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ARCO CHEMICAL REPORTS YEAR-END RESULTS

 ARCO CHEMICAL REPORTS YEAR-END RESULTS
 NEWTOWN SQUARE, Pa., Jan. 23 /PRNewswire/ -- ARCO Chemical Company


(NYSE: RCM) reported 1991 net income of $188 million, or $1.96 per share.
 In 1990, the company reported net income of $351 million, or $3.66 per share.
 For the quarter ended Dec. 31, 1991, the company reported net income of $68 million, or $0.71 per share, including income of $37 million (after-tax) from business interruption insurance. Net income in the fourth quarter of 1990 was $68 million, or $0.71 per share, including income of $46 million (after-tax) from business interruption insurance.
 Alan R. Hirsig, president and chief executive officer, said: "1991 was a very difficult year as worldwide economies showed little sign of recovering from the recession. However, our continued efforts to expand into new markets throughout the world helped us maintain our sales volumes in spite of this difficult environment. Sales volumes in 1991 increased over 1990, primarily reflecting the restart of the Channelview facility, and were up slightly from our volumes in 1989.
 The recession's impact was most evident in our margins which declined in both MTBE and styrene. MTBE margins in 1991 were down significantly from 1990, particularly in Europe, due to lower prices for premium unleaded gasoline and higher feedstock costs. Styrene margins also continued to deteriorate throughout the year as a result of lower prices and increased industry capacity."
 Gross profit in 1991 totalled $707 million and included $153 million (pre-tax) from business interruption insurance related to both the 1990 Channelview incident claim, which is now finalized, and feedstock contamination in 1990 at the Bayport plant. In 1990, gross profit was $821 million, including $120 million of pre-tax income from business interruption insurance.
 In 1991, pre-tax income included charges of $25 million associated with the company's cost reduction program. Also included were charges of $13 million related to future environmental cleanup costs compared with $24 million in 1990. Charges to 1990 pre-tax income included approximately $90 million for costs related to the Channelview incident. A favorable adjustment of $18 million reflecting a change in the estimate of these costs was made in 1991. 1990 net income also included a $43 million favorable adjustment resulting from a change in accounting for income taxes.
 Interest expense in 1991 of $79 million was $28 million higher than last year because of higher average long-term debt outstanding. Other income declined by $49 million as compared to 1990. The decline was primarily the result of continuing losses from the joint venture in Korea.
 The company's 1991 effective tax rate was 41.0 percent, compared to 34.1 percent in 1990. The increase in the 1991 rate over the 1990 rate is attributable to net losses in the Asia Pacific region combined with overall lower pre-tax income and higher state income taxes as a result of legislated tax rate increases.
 ARCO CHEMICAL COMPANY
 (Unaudited; millions of dollars except per share data)
 Periods ended Three Months Year
 Dec. 31 1991 1990 1991 1990
 Sales and other
 operating revenues $ 747 $ 759 $2,837 $2,830
 Gross profit 194 184 707 821
 Selling, general and
 administrative expenses 65 60 238 222
 Research and development 18 17 64 59
 Costs related to plant
 incident ( 6) 3 ( 18) 71
 Cost reduction program -- -- 25 --
 Operating income 117 104 398 469
 Interest expense ( 21) ( 18) ( 79) ( 51)
 Other income (net) (A) 10 5 -- 49
 Income before income taxes and
 cumulative effect of change
 in accounting principle 106 91 319 467
 Provision for income taxes ( 38) ( 23) (131) (159)
 Income before cumulative effect of
 change in accounting principle 68 68 188 308
 Cumulative effect of change in
 accounting principle for
 income taxes (B) -- -- -- 43
 NET INCOME $ 68 $ 68 $ 188 $ 351
 Earnings per common share $0.71 $0.71 $ 1.96 $ 3.66
 (A) Primarily interest income, results from equity and other investments and foreign exchange gains and losses.
 (B) The company adopted SFAS No. 96 in the first quarter of 1990 and changed from the deferred method to the liability method of accounting for income taxes ($.45 per share effect).
 Depreciation/amortization expense for the three months ended Dec. 31, 1991, and Dec. 31, 1990, was $51 million and $38 million, respectively, and for the year ended Dec. 31, 1991, and Dec. 31, 1990, was $164 million and $155 million, respectively.
 ARCO CHEMICAL COMPANY
 SALES VOLUMES STATISTICS
 (Unaudited)
 Periods ended Three Months Year
 Dec. 31 1991 1990 1991 1990
 PO and Derivatives (mm lbs.) 755 536 2,729 2,563
 TBA and Derivatives (mm gals.) 277 278 996 955
 SM and Derivatives (mm lbs.) 372 206 1,278 1,098
 /delval/
 -0- 1/23/92
 /CONTACT: Gerald T. Davis, 215-359-3198 (media), or Marcia H. Gesser, 215-359-3382, (financial), both of ARCO Chemical/
 (RCM) CO: ARCO Chemical Company ST: Pennsylvania IN: CHM SU: ERN


JS-LJ -- PH025 -- 2843 01/23/92 13:19 EST
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Date:Jan 23, 1992
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