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ARCO REPORTS EARNINGS FOR FOURTH QUARTER, FULL YEAR 1991

 ARCO REPORTS EARNINGS FOR FOURTH QUARTER, FULL YEAR 1991
 LOS ANGELES, Jan. 27 /PRNewswire/ -- ARCO (NYSE: ARC) today reported 1991 net income of $709 million, or $4.39 per share, which included approximately $295 million after tax in net charges related primarily to personnel reductions and property sales and writedowns.
 Without these charges, ARCO would have reported 1991 earnings of $1.004 billion, or $6.21 per share.
 ARCO's 1990 net income was a record $2.011 billion, or $12.15 per share. The 1990 results included a $323 million gain as a result of an accounting change for income taxes as well as $185 million in after-tax gains resulting from an accident settlement and assets sales. These gains were partially offset by net charges totaling approximately $400 million after tax, which consisted primarily of provisions for tax and royalty issues and charges for future environmental remediation costs. Without these special gains and charges, 1990 net income would have been $1.903 billion, or $11.50 per share.
 Return on stockholders' equity for 1991 was 10.1 percent. Without the $295 million in special charges, the 1991 return on stockholders' equity would have been 14.1 percent.
 For the fourth quarter of 1991, ARCO's net income was $268 million, or $1.67 per share, compared to $566 million, or $3.45 per share, in the fourth quarter of 1990.
 "Earnings in 1991 compared poorly with the record results of 1990 because of a dramatic change in the operating environment," said Lodwrick M. Cook, ARCO chairman and chief executive officer. "Oil prices were down from last year's levels which were temporarily inflated by the Mideast crisis. Natural gas prices were lower in 1991, and the heavy impact of the recession on our refining and marketing and chemical businesses further depressed earnings levels.
 "In response to the unfavorable economic climate and ARCO's revised downward expectations for domestic natural gas prices over the long term, we initiated staff reductions, restructuring of our Lower 48 operations and property sales and writedowns during the third quarter of 1991. The charges related to these changes significantly impacted this year's results," Cook said.
 ARCO's worldwide oil and gas exploration and production operations earned $549 million after tax for 1991. This included approximately $170 million after tax in net charges related to personnel reductions and the anticipated losses on disposal of properties in the Lower 48, partially offset by a benefit associated with the reduction in U.K. corporation tax rates. In 1990, the segment earned $1.36 billion, including $185 million in after-tax gains related to the Lower 48 offshore accident settlement and the sale of Norwegian assets.
 The company's average price for domestic crude oil in 1991 was $12.93 per barrel, down from $16.56 per barrel in 1990. The average domestic natural gas price was $1.54 per thousand cubic feet in 1991, down from $1.66 per thousand cubic feet in 1990.
 Worldwide production of crude oil and natural gas liquids averaged 744,200 barrels per day in 1991, up from 705,400 barrels per day in 1990. Volumes were higher than the previous year as a result of leases acquired in the Midway-Sunset field of California in early 1991 and the expanded gas handling system at Prudhoe Bay on Alaska's North Slope. ARCO's international operations reflected increased production from the startup of the BZZ field in Indonesia and increased production onshore in the United Kingdom.
 Worldwide natural gas production averaged 1,660 million cubic feet per day, down from 1,747 million cubic feet per day in 1990. The reduced production levels reflected primarily natural field declines in the Lower 48 which more than offset increases in North Sea natural gas production.
 Worldwide exploration expenses totaled $599 million in 1991, compared to $651 million in 1990. The decrease was primarily due to lower dryhole expenses in both Alaska and International.
 ARCO's coal operations earned $33 million after tax, which included an estimated $50 million in net after-tax charges primarily associated with a writedown on the Coal Resources of Queensland mine in Australia, partially offset by gains from the sale of Venezuelan assets. In 1990, coal operations earned $91 million.
 Refining and marketing earnings for 1991 totaled $266 million after tax and included approximately $10 million of net after-tax charges. These included charges for personnel reductions, future environmental remediation associated with previously divested properties, and litigation issues, partially offset by benefits associated with accounting and tax adjustments in Brazil. Compared to 1990, ARCO's refining and marketing segment was impacted by lower refining margins resulting from higher industry production levels on the West Coast and weak consumer demand. ARCO's 1990 earnings from refining and marketing totaled $439 million after tax.
