Newspaper article THE JOURNAL RECORD

Sohio Taking $1.15 Billion from 4th Quarter Earnings

Newspaper article THE JOURNAL RECORD

Sohio Taking $1.15 Billion from 4th Quarter Earnings

Article excerpt

CLEVELAND (AP) - A $1.15 billion after-tax charge against fourth-quarter earnings will be taken by Standard Oil Co. (Ohio), Sohio said Tuesday.

The charge will reflect the cost of reorganizing Sohio's mineral operations.

In the fourth quarter of 1984, Sohio had a $290 million profit on revenues of $3.2 billion.

Sohio said the reorganization will include expenditure of $400 million over three years to modernize its copper mines near Salt Lake City, Utah, which were closed earlier this year because of operating losses. That project will make some assets obsolete or surplus, the announcement said.

Also contributing to the special charge, Sohio said, will be the reassessment of the value of some mineral reserves; previously announced staff reduction and organization programs; regulatory measures associated with its Alaska oil operations; and the sale of some assets.

""Apart from these special charges, our basic oil and gas production, refining and marketing businesses continue at a pace somewhat stronger than indicated in the third quarter,'' Sohio Chairman Alton W. Whitehouse said.

""The Utah property contains high-quality reserves that we believe are competitive on a world scale,'' he said.

He said Sohio knew the Utah operation was not competitive because of outdated facilities and high labor costs when it was obtained in Sohio's $1.8 billion acquisition of Kennecott Corp. in 1981. Whitehouse said studies were undertaken on a modernization plan.

""Previous actions taken at our other two copper mining operations, in Arizona and New Mexico, have brought them to essentially break-even at today's prices,'' Whitehouse said. ""We believe that the Utah modernization program, coupled with labor cost reductions, will make it a low-cost domestic producer and competitive with other international producers. …

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