SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 11-K (Mark One) [ ] Annual Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934 (Fee Required) OR [X] Transition report pursuant to Section 15(d) of the Securities Exchange Act of 1934 (No Fee Required) For the transition period from July 1, 1995 through December 31, 1995 Commission File Number 33-26867 LYONDELL PETROCHEMICAL COMPANY 401(K) AND SAVINGS PLAN (FORMERLY THE 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) LYONDELL PETROCHEMICAL COMPANY 401(K) AND SAVINGS PLAN (FORMERLY THE LYONDELL PETROCHEMICAL COMPANY CAPITAL ACCUMULATION PLAN FOR NON-REPRESENTED EMPLOYEES) INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE PAGE ---- Report of Independent Accountants 2 Financial Statements: Statements of Net Assets Available for Benefits as of December 31, 1995 and June 30, 1995 3 Statement of Changes in Net Assets Available for Benefits with Fund Information for the six months ended December 31, 1995 4 Notes to Financial Statements 6 Supplemental Schedule: Item 27d - Schedule of Reportable Transactions for the six months ended December 31, 1995 14 1 REPORT OF INDEPENDENT ACCOUNTANTS To the Benefits Administrative Committee of the Lyondell Petrochemical Company 401(k) and Savings Plan : We have audited the accompanying statements of net assets available for benefits of the Lyondell Petrochemical Company 401(k) and Savings Plan, formerly the Lyondell Petrochemical Company Capital Accumulation Plan for Non-Represented Employees, (the "Plan") as of December 31, 1995 and June 30, 1995, and the related statement of changes in net assets available for benefits for the six months ended December 31, 1995. 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. 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 December 31, 1995 and June 30, 1995, and the changes in net assets available for benefits for the six months ended December 31, 1995 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 schedule of reportable transactions is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is 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 schedule 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. Houston, Texas June 13, 1996 2 LYONDELL PETROCHEMICAL COMPANY 401(K) AND SAVINGS PLAN (FORMERLY THE LYONDELL PETROCHEMICAL COMPANY CAPITAL ACCUMULATION PLAN FOR NON-REPRESENTED EMPLOYEES) STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS AS OF DECEMBER 31, 1995 AND JUNE 30, 1995 DECEMBER 31 JUNE 30 1995 1995 -------------- --------- ASSETS Investments, at fair value: Investment in Lyondell Petrochemical Company Master Trust $108,490,438 Lyondell Petrochemical Company ("Lyondell") common stock (June 30, 1995 - 1,414,306 shares, cost $31,632,558) -- $36,241,591 Atlantic Richfield Company ("ARCO") common stock (June 30, 1995 - 106,873 shares, cost $7,466,571) -- 11,729,312 Money Market Fund -- 10,199,381 Equity Fund (June 30, 1995 - 64,066 units, cost $2,624,939) -- 3,627,673 Bond Fund (June 30, 1995 - 62,064 units, cost $877,080) -- 1,007,113 ------------ ----------- Total investments 108,490,438 62,805,070 Participant loans receivable -- 2,902,000 Other assets -- 294,179 ------------ ----------- Net assets available for benefits $108,490,438 $66,001,249 ============ =========== See notes to financial statements. 3 LYONDELL PETROCHEMICAL COMPANY 401(K) AND SAVINGS PLAN (FORMERLY THE LYONDELL PETROCHEMICAL COMPANY CAPITAL ACCUMULATION PLAN FOR NON-REPRESENTED EMPLOYEES) STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION FOR THE SIX MONTHS ENDED DECEMBER 31, 1995 PARTICIPANT DIRECTED -------------------------------------------------------------------------------------------------------- LYONDELL LYONDELL COMMON COMMON STOCK - STOCK - ARCO MONEY DIVIDEND DIVIDEND COMMON MARKET EQUITY BOND PAYOUT REINVESTMENT STOCK FUND FUND FUND -------------- -------------- -------------- --------------- ------------------- ---------------- Contributions: Company Participant $ 335,597 $ 855,748 $ 910,913 Rollover 