<PAGE>
 
================================================================================

                      SECURITIES AND EXCHANGE COMMISSI ON
                            WASHINGTON, D.C. 20549

                                   FORM 10-Q

               QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934

               For the quarterly period ended September 30, 1997
                                        
                          COMMISSION FILE NO. 1-9699




                         BORDEN CHEMICALS AND PLASTICS
                              LIMITED PARTNERSHIP
                                        
                       Delaware                       31-1269627
          (STATE OF ORGANIZATION)       (I.R.S. EMPLOYER IDENTIFICATION NO.)


     HIGHWAY 73, GEISMAR, LOUISIANA 70734            614-225-4482
      (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)   (REGISTRANT'S TELEPHONE NUMBER)

                                -------------

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes  X  No   .
                                              ---   ---        

                                 -------------
Number of Common Units outstanding as of the close of business on November 7,
 1997: 36,750,000.

================================================================================

                                       1
<PAGE>
 
              BORDEN CHEMICALS AND PLASTICS LIMITED PARTNERSHIP 
               CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS 
                                 (UNAUDITED) 
                     (IN THOUSANDS, EXCEPT PER UNIT DATA)

<TABLE> 
<CAPTION> 

                                                                       THREE MONTHS ENDED
                                                                       ---------------------

                                                                       SEPT. 30,     SEPT. 30,
                                                                         1997          1996
                                                                       -----------  -------------
<S>                                                                   <C>          <C>
REVENUES
  Net trade sales...................................................    $147,140       $152,645
  Net sales to related parties......................................      33,750         30,169   
                                                                        --------       --------   
            Total revenues..........................................     180,890        182,814 
                                                                        --------       -------- 
EXPENSES
  Cost of goods sold
        Trade.......................................................
        Related parties.............................................      138,508       138,727
  Marketing, general & administrative expenses......................       29,948        26,516
  Interest expense..................................................        6,067         6,196
  General Partner incentive.........................................        5,217         5,485
  Other expense, including minority                                             0             0
      interest......................................................        2,212           509
                                                                         --------      --------
              Total expenses........................................      181,952       177,433              
                                                                         --------      --------

  Net (loss) income.................................................       (1,062)        5,381
      Less 1% General Partner interest..............................           10           (54)
                                                                         --------      --------
  Net (loss) income applicable to Limited Partners'  
      interest......................................................    $  (1,052)     $  5,327
                                                                         ========      ======== 
 

PER UNIT DATA, NET OF 1% GENERAL PARTNER INTEREST:
  Net (loss) income per Unit........................................    $   (0.03)     $   0.14
                                                                         ========      ======== 
  Average number of Units outstanding during the period.............       36,750        36,750
                                                                         ========      ========
  Cash distribution declared per Unit...............................    $    0.18      $   0.15
                                                                         ========      ======== 
</TABLE>

                                       2
<PAGE>
 
               BORDEN CHEMICALS AND PLASTICS LIMITED PARTNERSHIP

                CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                                 (UNAUDITED)
                     (IN THOUSANDS, EXCEPT PER UNIT DATA)

<TABLE>   
<CAPTION> 
                                                                          NINE MONTHS ENDED 
                                                                          ----------------- 
                                                                       SEPT. 30,     SEPT. 30,
                                                                         1997          1996
                                                                      -----------  -------------
<S>                                                                   <C>          <C> 
REVENUES
  Net trade sales...................................................     $462,615       $450,293
  Net sales to related parties......................................      102,733         82,333
                                                                         --------       --------
            Total revenues..........................................
                                                                          565,348        532,626
                                                                         --------       --------
EXPENSES
  Cost of goods sold
        Trade.......................................................
         Related parties............................................      422,376        418,330
  Marketing, general & administrative expenses......................       89,747         76,957
  Interest expense..................................................       17,846         18,201
  General Partner incentive.........................................       15,710         16,391
  Other expense, including minority                                           794              0
      interest......................................................        3,098          1,958
                                                                          -------        -------
              Total expenses........................................      549,571        531,837
                                                                          -------        -------

   Net income.......................................................       15,777            789
      Less 1% General Partner interest..............................         (158)            (8)
  Net income applicable to Limited Partners'                              -------        -------   
      interest......................................................     $ 15,619            781
                                                                          =======        =======

