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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): MARCH 13, 1998.
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LYONDELL PETROCHEMICAL 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)
1-10145 95-4160558
(COMMISSION FILE NUMBER) (I.R.S. EMPLOYER IDENTIFICATION NO.)
1221 MCKINNEY STREET, SUITE 1600, HOUSTON, TEXAS 77010
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(Address of principal executive offices) (Zip Code)
(713) 652-7200
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(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
NOT APPLICABLE
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
Pursuant to the terms of the Partnership Agreement with Millennium Chemicals
Inc. ("Millennium"), Lyondell Petrochemical Company (the "Company") and
Millennium are required to jointly select the independent accountants for
Equistar Chemicals, LP ("Equistar"), the Company's petrochemical joint venture
which was formed December 1, 1997. The management of the Company and Equistar,
with the approval of the Company's audit committee and the Equistar Partnership
Governance Committee, solicited proposals for the Company and Equistar's annual
audits from several independent accounting firms. In that process, the Company
requested that Coopers & Lybrand L.L.P. ("Coopers and Lybrand") and Price
Waterhouse LLP ("Price Waterhouse") submit a joint proposal because of their
announcement of a plan to merge. Coopers & Lybrand are the Company's present
independent accountants and Price Waterhouse are the independent accountants for
Millennium.
It is the view of the Company's management that the firm that serves as
independent accountants for Equistar should also serve as the independent
accountants for the Company because of the materiality of Equistar to the
Company. As a result of this process, the Company's audit committee and the
Equistar Partnership Governance Committee approved management's recommendations
of the selection of Coopers & Lybrand and Price Waterhouse jointly as the
independent accountants for the Company and Equistar. Although such selection
anticipates the merger of Coopers & Lybrand and Price Waterhouse, the Company
intends to utilize both firms regardless of the outcome of the plan to merge.
ITEM 5. OTHER EVENTS.
On March 25, 1998, the Company issued a press release detailing earnings and
cost reduction goals.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Exhibits
Exhibit Document
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99 Press Release dated March 25, 1998.
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EXHIBIT INDEX
Exhibit Number Document
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99 Press Release Dated as of March 25, 1998.
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SIGNATURES
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.
Dated: March 26, 1998 LYONDELL PETROCHEMICAL COMPANY
By: /s/ KERRY A. GALVIN
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Kerry A. Galvin
Chief Corporate Counsel
and Corporate Secretary
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[LYONDELL LOGO APPEARS HERE]
LYONDELL DETAILS EARNINGS AND COST REDUCTION GOALS
HOUSTON, March 25, 1998 -- Lyondell Petrochemical Company (NYSE:LYO) has
set a goal to grow earnings per share by 10% per year on a 5-year rolling
average, Dan F. Smith, Lyondell's President and Chief Executive Officer told a
group of securities analysts visiting the company in Houston. This is from a
base of $2.63 per share, which was the average for the 5-year period 1993-1997.
The current estimates for Lyondell's earnings per share by the investment
community are $2.25 for 1998 and $2.11 for 1999.
"If the investment community estimates for 1998 are correct, we would have
to earn substantially more than they are estimating for1999 to achieve our
goal," Smith said.
"While we cannot control the petrochemical cycle, we believe that the
actions we have taken to reposition our petrochemicals and refining businesses
and strengthen our financial position gives us more control over earnings per
share," Smith said.
Lyondell also has set significant cost reduction and revenue enhancement
targets. As previously announced, the addition of Occidental to the Equistar
joint venture is expected to generate pre-tax profit improvement synergies of
more than $275 million annually by year-end 2000. In addition, Lyondell's other
major joint venture, LYONDELL-CITGO Refining Company Ltd. expects to improve
annual pre-tax profits by more than $150 million in 5 years. "The Company is
well positioned from a cash flow standpoint at this point in the cycle to take
advantage of investment opportunities both internally and externally," said
Smith.
# # #
For information, contact:
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Media - Jackie Wilson (713) 652-4596
Investors - Kevin DeNicola (713) 652-4590
The statements in this release relating to matters that are not historical facts
are forward-looking statements that involve risks and uncertainties, including,
but not limited to, future global economic conditions, production capacity,
competitive products and prices and other risks and uncertainties detailed in
the Securities and Exchange Commission filings of Lyondell.
Lyondell Petrochemical Company is a major chemical and refining company, with
majority ownership positions in the premier olefins, polymers and refining
companies in North America. Lyondell is:
. The largest producer of ethylene, propylene and polyethylene in North America
and a leading producer of high value-added specialty polymers, color
concentrates and polymeric powder through its interest in Equistar
Chemicals, LP.
. One of the largest and most profitable refiners in the United States,
processing very heavy Venezuelan crude oil to produce gasoline, low sulfur
diesel and jet fuel, through its 58.5% interest in LYONDELL-CITGO Refining
Company Ltd.
. The third-largest methanol producer in the U.S., through its 75% interest in
Lyondell Methanol Company LP.
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