SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 25, 1994
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ATLANTIC RICHFIELD COMPANY
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(Exact name of registrant as specified in its charter)
Delaware
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State or other jurisdiction of incorporation
1-1196 23-0371610
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(Commission File Number) (IRS Employer
Identification No.)
515 South Flower Street, Los Angeles, California 90071
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (213) 486-3511
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Not Applicable
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
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Press Release, dated July 25, 1994, announcing the earnings
results for the second quarter and six months ended June 1994.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
ATLANTIC RICHFIELD COMPANY
/s/ ALLAN L. COMSTOCK
_______________________________
Allan L. Comstock
Vice President and Controller
Dated: July 25, 1994
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ARCO [logo] Media Relations N E W S
515 South Flower Street
Los Angeles, California 90071-2201
Telephone 213 486-3385
Facsimile 213 486-0169
FOR IMMEDIATE RELEASE July 25, 1994
ARCO REPORTS EARNINGS FOR
1994 SECOND QUARTER, FIRST HALF
LOS ANGELES -- ARCO (NYSE: ARC) today reported 1994
second quarter earnings of $24 million, or $0.14 per
share. The 1994 second quarter results included net charges
of $154 million primarily related to the recently announced
restructure and personnel reduction.
In the 1993 second quarter, ARCO had net income of
$271 million, or $1.67 per share, which included a net benefit
of approximately $48 million after tax.
Mike R. Bowlin, ARCO President and Chief Executive
Officer, said: "While worldwide crude oil prices have
rebounded significantly in recent weeks, the depressed levels
of early 1994 continued to have a negative impact in the
second quarter.
"The charges we are taking in the second quarter follow
a complete review of our operations to develop new approaches
to doing business. As a result, operating efficiencies will
be realized and annual costs are expected to be reduced by
approximately $400 million after tax.
"We have already begun to realize operating cost benefits
from the 1993 restructure of our Lower 48 operations, and
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substantially all of the annual cost savings from the
companywide downsizings should be realized by 1996."
After-tax earnings for ARCO's worldwide oil and gas
exploration and production operations in the 1994 second
quarter were $81 million, down from $233 million in the 1993
second quarter. Included in the segment results for the 1994
second quarter was a net charge of $38 million related
primarily to personnel reductions in Alaska, partially offset
by a tax benefit association with international operations.
The 1993 second quarter included after-tax gains of $73
million from Lower 48 property sales.
ARCO's average price for domestic crude oil in the 1994
second quarter was $10.30 per barrel, down from $13.43 per
barrel in the 1993 second quarter. Average domestic natural
gas prices were $1.73 per thousand cubic feet, down from $2.07
per thousand cubic feet in the same period of 1993.
Worldwide exploration expenses totaled $91 million in
the 1994 second quarter, down from $148 million in the 1993
second quarter. The decrease primarily reflected lower
dryhole costs internationally and in Alaska.
ARCO's worldwide production of crude oil and natural gas
liquids averaged 655,500 barrels per day in the 1994 second
quarter, compared with 667,100 barrels per day in the 1993
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second quarter. Production increases internationally and
in Alaska were offset by a decline in Lower 48 production
which resulted from both the impact of producing property
sales in 1993 and natural field declines.
Domestic natural gas production was 969 million cubic
feet per day, up from 952 million cubic feet per day in the
1993 second quarter. New production from the Mustang Island
field in the Gulf of Mexico and improved field performance
offset the impact of producing property sales and natural
field declines. The Mustang Island field is operated by
Vastar Resources, Inc. (NYSE: VRI), in which ARCO holds an
82.3 percent interest.
ARCO's foreign natural gas production was 527 million
cubic feet per day in the 1994 second quarter, a 100 percent
increase over the 263 million cubic feet per day produced in
the 1993 second quarter. The increase reflected new
production from gas fields in Indonesia and the United Kingdom
North Sea.
ARCO's coal operations earned $12 million after tax,
compared with $26 million after tax for the 1993 second
quarter. The decrease was caused by the expiration of higher
priced contracts in the U.S., lower export prices from
Australia and an unfavorable foreign exchange rate. A
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favorable legal settlement related to a customer sales
contract was partially offset by a charge of $3 million for
U.S. staff reductions.
Refining and marketing after-tax earnings were
$16 million, including a $28 million charge related to the
restructuring, compared with $79 million for the 1993 second
quarter. The segment's results were impacted by lower West
Coast margins for all major products including gasoline,
jet fuel and diesel.
Earnings for ARCO's transportation operations totaled
$25 million after tax, compared with $50 million after tax for
the same quarter in 1993. The transportation results included
$26 million for restructuring charges.