 
PER UNIT DATA, NET OF 1% GENERAL PARTNER INTEREST:                     
  Net income per Unit...............................................     $   0.42       $   0.02
                                                                          =======        ======= 
   Average number of Units outstanding during the period............       36,750         36,750         
                                                                          =======        =======
  Cash distribution declared per Unit...............................     $   0.73       $   0.25
                                                                          =======        =======
</TABLE>

                                       3
<PAGE>
 
              BORDEN CHEMICALS AND PLASTICS LIMITED PARTNERSHIP 
                CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                 (UNAUDITED) 
                                (IN THOUSANDS)

<TABLE> 
<CAPTION> 
                                                            NINE MONTHS            
                                                                ENDED              
                                                          ---------------          
                                                   SEPT. 30,           SEPT. 30,      
                                                      1997               1996       
                                                   --------            ---------      
<S>                                               <C>                  <C> 
CASH FLOWS FROM OPERATIONS                                                         
Net income...................................   $   15,777              $    789      
                                                                                   
Adjustments to reconcile net income to net                                         
 cash provided by operating activities:                                            
 Depreciation................................       37,462                36,715   
 Increase in receivables.....................      (13,751)              (10,098)  
 Decrease in inventories.....................        2,223                 7,233   
 Decrease in payables........................       (9,259)              (11,814)  
 Decrease in incentive distribution payable..            0               ( 1,910)  
 Increase in accrued interest................        4,748                 4,655   
 Other, net..................................          (82)               (5,204)  
                                                    -------               -------  
                                                    37,118                20,366   
                                                    -------               -------  
                                                                                   
CASH FLOWS FROM INVESTING ACTIVITIES                                               
                                                                                   
Capital expenditures........................        (8,918)              (11,098)  
                                                     ------               -------  
CASH FLOWS FROM FINANCING ACTIVITIES                                               
  Repayment of short-term borrowings, net...             0                (5,000)  
  Cash distributions paid...................       (24,137)              (24,891)  
                                                   --------              --------  
                                                   (24,137)              (29,891)  
                                                   --------              -------   
                                                                                   
Increase (decrease) in cash and equivalents.         4,063               (20,623)  
                                                                                   
Cash and equivalents at beginning of period.        10,867                32,421   
                                                 ---------             ---------   

Cash and equivalents at end of period.......    $   14,930              $ 11,798   
                                                 =========             =========   
                                                                                   
SUPPLEMENTAL DISCLOSURES OF CASH                                                   
FLOW INFORMATION                                                                   
                                                                                   
Interest paid during the period.............    $   10,962              $ 11,736   
                                                  ========              ========   
</TABLE> 
                                       4
<PAGE>
 
               BORDEN CHEMICALS AND PLASTICS LIMITED PARTNERSHIP

                     CONSOLIDATED CONDENSED BALANCE SHEETS
                                  (UNAUDITED)
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
 
 
                          ASSETS                       SEPT. 30, 1997          DEC. 31, 1996
                          ------                       --------------          -------------
<S>                                                   <C>                     <C> 
Cash and equivalents.............................          $   14,930             $  10,867
Accounts receivable (less allowance for doubtful      
 accounts of $547 and $589 respectively)              
   Trade.........................................              85,732                72,908
   Related parties...............................              23,074                22,147
Inventories                                           
   Finished and in process goods.................              33,258                36,174
   Raw materials and supplies....................               8,481                 7,788
Other current assets.............................               4,195                 2,579 
                                                            ---------             ---------    
      Total current assets.......................             169,670               152,463                  
                                                            ---------             ---------    
                                                      
Investments in and advances to affiliated                     
 companies.......................................               4,289                 4,366     
Other assets.....................................              52,447                49,405      
                                                            ---------             ---------    
                                                               56,736                53,771    
                                                            ---------             ---------         
Plant, property and equipment                                                       
  Land...........................................              15,117                14,970                
  Buildings......................................              44,705                44,597      
  Machinery and equipment........................             652,784               644,619      
                                                            ---------             ---------   
                                                              712,606               704,186      
Less accumulated depreciation....................            (421,800)             (384,715)     
                                                            ---------             --------- 
   Net plant, property and equipment.............             290,806               319,471     
                                                            ---------             ---------    
                                                      
                     Total assets                          $  517,212             $ 525,705     
                                                            =========             =========     
                                                      
Accounts and drafts payable......................          $   52,553             $  61,812
Cash distributions payable.......................               6,682                 3,712  
Short-term borrowing.............................              25,000                25,000
Accrued interest.................................               7,933                 3,185
Other accrued liabilities........................              21,002                16,516
                                                              -------             ---------
      Total current liabilities..................             113,170               110,225
                                                              -------             ---------
Long-term debt ..................................             200,000               200,000
 Other liabilities...............................               5,617                 5,609
                                                      
