-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TFQ9tC2DnJHijIUUYqkK3AtEtaDUMPvKbtf41WbXjlMpNmEN8u3KuWZSBSx3Ie4p kcOcVHcNohawFS3+0XXX5Q== 0000899243-01-500884.txt : 20010702 0000899243-01-500884.hdr.sgml : 20010702 ACCESSION NUMBER: 0000899243-01-500884 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010629 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LYONDELL CHEMICAL CO CENTRAL INDEX KEY: 0000842635 STANDARD INDUSTRIAL CLASSIFICATION: PETROLEUM REFINING [2911] IRS NUMBER: 954160558 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-10145 FILM NUMBER: 1672169 BUSINESS ADDRESS: STREET 1: 1221 MCKINNEY ST STREET 2: STE 700 CITY: HOUSTON STATE: TX ZIP: 77010 BUSINESS PHONE: 7136527200 MAIL ADDRESS: STREET 1: 1221 MCKINNEY ST STREET 2: SUITE 700 CITY: HOUSTON STATE: TX ZIP: 77010 FORMER COMPANY: FORMER CONFORMED NAME: LYONDELL PETROCHEMICAL CO DATE OF NAME CHANGE: 19920703 11-K 1 d11k.txt FORM 11-K 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 For the fiscal year ended December 31, 2000 OR [_] Transition report pursuant to Section 15(d) of the Securities Exchange Act of 1934 Commission File Number 33-26867 LYONDELL CHEMICAL COMPANY 401(K) AND SAVINGS PLAN (Title of the Plan) LYONDELL CHEMICAL COMPANY 1221 McKinney Street Suite 700 Houston, Texas 77010 (Name and address of principal executive office of the issuer of the securities) LYONDELL CHEMICAL 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 3 Statement of Changes in Net Assets Available for Benefits 4 Notes to Financial Statements 5 Supplemental Schedules are not required at the plan level and have been omitted. 1 REPORT OF INDEPENDENT ACCOUNTANTS To the Benefits Administrative Committee of the Lyondell Chemical Company 401(k) and Savings Plan: In our opinion, the accompanying statements of net assets available for benefits and the related statement of changes in net assets available for benefits present fairly, in all material respects, the net assets available for benefits of the Lyondell Chemical Company 401(k) and Savings Plan (the "Plan") at December 31, 2000 and 1999, and the changes in net assets available for benefits for the year ended December 31, 2000 in conformity with accounting principles generally accepted in the United States of America. 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 of these statements in accordance with auditing standards generally accepted in the United States of America, which 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. /s/ PricewaterhouseCoopers LLP Houston, Texas June 28, 2001 2 LYONDELL CHEMICAL COMPANY 401(K) AND SAVINGS PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, ----------------------------------------- 2000 1999 --------------- --------------- ASSETS Investments, at fair value: Investment in Lyondell Chemical, Equistar Chemicals, and Lyondell-Citgo Plans Master Trust $331,555,509 $303,253,909 ------------ ------------ Net assets available for benefits $331,555,509 $303,253,909 ============ ============
See Notes to Financial Statements. 3 LYONDELL CHEMICAL COMPANY 401(K) AND SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED DECEMBER 31, 2000
PARTICIPANT NONPARTICIPANT PLAN DIRECTED DIRECTED TOTAL ----------- ---------------- ------------------ Contributions: Employer $ - - $10,946,028 $ 10,946,028 Participant 13,261,520 1,097,642 14,359,162 Rollover 1,664,481 51,541 1,716,022 ------------- ----------- ------------ Total 14,926,001 12,095,211 27,021,212 ------------- ----------- ------------ Investment income (loss): Lyondell Chemical, Equistar Chemicals, and Lyondell-Citgo Plans Master Trust (13,808,537) 10,403,486 (3,405,051) ------------- ----------- ------------ Net investment income (loss) (13,808,537) 10,403,486 (3,405,051) ------------- ----------- ------------ Benefits paid to participants (29,015,451) (1,918,384) (30,933,835) ------------- ----------- ------------ Administrative expenses (79,517) (11,583) (91,100) ------------- ----------- ------------ Loan activity: Participant borrowings 1,258,525 (1,258,525) - - Participant repayments (1,298,224) 1,298,224 - - ------------- ----------- ------------ Net loan activity (39,699) 39,699 - - ------------- ----------- ------------ Transfer activity: Net transfers from Equistar Chemicals, LP Savings and Investment Plan 36,260,801 (505,665) 35,755,136 Net transfers from LYONDELL-CITGO Refining Company Ltd. 401(K) and Savings Plan for Non-Represented Employees 691,064 (5,619) 685,445 Other transfers, net (39,699) (690,508) (730,207) Net transfers between investment options (125,440) 125,440 - - ------------- ----------- ------------ Net transfer activity 36,786,726 (1,076,352) 35,710,374 ------------- ----------- ------------ Net increase 8,769,523 19,532,077 28,301,600 Net assets available for benefits: Beginning of period 272,491,588 30,762,321 303,253,909 ------------- ----------- ------------ End of period $281,261,111 $50,294,398 $331,555,509 ============ =========== ============
