|UNION CARBIDE CORP /NEW/ filed this Form 10-K on 02/15/2018|
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
The Corporation is a wholly owned subsidiary of Dow; therefore, there is no public trading market for the Corporation's common stock.
ITEM 6. SELECTED FINANCIAL DATA
Omitted pursuant to General Instruction I of Form 10‑K.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Pursuant to General Instruction I of Form 10-K "Omission of Information by Certain Wholly-Owned Subsidiaries," this section includes only management's narrative analysis of the results of operations for the year ended December 31, 2017, the most recent fiscal year, compared with the year ended December 31, 2016, the fiscal year immediately preceding it.
Union Carbide Corporation (the "Corporation" or "UCC") is a chemicals and polymers company that has been a wholly owned subsidiary of The Dow Chemical Company ("Dow") since 2001. Effective August 31, 2017, pursuant to the merger of equals transaction contemplated by the Agreement and Plan of Merger, dated as of December 11, 2015, as amended on March 31, 2017, Dow and E. I. du Pont de Nemours and Company ("DuPont") each merged with subsidiaries of DowDuPont Inc. ("DowDuPont") and, as a result, Dow and DuPont became subsidiaries of DowDuPont (the "Merger"). See Note 3 to the Consolidated Financial Statements for additional information.
References below to "Dow" refer to The Dow Chemical Company and its consolidated subsidiaries, except as otherwise indicated by the context. References to "DowDuPont" refer to DowDuPont Inc. and its consolidated subsidiaries, except as otherwise indicated by the context.
Dow conducts its worldwide operations through principal product groups, and the Corporation's business activities comprise components of Dow's global operations 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.
RESULTS OF OPERATIONS
Total net sales for 2017 were $5,165 million, compared with net sales of $4,919 million in 2016, an increase of 5 percent. Net sales to related companies, principally to Dow, were $5,022 million for 2017, compared with $4,811 million for 2016, an increase of 4 percent. Selling prices to Dow are based on market prices for the related products, in accordance with the terms of Dow's intercompany pricing policies.
Total net sales were up from the previous year driven by an increase in price. Average selling prices increased 5 percent in 2017 compared with 2016. Prices were up across most products, primarily driven by higher feedstock, energy and other raw material costs and tight market supply as a result of hurricane-related supply disruptions in the last half of 2017, with the largest increases in polyethylene, ethylene oxide/ethylene glycol ("EO/EG"), oxo alcohols and vinyl acetate monomers. Sales volume was flat in 2017 compared with 2016 as sales volume increases in glutaraldehydes, vinyl acetate monomers and polyglycols were offset by volume declines in electrical and telecommunications, oxo alcohols and EO/EG.
Cost of Sales
Cost of sales were $4,176 million, up 12 percent from $3,713 million in 2016, due to higher feedstock, energy and other raw material costs, increased planned maintenance turnaround spending, as well as hurricane-related production and supply disruptions and repair costs in the last half of 2017, partially offset by a decrease in accruals for environmental remediation and restoration projects compared with the previous year.