SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
[X] Annual Report
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
(Fee Required)
For the fiscal year ended June 30, 1994
OR
[ ] Transition report pursuant to Section 15(d) of the
Securities Exchange Act of 1934
(No Fee Required)
For the transition period from
Commission File Number 33-26867
LYONDELL PETROCHEMICAL COMPANY CAPITAL ACCUMULATION PLAN
FOR NON-REPRESENTED EMPLOYEES
(Title of the Plan)
LYONDELL PETROCHEMICAL COMPANY
1221 McKinney Street
Suite 1600
Houston, Texas 77010
(Name and address of principal executive
office of the issuer of the securities)
FINANCIAL STATEMENTS OF THE LYONDELL PETROCHEMICAL COMPANY
CAPITAL ACCUMULATION PLAN FOR NON-REPRESENTED EMPLOYEES
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
PAGE
----
Report of Independent Accountants 2
Financial Statements:
Statement of Net Assets Available for Benefits
as of June 30, 1994 and 1993 3
Statement of Changes in Net Assets Available for
Benefits with Fund Information for the year
ended June 30, 1994 4
Notes to Financial Statements 5
Supplemental Schedules:
Item 27a - Schedule of Assets Held for Investment
Purposes as of and for the year ended June 30, 1994 9
Item 27d - Schedule of Reportable Transactions
for the year ended June 30, 1994 10
1
REPORT OF INDEPENDENT ACCOUNTANTS
To the Administrative Committee of the
Lyondell Petrochemical Company
Capital Accumulation Plan for Non-Represented Employees:
We have audited the accompanying statements of net assets available for benefits
of the Lyondell Petrochemical Company Capital Accumulation Plan for Non-
Represented Employees (the "Plan") as of June 30, 1994 and 1993, and the related
statement of changes in net assets available for benefits for the year ended
June 30, 1994. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
As discussed in Note 1, effective August 23, 1993, certain Plan participants
became participants of a new Plan with a new Plan sponsor.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
June 30, 1994 and 1993, and the changes in net assets available for benefits for
the year ended June 30, 1994, in conformity with generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
held for investment purposes and reportable transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The Fund Information in
the statement of changes in net assets available for benefits is presented for
purposes of additional analysis rather than to present the changes in net assets
available for benefits of each fund. The supplemental schedules and Fund
Information have been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
COOPERS & LYBRAND L.L.P.
Los Angeles, California
December 9, 1994
2
LYONDELL PETROCHEMICAL COMPANY CAPITAL ACCUMULATION PLAN
FOR NON-REPRESENTED EMPLOYEES
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF JUNE 30, 1994 AND 1993
1994 1993
---- ----
ASSETS
Investments, at fair value:
Lyondell Petrochemical Company common stock
(1994 - 1,223,629 shares, cost $26,255,750;
1993 - 1,582,502 shares, cost $34,011,980) $ 30,131,864 $ 33,430,355
Atlantic Richfield Company common stock
(1994 - 109,437 shares, cost $7,426,459;
1993 - 223,204 shares, cost $14,711,806) 11,189,933 25,947,465
ARCO Chemical Company common stock
(1994 - 609 shares, cost $23,122;
1993 - 576 shares, cost $21,627) 27,633 23,472
Money Market Fund 8,150,472 15,642,315
Equity Fund
(1994 - 57,183 units, cost $2,233,423;
1993 - 74,353 units, cost $2,619,889) 2,589,118 3,355,030
Bond Fund
(1994 - 68,146 units, cost $956,320;
1993 - 80,362 units, cost $1,089,649) 998,929 1,202,726
------------ ------------
Total investments 53,087,949 79,601,363
Participant loans receivable 3,134,259 4,378,394
Restoration payment receivable (Note 5) 471,222 --
Other assets 76,874 236,932
------------ ------------
Total assets 56,770,304 84,216,689
LIABILITIES
Amounts payable for securities purchased and
other accrued liabilities 42,911 359,929
------------ ------------
Net assets available for benefits $ 56,727,393 $ 83,856,760
============ ============
The accompanying notes are an integral part of these financial statements.