See Notes to Financial Statements. 4 LYONDELL CHEMICAL COMPANY 401(K) AND SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS 1. DESCRIPTION OF PLAN General-The Lyondell Chemical Company 401(k) and Savings Plan ("Plan") is a defined contribution plan for employees and vested former employees of Lyondell Chemical Company ("Lyondell" or "Company"). It is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). Effective March 15, 1999, the ARCO Chemical Company Capital Accumulation Plan was merged into the Plan. 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"). Lyondell 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 eligible base pay. 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-All participant assets are held in trust. Participant contributions and earnings thereon ("Participant Directed") are invested by the Trustee (see Plan Administration below) in accordance with the options selected by each participant. 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. Contributions to, withdrawals from and transfers between investment options by the participants are appropriately charged or credited to each fund. When investing in Lyondell common stock, the participant may designate that the common stock be held either in the Lyondell Common Stock - Dividend Payout Fund ("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 ("non-ESOP stock fund"). Dividends on common stock held in the non-ESOP stock fund are reinvested in Lyondell common stock and held in the participant's plan account. Dividends on common stock held in the ESOP are payable to the participant quarterly as allowed by the Plan. All Company matching contributions ("Nonparticipant Directed") are used to purchase Lyondell common stock in the ESOP and may only be transferred to other investment options under certain limited circumstances, as defined in the Plan. Employees of the former Atlantic Richfield Company ("ARCO") and the former ARCO Chemical Company who became employees of Lyondell had the assets attributable to their participation in the ARCO Capital Accumulation Plan II and ARCO Chemical Company Capital Accumulation Plan (which assets included ARCO common stock) transferred to the Plan. On April 18, 2000, pursuant to the terms of a merger agreement between BP Amoco p.l.c. ("BP") and ARCO, each share of outstanding common stock of ARCO was converted into the right to receive 1.64 BP American Depositary Receipts (ADRs) or, subject to the timely receipt of elections therefor, 9.84 BP Ordinary Shares. In addition, ARCO common stock was delisted from the exchanges on which it had been listed. 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 $5,000 or less, 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. 5 LYONDELL CHEMICAL COMPANY 401(K) AND SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS--(Continued) Withdrawals are made in a lump sum cash payment, although a participant may elect to receive Lyondell or, prior to April 18, 2000, ARCO common stock to the extent assets are held in the form of such stock. Distributions upon retirement or termination have generally been in Lyondell or ARCO common stock to the extent assets were 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 was received by the Benefits Administrative Committee. Interest rates on loans outstanding at December 31, 2000 and 1999 ranged from 7.75 percent to 9.5 percent. Repayment periods range from one to five years for general loans and one to ten years for residential loans. 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. Plan Administration-The Plan is administered by the Lyondell Benefits Administrative Committee. During 1999, Plan assets were maintained in the Lyondell Chemical Company Master Trust ("Lyondell Master Trust" under the custody of State Street Bank and Trust Company until April 1, at which time the assets were transferred to the Lyondell Chemical, Equistar Chemicals, and Lyondell-Citgo Plans Master Trust ("Master Trust") under the custody of Fidelity Management Trust Company (collectively, the two custodians, or trustees, are referred to as "Trustee"). The Trustee makes payments as authorized by the Plan. Lyondell pays administrative expenses of the Plan. Termination Provision-Although it has not expressed any intent to do so, Lyondell has the right to terminate the Plan at any time subject to the provisions of the Employee Retirement Income Security Act of 1974. 