3,957,106 ------------------------------------------------------------------------------------------------------- Total 335,597 855,748 4,868,019 -------------------------------------------------------------------------------------------------------- Benefits paid to participants (383,820) (154,817) $ (83,378) (981,957) -------------------------------------------------------------------------------------------------------- Investment income (loss): Lyondell Petrochemical Company Master Trust (1,047,837) (847,386) 578,717 1,204,379 Interest income 3,202 $ 2,413 $ 658 -------------------------------------------------------------------------------------------------------- Net investment income (loss) (1,047,837) (847,386) 578,717 1,207,581 -------------------------------------------------------------------------------------------------------- Participant borrowings (315,397) (448,266) (132,155) (1,988,884) Participant repayments 268,489 394,551 467,867 --------------------------------------------------------------------------------------------------------- Net loan activity (46,908) (53,715) (132,155) (1,521,017) --------------------------------------------------------------------------------------------------------- Amounts transferred from Lyondell Petrochemical Company Savings Plan for Non-Represented Employees 1,477,273 3,536,642 4,320,858 7,439,796 Other transfers from (to) LCR Plans (59,941) 31,909 (55,994) (27,236) Transfers between investment options 7,728,753 1,696,676 (545,064) (1,301,794) (3,630,086) (1,007,771) -------------------------------------------------------------------------------------------------------- Net increase (decrease) 8,003,117 5,065,057 4,082,984 9,683,392 (3,627,673) (1,007,113) Net assets available for benefits: Beginning of period 4,170,045 9,983,232 11,729,312 10,493,560 3,627,673 1,007,113 -------------------------------------------------------------------------------------------------------- End of period $12,173,162 $15,048,289 $15,812,296 $20,176,952 $ -- $ -- ======================================================================================================== SSGA IDS INTERMEDIATE NEW BOND DIMENSIONS FUND FUND -------------- -------------- Contributions: Company Participant $ 197,305 $ 927,615 Rollover 1,333,971 4,211,014 -------------------------- Total 1,531,276 5,138,629 -------------------------- Benefits paid to participants (21,171) (49,337) -------------------------- Investment income (loss): Lyondell Petrochemical Company Master Trust 128,117 1,081,891 Interest income -------------------------- Net investment income (loss) 128,117 1,081,891 -------------------------- Participant borrowings (186,029) (572,796) Participant repayments 22,772 122,452 -------------------------- Net loan activity (163,257) (450,344) -------------------------- Amounts transferred from Lyondell Petrochemical Company Savings Plan for Non-Represented Employees 533,805 2,067,179 Other transfers from (to) LCR Plans (1,130) 9,816 Transfers between investment options 683,793 4,226,760 --------------------------- Net increase (decrease) 2,691,433 12,024,594 Net assets available for benefits: Beginning of period -------------------------- End of period $2,691,433 $12,024,594 ========================== (Continued on next page) 4 LYONDELL PETROCHEMICAL COMPANY 401(K) AND SAVINGS PLAN (FORMERLY THE LYONDELL PETROCHEMICAL COMPANY CAPITAL ACCUMULATION PLAN FOR NON-REPRESENTED EMPLOYEES) STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION FOR THE SIX MONTHS ENDED DECEMBER 31, 1995 PARTICIPANT DIRECTED NON-PART. ----------------------------------------------------------------- DIRECTED DODGE & SEVEN -------------- COX SEAS PBHG EUROPACIFIC LYONDELL BALANCED S&P 500 GROWTH GROWTH PARTICIPANT COM. STOCK PLAN FUND FUND FUND FUND LOANS DIV. PAYOUT TOTAL ---------- ---------- ------------ ------------ ------------ ------------- ---------- Contributions: Company $ 2,666,951 $ 2,666,951 Participant $ 33,219 $ 29,923 $ 94,544 $ 28,747 3,413,611 Rollover 38,443 