UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2021~~March 31, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission file number 1-9210

_____________________

OCCIDENTAL PETROLEUM CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

95-4035997

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

5 Greenway Plaza, Suite 110

Houston,

Texas

77046

(Address of principal executive offices) (Zip Code)

(713) 215-7000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.20 par value	OXY	New York Stock Exchange
Warrants to Purchase Common Stock, $0.20 par value	OXY WS	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

þ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

þ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer þ Accelerated Filer ☐ Non-Accelerated Filer ☐

Smaller Reporting Company ☐ Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes þ No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class

Outstanding ~~at September 30, 2021~~as of March 31, 2022

Common Stock, $0.20 par value

~~933,980,981~~937,190,982


TABLE OF CONTENTS		PAGE
Part I	Financial Information
Item 1.	Financial Statements (unaudited)
	A bbreviations U sed W ithi n T his D ocument	2
	Consolidated Condensed Balance Sheets — ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021	23
	Consolidated Condensed Statements of Operations — Three ~~and nine~~ months ended ~~September 30, 2021~~March 31, 2022 and ~~2020~~2021	45
	Consolidated Condensed Statements of Comprehensive Income (Loss) — Three ~~and nine~~ months ended ~~September 30, 2021~~March 31, 2022 and ~~2020~~2021	56
	Consolidated Condensed Statements of Cash Flows — ~~Nine~~Three months ended ~~September 30, 2021~~March 31, 2022 and ~~2020~~2021	67
	Consolidated Condensed Statements of Equity — Three ~~and nine~~ months ended ~~September 30, 2021~~March 31, 2022 and ~~2020~~2021	78
	Notes to Consolidated Condensed Financial Statements
	Note 1—General	9
	Note ~~2—Divestitures~~ ~~and Other Transactions~~	102
	~~Note 3—~~—Revenue	10
	Note 4—3 —Inventories	11
	Note 4—Divestitures and Other Transactions	12
	Note ~~5—Derivatives~~5 —Long-Term Debt	1312
	Note 6 —~~FairValue Measurements~~Derivatives	1612
	Note 7 —~~Long-Term Debt~~Income Taxes	1815
	Note 8 —~~Lawsuits, Claims, Commitments~~Retirement and ~~Contingencies~~Postretirement Benefit Plans	1916
	Note 9 —Environmental Liabilities and Expenditures	2016
	Note 1 010 —~~Retirement~~Lawsuits, Claims, Commitments and ~~Postretirement Benefit Plans~~Contingencies	2118
	Note 11—Earnings per Share and Stockholders' Equity	2219
	Note 12 —Segments	2320
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2421
	Cautionary Statement Regarding Forward-Looking Statements	2522
	Current Business Outlook	2623
	Consolidated Results of Operations	2724
	Segment Results of Operations and Items Affecting Comparability	2826
	Income Taxes	3231
	Liquidity and Capital Resources	31
	Environmental Liabilities and Expenditures	32
	Lawsuits, Claims, Commitments and Contingencies	33
	~~Environmental Liabilities and Expenditures~~	3332
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3332
Item 4.	Controls and Procedures	3432
Part II	Other Information
Item 1.	Legal Proceedings	3433
Item 1A.	Risk Factors	3433
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 6.	Exhibits	3433

