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 December 31, 1997 OR [ ] Transition report pursuant to Section 15(d) of the Securities Exchange Act of 1934 (No Fee Required) Commission File Number 33-26867 LYONDELL PETROCHEMICAL COMPANY 401(K) AND SAVINGS PLAN (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 INDEX TO FINANCIAL STATEMENTS PAGE ---- Report of Independent Accountants 2 Financial Statements: Statements of Net Assets Available for Benefits as of December 31, 1997 and 1996 3 Statement of Changes in Net Assets Available for Benefits with Fund Information for the year ended December 31, 1997 4 Notes to Financial Statements 6 Supplemental Schedules: Item 27a - Schedule of Assets Held for Investment Purposes 11 as of December 31, 1997 Item 27d - Schedule of Reportable Transactions 12 for the year ended December 31, 1997 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 (the "Plan") as of December 31, 1997 and 1996, and the related statement of changes in net assets available for benefits for the year ended December 31, 1997. 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, 1997 and 1996, and the changes in net assets available for benefits for the year ended December 31, 1997 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 as of December 31, 1997 and reportable transactions for the year then ended 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 has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is 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 24, 1998 2 LYONDELL PETROCHEMICAL COMPANY 401(K) AND SAVINGS PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, ---------------------------------------------- 1997 1996 -------------------- -------------------- ASSETS Cash $ 13,970 $ - - -------------------- -------------------- Investments, at fair value: Investment in Lyondell Petrochemical Company Master Trust - - 130,720,057 Lyondell Petrochemical Company ("Lyondell") common stock (2,153,142 shares, cost $48,520,270) 57,058,263 - - Atlantic Richfield Company ("ARCO") common stock (159,929 shares, cost $6,443,795) 12,814,311 - - Short-Term Investment Fund 26,983,034 - - SSGA Intermediate Bond Fund (41,703 shares, cost $3,034,880) 3,342,833 - - IDS New Dimensions Fund (855,828 shares, cost $16,587,671) 20,420,080 - - Dodge & Cox Balanced Fund (71,241 shares, cost $4,410,600) 4,757,456 - - Seven Seas S&P 500 Fund (412,609 shares, cost $7,199,517) 8,024,124 - - PBHG Growth Fund (326,832 shares, cost $8,361,077) 8,299,159 - - Europacific Growth Fund (115,453 shares, cost $3,073,618) 3,004,084 - - Participant loans receivable, at cost 10,590,993 - - -------------------- -------------------- Total investments 155,294,337 130,720,057 Interest and dividends receivable 3,530,433 - - -------------------- -------------------- Total assets 158,838,740 130,720,057 LIABILITIES -- Other liabilities 85,933 - - -------------------- -------------------- Net assets $158,752,807 $130,720,057 ==================== ==================== See notes to financial statements. 3 LYONDELL PETROCHEMICAL COMPANY 401(K) AND SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION FOR THE YEAR ENDED DECEMBER 31, 1997 PARTICIPANT DIRECTED ----------------------------------------------------------------- LYONDELL LYONDELL COMMON COMMON STOCK - STOCK - ARCO MONEY DIVIDEND DIVIDEND COMMON MARKET PAYOUT REINVESTMENT STOCK FUND ------------- ------------- ------------- ------------- Contributions: Company $ - - $ - - $ - - $ - - Participant 652,071 1,163,304 - - 1,742,604 Rollover 1,178 313,675 - - 614,663 ----------------------------------------------------------------- Total 653,249 1,476,979 - - 2,357,267 ----------------------------------------------------------------- Investment income - Dividends on common stock 361,412 613,545 489,939 - - Interest income 14,293 20,457 13,117 2,667,513 Net appreciation (depreciation) in the fair value of investments 2,188,395 3,675,838 2,352,253 - - ----------------------------------------------------------------- Net investment income 2,564,100 4,309,840 2,855,309 2,667,513 ----------------------------------------------------------------- Benefits paid to participants (660,402) (734,456) (1,615,893) (5,092,566) ----------------------------------------------------------------- Participant borrowings (251,531) (452,927) (104,833) (1,493,203) Participant repayments 550,928 791,716 2,360 1,371,226 ----------------------------------------------------------------- Net loan activity 299,397 338,789 (102,473) (121,977) ----------------------------------------------------------------- Transfers between investment options (13,700,429) 31,568,779 (560,691) 3,220,175 ----------------------------------------------------------------- Net increase (decrease) (10,844,085) 36,959,931 576,252 3,030,412 Net assets available for benefits: Beginning of year 12,107,050 16,010,832 12,456,323 22,653,125 ----------------------------------------------------------------- End of year $ 1,262,965 $52,970,763 $13,032,575 $25,683,537 ================================================================= PARTICIPANT DIRECTED ---------------------------- SSGA IDS INTERMEDIATE NEW BOND DIMENSIONS Fund Fund ------------- ------------ Contributions: Company $ - - $ - - Participant 275,677 1,949,169 Rollover 99,070 361,071 ---------------------------- Total 374,747 2,310,240 ---------------------------- Investment income - Dividends on common stock - - 3,281,122 Interest income - - - - Net appreciation (depreciation) in the fair value of investments 231,893 2,623,530 ---------------------------- Net investment income 231,893 5,904,652 ---------------------------- Benefits paid to participants (181,641) (2,154,063) ---------------------------- Participant borrowings (146,532) (926,745) Participant repayments 144,991 825,663 ---------------------------- Net loan activity (1,541) (101,082) ---------------------------- Transfers between investment options 75,606 (4,529) ---------------------------- Net increase (decrease) 499,064 5,955,218 Net assets available for benefits: Beginning of year 2,846,547 17,745,948 ---------------------------- End of year $3,345,611 $23,701,166 ============================ (Continued on next page) 4 LYONDELL PETROCHEMICAL COMPANY 401(K) AND SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION FOR THE YEAR ENDED DECEMBER 31, 1997 PARTICIPANT DIRECTED ---------------------------------------------------------------------------- DODGE & SEVEN COX SEAS PBHG EUROPACIFIC PARTICIPANT BALANCED S&P 500 GROWTH GROWTH LOAN FUND FUND FUND FUND FUND ------------ ------------ ------------ ------------ ------------- Contributions: Company $ - - $ - - $ - - $ - - $ - - Participant 336,464 605,407 863,464 308,460 - - Rollover 99,462 157,537 147,009 120,827 - - ---------------------------------------------------------------------------- Total 435,926 762,944 1,010,473 429,287 - - ---------------------------------------------------------------------------- Investment income - Dividends on common stock 586,459 333,315 - - 226,649 - - Interest income - - - - - - - - 841,510 Net appreciation (depreciation) in the fair value of investments 286,674 1,006,501 (460,181) (96,327) - - ---------------------------------------------------------------------------- Net investment income 873,133 1,339,816 (460,181) 130,322 841,510 ---------------------------------------------------------------------------- Benefits paid to participants (156,997) (783,008) (734,478) (191,116) (355,631) ---------------------------------------------------------------------------- Participant borrowings (175,204) (265,986) (477,261) (77,788) 4,606,057 Participant repayments 149,871 233,671 373,956 92,792 (4,660,743) ---------------------------------------------------------------------------- Net loan activity (25,333) (32,315) (103,305) 15,004 (54,686) ---------------------------------------------------------------------------- Transfers between investment options 1,409,696 3,612,408 820,026 813,369 311 --------------------------------------------------------------------------- Net increase (decrease) 2,536,425 4,899,845 532,535 1,196,866 431,504 Net assets available for benefits: Beginning of year 2,465,722 3,083,873 7,765,727 1,807,218 10,159,489 ---------------------------------------------------------------------------- End of year $5,002,147 $7,983,718 $8,298,262 $3,004,084 $10,590,993 ============================================================================ NON-PART. DIRECTED ------------- LYONDELL COM.STOCK PLAN DIV. PAYOUT TOTAL ------------- ------------- Contributions: Company $ 5,972,149 $ 5,972,149 Participant - - 7,896,620 Rollover - - 1,914,492 -------------------------------- Total 5,972,149 15,783,261 -------------------------------- Investment income - Dividends on common stock 671,194 6,563,635 Interest income 26,544 3,583,434 Net appreciation (depreciation) in the fair value of investments 4,099,388 15,907,964 -------------------------------- Net investment income 4,797,126 26,055,033 -------------------------------- Benefits paid to participants (1,145,293) (13,805,544) -------------------------------- Participant borrowings (234,047) - - Participant repayments 123,569 - - Net loan activity (110,478) - - -------------------------------- Transfers between investment options (27,254,721) - - -------------------------------- Net increase (decrease) (17,741,217) 28,032,750 Net assets available for benefits: Beginning of year 21,618,203 130,720,057 -------------------------------- End of year $ 3,876,986 $158,752,807 ================================ See notes to financial statements. 