41,783 74,436 54,353 9,711,106 ----------------------------------------------------------------------------------------------- Total 71,662 71,706 168,980 83,100 2,666,951 15,791,668 ----------------------------------------------------------------------------------------------- Benefits paid to participants (2,016) (1,067) (1,318) (1,609) $ (40,229) (141,390) (1,862,109) ----------------------------------------------------------------------------------------------- Investment income (loss): Lyondell Petrochemical Company Master Trust 24,303 30,215 223,347 7,586 189,393 (1,981,289) (408,564) Interest income 6,273 ----------------------------------------------------------------------------------------------- Net investment income (loss) 24,303 30,215 223,347 7,586 189,393 (1,981,289) (402,291) ----------------------------------------------------------------------------------------------- Participant borrowings (16,300) (25,139) (32,216) (5,480) 3,814,298 (91,636) -- Participant repayments 9,168 6,683 21,435 2,587 (1,318,943) 2,939 -- ----------------------------------------------------------------------------------------------- Net loan activity (7,132) (18,456) (10,781) (2,893) 2,495,355 (88,697) -- ----------------------------------------------------------------------------------------------- Amounts transferred from Lyondell Petrochemical Company Savings Plan for Non-Represented Employees 1,956,651 7,732,293 29,064,497 Other transfers from (to) LCR Plans (102,576) Transfers between investment options 691,337 565,145 2,429,810 422,886 (11,960,445) -- ---------------------------------------------------------------------------------------------- Net increase (decrease) 778,154 647,543 2,810,038 509,070 4,601,170 (3,772,577) 42,489,189 Net assets available for benefits: Beginning of period 2,902,000 22,088,314 66,001,249 ---------------------------------------------------------------------------------------------- End of period $778,154 $647,543 $2,810,038 $509,070 $ 7,503,170 $ 18,315,737 $108,490,438 ============================================================================================== See notes to financial statements. 5 LYONDELL PETROCHEMICAL COMPANY 401(K) AND SAVINGS PLAN (FORMERLY THE LYONDELL PETROCHEMICAL COMPANY CAPITAL ACCUMULATION PLAN FOR NON-REPRESENTED EMPLOYEES) NOTES TO FINANCIAL STATEMENTS 1. DESCRIPTION OF PLAN GENERAL - The Lyondell Petrochemical Company Capital Accumulation Plan for Non- Represented Employees is a defined contribution plan for employees and deferred vested former employees of Lyondell Petrochemical Company (the "Company" or "Lyondell"). Effective as of July 1, 1995, the Plan was amended and its name was changed to "Lyondell Petrochemical Company 401(k) and Savings Plan" (the "Plan"). Also effective as of July 1, 1995, the Lyondell Petrochemical Company Savings Plan for Non-Represented Employees ("Savings Plan") was merged into the Plan and the assets of the Savings Plan were transferred into the Plan. CONTRIBUTIONS - Effective July 1, 1995, participants are allowed to contribute from 1% to 14% of their base pay to the Plan through pre-tax payroll deductions ("Elective Deferrals") and from 1% to 10% of their base pay through after-tax payroll deductions ("Savings Contributions"). Also effective July 1, 1995, the Company makes matching contributions to the participant's account at the rate of 160% of the Elective Deferrals up to a maximum Company contribution of 8% of the participant's base salary. Prior to July 1, 1995, participants were allowed to contribute from 1% to 12% of their base pay and the Company made matching contributions to the participant's account at the rate of 150% of the participant's contribution up to a maximum Company contribution of 6% of the participant's base salary. All contributions and earnings thereon are fully vested and nonforfeitable. All earnings are allocated to individual participant accounts on the basis of the units held in the investment fund. Participants should refer to the Plan document