ABBREVIATIONS USED WITHIN THIS DOCUMENT


$/Bbl			price per barrel
Andes			Andes Petroleum Ecuador Ltd.
AOC			Administrative Order on Consent
Bcf			billions of cubic feet
Boe			barrels of oil equivalent
CERCLA			Comprehensive Environmental Response, Compensation, and Liability Act
CO2			carbon dioxide
DD&A			depreciation, depletion and amortization
EPA			Environmental Protection Agency
LIFO			last in first out
Maxus			Maxus Energy Corporation
Mbbl			thousands of barrels
Mboe			thousands of barrels equivalent
Mboe/d			thousands of barrels equivalent per day
Mcf			thousand cubic feet
MMbbl			millions of barrels
MMcf			millions of cubic feet
NGL			natural gas liquids
NPL			National Priorities List
Occidental			Occidental Petroleum Corporation, a Delaware corporation and one or more entities in which it owns a controlling interest (subsidiaries)
OEPC			Occidental Exploration and Production Company
OPEC			Organization of the Petroleum Exporting Countries
OxyChem			Occidental Chemical Corporation
OXY USA			OXY USA Inc.
RCF			revolving credit facility
Repsol			Repsol, S.A.
ROD			Record of Decision
WES			Western Midstream Partners, LP
WTI			West Texas Intermediate
YPF			YPF S.A.
Zero Coupons			Zero Coupon senior notes due 2036
2021 Form 10-K			Occidental’s Annual Report on Form 10-K for the year ended December 31, 2021

PART I FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)


Consolidated Condensed Balance Sheets			Occidental Petroleum Corporation and Subsidiaries


millions	millions	September 30, 2021		December 31, 2020		millions	March 31, 2022		December 31, 2021

ASSETS	ASSETS					ASSETS
CURRENT ASSETS	CURRENT ASSETS					CURRENT ASSETS
Cash and cash equivalents	Cash and cash equivalents	$	2,059	$	2,008	Cash and cash equivalents	$	1,909	$	2,764
Restricted cash and restricted cash equivalents		220		170
Trade receivables, net	Trade receivables, net	3,477		2,115		Trade receivables, net	5,434		4,208
Inventories	Inventories	1,773		1,898		Inventories	1,406		1,846
Assets held for sale						Assets held for sale	—		72
Other current assets	Other current assets	1,272		1,195		Other current assets	1,309		1,321
Assets held for sale		1,098		1,433
Total current assets	Total current assets	9,899		8,819		Total current assets	10,058		10,211

INVESTMENTS IN UNCONSOLIDATED ENTITIES	INVESTMENTS IN UNCONSOLIDATED ENTITIES	3,266		3,250		INVESTMENTS IN UNCONSOLIDATED ENTITIES	3,015		2,938

PROPERTY, PLANT AND EQUIPMENT	PROPERTY, PLANT AND EQUIPMENT					PROPERTY, PLANT AND EQUIPMENT
Oil and gas segment		100,483		102,454
Chemical segment		7,468		7,356
Midstream and marketing segment		8,304		8,232
Oil and gas						Oil and gas	101,511		101,251
Chemical						Chemical	7,588		7,571
Midstream and marketing						Midstream and marketing	7,483		8,371
Corporate	Corporate	937		922		Corporate	960		964
Gross property, plant and equipment	Gross property, plant and equipment	117,192		118,964		Gross property, plant and equipment	117,542		118,157
Accumulated depreciation, depletion and amortization	Accumulated depreciation, depletion and amortization	(56,548)		(53,075)		Accumulated depreciation, depletion and amortization	(58,313)		(58,227)
Net property, plant and equipment	Net property, plant and equipment	60,644		65,889		Net property, plant and equipment	59,229		59,930

OPERATING LEASE ASSETS	OPERATING LEASE ASSETS	804		1,062		OPERATING LEASE ASSETS	689		726

LONG-TERM RECEIVABLES AND OTHER ASSETS, NET	LONG-TERM RECEIVABLES AND OTHER ASSETS, NET	1,145		1,044		LONG-TERM RECEIVABLES AND OTHER ASSETS, NET	1,231		1,231

TOTAL ASSETS	TOTAL ASSETS	$	75,758	$	80,064	TOTAL ASSETS	$	74,222	$	75,036
The accompanying notes are an integral part of these consolidated condensed financial statements.

The accompanying notes are an integral part of these Consolidated Condensed Financial Statements.						The accompanying notes are an integral part of these Consolidated Condensed Financial Statements.


