UNION CARBIDE

              7/30/93 52-Wk-Rng FY/Q  EPS93  EPS94 PE94 NxtQtr LyQtr
Union Carbide   18.75   20-12   12/3   0.90   1.25 15.0   0.21  0.18 UK

1.  2Q EARNINGS OF $0.24 WERE BETTER THAN ANALYSTS' ESTIMATES largely due to
higher income from companies in which Carbide had an equity position and due to
lower "other expense" and lower depreciation.  EBITD from core operations was
actually lower than expected by $11 million.  In aggregate a roughly $7 million
pretax loss from an asset sale was largely offset by unusually low depreciation
and interest expense.  Carbide expects these last two items to revert to higher
levels in the second half of 1993 compared to the second quarter levels.

2.  The recently completed sale of the silicons business will have a net- net
dilutive effect of $0.03-$0.04 per share each quarter compared to the first and
second quarters of 1993.  While that business earned very little in last year's
first half, it has been a very good contributor year to date, thus next year's
first half will have a tougher comparison year over year.

3.  Core business trends remain weak contrary to the tone of today's Wall
Street Journal article.  New capacity additions will likely keep margins
depressed. For its part, Carbide expects to add roughly 100 million pounds per
year (partly ethylene) capacity in Quebec by early 1994.  Formosa's 530 million
pounds per year ethylene glycol and 450 million pounds per year HDPE plants
start up in the next few weeks followed next year by 1.5 billion ethylene and a
500 million pound LLDPE plant.

4.  Cash flow is trending a bit below budget.  Year to date operations have
been cash negative to the tune of $50-$60 million  Capital spending will likely
run $10 million below budget this year at $350 million, but next year's
spending is likely to be $400-$425 million (vs. our $400 million earlier
estimate).  1995 spending will likely exceed 1994 levels as spending for the
Kuwait mega project starts.  SHARES OUTSTANDING CONTINUE TO DRIFT UPWARDS TO
155 MILLION BY THE END OF SECOND QUARTER 1993.

5.  WHERE IS THE GOOD NEWS?  FIXED COST CONTINUES TO DRIFT DOWNWARDS.  SG&A
plus R&D was $7 million below year ago in the first half (full year 1992 was
$34 million below 1991; second half 1992 was $2 million below year ago).
Interest expense is down $56 million is the first half of 1993 vs. year ago;
will be expected to be $17 million lower in the second half of 1993 vs. year
ago.  MARGINS IN POLYETHYLENE AND ETHYLENE GLYCOL HAVE LITTLE OR NO ROOM LEFT
TO FALL.

VALUATION
Multiple              UK      DOW   LYO    CUE(1) S&P500

1994 EBITD            6.0     7.0   13.0     7.1      NA
1993 Gross Cash Flow  8.9     7.9   29.4     6.2     9.0
Normalized EBITD      4.3     4.8    3.9     3.3      NA
1994 P/E             15.0    19.9   88.2      NM    14.9
Yield,%               4.0     4.3    5.1     0.0     3.0

(1) Hanson has bid to acquire this company.