UNION CARBIDE

                                 1/28/94

                      Stock     Price      52 week     YTD Pr    Div  Gross
                      Rating     1/27   --- Range ---    Chg     Rate Yield
Union Carbide Corp.     MO      24.88       26-16        11      0.75  3.0

                                            ----Interim----    1994E  pr/94
          FY/IP       EPS93     EPS94 PE94  --Next- -YrAgo-   EBITDA EBITDA
UK        12/01Q      1.00      1.25E 19.9     n/a     n/a      3.81   6.5

1.  4Q EPS of $0.25 exceeded analysts' $0.17 estimate.  Lower raw material
prices have helped.  Cost cutting is ahead of our expectations.  This explains
half of the surprise.  The rest is for less desired reasons.

a)  4Q interest expense was unusually low by $4 million pretax due to one-
time interest rate swap realizations.  Despite lower debt, UK says its 1994
interest expense will equal 1993 levels of roughly $70 million.

b)  4Q income from UOP (a joint venture with Allied-Signal) was well above
normal levels UK says such levels cannot be maintained.  Full year 1993 UOP
pretax contribution is estimated to be slightly over $65 million vs $60
million in 1992.  Look for a 7-10% increase in 1994.  This income is
included in the 'other expense(income)' line item.

c)  4Q tax rate of 30.5% was below expectations.  Full year 1993 was 34.4%
UK expects 31% for 1994.  The lower 4Q 1993 and full year 1994 rates are
temporary.  So long as the base petrochemical business (Union Carbide
Chemicals and Plastics) makes little or no money, the use of foreign sales
corporations and R&D tax credits bring down the tax rate.  The sustainable
rate longer term is closer to 35%.

2.  CARBON PRODUCTS, HOWEVER, HAS RECOVERED.  THIS HAS BEEN THE KEY STORY
FOR 1993 AND WILL BE FOR 1994, despite a 4Q 1993 aberration from unusually
high expenses.  Carbide's 50% in this JV contributed an estimated $14
million net income in 1993 vs a $16 million loss in 1992, a favorable swing
of $30 million.  We look for another $20 million to $25 million increase in
1994 with potential for a further $5 or $10 million in 1995 or 1996.

3.  WE ESTIMATE 4Q UNDERLYING EARNINGS TO BE $0.22/SHARE, CORRECTING FOR
the positives and negatives mentioned above.

                            4Q1993     4Q 1993       4Q 1992     4Q 1992
                            Reported   Underlying(a) Year ago    Underlying

1.  Pretax before            62             62          58          58
  items below
UOP income (a)               25             17          18          15
Other expense(a)           (15)           (15)        (22)        (15)
Other(expense)income,
  total                      10              2           4           0
Interest expense           (13)           (17)        (23)        (23)
2.  Pretax income            59             47          31          35
tax rate                  30.5%            34%         26%         34%
tax                        (18)           (16)         (8)        (12)
3.  Net Income               41             31          23          23
Equity investments            3              8           4           4
    (carbon products)
4.  Net income - Total       44             39          19          19
5.  EPS,fully diluted     $0.25          $0.22       $0.12       $0.12

(a) our estimated breakdown.

4.  We continue to estimate $1.25 earnings for 1994 based on Carbon
products recovery and the lingering benefits of cost cutting.  Base
business continues to languish but has good upside late in the decade.