Consolidated Condensed Balance Sheets			Occidental Petroleum Corporation and Subsidiaries


millions, except share and per-share amounts	millions, except share and per-share amounts	September 30, 2021		December 31, 2020		millions, except share and per-share amounts	March 31, 2022		December 31, 2021

LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
CURRENT LIABILITIES	CURRENT LIABILITIES					CURRENT LIABILITIES
Current maturities of long-term debt(a)	Current maturities of long-term debt(a)	$	780	$	440	Current maturities of long-term debt(a)	$	507	$	186
Current operating lease liabilities	Current operating lease liabilities	265		473		Current operating lease liabilities	173		186
Accounts payable	Accounts payable	3,713		2,987		Accounts payable	4,664		3,899
Accrued liabilities	Accrued liabilities	3,654		3,570		Accrued liabilities	3,356		4,046
Liabilities of assets held for sale	Liabilities of assets held for sale	714		753		Liabilities of assets held for sale	—		7
Total current liabilities	Total current liabilities	9,126		8,223		Total current liabilities	8,700		8,324

LONG-TERM DEBT, NET	LONG-TERM DEBT, NET					LONG-TERM DEBT, NET
Long-term debt, net(b)	Long-term debt, net(b)	30,915		35,745		Long-term debt, net(b)	25,865		29,431

DEFERRED CREDITS AND OTHER LIABILITIES	DEFERRED CREDITS AND OTHER LIABILITIES					DEFERRED CREDITS AND OTHER LIABILITIES
Deferred income taxes, net	Deferred income taxes, net	6,825		7,113		Deferred income taxes, net	4,806		7,039
Asset retirement obligations	Asset retirement obligations	3,942		3,977		Asset retirement obligations	3,634		3,687
Pension and postretirement obligations	Pension and postretirement obligations	1,595		1,763		Pension and postretirement obligations	1,541		1,540
Environmental remediation liabilities	Environmental remediation liabilities	1,000		1,028		Environmental remediation liabilities	933		944
Operating lease liabilities	Operating lease liabilities	593		641		Operating lease liabilities	558		585
Other	Other	2,889		3,001		Other	3,278		3,159
Total deferred credits and other liabilities	Total deferred credits and other liabilities	16,844		17,523		Total deferred credits and other liabilities	14,750		16,954

STOCKHOLDERS' EQUITY	STOCKHOLDERS' EQUITY					STOCKHOLDERS' EQUITY
Preferred stock at par value, 100,000 shares at September 30, 2021 and December 31, 2020		9,762		9,762
Common stock at par value, 1,083,180,911 shares at September 30, 2021 and 1,080,564,947 shares at December 31, 2020		217		216
Treasury stock, 149,199,930 shares at September 30, 2021 and 149,051,634 shares at December 31, 2020		(10,668)		(10,665)
Preferred stock, at $1.00 per share par value (100,000 shares as of March 31, 2022 and December 31, 2021)						Preferred stock, at $1.00 per share par value (100,000 shares as of March 31, 2022 and December 31, 2021)	9,762		9,762
Common stock, at $0.20 per share par value, authorized shares: 1.5 billion, issued shares: 2022 — 1,087,270,122 shares and 2021 — 1,083,423,094 shares						Common stock, at $0.20 per share par value, authorized shares: 1.5 billion, issued shares: 2022 — 1,087,270,122 shares and 2021 — 1,083,423,094 shares	217		217
Treasury stock: 2022 — 150,079,140 shares and 2021 — 149,348,394 shares						Treasury stock: 2022 — 150,079,140 shares and 2021 — 149,348,394 shares	(10,709)		(10,673)
Additional paid-in capital	Additional paid-in capital	16,692		16,552		Additional paid-in capital	16,785		16,749
Retained earnings	Retained earnings	3,152		2,996		Retained earnings	9,032		4,480
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(282)		(288)		Accumulated other comprehensive loss	(180)		(208)
Total stockholders' equity	Total stockholders' equity	18,873		18,573		Total stockholders' equity	24,907		20,327
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	75,758	$	80,064	TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	74,222	$	75,036
The accompanying notes are an integral part of these consolidated condensed financial statements.