3
LYONDELL PETROCHEMICAL COMPANY CAPITAL ACCUMULATION PLAN
FOR NON-REPRESENTED EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
FOR THE YEAR ENDED JUNE 30, 1994
ARCO
Chemical
Lyondell ARCO Common Money Equity Bond Participant
Plan Total Common Stock Common Stock Stock Market Fund Fund Fund Loans
------------ ------------ ------------ ------- ------------ ----------- ---------- -----------
Contributions:
Company $ 3,080,032 $ 3,080,032
Participant 3,474,671 1,586,497 $ 1,114,688 $ 620,401 $ 153,085
------------ ------------ ------------ ------- ------------ ----------- ---------- -----------
Total 6,554,703 4,666,529 1,114,688 620,401 153,085
------------ ------------ ------------ ------- ------------ ----------- ---------- -----------
Benefits paid to
participants (5,783,632) (781,035) $ (1,070,645) (3,931,952)
------------ ------------ ------------ ------- ------------ ----------- ---------- -----------
Investment income:
Cash dividends on
Atlantic Richfield
Company common stock 762,785 762,785
Cash dividends on
Lyondell Petrochemical
Co. common stock 1,137,060 1,137,060
Earnings on other
investments 604,859 $ 1,471 394,968 $ 208,420
Net appreciation
(depreciation) in the
fair value of investments 662,381 2,711,009 (1,625,610) 2,666 (468,677) (33,294) 76,287
------------ ------------ ------------ ------- ------------ ----------- ---------- -----------
Net investment income
(loss) 3,167,085 3,848,069 (862,825) 4,137 (73,709) (33,294) 76,287 208,420
------------ ------------ ------------ ------- ------------ ----------- ---------- -----------
Restoration payment
(Note 5) 471,222 471,222
Amounts transferred
from (to):
LYONDELL-CITGO Capital
Accum. Plan
(Non-Represented) (31,674,300) (10,217,146) (11,652,844) (6,720,228) (1,393,872) (253,092) (1,437,118)
ARCO Capital Accum.
Plan III (6,425) (4,146) (423) (1,856)
ARCO Capital Accum.
Plan II 141,980 (54,221) 72,683 3,515 120,003
Net transfers between
options -- (756,541) (1,243,901) 24 2,273,226 (77,294) (180,077) (15,437)
------------ ------------ ------------ ------- ------------ ----------- ---------- -----------
Net increase (decrease) (27,129,367) (3,298,491) (14,757,532) 4,161 (6,863,661) (765,912) (203,797) (1,244,135)
Net assets available for
benefits:
Beginning of year 83,856,760 33,430,355 25,947,465 23,472 15,519,318 3,355,030 1,202,726 4,378,394
------------ ------------ ------------ ------- ------------ ----------- ---------- -----------
End of year $ 56,727,393 $ 30,131,864 $ 11,189,933 $27,633 $ 8,655,657 $ 2,589,118 $ 998,929 $ 3,134,259
============ ============ ============ ======= ============ =========== ========== ===========
The accompanying notes are an integral part of these financial statements.
4
LYONDELL PETROCHEMICAL COMPANY CAPITAL ACCUMULATION PLAN
FOR NON-REPRESENTED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
Note 1 - Description of Plan:
The Lyondell Petrochemical Company Capital Accumulation Plan for Non-
Represented Employees (the "Plan") is a defined contribution plan for non-
represented employees and deferred vested retirees of Lyondell Petrochemical
Company (the "Company" or "Lyondell").
All contributions are held in trust. Participant contributions are invested by
the Trustee in accordance with the option or options elected by each
participant. That portion of a participant's account derived from the
participant's own contributions and earnings thereon may be invested in the
following alternatives or any combination thereof: common stock of the Company,
units of the Equity Fund, units of the Bond Fund or units of the Money Market
Fund. When investing in common stock of the Company, the participant may
designate that the common stock be held either in the ESOP fund (that part of
the Plan qualified as an employee stock ownership plan under Section 4975(e)(7)
of the Internal Revenue Code) or in the non-ESOP fund. Dividends on common stock
held in the non-ESOP fund are reinvested in the common stock of the Company and
held in the participant's plan account. Dividends on common stock held in the
ESOP fund are reinvested in the Money Market Fund and held in the participant's
plan account.
On July 1, 1993, the Company and CITGO Petroleum Corporation ("CITGO")
announced the commencement of operations of LYONDELL-CITGO Refining Company Ltd.