for a complete description of the Plan. INVESTMENT ELECTION - Prior to July 1, 1995, participant contributions and earnings thereon were invested in the following alternatives or any combination thereof in accordance with the option or options selected by each participant: 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 Lyondell Common Stock - Dividend Payout Fund (the "ESOP") portion of the Plan (an employee stock ownership plan under Section 4975(e)(7) of the Internal Revenue Code) or in the Lyondell Common Stock - Dividend Reinvestment Fund (the "non-ESOP stock fund"). Dividends on common stock held in the non-ESOP stock 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 are reinvested in the Money Market Fund and are payable to the participant annually as allowed by the Plan. 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 and are invested in the ESOP and may not be transferred to other investment options. As of July 1, 1995, the Money Market Fund, Equity Fund and Bond Fund options were replaced by the following investment options: units of the State Street Short-Term Investment Fund (the "Money Market Fund"), units of the SSGA Intermediate Bond Fund, units of the IDS New Dimensions Fund, units of the Dodge & Cox Balanced Fund, units of the Seven Seas S&P 500 Fund, units of the PBHG Growth Fund and units of the Europacific Growth Fund. All of these funds are held within the Lyondell Petrochemical Company Master Trust (the "Trust"). A brief description of each fund follows: Money Market Fund - Contributions to this fund are primarily invested in commercial paper, certificates of deposit, bankers' acceptances, repurchase agreements and other high quality money market investments. Each participant earns interest based on the blended rate of the various interest rates for all securities held in the fund. SSGA Intermediate Bond Fund - Contributions to this fund are primarily invested in intermediate-term U.S. Treasury or Agency bonds, high quality investment-grade corporate bonds and "A"-rated or better asset backed investments. Each participant earns a return based on interest paid on the bonds and increases and decreases in the market value of the bonds. 6 LYONDELL PETROCHEMICAL COMPANY 401(K) AND SAVINGS PLAN (FORMERLY THE LYONDELL PETROCHEMICAL COMPANY CAPITAL ACCUMULATION PLAN FOR NON-REPRESENTED EMPLOYEES) NOTES TO FINANCIAL STATEMENTS (CONTINUED) IDS New Dimensions Fund - Contributions to this fund are primarily invested in stocks of medium to large companies operating in areas where economic and technological changes are occurring. Each participant receives a return based on the increase or decrease in the market value of the stocks held, plus dividends and interest income. Dodge & Cox Balanced Fund - Contributions to this fund are primarily invested in a diversified portfolio of stocks and investment grade bonds. Each participant earns a return based on reinvestment of dividends and the increase or decrease in the value of the stocks and bonds in the fund. Seven Seas S&P 500 Fund - Contributions to this fund are primarily invested in stocks of large companies in the U.S. Each participant earns a return based on the increase or decrease in the market value of the stocks held, plus dividends and interest income. PBHG Growth Fund - Contributions to this fund are primarily invested in stocks of small companies in the U.S. Each participant earns a return based on the increase or decrease in the market value of the stocks held, plus dividend and interest income. Europacific Growth Fund - Contributions to this fund are primarily invested in stocks of companies based outside the U.S. Each participant earns a return based on the increase or decrease in the market value of the stocks held, dividend and interest income and changes in the values of foreign currencies (as compared to the value of the U.S. dollar). Employees of Atlantic Richfield Company ("ARCO") who became employees of the Company had their assets attributable to their participation in the