(a) Included $99 million and $85 million of current finance lease liabilities as of March 31, 2022 and December 31, 2021, respectively.

(b) Included $540 million and $504 million of finance lease liabilities as of March 31, 2022 and December 31, 2021, respectively.

The accompanying notes are an integral part of these Consolidated Condensed Financial Statements.


Consolidated Condensed Statements of Operations			Occidental Petroleum Corporation and Subsidiaries


		Three months ended September 30,				Nine months ended September 30,					Three months ended March 31,
millions, except per-share amounts	millions, except per-share amounts	2021		2020		2021		2020		millions, except per-share amounts	2022		2021

REVENUES AND OTHER INCOME	REVENUES AND OTHER INCOME									REVENUES AND OTHER INCOME
Net sales	Net sales	$	6,792	$	4,108	$	18,043	$	13,649	Net sales	$	8,349	$	5,293
Interest, dividends and other income	Interest, dividends and other income	18		21		142		88		Interest, dividends and other income	49		75
Gains (losses) on sales of equity investments and other assets, net		5		(846)		119		(824)
Gains on sales of assets and equity investments, net										Gains on sales of assets and equity investments, net	135		111
Total	Total	6,815		3,283		18,304		12,913		Total	8,533		5,479

COSTS AND OTHER DEDUCTIONS	COSTS AND OTHER DEDUCTIONS									COSTS AND OTHER DEDUCTIONS
Oil and gas operating expense	Oil and gas operating expense	829		656		2,317		2,356		Oil and gas operating expense	864		776
Transportation and gathering expense	Transportation and gathering expense	360		343		1,053		1,275		Transportation and gathering expense	347		329
Chemical and midstream cost of sales	Chemical and midstream cost of sales	731		618		2,001		1,807		Chemical and midstream cost of sales	818		594
Purchased commodities	Purchased commodities	588		333		1,633		940		Purchased commodities	811		558
Selling, general and administrative expense		240		166		583		655
Selling, general and administrative expenses										Selling, general and administrative expenses	196		166
Other operating and non-operating expense	Other operating and non-operating expense	256		231		762		542		Other operating and non-operating expense	299		258
Taxes other than on income	Taxes other than on income	289		180		743		473		Taxes other than on income	335		210
Depreciation, depletion and amortization	Depreciation, depletion and amortization	1,916		1,915		6,481		6,343		Depreciation, depletion and amortization	1,643		2,194
Asset impairments and other charges	Asset impairments and other charges	17		2,723		173		10,996		Asset impairments and other charges	—		135
Anadarko acquisition-related costs	Anadarko acquisition-related costs	29		5		122		302		Anadarko acquisition-related costs	65		41
Exploration expense	Exploration expense	31		29		145		99		Exploration expense	25		28
Interest and debt expense, net	Interest and debt expense, net	449		353		1,229		1,015		Interest and debt expense, net	371		395
Total	Total	5,735		7,552		17,242		26,803		Total	5,774		5,684

Income (loss) before income taxes and other items	Income (loss) before income taxes and other items	1,080		(4,269)		1,062		(13,890)		Income (loss) before income taxes and other items	2,759		(205)

OTHER ITEMS	OTHER ITEMS									OTHER ITEMS
Gains (losses) on interest rate swaps and warrants, net		(26)		88		150		(573)
Gains on interest rate swaps, net										Gains on interest rate swaps, net	135		399
Income from equity investments	Income from equity investments	163		123		463		183		Income from equity investments	189		121
Total	Total	137		211		613		(390)		Total	324		520