 Transportation segment earnings totaled $212 million after tax for 1991, reflecting after-tax charges of about $30 million for personnel reduction costs and the settlement of the Kuparuk Pipeline tariff rate litigation. Results for 1991 were negatively impacted by a lower Trans Alaska Pipeline tariff, as determined by the TAPS Settlement Methodology Agreement. Transportation's 1990 earnings totaled $274 million after tax.
 The intermediate chemicals and specialty products segment, which includes ARCO's 83.4 percent interest in ARCO Chemical Co., earned after-tax income of $192 million, compared with $271 million in 1990. Volumes in all major product lines were up compared to 1990 when the Channelview, Texas, plant was shut down after an accident; however, margins were generally lower as a result of the weak worldwide economy. ARCO Chemical's reported 1991 results included a $153 million pre-tax benefit from business interruption insurance related both to the July 1990 Channelview plant incident claim, which is now finalized, and feedstock contamination in the fourth quarter 1990 at its Bayport, Texas, plant. Also included in 1991 results were pre-tax charges totaling $38 million reflecting personnel reductions and future environmental remediation costs, partially offset by a pre-tax benefit of $18 million related to a change in estimated accident charges. The 1990 results had a pre-tax benefit of $120 million from a business interruption insurance claim following the Channelview accident, offset by $90 million pre-tax in accident charges and $24 million for future environmental costs.
 Earnings from ARCO's 49.9 percent equity interest in Lyondell Petrochemical Co. were $111 million after tax for 1991, compared with $223 million after tax in 1990. The 1990 results included $45 million after tax relating to ARCO's recognition of dividends received in excess of its equity investment in Lyondell. Lyondell's 1991 results were impacted by lower olefins margins which were partially offset by improved refining margins.
 Total sales and operating revenues for 1991 were $18.2 billion, compared with $18.8 billion in 1990.
 During 1991, ARCO repurchased 1.7 million shares of stock for $202 million, or an average of approximately $119 per share. For the year, ARCO had an average of 161.7 million shares outstanding, including equivalents, down from 165.5 million shares in 1990. A total of 48,000 shares were repurchased in the fourth quarter of 1991 for $5.6 million.
 ATLANTIC RICHFIELD CO.
 Financial and Statistical Data
 (Millions of dollars except per share amounts)
 Three Months Ended Twelve Months Ended
 Dec. 31, Dec. 31,
 1991 1990 1991 1990
 Sales & other
 operating revenues
 (including excise
 taxes) $4,827 $5,740 $18,157 $18,808
 Income before income
 taxes, minority
 interest, and
 change in
 accounting for
 income taxes $479 $945 $1,160 $2,820
 Provision for taxes
 on income (200) (368) (420) (1,076)
 Minority interest in
 earnings of
 subsidiary (11) (11) (31) (56)
 Cumulative effect of
 change in accounting
 for income taxes --- --- --- 323
 Net income $268 $566 $709 $2,011
 Earned per share $1.67 $3.45 $4.39 $12.15 (a)
 After-tax segment
 earnings
 Resources:
 Oil and gas $197 $553 $549 $1,364
 Coal 23 27 33 91
 Products:
 Refining and
 marketing 48 54 266 439
 Transportation 65 58 212 274
 Intermediate chemicals
 & specialty products
 (ARCO Chemical Co.) 67 63 192 271
 Equity in earnings
 from Lyondell
 Petrochemical Co. 11 37 111 223
 Unallocated expenses
 and other
 operations (6) (72) (60) (410)
 Interest (137) (154) (594) (564)
 Cumulative effect of
 change in accounting
 for income taxes --- --- --- 323
 Net income $268 $566 $709 $2,011
 Average common shares
 outstanding including
 equivalents (millions
 of shares) 161.0 164.0 161.7 165.5
 Return on stockholders' equity
 Twelve-month period ended Dec. 31, 1991 - 10.1 percent
 Twelve-month period ended Dec. 31, 1990 - 29.3 percent
 (a) The impact of the adoption of SFAS 96 on earnings per share was $1.95 per share.
 -0- 1/27/92
 /CONTACT: Albert Greenstein of ARCO, 213-486-3384/
 (ARC) CO: ARCO ST: California IN: OIL SU: ERN


EH-JL -- LA004 -- 3801 01/27/92 13:36 EST
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