5 LYONDELL PETROCHEMICAL COMPANY 401(K) AND SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS 1. DESCRIPTION OF PLAN General - The Lyondell Petrochemical Company 401(k) and Savings Plan (the "Plan") is a defined contribution plan for employees and deferred vested former employees of Lyondell Petrochemical Company (the "Company" or "Lyondell"). Participants should refer to the Plan document for a complete description of the Plan. CONTRIBUTIONS - Participants are allowed to contribute from 1 percent to 14 percent of their base pay to the Plan through pre-tax payroll deductions ("Elective Deferrals") and from 1 percent to 10 percent of their base pay through after-tax payroll deductions ("Savings Contributions"). The Company makes matching contributions to the participant's account at the rate of 160 percent of the Elective Deferrals up to a maximum Company contribution of 8 percent 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. INVESTMENT ELECTION - Participant contributions and earnings thereon are 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 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 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. 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 earns a return based on the increase or decrease in the market value of the stocks held, plus dividend 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 the increase or decrease in the value of the stocks and bonds held, plus dividend and interest income. 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 dividend and interest income. 6 LYONDELL PETROCHEMICAL COMPANY 401(K) AND SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS (Continued) 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). 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. 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 elected by the participant except upon reinvestment of dividends from the shares of ARCO 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 percent 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 Benefits Administrative Committee. Interest rates on loans outstanding at December 31, 1997 and 1996 range from 6 percent to 9.5 percent. Loans may be taken by participants for a period from one to five years. Repaid principal and interest are added to investment funds according to the current investment elections of the participant. The loans are carried at their face amount, which approximates fair value. 7 LYONDELL PETROCHEMICAL COMPANY 401(K) AND SAVINGS PLAN 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 Lyondell and ARCO common 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. INVESTMENTS - See note 4. PAYMENT OF BENEFITS - Benefits are recorded when paid. USE OF ESTIMATES - The preparation of the Plan's financial statements in conformity with generally accepted accounting principles requires the Plan's management to make significant estimates and assumptions that affect the reported amounts of net assets available for benefits at the date of the financial statements and the changes in net assets available for benefits during the reporting period and, when applicable, disclosures of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. RISKS AND UNCERTAINTIES - The Plan provides for various investment options in any combination of stocks and mutual funds. Investment securities are exposed to various risks, such as market and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the statement of net assets available for plan benefits. 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 dated March 6, 1997 from the Internal Revenue Service ("IRS"). The Benefits Administrative Committee believes that the Plan is currently designed and being operated in compliance with the applicable requirements of the Code. Accordingly, no provision is made for federal income taxes. 