The intermediate chemicals and specialty products
segment, which reflects ARCO's 83.3 percent interest in ARCO
Chemical Company, had after-tax earnings of $68 million,
compared with $55 million in the 1993 second quarter. The
improved earnings resulted primarily from higher propylene
oxide and styrene monomer volumes and margins, which reflected
a stronger U.S. economy and increased export sales.
ARCO earned $16 million from its 49.9 percent equity
interest in Lyondell Petrochemical Company in the 1994 second
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quarter. This compared to a loss of $5 million in the 1993
second quarter. Lyondell's petrochemical business results
improved substantially in the 1994 second quarter as a result
of higher margins for all of its major products. Its 1993
second quarter results were negatively impacted by
approximately $4 million in charges net to ARCO, primarily for
cancellation of a capital project.
The $154 million in net charges in the 1994 second
quarter also included $32 million for corporate headquarters
personnel reductions, $14 million to reimburse money market
losses in certain employee benefit plans and $13 million for
future environmental remediation costs. The 1993 second
quarter earnings included a $25 million after-tax charge for
future environmental remediation costs.
ARCO's sales and other operating revenues totaled
$4.2 billion in the 1994 second quarter, down from $4.7
billion in the 1993 second quarter.
1994 Six Month Earnings:
For the first six months of 1994, ARCO's net income
totaled $173 million, or $1.06 per share, compared with $531
million, or $3.27 per share, in the first half of 1993.
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For the first six months of 1994, ARCO's sales and other
operating revenues totaled $8.0 billion, compared with $9.2
billion in the same 1993 period.
# # #
For information, contact: Albert Greenstein (213) 486-3384
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<CAPTION>
ATLANTIC RICHFIELD COMPANY
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
(Millions of dollars except
per share amounts)
Three Months Ended Six Months Ended
June 30 June 30
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1994 1993 1994 1993
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<S> <C> <C> <C> <C>
REVENUES
Sales and other operating revenues
(including excise taxes) $4,174 $4,670 $7,974 $9,177
Income from equity investments 24 - 41 15
Interest 56 37 101 79
Other revenues 83 193 146 297
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4,337 4,900 8,262 9,568
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EXPENSES
Trade purchases 1,558 1,808 2,825 3,552
Costs and other operating expenses 823 822 1,578 1,569
Exploration expenses (including
undeveloped lease amortization) 91 148 195 284
Selling, general and administrative
expenses 429 461 824 885
Taxes other than excise and
income taxes 184 301 368 607
Excise taxes 382 336 742 626
Depreciation, depletion and
amortization 414 387 835 786
Interest(a) 187 176 371 356
Unusual items 249 - 249 -
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4,317 4,439 7,987 8,665
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Income before income taxes and
minority interest 20 461 275 903
Provision (benefit) for taxes
on income (17) 182 80 355
Minority interest in earnings
of subsidiaries 13 8 22 17
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Net income $ 24 $ 271 $ 173 $ 531
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Earned per share(b) $ 0.14 $ 1.67 $ 1.06 $ 3.27
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Dividends per common share $1.375 $1.375 $ 2.75 $ 2.75
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(a) Excludes capitalized interest of $10 million and $16 million for the
three-month periods and $17 million and $37 million for the six-month
periods ended June 30, 1994 and 1993, respectively.
(b) The average number of common shares, including equivalents, were
163,143,758 shares and 162,364,752 shares for the three-month periods
and 163,038,659 shares and 162,265,985 shares for the six-month
periods ended June 30, 1994 and 1993, respectively.
(c) The common shares, including equivalents, outstanding at June 30, 1994
and 1993 were 163,287,070 shares and 162,494,225 shares, respectively.
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<CAPTION>
ATLANTIC RICHFIELD COMPANY
FINANCIAL AND STATISTICAL DATA
(UNAUDITED)
(Millions of dollars)
Three Months Ended Six Months Ended
June 30, June 30,
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1994 1993 1994 1993
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<S> <C> <C> <C> <C>
After-tax segment earnings
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Resources:
Oil and gas $ 81 $ 233 $ 163 $ 410
Coal 12 26 31 51
Products:
Refining and marketing 16 79 111 172
Transportation 25 50 70 103
Intermediate chemicals & specialty
products (ARCO Chemical Company) 68 55 116 114
Equity in earnings (loss) from
Lyondell Petrochemical Company 16 (5) 27 2
Unallocated expenses and other (67) (44) (92) (72)
Interest (127) (123) (253) (249)
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Net income $ 24 $ 271 $ 173 $ 531
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