was $1,165 million at December 31, 2019, and was included in “Asbestos-related liabilities - current” and “Asbestos-related liabilities - noncurrent” in the consolidated balance sheets.

Each quarter, the Corporation reviews claims filed, settled and dismissed, as well as average settlement and resolution costs by disease category. The Corporation also considers additional quantitative and qualitative factors such as the nature of pending claims, trial experience of the Corporation and other asbestos defendants, current spending for defense and processing costs, significant appellate rulings and legislative developments, trends in the tort system, and their respective effects on expected future resolution costs. UCC management considers these factors in conjunction with the most recent Ankura study and determines whether a change in the estimate is warranted. Based on the Corporation's review of 2020 activity, it was determined that no adjustment to the accrual was required at March 31, 2020.

The Corporation’s asbestos-related liability for pending and future claims and defense and processing costs was $1,148 million at March 31, 2020, and approximately 19 percent of the recorded claim liability related to pending claims and approximately 81 percent related to future claims.

Summary

The Corporation's management believes the amounts recorded for the asbestos-related liability, including defense and processing costs, reflect reasonable and probable estimates of the liability based on current, known facts. However, future events, such as the number of new claims to be filed and/or received each year and the average cost of defending and disposing of each such claim, as well as the numerous uncertainties surrounding asbestos litigation in the United States over a significant period of time, could cause the actual costs for the Corporation to be higher or lower than those projected or those recorded. Any such event could result in an increase or decrease in the recorded liability.

Because of the uncertainties described above, the Corporation cannot estimate the full range of the cost of resolving pending and future asbestos-related claims facing UCC and Amchem. As a result, it is reasonably possible that an additional cost of disposing of asbestos-related claims, including future defense and processing costs, could have a material impact on the Corporation's results of operations and cash flows for a particular period and on the consolidated financial position.

Other Litigation Matters

The Corporation is also involved in a number of legal proceedings and claims with both private and governmental parties. These cover a wide range of matters, including, but not limited to: product liability; trade regulation; governmental tax and regulatory disputes; health, safety and environmental matters; employment matters; patent infringement; contracts; and commercial litigation. While it is not possible at this time to determine with certainty the ultimate outcome of any of the legal proceedings and claims referred to in this filing, management believes that the possibility is remote that the aggregate of all such other claims and lawsuits will have a material adverse impact on the results of operations, cash flows and financial position of the Corporation.

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BUSINESS SEPARATION

3 Months Ended

Mar. 31, 2020

BUSINESS SEPARATION [Abstract]

Mergers, Acquisitions and Dispositions Disclosures [Text Block]

BUSINESS SEPARATION

On April 1, 2019, DowDuPont completed the separation of its materials science business and Dow Inc. became the direct parent company of TDCC. UCC remains a wholly owned subsidiary of TDCC.

In the first quarter of 2019, in anticipation of DowDuPont's intended separation of its materials science business, UCC's assets and liabilities aligned with TDCC's specialty products business were transferred to TDCC as part of the internal reorganization steps to align TDCC's specialty products business to DowDuPont. In order to align entity ownership under TDCC, UCC distributed shares and assets to TDCC through dividends or asset distributions. As a result, in February 2019, UCC issued to TDCC a dividend of 1,067 shares of common stock of Dow International Holdings Company (“DIHC”), a cost method investment, resulting in a reduction in "Investments in related companies" of $401 million. UCC also transferred, as an asset distribution, the assets and liabilities aligned with TDCC's specialty products business for an additional dividend of $71 million to TDCC. The results of these transactions are reflected in “Investments in related companies” and “Retained earnings” in the consolidated balance sheets. See Note 12 for additional information.

The Corporation evaluated the impact of the specialty products product line transfer and determined it did not represent a strategic shift that had a major effect on the Corporation’s operations and financial results and did not qualify as an individually significant component of the Corporation. As a result, this transfer was not reported as discontinued operations.

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Fair Value Measures and Disclosures

3 Months Ended

Mar. 31, 2020

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/quality checks.

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

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.

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Fair Value Measures and Disclosures (Details) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Long-term Debt	$ (473)	$ (474)
Long-term Debt, Fair Value	(524)	(589)
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	(51)	(115)
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

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COMMITMENTS AND CONTINGENT LIABILITIES (Asbestos-Related Matters of Union Carbide Corporation) (Table and Narrative) (Details) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Loss Contingencies [Line Items]
Liability for Asbestos Claims and Defense Costs Gross	$ 1,148	$ 1,165
Percentage of recorded asbestos liability related to pending claims	19.00%
Percentage of recorded asbestos liability related to future claims	81.00%

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LEASES (Notes)

3 Months Ended

Mar. 31, 2020

Leases [Abstract]

Leases

LEASES

For additional information on the Corporation's leases, see Note 15 to the Consolidated Financial Statements included in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2019.

The components of lease cost for operating and finance leases for the three months ended March 31, 2020 and 2019 were as follows:

Lease Cost	Three Months Ended
In millions	Mar 31, 2020		Mar 31, 2019
Operating lease cost	$	5	$	6
Short-term lease cost	6		7
Variable lease cost	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, 2020		Mar 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	5	$	6

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

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 March 31, 2020:

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 March 31, 2020, the Corporation had additional leases of approximately $16 million for equipment and a rail yard, which had not yet commenced. These leases are expected to commence in 2020 and 2021, with lease terms of up to 20 years.

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RELATED PARTY TRANSACTIONS

3 Months Ended

Mar. 31, 2020

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS DISCLOSURE

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 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 was included in "Sundry income (expense) - net" in the consolidated statements of income. Purchases from that TDCC subsidiary were $231 million in the first quarter of 2020 ($334 million in the first quarter of 2019). The decrease in purchase costs in the first quarter of 2020 when compared with the same period last year was primarily due to lower feedstock and energy costs.