Income (loss) from continuing operations before income taxes		1,217		(4,058)		1,675		(14,280)
Income from continuing operations before income taxes										Income from continuing operations before income taxes	3,083		315
Income tax benefit (expense)	Income tax benefit (expense)	(387)		403		(446)		1,896		Income tax benefit (expense)	1,793		(16)
Income (loss) from continuing operations		830		(3,655)		1,229		(12,384)
Income (loss) from discontinued operations, net of tax		(2)		80		(444)		(1,335)
Income from continuing operations										Income from continuing operations	4,876		299
Loss from discontinued operations, net of tax										Loss from discontinued operations, net of tax	—		(445)
NET INCOME (LOSS)	NET INCOME (LOSS)	828		(3,575)		785		(13,719)		NET INCOME (LOSS)	4,876		(146)
Less: Preferred stock dividends	Less: Preferred stock dividends	(200)		(203)		(600)		(644)		Less: Preferred stock dividends	(200)		(200)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	628	$	(3,778)	$	185	$	(14,363)	NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	4,676	$	(346)

PER COMMON SHARE	PER COMMON SHARE									PER COMMON SHARE
Income (loss) from continuing operations—basic		$	0.67	$	(4.16)	$	0.67	$	(14.26)
Income (loss) from discontinued operations—basic		—		0.09		(0.47)		(1.46)
Income from continuing operations—basic										Income from continuing operations—basic	$	4.96	$	0.11
Loss from discontinued operations—basic										Loss from discontinued operations—basic	$	—	$	(0.48)
Net income (loss) attributable to common stockholders—basic	Net income (loss) attributable to common stockholders—basic	$	0.67	$	(4.07)	$	0.20	$	(15.72)	Net income (loss) attributable to common stockholders—basic	$	4.96	$	(0.37)

Income (loss) from continuing operations—diluted		$	0.65	$	(4.16)	$	0.65	$	(14.26)
Income (loss) from discontinued operations—diluted		—		0.09		(0.46)		(1.46)
Income from continuing operations—diluted										Income from continuing operations—diluted	$	4.65	$	0.10
Loss from discontinued operations—diluted										Loss from discontinued operations—diluted	$	—	$	(0.46)
Net income (loss) attributable to common stockholders—diluted	Net income (loss) attributable to common stockholders—diluted	$	0.65	$	(4.07)	$	0.19	$	(15.72)	Net income (loss) attributable to common stockholders—diluted	$	4.65	$	(0.36)
The accompanying notes are an integral part of these consolidated condensed financial statements.

The accompanying notes are an integral part of these Consolidated Condensed Financial Statements.										The accompanying notes are an integral part of these Consolidated Condensed Financial Statements.


Consolidated Condensed Statements of Comprehensive Income (Loss)			Occidental Petroleum Corporation and Subsidiaries

Three months ended September 30, Nine months ended September 30,
millions 2021 2020 2021 2020
Net income (loss) $ 828 $ (3,575) $ 785 $ (13,719)
Other comprehensive income (loss) items:
Pension and postretirement gains
(losses) (a)
(45) 28 4 (63)
Gains (losses) on derivatives 2 (1) 3 2
Other (1) 2 (1) (1)
Other comprehensive income (loss), net of tax (44) 29 6 (62)
Comprehensive income (loss) attributable to preferred and common stockholders $ 784 $ (3,546) $ 791 $ (13,781)
The accompanying notes are an integral part of these consolidated condensed financial statements.


	Three months ended March 31,
millions	2022		2021

Net income (loss)	$	4,876	$	(146)
Other comprehensive income items:
Gains on derivatives (a)	27		1
Pension and postretirement gains (b)	1		52

Other comprehensive income, net of tax	28		53
Comprehensive income (loss) attributable to preferred and common stockholders	$	4,904	$	(93)

(a) Net of tax ~~benefit (expense)~~expense of $8 million and zero for the three months ended March 31, 2022 and 2021, respectively.

(b) Net of tax expense of zero and ~~$(8)~~$15 million for the three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020, respectively, and $(13) million and $18 million for the nine months ended September 30, 2021 and 2020,~~ respectively.