ARCO Capital Accumulation Plan II (which assets included ARCO common stock) transferred to the Plan. ARCO common stock may be held or sold within the Plan; however, no new purchases of ARCO common stock may be made except upon reinvestment of dividends from the shares of common stock. WITHDRAWALS AND BORROWINGS - If a participant terminates employment, for any reason, 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. If the participant's account balance is less than $3,500, the participant's account balance will be distributed as soon as practicable. The Plan permits withdrawals of Elective Deferrals under certain hardship conditions as defined by the Plan and granted by the Benefits Administrative Committee. Savings Contributions may be withdrawn in total or partial amounts as defined by the Plan. Withdrawals are made in a lump sum cash payment, although a participant may elect to receive Lyondell or ARCO common stock to the extent assets are held in the form of such stock. Distributions upon retirement or termination are generally in Lyondell or ARCO common stock, to the extent assets are held in the form of such stock, and in cash to the extent invested in any other investment funds maintained under the Plan. The Plan provides for employees to borrow up to 50% of their account balance, as defined by the Plan and subject to a minimum and maximum borrowing level. 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 Plan. Interest rates range from 6 % to 9.5 %. A loan may be taken by participants for a period from one to five years. Repaid principal and interest are credited to investment funds according to the current investment elections of the participant. The loans, which are carried at their face amount, are collateralized by the balance in the participant's account. 7 LYONDELL PETROCHEMICAL COMPANY 401(K) AND SAVINGS PLAN (FORMERLY THE LYONDELL PETROCHEMICAL COMPANY CAPITAL ACCUMULATION PLAN FOR NON-REPRESENTED EMPLOYEES) NOTES TO FINANCIAL STATEMENTS (CONTINUED) PLAN ADMINISTRATION - The Plan is administered by the Company's Benefits Administrative Committee. The assets of the Plan are maintained in the Trust under the custody of State Street Bank and Trust Company (the "Trustee"). The Trustee makes payments as authorized by the Plan. The Trustee has also been appointed investment manager to the Money Market Fund, the SSGA Intermediate Bond Fund and the stock funds. Other investment options are managed by their respective fund investment managers. Administrative expenses are paid by the Company. TERMINATION PROVISION - Although it has not expressed any intent to do so, the Company has the right to terminate the Plan at any time 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. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING - The financial statements of the Plan are prepared using the accrual method of accounting. PAYMENT OF BENEFITS - Benefits are recorded when paid. USE OF ESTIMATES - The preparation of financial statements in conformity with generally accepted accounting principles requires the Plan's management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 3. TAX STATUS The Plan is a qualified plan under Sections 401(a) and (k) of the Internal Revenue Code of 1986, as amended ("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 ("IRS"). Accordingly, no provision is made for federal income taxes. Subsequent Plan amendments are not included in the IRS's ruling. The Company believes that the Plan, as presently amended, will continue to qualify under applicable provisions of the Code. The Plan as amended was submitted to the IRS on June 30, 1995 for a favorable determination letter. 