The Corporation has a master services agreement with TDCC, whereby TDCC provides services including, but not limited to: accounting; legal; treasury (investments, cash management, risk management, insurance); procurement; human resources; environmental; health and safety; and business management for UCC. Under the master services agreement with 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 $8 million in the first quarter of 2020 ($6 million in the first quarter of 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 $23 million in the first quarter of 2020 ($23 million in the first quarter of 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 March 31, 2020, the Corporation had a note receivable of $1.5 billion ($1.5 billion at December 31, 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.

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, 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 March 31, 2020, $936 million was available under the revolving credit agreement ($937 million at December 31, 2019). The cash collateral was reported as “Noncurrent receivables from related companies” in the consolidated balance sheets.

On a quarterly basis, the Corporation's Board of 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 first quarter of 2020, the Corporation declared and paid a cash dividend of $81 million to TDCC. In the first quarter of 2019, the Corporation declared and paid a cash dividend of $160 million to TDCC.

In the first quarter of 2019, in anticipation of the business separation activities to align 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 TDCC's specialty products business for an additional dividend to TDCC of $71 million. See Note 3 for additional information.

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REVENUE FROM CONTRACT WITH CUSTOMERS

3 Months Ended

Mar. 31, 2020

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 market-based prices in accordance with the terms of an agreement between UCC and TDCC. Approximately 99 percent of the Corporation's revenue for the three months ended March 31, 2020, related to sales of product (98 percent for the three months ended March 31, 2019); 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 21 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 $39 million at March 31, 2020 ($41 million at December 31, 2019), of which $3 million ($4 million at December 31, 2019) was included in "Accrued and other current liabilities" and $36 million ($37 million at December 31, 2019) 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.

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Cover Page	3 Months Ended
	Mar. 31, 2020 shares
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2020
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	2020
Document Fiscal Period Focus	Q1
Amendment Flag	false
Title of 12(b) Security	None

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Consolidated Statements of Cash Flows - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Net income attributable to Union Carbide Corporation	$ 146	$ 245
Depreciation and amortization	52	49
Provision (credit) for deferred income tax	1	(1)
Net gain on sales of property and investments	1	0
Restructuring and asset related charges - net	2	1
Net periodic pension benefit cost	14	13
Payment for Pension Benefits	1	1
Other, net	1	0
Increase (Decrease) in Accounts and Notes Receivable	(1)	(2)
Increase (Decrease) in Accounts Receivable, Related Parties	48	40
Increase (Decrease) in Inventories	(4)	17
Accounts payable	3	7
Related company payables	(95)	(124)
Asbestos-related payments	18	17
Increase (Decrease) in Other Operating Assets and Liabilities, Net	(53)	(99)
Cash provided by operating activities	112	216
Capital Expenditures	33	60
Increase (Decrease) in Due from Related Parties	0	(1)
Proceeds from sales of investments	0	2
Cash used for investing activities	(33)	(57)
Payments of Dividends	81	160
Changes in short-term notes payable	2	1
Cash used for financing activities	(79)	(159)
Cash and cash equivalents	11	13
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect, Total	$ 0	$ 0

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PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Defined Benefit Pension Plans [Member]
Service cost	$ 9	$ 9
Interest cost	28	36
Defined Benefit Plan, Expected Return (Loss) on Plan Assets	50	53
Defined Benefit Plan, Amortization of Gain (Loss)	(27)	(21)
Net periodic benefit cost	14	13
Other Postretirement Benefits [Member]
Interest cost	1	2
Defined Benefit Plan, Amortization of Gain (Loss)	1	2
Net periodic benefit cost	$ 0	$ 0

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COMMITMENTS AND CONTINGENT LIABILITIES (Environmental Matters) (Narrative) (Details) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Site Contingency [Line Items]
Accrual for Environmental Loss Contingencies	$ 131	$ 132
Super Fund Sites [Member]
Site Contingency [Line Items]
Accrual for Environmental Loss Contingencies	$ 18	$ 20

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INTANGIBLE ASSETS (Schedule of Future Amortization Expense of Intangible Assets) (Details) $ in Millions	Mar. 31, 2020 USD ($)
Estimated Amortization Expense, 2020	$ 8
Estimated Amortization Expense, 2021	6
Estimated Amortization Expense, 2022	5
Estimated Amortization Expense, 2023	3
Estimated Amortization Expense, 2024	1
Estimated Amortization Expense, 2025	$ 0

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LEASES (Tables)

3 Months Ended

Mar. 31, 2020

Leases [Abstract]

Lease, Cost [Table Text Block]

Lease Cost	Three Months Ended
In millions	Mar 31, 2020		Mar 31, 2019
Operating lease cost	$	5	$	6
Short-term lease cost	6		7
Variable lease cost	2		—
Total lease cost	$	13	$	13

Schedule of Supplemental Cash Flow Information Related to Leases [Table Text Block]

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

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, 2020 and December 31, 2019:

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 Terms and Discount Rates [Table Text Block]

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	%

Maturities of Lease Liabilities [Table Text Block]

The following table provides the maturities of lease liabilities at March 31, 2020:

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

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BUSINESS SEPARATION (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Feb. 15, 2019
The Dow Chemical Company [Member]
Related Party Transaction [Line Items]
Dividends, Common Stock, Stock	$ 401
Dividends, Paid-in-kind	$ 71
Dow International Holdings Company [Member]
Related Party Transaction [Line Items]
Common Stock, Related Company		1,067