The accompanying notes are an integral part of these Consolidated Condensed Financial Statements.


Consolidated Condensed Statements of Cash Flows			Occidental Petroleum Corporation and Subsidiaries


		Nine months ended September 30,					Three months ended March 31,
millions	millions	2021		2020		millions	2022		2021

CASH FLOW FROM OPERATING ACTIVITIES	CASH FLOW FROM OPERATING ACTIVITIES					CASH FLOW FROM OPERATING ACTIVITIES
Net income (loss)	Net income (loss)	$	785	$	(13,719)	Net income (loss)	$	4,876	$	(146)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:	Adjustments to reconcile net income (loss) to net cash provided by operating activities:					Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Discontinued operations, net	Discontinued operations, net	444		1,335		Discontinued operations, net	—		445
Depreciation, depletion and amortization of assets	Depreciation, depletion and amortization of assets	6,481		6,343		Depreciation, depletion and amortization of assets	1,643		2,194
Deferred income tax benefit	Deferred income tax benefit	(192)		(2,117)		Deferred income tax benefit	(2,240)		(81)
Asset impairments and other charges	Asset impairments and other charges	173		10,915		Asset impairments and other charges	—		135
(Gains) losses on sales of equity investments and other assets, net		(119)		824
Gain on sales of assets, net						Gain on sales of assets, net	(135)		(111)
Other noncash reconciling items	Other noncash reconciling items	240		134		Other noncash reconciling items	34		(301)
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
(Increase) decrease in receivables		(1,366)		4,248
(Increase) decrease in inventory		92		(242)
(Increase) decrease in other current assets		(172)		293
Increase (decrease) in accounts payable and accrued liabilities		593		(5,609)
Increase in current domestic and international income taxes		63		70
Increase in receivables						Increase in receivables	(1,238)		(937)
Decrease (increase) in inventories						Decrease (increase) in inventories	439		(311)
Increase in other current assets						Increase in other current assets	(158)		(82)
Decrease in accounts payable and accrued liabilities						Decrease in accounts payable and accrued liabilities	(187)		(42)
Increase in current domestic and foreign income taxes						Increase in current domestic and foreign income taxes	205		25
Operating cash flow from continuing operations	Operating cash flow from continuing operations	7,022		2,475		Operating cash flow from continuing operations	3,239		788
Operating cash flow from discontinued operations, net of taxes	Operating cash flow from discontinued operations, net of taxes	320		76		Operating cash flow from discontinued operations, net of taxes	—		122
Net cash provided by operating activities	Net cash provided by operating activities	7,342		2,551		Net cash provided by operating activities	3,239		910

CASH FLOW FROM INVESTING ACTIVITIES	CASH FLOW FROM INVESTING ACTIVITIES					CASH FLOW FROM INVESTING ACTIVITIES
Capital expenditures	Capital expenditures	(1,933)		(1,921)		Capital expenditures	(858)		(579)
Change in capital accrual	Change in capital accrual	(83)		(725)		Change in capital accrual	(39)		(75)
Purchases of businesses and assets, net	Purchases of businesses and assets, net	(122)		(102)		Purchases of businesses and assets, net	(29)		(105)
Proceeds from sales of other assets and equity investments, net		1,005		193
Proceeds from sales of assets, net						Proceeds from sales of assets, net	267		496
Equity investments and other, net	Equity investments and other, net	(21)		188		Equity investments and other, net	(3)		(10)
Investing cash flow from continuing operations	Investing cash flow from continuing operations	(1,154)		(2,367)		Investing cash flow from continuing operations	(662)		(273)
Investing cash flow from discontinued operations	Investing cash flow from discontinued operations	(48)		(31)		Investing cash flow from discontinued operations	—		(9)
Net cash used by investing activities	Net cash used by investing activities	(1,202)		(2,398)		Net cash used by investing activities	(662)		(282)