("LCR"). LCR adopted the LYONDELL-CITGO Refining Company Ltd. Capital
Accumulation Plan for Non-Represented Employees (the "LCR Plan") which is
substantially similar to the Plan. All participants of the Plan who became
employees of LCR as of July 1, 1993 continued to participate in the Plan until
August 23, 1993. On August 23, 1993, participants of the Plan who became
employees of LCR had the assets attributable to their participation in the Plan
transferred to the LCR Plan. Participants of the LCR Plan may not direct
participant or LCR employer contributions into new purchases of Company,
Atlantic Richfield Company ("ARCO") or ARCO Chemical Company ("ARCO Chemical")
common stock.
Employees of ARCO or ARCO Chemical who became employees of the Company had
their assets attributable to their participation in the Atlantic Richfield
Company Capital Accumulation Plan II or ARCO Chemical Company Capital
Accumulation Plan (which assets included ARCO common stock and ARCO Chemical
common stock) transferred to the Plan. ARCO common stock and ARCO Chemical
common stock may be held or sold within the Plan; however, no new purchases of
ARCO or ARCO Chemical common stock may be made except upon reinvestment of
dividends from the respective common stock.
Under plan provisions, participants, upon reaching retirement age of 65, are
distributed their account balances within 60 days of the retirement, or, if the
participant so elects, in the calendar year following such retirement. If a
participant terminates employment, for any reason, prior to retirement age, the
participant's account balance will be distributed upon attainment of age 65 or
anytime the participant makes application to receive the funds prior to age 65.
A participant may elect within sixty days of termination to receive an immediate
distribution or defer receipt until the following calendar year.
5
LYONDELL PETROCHEMICAL COMPANY CAPITAL ACCUMULATION PLAN
FOR NON-REPRESENTED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
Note 1 - Description of Plan (Continued):
Participants are allowed to contribute from 1% to 12% of their base pay to the
Plan through payroll deductions. The Company makes matching contributions to the
participant's account at 150% of the participant's contribution, up to 6% of the
participant's base salary. All Company contributions are made in the form of
common stock of the Company or cash to be used to purchase common stock of the
Company. All contributions and earnings are fully vested and nonforfeitable.
All contributions and earnings are allocated to individual participant accounts
on an equity basis. Participants should refer to the Plan document for a
complete description of the Plan.
Although it has not expressed any intent to do so, the Company has the right
to discontinue its contributions at any time or terminate the Plan subject to
the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA").
In the event of Plan termination, all participants will be fully vested in their
accounts and all assets of the Plan will continue to be held for distribution to
participants as provided in the Plan.
Note 2 - Summary of Significant Accounting Policies:
Basis of Accounting
The financial statements of the Plan are prepared under the accrual method
accounting.
Investments
Investments in common stock of the Company, ARCO and ARCO Chemical are valued
at fair value based on quoted market prices in an active market as of the last
business day of the Plan's fiscal year. All other investment options are valued
at net asset value as of the last business day of the Plan's fiscal year. Net
asset value is the fair value of all securities plus accruals for dividend
income, interest income, and investment management expenses. The value per unit
is determined by dividing the net asset value by number of units outstanding.
Short-term and certain other investments are valued at cost which approximates
fair value.
Purchases and sales of securities are accounted for on a trade date basis (the
date the order to buy or sell is executed). Gains or losses on the sale or
distribution of securities is computed on a first-in-first-out basis. Dividend
income is accrued on the ex-dividend date and interest income is accrued as
earned. The Plan presents in the statement of changes in net assets available
for benefits the net appreciation or depreciation in the fair value of its
investments which consists of the realized gains or losses and the unrealized
appreciation or depreciation on those investments.
Plan Expenses
All costs of administering the Plan are paid by the Company.
6
LYONDELL PETROCHEMICAL COMPANY CAPITAL ACCUMULATION PLAN
FOR NON-REPRESENTED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
Note 2 - Summary of Significant Accounting Policies (Continued):
Participant Loans
Participant loans are interest-bearing loans taken by participants against
their respective account balances. The interest rate currently charged for loans
is a fixed rate equal to the average prime rate reported in The Wall Street
Journal as of the last business day of the month preceding the date the loan
application is received by the Lyondell Petrochemical Company Capital
Accumulation Plan for Non-Represented Employees Administrative Committee.
Interest rates range from 6 percent to 10 percent. A loan may be taken by
participants for a period from one to five years. Repaid principal and interest
are credited to the participant's Money Market Fund account. The loans are
collateralized by the balance in the participant's account.
Payment of Benefits
Benefits are recorded when paid.
