10-K
UNION CARBIDE CORP /NEW/ filed this Form 10-K on 02/15/2018
Entire Document
 

the consolidated statements of income. In 2016, severance of $2 million was paid, substantially completing the 2015 restructuring activities, with any remaining liabilities for contract cancellation fees to be settled over time.

The Corporation expects to incur additional costs in the future related to restructuring activities, as UCC continually looks for ways to enhance the efficiency and cost effectiveness of its operations. Future costs are expected to include demolition costs related to the closed facilities; these will be recognized as incurred. The Corporation also expects to incur additional employee­ related costs, including involuntary termination benefits, related to its other optimization activities. These costs cannot be reasonably estimated at this time.


NOTE 6 - SUPPLEMENTARY INFORMATION
Sundry Income (Expense) - Net
 
 
 
In millions
2017
2016
2015
Dow administrative and overhead fees 1
$
(33
)
$
(27
)
$
(30
)
Net commission expense - related company 1
(22
)
(22
)
(22
)
Net gain (loss) on sales of property
23

50

(3
)
Interest income
20

14

8

Net gain on sale of a nonconsolidated affiliate 2
4



Net gain on ownership transfer of property


23

Net gain on sale of patents 3


10

Foreign exchange gain (loss)

1

(2
)
Other - net
(3
)

(6
)
Total sundry income (expense) - net
$
(11
)
$
16

$
(22
)
1.
See Note 18 for additional information.
2.
See Note 10 for additional information.
3.
See Note 4 for additional information.

Accrued and Other Current Liabilities
"Accrued and other current liabilities" in the consolidated balance sheets were $174 million at December 31, 2017, and $181 million at December 31, 2016. The current portion of the Corporation's accrued obligations for environmental matters, which is a component of "Accrued and other current liabilities," was $67 million at December 31, 2017, and $58 million at December 31, 2016 (see Note 14 for additional information). No other component of "Accrued and other current liabilities" was more than 5 percent of total current liabilities.


NOTE 7 - INCOME TAXES
On December 22, 2017, the Tax Cuts and Jobs Act ("The Act") was enacted. The Act reduces the U.S. federal corporate income tax rate from 35 percent to 21 percent, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously deferred, creates new provisions related to foreign sourced earnings, eliminates the domestic manufacturing deduction and moves to a territorial system. At December 31, 2017, the Corporation had not completed its accounting for the tax effects of The Act; however, as described below, the Corporation made a reasonable estimate of the effects on its existing deferred tax balances and the one-time transition tax. In accordance with Staff Accounting Bulletin 118 (“SAB118”), income tax effects of The Act may be refined upon obtaining, preparing or analyzing additional information during the measurement period and such changes could be material. During the measurement period, provisional amounts may also be adjusted for the effects, if any, of interpretive guidance issued after December 31, 2017, by U.S. regulatory and standard-setting bodies.

As a result of The Act, the Corporation remeasured its U.S. federal deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21 percent. However, the Corporation is still analyzing certain aspects of The Act and refining its calculations, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts. The provisional amount recorded related to the remeasurement of the Corporation’s deferred tax balance was $250 million, recorded as a charge to "Provision (Credit) for income taxes."

The Act requires a mandatory deemed repatriation of post-1986 undistributed foreign earnings and profits ("E&P"), which results in a one-time transition tax. As a result, the Corporation recorded an insignificant provisional amount for the transition tax liability for its foreign subsidiaries. The Corporation has not yet completed its calculation of the total post-1986 foreign E&P for its foreign subsidiaries as E&P will not be finalized until the DowDuPont federal income tax

31