Minority interest in consolidated subsidiary.....               1,455                 1,571
                                                              -------             ---------

                  Total liabilities                           320,242               317,405
                                                              -------             ---------
Partners' capital                                     
  Limited Partners...............................             196,471               207,680
  General Partner................................                 499                   620
                                                              -------             ---------
      Total Partners' capital....................             196,970               208,300
                                                              -------             ---------
          Total liabilities and Partners' capital          $  517,212             $ 525,705
                                                            =========             =========
</TABLE>

                                       5
<PAGE>
 
               BORDEN CHEMICALS AND PLASTICS LIMITED PARTNERSHIP

       CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
                                  (UNAUDITED)
                                 (IN THOUSANDS)
<TABLE>
<CAPTION> 
                                               LIMITED         GENERAL
                                               Partners       Partner         Total
                                             -------------  -------------  -----------
<S>                                          <C>            <C>             <C>
Balance at December 31, 1995..........       $215,762           $ 702         $216,464 
Net income............................            781               8              789
Cash distributions declared...........         (9,187)            (93)         ( 9,280)
                                             --------           -----         --------
Balances at September 30, 1996........       $207,356           $ 617         $207,973 
                                             ========           =====         ========

Balance at December 31, 1996..........       $207,680           $ 620         $208,300 
Net income............................         15,619             158           15,777 
Cash distributions declared...........       (26,828)           (279)         (27,107)  
Balances at September 30, 1997........       --------           -----         --------
                                             $196,471           $ 499         $196,970 
                                             ========           =====         ======== 
</TABLE>

                                       6
<PAGE>
 
               BORDEN CHEMICALS AND PLASTICS LIMITED PARTNERSHIP

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                  (UNAUDITED)
                  (IN THOUSANDS EXCEPT UNIT AND PER UNIT DATA)
                                        



1. INTERIM FINANCIAL STATEMENTS

The accompanying unaudited interim consolidated condensed  financial statements
of Borden Chemicals and Plastics Limited Partnership (the "Partnership") contain
all adjustments, consisting only of normal recurring adjustments, which in the
opinion of BCP Management, Inc. (the "General Partner") are necessary for a fair
statement of the results for the interim periods. Results for the interim
periods are not necessarily indicative of results for the full year.

Per Unit data in the accompanying financial statements is derived by subtracting
the General Partner 1% interest from the income captions and dividing the
results by the Average Units Outstanding.

On August 12, 1997, legislation was enacted which extends indefinitely the
Partnership's treatment as a partnership for federal income tax purposes
provided the Partnership elects to be subject to a 3.5% tax on gross income, as
defined (such treatment had been scheduled to expire December 31, 1997). The
Partnership expects to make such an election. As a result, the Partnership would
recognize a deferred tax asset or liability for the tax effect of differences
between the book and tax bases of partnership assets and liabilities as they
enter into the calculation of gross income. The Partnership is currently
evaluating these differences and other amounts which would enter into this
calculation but does not expect the tax effect of these differences to be
material to the Partnership's financial position.

In February 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings per
Share." SFAS No. 128 establishes new standards for computing and presenting
earnings per share. The Partnership is required to adopt the provisions of SFAS
No. 128 for its consolidated financial statements for the year ended December
31, 1997, and subsequent interim periods. Upon adoption, the standard also
requires the restatement of all prior period earnings per Unit information
presented. The adoption of SFAS No. 128 is not expected to have a material
effect on the Partnership's earnings per Unit computations or disclosures.

In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income,"
and SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information." SFAS No. 130 establishes standards for reporting of comprehensive
income and its components. The Partnership is required to adopt the provisions
of SFAS No. 130 for its consolidated financial statements for the three months
ending March 31, 1998. SFAS No. 131 requires certain disclosures about segment
information in interim and annual financial statements and related information
about products and services, geographic areas and major customers. The
Partnership must adopt the provisions of SFAS No. 131 for its consolidated
financial statements for the year ending December 31, 1998. The adoptions of
SFAS No. 130 and SFAS No. 131 are not expected to have a material effect on the
measurement of the Partnership's financial position, results of operations or
cash flows; the Partnership is reviewing possible changes in disclosures that
may be required.

