10-Q
UNION CARBIDE CORP /NEW/ filed this Form 10-Q on 04/27/2017
Entire Document
 
 Union Carbide Corporation and Subsidiaries
 Notes to the Consolidated Financial Statements
(Unaudited)

certain existing pledged assets, primarily equity interests in various subsidiaries and a joint venture, with cash collateral. At March 31, 2017, $948 million ($947 million at December 31, 2016) was available under the revolving credit agreement. The cash collateral is reported as “Noncurrent receivables from related companies” in the consolidated balance sheets.

On a quarterly basis, the Corporation's Board of Directors reviews and determines if there will be a dividend distribution to its parent company and sole shareholder, Dow. 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 2017, the Corporation declared and paid a cash dividend of $169 million to Dow ($200 million declared and paid to Dow in the first quarter of 2016).


NOTE 9 - ACCUMULATED OTHER COMPREHENSIVE LOSS
The following table provides an analysis of the changes in accumulated other comprehensive loss for the three-month periods ended March 31, 2017 and 2016:

Accumulated Other Comprehensive Loss
Three Months Ended
In millions
Mar 31, 2017

 
Mar 31, 2016

Cumulative Translation Adjustments at beginning of year
$
(62
)
 
$
(61
)
Translation adjustments
1

 

Balance at end of period
$
(61
)
 
$
(61
)
Pension and Other Postretirement Benefit Plans at beginning of year
$
(1,258
)
 
$
(1,167
)
Adjustments to pension and other postretirement benefit plans (net of tax of $8, $6) (1) (2)
12

 
11

Balance at end of period
$
(1,246
)
 
$
(1,156
)
Total Accumulated Other Comprehensive Loss
$
(1,307
)
 
$
(1,217
)
(1)
Included in "Net periodic benefit cost." See Note 7 for additional information.
(2)
Tax amounts are included in "Provision for income taxes" in the consolidated statements of income.


NOTE 10 - PLANNED MERGER WITH DUPONT
On December 11, 2015, Dow and E. I. du Pont de Nemours and Company ("DuPont") entered into an Agreement and Plan of Merger, as amended on March 31, 2017 (the "Merger Agreement"), to effect an all-stock, merger of equals strategic combination resulting in a newly formed corporation named DowDuPont Inc. ("DowDuPont"). Pursuant to the terms of the Merger Agreement, Dow and DuPont will each merge with wholly owned subsidiaries of DowDuPont (the "Mergers") and, as a result of the Mergers, will become subsidiaries of DowDuPont (collectively, the "Merger Transaction"). Following the consummation of the Mergers, Dow and DuPont intend to pursue, subject to the receipt of any required regulatory approvals and approval by the board of directors of DowDuPont, the separation of the combined company’s agricultural business, specialty products business and materials science business through one or more tax-efficient transactions.

On March 27, 2017, Dow and DuPont announced that the European Commission ("EC") granted conditional approval in Europe of the companies' proposed merger of equals. The EC's approval was conditioned on DuPont and Dow fulfilling certain divestiture commitments given to the EC in connection with the clearance. Specifically, DuPont will divest its Cereal Broadleaf Herbicides and Chewing Insecticides portfolios as well as its Crop Protection research and development pipeline and organization (excluding seed treatment, nematicides, late-stage research and development ("R&D") programs and certain personnel needed to support marketed products and R&D programs that will remain with DuPont) (collectively, the "DuPont Divested Assets"). Dow will divest its global Ethylene Acrylic Acid ("EAA") copolymers and ionomers business to SK Global Chemical Co., Ltd., as announced on February 2, 2017. Dow's divestiture of the EAA business is conditioned on Dow and DuPont closing the Merger Transaction, in addition to other customary closing conditions, including the receipt of certain required regulatory approvals, local employment law and governance obligations.

On March 31, 2017, in connection with the commitments given to the EC with respect to its conditional approval of the Merger Transaction, DuPont entered into an agreement with FMC Corporation ("FMC") whereby FMC will acquire the DuPont Divested Assets and DuPont will acquire FMC's Health and Nutrition business segment, excluding its Omega-3 products (the "H&N Business"). DuPont's transaction with FMC is expected to close in the fourth quarter of 2017, subject to the closing of

16