8 LYONDELL PETROCHEMICAL COMPANY 401(K) AND SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS (Continued) 4. LYONDELL PETROCHEMICAL COMPANY MASTER TRUST The Lyondell Petrochemical Company Master Trust ("LPC Master 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 was administered by the Benefits Administrative Committees of the Company and LCR. The investments were directed by outside investment managers and the Trustee. Prior to January 1, 1997, the Plan was included in the LPC Master Trust. Effective January 1, 1997, the assets of the LYONDELL-CITGO Refining Company Ltd. 401 (K) and Savings Plan for Represented Employees and the LYONDELL-CITGO Refining Company Ltd. 401 (K) and Savings Plan for Non-Represented Employees were transferred from the LPC Master Trust into a newly created LYONDELL-CITGO Refining Company Ltd. Master Trust. Subsequent to this transfer, only the assets of the Lyondell Petrochemical Company 401 (K) and Savings Plan remained in the LPC Master Trust, transforming the LPC Master Trust into the Lyondell Petrochemical Company Trust. All accounting procedures, investment valuation procedures, and unit determination procedures for the Trust are consistent with the procedures of the LPC Master Trust. Investments of the Trust consist of ownership interests 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. All other investment funds are valued at net asset value as of the last business day of the periods presented, which is the fair value of all securities held plus accruals for dividend income and interest income. The fund value per unit is determined by dividing the net asset value of the fund 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 are 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 Trust presents 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. The Plan does not own specific securities or other assets in the Trust, but has 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 recorded in each investment fund. 9 LYONDELL PETROCHEMICAL COMPANY 401(K) AND SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS (Continued) Net assets of the LPC Master Trust as of December 31, 1996 are as follows: Assets: Cash $ 138,320 Investments, at fair value: Lyondell common stock 71,376,712 ARCO common stock 36,708,065 Money Market Fund 65,684,452 SSGA Intermediate Bond Fund 5,177,011 IDS New Dimensions Fund 35,655,477 Dodge & Cox Balanced Fund 2,463,558 Seven Seas S&P 500 Fund 7,334,273 PBHG Growth Fund 19,541,967 Europacific Growth Fund 3,976,444 SSGA Lifesolutions Growth Fund 1,782,076 SSGA Lifesolutions Income & Growth Fund 648,012 SSGA Lifesolutions Balanced Growth Fund 2,321,101 Participant loans receivable, at cost 22,556,488 Interest and dividends receivable 296,481 Other assets 107,754 ------------- Total assets 275,768,191 Liabilities: Other liabilities 118,199 ------------- Net assets $275,649,992 ============= Plan percentage 47% 5. YEAR 2000 The year 2000 issue is a result of computer programs being written using two digits rather than four to define the applicable year. As a result, major systems failure or miscalculations could occur subsequent to December 31, 1999. This year 2000 issue creates a risk for the Company and the Plan concerning problems in its own computer systems and from third parties with whom the Company engages in the administration of the Plan. The Company is conducting a comprehensive review of its computer systems and of third party vendors to identify any systems that could be affected by the year 2000 issue. However, there can be no assurance that the year 2000 issue will not impact the Plan's ability to process and record Plan transactions. 6. SUBSEQUENT EVENT Equistar Chemicals, LP ("Equistar") was formed on December 1, 1997 as a joint venture between the Company and Millennium Petrochemicals Inc. and is operated as a limited partnership. Substantially all Lyondell employees became employees of Equistar as of January 1, 1998. Effective January 1, 1998, the Equistar Chemicals, LP Savings and Investment Plan ("Equistar Plan") was created and the former Lyondell employees began participating in the Equistar Plan. The assets of the Equistar Plan and other defined contribution plans of Equistar will be held in the Lyondell Petrochemical Company Trust, thereby creating a Master Trust. 10 LYONDELL PETROCHEMICAL COMPANY 401 (K) AND SAVINGS PLAN SUPPLEMENTAL SCHEDULE EIN: 95-4160558, P/N 005 Item 27a -- Schedule of Assets Held for Investment Purposes as of December 31, 1997 (a) (b) Identity of issue, borrower, (c) Description of investment (d) Cost (1) (e) Current value lessor, or similar party including maturity date, rate of interest, collateral, par or maturity value - ---------------------------------------------------------------------------------------------------------------------------- * Lyondell Petrochemical Company Common stock, par value $1.00, $48,520,270 $57,058,263 2,153,142 shares Atlantic Richfield Company Common stock, par value $2.50, 6,443,795 12,814,311 159,929 shares * Short-Term Investment Fund Cash and cash equivalents with 26,983,034 26,983,034 variable interest rates * SSGA Intermediate Bond Fund 41,703 shares 3,034,880 3,342,833 IDS New Dimensions Fund 855,828 shares 16,587,671 20,420,080 Dodge & Cox Balanced Fund 71,241 shares 