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. Investment Valuation and Income Recognition-The Plan's investments are stated at fair value. Quoted market prices are used to value investments. 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. Short-term and certain other investments are valued at cost, which approximates fair value. Purchases and sales of securities are accounted for on the settlement date. Gains or losses on the sale or distribution of securities are computed on an average cost basis. Dividend income is accrued on the ex-dividend date and interest income is accrued as earned. The net appreciation or depreciation in the fair value of investments, which consist of the realized gains or losses and the unrealized appreciation or depreciation on those investments, is included in "Investment income (loss)" in the statement of changes in net assets. 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. 6 LYONDELL CHEMICAL COMPANY 401(K) AND SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS--(Continued) Risks and Uncertainties-The Plan provides for investment options in various combinations 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 Benefits Administrative Committee believes that the Plan as currently designed and operated, is in compliance with the applicable requirements of the Code. Accordingly, no provision is made for federal income taxes. 4. LYONDELL CHEMICAL, EQUISTAR CHEMICALS, AND LYONDELL-CITGO PLANS MASTER TRUST The Master Trust was established on March 15, 1999 and is a pooled investment trust composed of the beneficial interests of certain participating defined contribution plans of Lyondell, Equistar Chemicals, LP and LYONDELL-CITGO Refining LP, all of which are related entities. It was formed by combining the assets of ARCO Chemical Company Capital Accumulation Plan, which were transferred to the Master Trust on March 15, 1999, and the assets formerly held in the Lyondell Master Trust, the LYONDELL-CITGO Refining Company Ltd. Master Trust and the Equistar Chemicals, LP Savings Plan for Former Occidental Petroleum Corporation Employees, which were transferred to the Master Trust on April 1, 1999. Net assets of the Master Trust were as follows:
December 31, ------------------------------------------- 2000 1999 -------------- ------------ ASSETS Investments, at fair value: Participant directed investments Common stock $108,367,679 $119,954,255 Mutual funds 681,536,602 781,886,517 Participant loans receivable, at cost 45,711,733 50,558,066 Nonparticipant directed: Common stock 50,294,398 31,176,966 ------------ ------------ Total investments 885,910,412 983,575,804 Other receivables 498,769 519,984 ------------ ------------ Total assets 886,409,181 984,095,788 LIABILITIES Other liabilities - - 414,645 ------------ ------------ NET ASSETS AVAILABLE FOR BENEFITS $886,409,181 $983,681,143 ============ ============ Plan percentage 37.40% 30.83% ============ ============
7 LYONDELL CHEMICAL COMPANY 401(K) AND SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS--(Continued) During 2000, the Master Trust's investments (including gains and losses on investments bought and sold, as well as held during the year) depreciated in value by $88,526,072 as follows: Common stocks $ 21,811,058 Mutual funds (110,337,130) -------------- $ (88,526,072) ============== The following investments represented 5 percent or more of the Master Trust's net assets:
DECEMBER 31, ---------------------------------------- 2000 1999 ------------- ------------ Fidelity Retirement Money Market Fund $139,963,321 $177,395,339 Fidelity Fund (3,598,678 and 3,781,968 shares, respectively) 117,892,695 161,149,647 Fidelity Brokerage Link 93,733,498 77,224,722 Spartan US Equity Index Fund (1,647,642 and 2,131,237 shares, respectively) 77,126,116 111,016,115 Lyondell Chemical Company common stock Participant directed: (3,588,076 shares) 54,944,201 Nonparticipant directed: (3,284,425 shares) 50,294,398 ------------ Total Lyondell Chemical Company common stock 105,238,599 Atlantic Richfield Company common stock (649,639 shares) 56,193,771 Participant loans receivable, at cost 45,711,733 50,558,066
8 LYONDELL CHEMICAL COMPANY 401(K) AND SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS--(Continued) Changes in net assets of the Master Trust for the year ended December 31, 2000 are presented below.