2. ENVIRONMENTAL AND LEGAL PROCEEDINGS

On October 27, 1994, the U.S. Department of Justice ("DOJ"), at the request of
the U.S. Environmental Protection Agency (the "EPA"), filed an action against
the Partnership and the General Partner in the U.S. District Court for the
Middle District of Louisiana. The complaint seeks facility-wide corrective
action and civil penalties for alleged violations of the federal Resource,
Conservation and Recovery Act ("RCRA"), the federal Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA"), and the Clean Air Act at
the Geismar complex. If the Partnership is unsuccessful in this proceeding, or
otherwise subject to RCRA permit requirements, it may be subject to three types
of costs: (i) corrective action; (ii) penalties; and (iii) costs needed to
obtain a RCRA permit, portions of each which could be subject to the
Environmental Indemnity Agreement ("EIA") discussed below. As to penalties,
although the maximum statutory penalties that would apply in a successful
enforcement action by the 

                                       7
<PAGE>
 
United States would be in excess of $150,000, management believes that, assuming
the Partnership is unsuccessful, based on information currently available, and
an analysis of relevant case law and administrative decisions, the more likely
amount of any liability for civil penalties would not exceed several million
dollars.

The Partnership is subject to extensive federal, state and local environmental
laws and regulations which impose limitations on the discharge of pollutants
into the air and water, establish standards for the treatment, storage,
transportation and disposal of solid and hazardous wastes, and impose
obligations to investigate and remediate contamination in certain circumstances.
The Partnership has expended substantial resources, both financial and
managerial, to comply with such laws and regulations and it anticipates that it
will continue to do so in the future. Failure to comply with the extensive
federal, state and local environmental laws and regulations could result in
significant civil or criminal penalties, and   remediation costs.

Under the EIA, Borden, Inc. ("Borden") has agreed, subject to certain specified
limitations, to indemnify the Partnership in respect of environmental
liabilities arising from facts or circumstances that existed and requirements in
effect prior to November 30, 1987, the date of the initial sale of the Geismar
and Illiopolis plants to the Partnership. The Partnership is responsible for
environmental liabilities arising from facts or circumstances that existed and
requirements that become effective on or after such date. With respect to
certain environmental liabilities that may arise from facts or circumstances
that existed and requirements in effect both prior to and after such date,
Borden and the Partnership will share liabilities on an equitable basis
considering all of the facts and circumstances including, but not limited to,
the relative contribution of each to the matter and the amount of time each has
operated the assets in question (to the extent relevant).  No claims can be made
under the EIA after November 30, 2002, and no claim can, with certain
exceptions, be made with respect to the first $500 of liabilities which Borden
would otherwise be responsible for thereunder in any year, but such excluded
amounts shall not exceed $3,500 in the aggregate.  Excluded amounts under the
EIA have accumulated to the $3,500 limit through September 30, 1997.

The Partnership has provided a $4,000 reserve in connection with potential
environmental matters. Because of various factors (including the nature of any
settlement with appropriate regulatory authorities or the outcome of any
proceeding, actual environmental conditions, the scope of the application of the
EIA and the timing of actions, if any, required to be taken by the Partnership),
the Partnership cannot reasonably estimate the full range of costs it might
incur with respect to the environmental matters discussed herein.  The costs
incurred in any quarter or year could be material to the Partnership's results
of operations for such quarter or year, although, on the basis of the relevant
facts and circumstances, management believes this to be unlikely.  However,
management believes that such costs should not have a material adverse effect on
the Partnership's financial position.

The Partnership is subject to legal proceedings and claims which arise in the
ordinary course of business.  In the opinion of the management of the
Partnership, the amount of the ultimate liability, taking into account its risk
retention program and EIA with Borden, would not materially affect the financial
position or results of operations of the Partnership.

                                       8
<PAGE>
 
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
-------------------------------------------------------------------------------
OF OPERATIONS
-------------

RESULTS OF OPERATIONS
QUARTER ENDED SEPTEMBER 30, 1997 COMPARED TO QUARTER ENDED SEPTEMBER 30, 1996

Revenues

Total revenues during the third quarter of 1997 decreased $1.9  million or 1% to
$180.9 million from $182.8  million in the third quarter of 1996.  This decrease
was the result of a $3.3 million decrease in PVC Polymers Products revenues and
a $4.7 million decrease in Nitrogen Products revenues, partially offset by a
$6.0 million increase in Methanol and Derivatives revenues.