4. LYONDELL PETROCHEMICAL COMPANY MASTER TRUST The Trust was established in July 1995 for certain participating benefit plans of the Company and LYONDELL-CITGO Refining Company Ltd. ("LCR"), a Texas limited liability company which is related to the Company, and is administered by the Benefits Administrative Committees of the Company and LCR. The investments are directed by outside investment managers and the Trustee. Investments of the Trust consist of an ownership interest in various investment funds and equity securities of Lyondell and ARCO. Assets of the Trust are valued by the Trustee based on the value established by the Trustee or the outside investment managers for the various investment funds. Investments in Lyondell and ARCO common stock are valued at fair value based on quoted market prices in an active market as of the last business day of the periods presented. Net asset value is the fair value of all securities plus accruals for dividend income and interest income. The value per unit by fund is determined by dividing the net asset value of the fund by number of units 8 LYONDELL PETROCHEMICAL COMPANY 401(K) AND SAVINGS PLAN (FORMERLY THE LYONDELL PETROCHEMICAL COMPANY CAPITAL ACCUMULATION PLAN FOR NON-REPRESENTED EMPLOYEES) NOTES TO FINANCIAL STATEMENTS (CONTINUED) outstanding. 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. Participating plans do not own specific securities or other assets in the Trust, but have an ownership interest in each selected fund within the Trust which is valued daily. Contributions to, withdrawals from and transfers between investment options in the Trust by the participants are charged or credited, as the case may be, to each investment fund. Net assets of the Trust as of December 31, 1995 are as follows: Assets: Cash $ 10,083 Investments, at fair value: Lyondell common stock 74,453,390 ARCO common stock 41,515,524 Money Market Fund 59,075,745 SSGA Intermediate Bond Fund 4,588,848 IDS New Dimensions Fund 21,459,069 Dodge & Cox Balanced Fund 761,230 Seven Seas S&P 500 Fund 2,083,081 PBHG Growth Fund 6,428,854 Europacific Growth Fund 1,083,832 SSGA Lifesolutions Growth Fund 857,801 SSGA Lifesolutions Income & Growth Fund 321,497 SSGA Lifesolutions Balanced Growth Fund 679,526 Participant loans receivable 18,526,928 Interest and dividends receivable 1,256,979 Receivable for investments sold 111,696 Other assets 1,741,613 ------------ Total assets 234,955,696 Liabilities: Payable for investments purchased 91,700 Other liabilities 462,780 ------------ Net assets $234,401,216 ============ 9 LYONDELL PETROCHEMICAL COMPANY 401(K) AND SAVINGS PLAN (FORMERLY THE LYONDELL PETROCHEMICAL COMPANY CAPITAL ACCUMULATION PLAN FOR NON-REPRESENTED EMPLOYEES) NOTES TO FINANCIAL STATEMENTS (CONTINUED) Changes in net assets of the Trust for the six months ended December 31, 1995 are presented below. The fund information is presented for purposes of additional analysis rather than to present the changes in net assets of each fund. LYONDELL LYONDELL COMMON COMMON SSGA STOCK - STOCK - ARCO MONEY INTERMEDIATE DIVIDEND DIVIDEND COMMON MARKET BOND REINVEST PAYOUT STOCK FUND FUND ------------- ------------- ------------- ------------- ------------- Contributions: Employer $ 2,666,951 $ 1,394,328 $ 111,238 Participant $ 855,769 335,597 2,763,814 348,102 Rollover 3,954,145 1,372,884 Other 59,078 179,798 152,240 4,822 -------------------------------------------------------------------------- Total 914,847 3,182,346 8,264,527 1,837,046 -------------------------------------------------------------------------- Investment income (loss): Dividends on common stock 895,207 599,127 $ 1,123,395 Earnings on other investments 34,471 21,692 31,740 1,706,897 Net appreciation (depreciation) in the fair value of investments (4,553,517) (3,066,444) 392,053 225,851 -------------------------------------------------------------------------- Net investment income (loss) (3,623,839) (2,445,625) 1,547,188 1,706,897 225,851 -------------------------------------------------------------------------- Benefits paid to participants (920,220) (525,211) (766,349) (2,219,895) (36,792) -------------------------------------------------------------------------- Participant loan activity: Borrowings (624,841) (397,153) (380,753) (5,991,262) (388,539) Repayments 338,538 238,630 1,741,433 92,045 -------------------------------------------------------------------------- Net loan activity (286,303) (158,523) (380,753) (4,249,829) (296,494) -------------------------------------------------------------------------- Amounts transferred from Lyondell and LCR Plans 54,495,022 29,820,607 43,490,415 59,316,478 3,340,835 Transfers between investment options (5,011,562) 615,365 (1,506,259) (4,970,174) (388,774) -------------------------------------------------------------------------- Net assets, December 31, 1995 $45,567,945 $30,488,959 $42,384,242 $57,848,004 $4,681,672 ========================================================================== (Continued on next page) 10 LYONDELL PETROCHEMICAL COMPANY 401(K) AND SAVINGS PLAN (FORMERLY THE LYONDELL PETROCHEMICAL COMPANY CAPITAL ACCUMULATION PLAN FOR NON-REPRESENTED EMPLOYEES) NOTES TO FINANCIAL STATEMENTS (CONTINUED) IDS DODGE SEVEN NEW & COX SEAS PBHG EUROPACIFIC DIMENSIONS BALANCED S&P 500 GROWTH GROWTH FUND FUND FUND FUND FUND ------------- ---------- ------------ ------------ ------------ Contributions: Employer $ 436,438 $ 28,199 $ 64,847 $ 10,518 Participant 1,545,966 $ 33,219 71,562 190,419 42,006 Rollover 4,232,695 38,442 68,215 113,348 54,353 Other 27,071 -------------------------------------------------------------------- Total 6,242,170 71,661 167,976 368,614 106,877 -------------------------------------------------------------------- Investment income (loss): Dividends on common stock 969,987 21,977 57,245 25,035 Earnings on other investments Net appreciation (depreciation) in the fair value of investments 1,258,033 2,327 42,139 472,060 (2,477) -------------------------------------------------------------------- Net investment income (loss) 2,228,020 24,304 99,384 472,060 22,558 -------------------------------------------------------------------- Benefits paid to participants (287,849) (2,016) (11,530) (8,972) (2,130) -------------------------------------------------------------------- Participant loan activity: Borrowings (1,041,376) (16,300) (43,179) (91,337) (12,852) Repayments 448,014 9,169 38,433 62,765 8,849 -------------------------------------------------------------------- Net loan activity (593,362) (7,131) (4,746) (28,572) (4,003) -------------------------------------------------------------------- Amounts transferred from Lyondell and LCR Plans 14,506,564 Transfers between investment options 710,309 691,336 1,872,836 5,336,582 995,804 -------------------------------------------------------------------- Net assets, December 31, 1995 $22,805,852 $778,154 $2,123,920 $6,139,712 $1,119,106 ==================================================================== (Continued on next page) 11 LYONDELL PETROCHEMICAL COMPANY 401(K) AND SAVINGS PLAN (FORMERLY THE LYONDELL PETROCHEMICAL COMPANY CAPITAL ACCUMULATION PLAN FOR NON-REPRESENTED EMPLOYEES) NOTES TO FINANCIAL STATEMENTS (CONTINUED) SSGA SSGA SSGA LIFESOLUTIONS LIFESOLUTIONS LIFESOLUTIONS GROWTH INCOME & BALANCED PARTICIPANT TRUST FUND GROWTH FUND GROWTH FUND LOANS TOTAL -------------- -------------- -------------- ------------ ------------- Contributions: Employer $ 29,533 $ 7,365 $ 23,273 $ 4,772,690 Participant 41,655 9,791 29,884 6,267,793 Rollover 2,099 9,836,181 Other 423,000 ---------------------------------------------------------------------------- Total 71,188 17,156 55,256 21,299,664 ---------------------------------------------------------------------------- Investment income (loss): Dividends on common stock 3,691,973 Earnings on other investments 1,794,800 Net appreciation (depreciation) in the fair value of investments 22,790 10,322 21,489 (5,175,374) ---------------------------------------------------------------------------- Net investment income (loss) 22,790 10,322 21,489 311,399 ---------------------------------------------------------------------------- Benefits paid to participants (9,566) (14,426) (4,804,956) ---------------------------------------------------------------------------- Participant loan activity: Borrowings (39,101) (194) (14,353) $ 9,041,240 -- Repayments 