PARTICIPANT NONPARTICIPANT TRUST DIRECTED DIRECTED TOTAL ------------------ ------------------ ------------------ Contributions: Employer $ 21,482,835 $10,946,028 $ 32,428,863 Participant 41,207,532 1,097,642 42,305,174 Rollover 4,708,929 51,541 4,760,470 ------------- ----------- ------------- Total 67,399,296 12,095,211 79,494,507 ------------- ----------- ------------- Investment income (loss): Interest income 12,956,646 273,418 13,230,064 Dividend income 3,310,461 690,508 4,000,969 Net appreciation (depreciation) in the fair value of investments (97,965,632) 9,439,560 (88,526,072) ------------- ----------- ------------- Net investment income (loss) (81,698,525) 10,403,486 (71,295,039) ------------- ----------- ------------- Benefits paid to participants (102,470,203) (1,918,384) (104,388,587) ------------- ----------- ------------- Administrative expenses (375,948) (11,583) (387,531) ------------- ----------- ------------- Loan activity: Participant borrowings 1,258,525 (1,258,525) - - Participant repayments (1,298,224) 1,298,224 - - ------------- ----------- ------------- Net loan activity (39,699) 39,699 - - ------------- ----------- ------------- Transfer activity: Net transfers to Equistar Chemicals, LP Savings and Investment Plan 505,665 (505,665) - - Net transfers to LYONDELL-CITGO Refining Company Ltd. 401(K) and Savings Plan for Non-Represented Employees 5,619 (5,619) - - Intra-plan transfers (125,440) 125,440 - - Other transfers, net (4,804) (690,508) (695,312) ------------- ----------- ------------- Net transfer activity 381,040 (1,076,352) (695,312) ------------- ----------- ------------- Net (decrease) increase (116,804,039) 19,532,077 (97,271,962) Net assets available for assets: Beginning of period 952,918,822 30,762,321 983,681,143 ------------- ----------- ------------- End of period $ 836,114,783 $50,294,398 $ 886,409,181 ============= =========== =============
9 LYONDELL CHEMICAL COMPANY 401(K) AND SAVINGS PLAN SIGNATURE 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 CHEMICAL COMPANY 401(K) AND SAVINGS PLAN By: /s/ GERALD A. O'BRIEN ---------------------------------------- Gerald A. O'Brien Benefits Administrative Committee Date: June 28, 2001 10 EXHIBIT INDEX SEQUENTIALLY EXHIBIT NUMBERED PAGE NO. EXHIBIT WHERE LOCATED - ------- ------- ------------- 23 Consent of PricewaterhouseCoopers LLP 12 11 EX-23 2 dex23.txt CONSENT Exhibit 23 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 33-26867) of Lyondell Chemical Company of our report dated June 28, 2001 relating to the financial statements of the Lyondell Chemical Company 401(k) and Savings Plan, which appears in this Form 11-K. /s/ PricewaterhouseCoopers LLP Houston, Texas June 28, 2001 12 -----END PRIVACY-ENHANCED MESSAGE-----