Note 3 - Tax Status:
The Plan is a qualified plan under Sections 401(a) and (k) of the Internal
Revenue Code of 1986, as amended (the "Code") and is a qualified employee stock
ownership plan under Section 4975(e)(7) of the Code. The Plan has received a
favorable determination letter from the Internal Revenue Service (the
"Service"). Accordingly, no provision is made for federal income taxes.
Subsequent Plan amendments are not included in the Service's ruling. The
Company believes that the Plan, as presently amended, will continue to qualify
under applicable provisions of the Code.
Note 4 - Reconciliation of Financial Statements to Form 5500:
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500.
June 30
------------------------
1994 1993
----------- -----------
Net assets available for benefits per the financial
statements $56,727,393 $83,856,760
Amounts allocated to withdrawing
participants (180,369) (487,678)
----------- -----------
Net assets available for benefits per the Form
5500 $56,547,024 $83,369,082
=========== ===========
7
LYONDELL PETROCHEMICAL COMPANY CAPITAL ACCUMULATION PLAN
FOR NON-REPRESENTED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
Note 4 - Reconciliation of Financial Statements to Form 5500 (Continued):
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500.
Year Ended
June 30, 1994
-------------
Benefits paid to participants per the financial
statements $5,783,632
Add: Amounts allocated to withdrawing
participants at June 30, 1994 180,369
Less: Amounts allocated to withdrawing
participants at June 30, 1993 (487,678)
----------
Benefits paid to participants per the Form 5500 $5,476,323
==========
Amounts allocated to withdrawing participants are recorded on the Form 5500
for benefit claims that have been processed and approved for payment prior to
June 30 but not yet paid as of that date.
Note 5 - Subsequent Event:
On December 1, 1994, after receiving a favorable ruling from the Internal
Revenue Service, ARCO made a restoration payment to the Plan which constituted a
reimbursement of principal with respect to certain losses incurred by the Plan
on April 30, 1994, and interest accrued thereon to the date of the restoration
payment.
8
LYONDELL PETROCHEMICAL COMPANY CAPITAL ACCUMULATION PLAN
FOR NON-REPRESENTED EMPLOYEES
SUPPLEMENTAL SCHEDULES
EIN: 95-4160558, P/N 005
Item 27a - Schedule of Assets Held for Investment Purposes
as of June 30, 1994
- --------------------------------------------------------------------------------------------------------------
(a) (b) Identity of issue, (c) Description of investment (d) Cost (e) Current
borrower, lessor, or similar including maturity date, rate value
party of interest, collateral, par or
maturity value
- --------------------------------------------------------------------------------------------------------------
Atlantic Richfield Company Par value $2.50 $7,426,459 $11,189,933
common stock
- --------------------------------------------------------------------------------------------------------------
ARCO Chemical Company Par value $1.00 $23,122 $27,633
common stock
- --------------------------------------------------------------------------------------------------------------
Lyondell Petrochemical Par value $1.00 $26,255,750 $30,131,864
Company common stock
- --------------------------------------------------------------------------------------------------------------
Money Market Fund Cash and cash equivalents $8,150,472 $8,150,472
with variable rates
- --------------------------------------------------------------------------------------------------------------
Equity Fund Par value $15.33 $2,233,423 $2,589,118
- --------------------------------------------------------------------------------------------------------------
Bond Fund Par value $10.00 $956,320 $998,929
- --------------------------------------------------------------------------------------------------------------
Participant Loans Various rates of interest -- $3,134,259
ranging from 6% to 10%;
maturing between 1 and 5
years
- --------------------------------------------------------------------------------------------------------------
Item 27a - Schedule of Assets Held for Investment Purposes Which Were Both
Acquired and Disposed of Within the Plan Year
For The Year Ended June 30, 1994
- --------------------------------------------------------------------------------------------------------------
(a) Identity of issue, (b) Description of investment (c) Cost of (d) Proceeds of
borrower, lessor, or similar including maturity date, rate acquisitions dispositions
party of interest, collateral, par or
maturity value
- --------------------------------------------------------------------------------------------------------------
Atlantic Richfield Company Par value $2.50 $27,342 $26,040
common stock
- --------------------------------------------------------------------------------------------------------------
Lyondell Petrochemical Par value $1.00 $625,364 $705,872
Company common stock
- --------------------------------------------------------------------------------------------------------------
Equity Fund Par value $15.33 $187,776 $189,699
- --------------------------------------------------------------------------------------------------------------
Bond Fund Par value $10.00 $41,589 $41,053