38,331 6,936 33,106 (3,056,249) -- ---------------------------------------------------------------------------- Net loan activity (770) 6,742 18,753 5,984,991 -- ---------------------------------------------------------------------------- Amounts transferred from Lyondell and LCR Plans 12,625,188 217,595,109 Transfers between investment options 770,069 287,277 597,191 -- ---------------------------------------------------------------------------- Net assets, December 31, 1995 $853,711 $321,497 $678,263 $18,610,179 $234,401,216 ============================================================================ 12 LYONDELL PETROCHEMICAL COMPANY 401(K) AND SAVINGS PLAN (FORMERLY THE LYONDELL PETROCHEMICAL COMPANY CAPITAL ACCUMULATION PLAN FOR NON-REPRESENTED EMPLOYEES) NOTES TO FINANCIAL STATEMENTS (CONTINUED) 5. VALUATION OF FUND UNITS The total number of units held within each fund and their respective values are as follows: SEPTEMBER 30, 1995 DECEMBER 31, 1995 ------------------------ ------------------------ NO. OF UNITS UNIT VALUE NO. OF UNITS UNIT VALUE ------------ ---------- ------------ ---------- Money Market Fund 2,207,232 $10.06 1,976,656 $10.21 SSGA Intermediate Bond Fund 260,686 10.19 255,239 10.54 IDS New Dimensions Fund 934,985 10.35 1,111,186 10.82 Dodge & Cox Balanced Fund 24,756 10.11 73,891 10.53 Seven Seas S&P 500 Fund 16,627 10.29 60,220 10.75 PBHG Growth Fund 148,301 10.52 242,347 11.60 Europacific Growth Fund 39,481 10.19 49,249 10.34 6. 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. DECEMBER 31 JUNE 30 1995 1995 ------------ ---------- Net assets available for benefits per the financial statements $108,490,438 $66,001,249 Amounts allocated to withdrawing participants (386,700) ------------ ----------- Net assets available for benefits per the Form 5500 $108,490,438 $65,614,549 ============ =========== The following is a reconciliation of benefits paid to participants per the financial statements to the Form 5500 for the six months ended December 31, 1995. Benefits paid to participants per the financial statements $1,862,109 Less: Amounts allocated to withdrawing participants at June 30, 1995 (386,700) Amounts transferred from the Savings Plan per the financial statements $29,064,497 Amounts transferred from the Savings Plan per the Form 5500 29,024,380 ----------- Difference in amounts transferred (40,117) ---------- Benefits paid to participants per the Form 5500 $1,435,292 ========== 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, 1995 but not yet paid as of that date. * * * * * 13 LYONDELL PETROCHEMICAL COMPANY 401(K) AND SAVINGS PLAN (FORMERLY THE LYONDELL PETROCHEMICAL COMPANY CAPITAL ACCUMULATION PLAN FOR NON-REPRESENTED EMPLOYEES) SUPPLEMENTAL SCHEDULE EIN: 76-0395303, P/N 066 ITEM 27D - SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE SIX MONTHS ENDED DECEMBER 31, 1995 (A) IDENTITY OF (B) DESCRIPTION (C) PURCHASE (D) SELLING (E) LEASE (F) EXPENSE (G) COST OF (H) CURRENT (I) NET PARTY INVOLVED OF ASSET (INCLUDE PRICE PRICE RENTAL INCURRED ASSET VALUE OF GAIN OR INTEREST RATE AND WITH ASSET ON (LOSS) MATURITY IN CASE TRANSACTION TRANSACTION OF A LOAN) DATE - ------------------------------------------------------------------------------------------------------------------------------------ Single Transactions: Money Market Fund Cash and cash equivalents $10,199,381 N/A N/A $10,199,381 $10,199,381 -- with variable interest rates Equity Fund Par value $15.33 $ 3,627,673 N/A N/A $ 2,624,939 $ 3,627,673 $1,002,734 Series of Transactions: None 14 LYONDELL PETROCHEMICAL COMPANY 401(K) AND SAVINGS PLAN (FORMERLY THE LYONDELL PETROCHEMICAL COMPANY CAPITAL ACCUMULATION PLAN 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 401(K) AND SAVINGS PLAN By: RICHARD W. PARK --------------------------------- RICHARD W. PARK Chairman, Benefits Administrative Committee Date: June 26, 1996 15 EXHIBIT INDEX SEQUENTIALLY EXHIBIT NUMBERED PAGE NO. EXHIBIT WHERE LOCATED - ------- ------ ------------- 23 Consent of Coopers & Lybrand L.L.P. 17 16