4,410,600 4,757,456 * Seven Seas S&P 500 Fund 412,609 shares 7,199,517 8,024,124 PBHG Growth Fund 326,832 shares 8,361,077 8,299,159 Europacific Growth Fund 115,453 shares 3,073,618 3,004,084 * Participant loans receivable Loans with various interest rates - - 10,590,993 ranging from 6% to 9.5%; maturing between 1 and 5 years * Party-in-interest (1) Cost was determined based on historical cost. 11 LYONDELL PETROCHEMICAL COMPANY 401(K) AND SAVINGS PLAN SUPPLEMENTAL SCHEDULE EIN: 95-4160558, P/N 005 ITEM 27D - SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1997 (A) IDENTITY OF PARTY (B) DESCRIPTION OF ASSET (C) PURCHASE (D) SELLING (E) LEASE INVOLVED (INCLUDE INTEREST RATE AND PRICE PRICE RENTAL MATURITY IN CASE OF A LOAN) - ------------------------------------------------------------------------------------------------------------------ Single Transactions: Lyondell Common Stock Lyondell Common Stock $35,868,969 - - - - Div. Reinvest Fund SERIES OF TRANSACTIONS: Lyondell Common Stock Lyondell Common Stock 43,663,376 - - - - Div. Reinvest Fund Lyondell Common Stock Lyondell Common Stock - - $10,192,967 - - Div. Reinvest Fund Lyondell Common Stock Short-Term Investment Fund 12,435,455 - - - - Div. Reinvest Fund Lyondell Common Stock Short-Term Investment Fund - - 12,652,753 - - Div. Reinvest Fund Money Market Fund Short Term Investment Fund 45,115,284 - - - - Money Market Fund Short Term Investment Fund - - 41,814,314 - - IDS New Dimensions Fund IDS New Dimensions Fund 22,352,414 - - - - IDS New Dimensions Fund IDS New Dimensions Fund - - 22,181,814 - - Seven Seas S&P 500 Fund Seven Seas S&P 500 Index Fund 7,327,524 - - - - Seven Seas S&P 500 Fund Seven Seas S&P 500 Index Fund - - 3,395,094 - - PBHG Growth Fund PBHG Growth Fund Inc 13,286,277 - - - - PBHG Growth Fund PBHG Growth Fund Inc - - 12,112,099 - - (A) IDENTITY OF PARTY (F) EXPENSE (G) COST OF (H) CURRENT (I) NET GAIN INVOLVED INCURRED WITH ASSET VALUE OF ASSET OR (LOSS) TRANSACTION ON TRANSACTION DATE - ------------------------------------------------------------------------------------------------- Single Transactions: Lyondell Common Stock - - $35,868,969 $35,868,969 - - Div. Reinvest Fund SERIES OF TRANSACTIONS: Lyondell Common Stock - - 43,663,376 43,663,376 - - Div. Reinvest Fund Lyondell Common Stock - - 8,954,660 10,192,967 $1,238,307 Div. Reinvest Fund Lyondell Common Stock - - 12,435,455 12,435,455 - - Div. Reinvest Fund Lyondell Common Stock - - 12,652,753 12,652,753 - - Div. Reinvest Fund Money Market Fund - - 45,115,284 45,115,284 - - Money Market Fund - - 41,814,314 41,814,314 - - IDS New Dimensions Fund - - 22,352,414 22,352,414 - - IDS New Dimensions Fund - - 23,548,327 22,181,814 (1,366,513) Seven Seas S&P 500 Fund - - 7,327,524 7,327,524 - - Seven Seas S&P 500 Fund - - 3,111,336 3,395,094 283,758 PBHG Growth Fund - - 13,286,277 13,286,277 - - PBHG Growth Fund - - 12,688,807 12,112,099 (576,708) 12 LYONDELL PETROCHEMICAL COMPANY 401(K) AND SAVINGS PLAN SUPPLEMENTAL SCHEDULE EIN: 95-4160558, P/N 005 ITEM 27D - SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1997 (continued) (A) IDENTITY OF PARTY (B) DESCRIPTION OF ASSET (C) PURCHASE (D) SELLING (E) LEASE (F) EXPENSE INVOLVED (INCLUDE INTEREST RATE AND PRICE PRICE RENTAL INCURRED WITH MATURITY IN CASE OF A LOAN) TRANSACTION - ---------------------------------------------------------------------------------------------------------------------------------- Lyondell Common Stock Lyondell Common Stock $ 8,551,214 - - - - - - Div. Payout Lyondell Common Stock Lyondell Common Stock - - $44,692,298 - - - - Div. Payout Lyondell Common Stock Short-Term Investment Fund 15,597,262 - - - - - - Div. Payout Lyondell Common Stock Short-Term Investment Fund - - 15,341,259 - - - - Div. Payout (A) IDENTITY OF PARTY (F) EXPENSE (G) COST OF (H) CURRENT (I) NET GAIN OR INVOLVED INCURRED WITH ASSET VALUE OF ASSET (LOSS) TRANSACTION ON TRANSACTION DATE - ------------------------------------------------------------------------------------------------- Lyondell Common Stock - - $ 8,551,214 $ 8,551,214 - - Div. Payout Lyondell Common Stock - - 38,448,567 44,692,298 $6,243,731 Div. Payout Lyondell Common Stock - - 15,597,262 15,597,262 - - Div. Payout Lyondell Common Stock - - 15,341,259 15,341,259 - - Div. Payout 13 LYONDELL PETROCHEMICAL COMPANY 401(K) AND SAVINGS PLAN 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: /s/ JEFFERY R. PENDERGRAFT ------------------------------------------- JEFFERY R. PENDERGRAFT Chairman, Benefits Administrative Committee Date: June 26, 1998 14 EXHIBIT INDEX SEQUENTIALLY EXHIBIT NUMBERED PAGE No. EXHIBIT WHERE LOCATED --- ------- ------------- 23 Consent of Coopers & Lybrand L.L.P. 16 15