- --------------------------------------------------------------------------------------------------------------
9
LYONDELL PETROCHEMICAL COMPANY CAPITAL ACCUMULATION PLAN
FOR NON-REPRESENTED EMPLOYEES
SUPPLEMENTAL SCHEDULES (Continued)
EIN: 95-4160558, P/N 005
Item 27d - Schedule of Reportable Transactions
For The Year Ended June 30, 1994
- --------------------------------------------------------------------------------------------------------------
(a) Identity of party (b) Description of (c) Purchase (d) Selling (e) Lease
involved asset (include interest price price rental
rate and maturity in
case of a loan)
- --------------------------------------------------------------------------------------------------------------
Atlantic Richfield Par value $2.50 $641,944 N/A
Company common stock
- --------------------------------------------------------------------------------------------------------------
Atlantic Richfield Par value $2.50 $2,193,705 N/A
Company common stock
- --------------------------------------------------------------------------------------------------------------
Lyondell Petrochemical Par value $1.00 $7,665,639 N/A
Company common stock
- --------------------------------------------------------------------------------------------------------------
Lyondell Petrochemical Par value $1.00 $3,399,626 N/A
Company common stock
- --------------------------------------------------------------------------------------------------------------
ARCO Chemical Par value $1.00 $1,495 N/A
Company common stock
- --------------------------------------------------------------------------------------------------------------
Money Market Fund Cash and cash $11,636,276 N/A
equivalents with
variable rates
- --------------------------------------------------------------------------------------------------------------
Money Market Fund Cash and cash $12,410,983 N/A
equivalents with
variable rates
- --------------------------------------------------------------------------------------------------------------
Equity Fund Par value $15.33 $1,249,642 N/A
- --------------------------------------------------------------------------------------------------------------
Equity Fund Par value $15.33 $798,295 N/A
- --------------------------------------------------------------------------------------------------------------
Bond Fund Par value $10.00 $331,190 N/A
- --------------------------------------------------------------------------------------------------------------
Bond Fund Par value $10.00 $266,422 N/A
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
(a) Identity of party (f) Expense (g) Cost of (h) Current (i) Net gain
involved incurred asset value of or (loss)
with asset on
transaction transaction
date
- --------------------------------------------------------------------------------------------------------------
Atlantic Richfield N/A $641,944 --
Company common stock
- --------------------------------------------------------------------------------------------------------------
Atlantic Richfield N/A $1,354,649 $2,193,705 $839,056
Company common stock
- --------------------------------------------------------------------------------------------------------------
Lyondell Petrochemical N/A $7,665,639 --
Company common stock
- --------------------------------------------------------------------------------------------------------------
Lyondell Petrochemical N/A $3,548,877 $3,399,626 ($149,251)
Company common stock
- --------------------------------------------------------------------------------------------------------------
ARCO Chemical N/A $1,495 --
Company common stock
- --------------------------------------------------------------------------------------------------------------
Money Market Fund N/A $11,636,276 --
- --------------------------------------------------------------------------------------------------------------
Money Market Fund N/A $12,410,983 $12,410,983 --
- --------------------------------------------------------------------------------------------------------------
Equity Fund N/A $1,249,642 --
- --------------------------------------------------------------------------------------------------------------
Equity Fund N/A $686,933 $798,295 $111,362
- --------------------------------------------------------------------------------------------------------------
Bond Fund N/A $331,190 --
- --------------------------------------------------------------------------------------------------------------
Bond Fund N/A $246,820 $266,422 $19,602
- --------------------------------------------------------------------------------------------------------------
10
LYONDELL PETROCHEMICAL COMPANY CAPITAL ACCUMULATION PLAN
FOR NON-REPRESENTED EMPLOYEES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the Plan) have duly caused this annual
report to be signed on its behalf by the undersigned hereunto duly authorized.
LYONDELL PETROCHEMICAL COMPANY
CAPITAL ACCUMULATION PLAN FOR
NON-REPRESENTED EMPLOYEES
By: RICHARD W. PARK
-------------------------------
(Signature)
Richard W. Park
Member, Capital Accumulation Plan
Administrative Committee
Date: December 14, 1994
11
EXHIBIT INDEX
Sequentially
Exhibit Numbered Page
No. Exhibit Where Located
------- ------- -------------
24 Consent of Coopers & Lybrand L.L.P. 13
12