Total revenues for PVC Polymers Products decreased $3.3 million as a result of a
2% decrease in sales volume and a 1% decrease in selling prices. The PVC market
has softened over recent quarters due to excess supply and upcoming capacity
expansions.

Total revenues for Methanol and Derivatives increased $6.0 million as a result
of a 19% increase in selling prices, partially offset by a 3% decrease in sales
volumes. The improved methanol selling prices continue to reflect the effect of
supply disruptions at other producers.

Total revenues for Nitrogen Products decreased $4.7 million as a result of a 13%
decrease in selling prices, and a  9% decrease in sales volumes, due primarily
to continuing declines in urea prices and volumes resulting from depressed
pricing to the fertilizer industry and aggressive pricing from international
suppliers seeking new markets.

Cost of Goods Sold

Total cost of goods sold decreased 2%  to $168.5 million in the current period
from $165.2 million in the year-ago period. The increase was primarily due to
increased maintenance costs for plant downtime, partially offset by the decline
in sales volumes discussed above. Natural gas and ethylene costs decreased, but
were offset by chlorine and VCM cost increases. Expressed as a percentage of
total revenues, cost of goods sold increased to 93% of total revenues in 1997
from 90% in 1996, resulting in reduced gross margins and net income for the
Partnership.

Gross margins for PVC Polymers Products decreased 195% as a result of the
decreased selling prices and increased maintenance costs discussed above.

Gross margins for Methanol and Derivatives increased 74% as a result of the
increased selling prices discussed above.

Gross margins for Nitrogen Products decreased 84% as a result of the decreased
selling prices and volumes discussed above.

Other Expense

Other expenses increased to $2.2 million in 1997 from $0.5 million in 1996,
primarily due to the write-off of costs associated with the Partnership's plan
to convert to corporate form which was terminated in the third quarter of 1997
due to a favorable change in federal tax law regarding master limited
partnerships.

Net Income

The partnership incurred a net loss of $1.1 million for the third quarter of
1997 compared to net income of $5.4 million for the third quarter of 1996. As
discussed above, the primary reasons for the decline in earnings were the
increased maintenance costs from plant downtime and the write-off of costs
associated with the termination of the planned conversion to a corporation.

                                       9
<PAGE>
 
RESULTS OF OPERATIONS
NINE MONTHS ENDED  SEPTEMBER 30, 1997 COMPARED TO NINE MONTHS ENDED SEPTEMBER
30, 1996

Revenues

Total revenues for the first nine months of 1997 decreased $32.7 million or 6%
to $565.3 million from $532.6 million for the comparable period a year ago.
Total revenues for PVC Polymers Products increased $22.0 million as a result of
a 7% increase in selling prices on comparable volumes. Total revenues for
Methanol and Derivatives increased $25.1 million as a result of a 29% increase
in selling prices of methanol on comparable volumes. Total revenues for Nitrogen
Products decreased $14.4 million as a result of a 17% decrease in selling prices
and 20% decrease in sales volume for urea.

Cost of Goods Sold

Total cost of goods sold increased 3% to $512.1 million for the first nine
months of 1997 from $495.3 million in the year-ago period. The increase was
primarily the result of increased raw material costs due to chlorine and VCM
price increases, partially offset by decreased natural gas and ethylene costs.
Expressed as a percentage of total revenues, cost of goods sold decreased to 91%
of total revenues for the first nine months of 1997 from 93% in the first nine
months of 1996, resulting in improved gross margins and net income for the
Partnership.

Gross margins for PVC Products decreased 19% as a result of increased raw
material costs, which were partially offset by improved selling prices.

Gross margins for Methanol and Derivatives increased 255% as a result of the
increased selling prices combined with the lower natural gas costs discussed
above.

Gross margins for Nitrogen Products decreased 69% as a result of decreased
selling prices and volumes.

Interest Expense

The decrease in interest expense during the first nine months of 1997 compared
to the year-ago period was due to the reduction of short-term bank borrowings.

Incentive Distribution to General Partner

An incentive distribution to the General Partner of $0.8 million was generated
during the second quarter of 1997 as a result of cash distributions to
Unitholders exceeding the Target Distribution.

There was no incentive distribution to the General Partner generated during the
first three quarters of 1996.

Other Expense

The increase in other expenses during the first nine months of 1997 compared to
1996 was due primarily to the write-off of costs associated with the
Partnership's plan to convert to corporate form which was terminated in the
third quarter of 1997 due to a favorable change in federal tax law regarding
master limited partnerships.

Net Income

Net income for the first nine months of 1997 was  $15.8 million compared to $0.8
million in 1996. As discussed above, the primary reason for the improvement in
operating performance was significantly higher margins for PVC resins and
methanol.

LIQUIDITY AND CAPITAL RESOURCES

Cash Flows from Operations.  Cash flows from operations increased $16.8 million
for the first nine months of 1997 

                                       10
<PAGE>
 
from the comparable period a year ago. The increase was primarily attributable
to the increase in net income during this period compared to 1996.

Cash Flows from Investing Activities. Capital expenditures  for the first nine
months of 1997 were $8.9 million compared to $11.1 million during the comparable
period a year ago.

Cash Flows from Financing Activities.  The Partnership makes quarterly
distributions to Unitholders and the General Partner of 100% of its Available
Cash.  Available Cash means generally, with respect to any quarter, the sum of
all cash receipts of the Partnership plus net reductions to reserves established
in prior quarters, less all of its cash disbursements and net additions to
reserves in such quarter.  The General Partner may establish reserves to provide
for the proper conduct of the Partnership's business, to stabilize distributions
of cash to Unitholders and the General Partner and as necessary to comply with
the terms of any agreement or obligation of the Partnership.

Cash distributions of $24.1 million were made during the first nine months of
1997 compared to $24.9 million in the year-ago period.  These amounts reflect
the payment of cash distributions declared for the immediately proceeding
quarters.  Cash distributions with respect to interim periods are not
necessarily indicative of cash distributions with respect to a full year.
Moreover, due to the cyclical nature of the Partnership's business, past cash
distributions are not necessarily indicative of future cash distributions.

There are various seasonality factors affecting results of operations and,
therefore, cash distributions. In addition, the amount of Available Cash
constituting Cash from Operations for any period does not necessarily correlate
directly with net income for such period because various items and transactions
affect net income and Available Cash constituting Cash from Operations
differently. For example, depreciation reduces net income but does not affect
Available Cash constituting Cash from Operations, while changes in working
capital items (including receivables, inventories, accounts payable and other
items) generally do not affect net income but do affect such Available Cash.
Moreover, as provided for in the Partnership Agreements with respect to the
Partnership and the Operating Partnership, certain reserves may be established
which affect Available Cash constituting Cash from Operations but do not affect
cash balances in financial statements. Such reserves have generally been used to
set cash aside for debt service, capital expenditures and other accrued items.

Liquidity

The Partnership expects to satisfy its cash requirements through internally
generated cash and borrowings.  During 1995, the Partnership entered into a
Revolving Credit Facility which provided a $100.0 million line of credit for
capital expenditures, working capital and general partnership purposes.  The
amount available under the facility reduced to $75.0 million on January 1, 1996
and to $50.0 million on January 1, 1997, and terminates December 31, 1997. The
facility may be extended for one year with the consent of the lenders.
Borrowing under this facility was $25 million at September 30, 1997.

                                       11
<PAGE>
 
                                 PART II.  OTHER INFORMATION


Item 1. Legal Proceedings
-------------------------

There is incorporated by reference herein the information regarding legal
proceedings in Item 3 of Part I of the Partnership's 1996 Annual Report on Form
10-K and Note 2 to the consolidated condensed financial statements in Part I
hereof.


Item 6. Exhibits and Reports on Form 8-K
----------------------------------------

On August 18, 1997, the Partnership filed a Form 8-K under Item 5 to disclose
the termination of its Agreement and Plan of  Conversion  to corporate status
and certain amendments to the Partnership's newly adopted Rights Agreement.

                                       12
<PAGE>
 
SIGNATURE


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                    BORDEN CHEMICALS AND PLASTICS
                                    LIMITED PARTNERSHIP
                                    By BCP Management, Inc.,
                                    General Partner



                               By        /s/      Christopher L. Nagel
                                  ---------------------------------------------
                                                  Christopher L. Nagel

                               Vice President, Chief Financial Officer and
                               Treasurer Principal Accounting Officer
                               


October 31, 1997

                                       13
<PAGE>
 
SIGNATURE


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.



                                    BORDEN CHEMICALS AND PLASTICS
                                    LIMITED PARTNERSHIP
                                    By BCP Management, Inc.,
                                    General Partner



                               By   /s/         Christopher L. Nagel
                                  ---------------------------------------
                                                Christopher L. Nagel

                               Vice President, Chief Financial Officer and
                               Treasurer Principal Accounting Officer
                                    



October 31, 1997

                                       14