CASH FLOW FROM FINANCING ACTIVITIES	CASH FLOW FROM FINANCING ACTIVITIES					CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from long-term debt, net of issuance costs		—		4,956
Payments of long-term debt	Payments of long-term debt	(4,555)		(4,615)		Payments of long-term debt	(3,259)		(174)
Proceeds from issuance of common stock	Proceeds from issuance of common stock	24		126		Proceeds from issuance of common stock	27		9
Purchases of treasury stock						Purchases of treasury stock	(36)		(3)
Cash dividends paid on common and preferred stock	Cash dividends paid on common and preferred stock	(630)		(1,634)		Cash dividends paid on common and preferred stock	(216)		(211)
Financing portion of net cash paid for derivative instruments		(824)		(377)
Financing portion of net cash received for derivative instruments						Financing portion of net cash received for derivative instruments	79		45
Other financing, net	Other financing, net	(48)		(103)		Other financing, net	(24)		(18)
Financing cash flow from continuing operations	Financing cash flow from continuing operations	(6,033)		(1,647)		Financing cash flow from continuing operations	(3,429)		(352)
Financing cash flow from discontinued operations	Financing cash flow from discontinued operations	(7)		(6)		Financing cash flow from discontinued operations	—		(2)
Net cash used by financing activities	Net cash used by financing activities	(6,040)		(1,653)		Net cash used by financing activities	(3,429)		(354)

Increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents	Increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents	100		(1,500)		Increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents	(852)		274
Cash, cash equivalents, restricted cash and restricted cash equivalents — beginning of period	Cash, cash equivalents, restricted cash and restricted cash equivalents — beginning of period	2,194		3,574		Cash, cash equivalents, restricted cash and restricted cash equivalents — beginning of period	2,803		2,194
Cash, cash equivalents, restricted cash and restricted cash equivalents — end of period	Cash, cash equivalents, restricted cash and restricted cash equivalents — end of period	$	2,294	$	2,074	Cash, cash equivalents, restricted cash and restricted cash equivalents — end of period	$	1,951	$	2,468
The accompanying notes are an integral part of these consolidated condensed financial statements.

The accompanying notes are an integral part of these Consolidated Condensed Financial Statements.						The accompanying notes are an integral part of these Consolidated Condensed Financial Statements.


~~Consolidated Condensed Statements of Equity~~			~~Occidental Petroleum Corporation and Subsidiaries~~

Equity Attributable to Common Stock
millions, except per-share amounts Preferred Stock Common Stock Treasury Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Total Equity
Balance at June 30, 2020 $ 9,762 $ 213 $ (10,657) $ 16,235 $ 8,105 $ (312) $ 23,346
Net loss — — — — (3,575) — (3,575)
Other comprehensive income, net of tax — — — — — 29 29
Dividends on common stock, $0.01 per share — — — — (10) — (10)
Dividends on preferred stock, $2,000 per share — 3 — 219 (203) — 19
Issuance of common stock and other, net — — — 51 — — 51
Balance at September 30, 2020 $ 9,762 $ 216 $ (10,657) $ 16,505 $ 4,317 $ (283) $ 19,860

Equity Attributable to Common Stock
millions, except per-share amounts Preferred Stock Common Stock Treasury Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Total Equity
Balance at June 30, 2021 $ 9,762 $ 217 $ (10,668) $ 16,638 $ 2,533 $ (238) $ 18,244
Net income — — — — 828 — 828
Other comprehensive loss, net of tax — — — — — (44) (44)
Dividends on common stock, $0.01 per share — — — — (9) — (9)
Dividends on preferred stock, $2,000 per share — — — — (200) — (200)
Issuance of common stock and other, net — — — 54 — — 54
Balance at September 30, 2021 $ 9,762 $ 217 $ (10,668) $ 16,692 $ 3,152 $ (282) $ 18,873

~~The accompanying notes are an integral part of these consolidated condensed financial statements.~~


Consolidated Condensed Statements of Equity			Occidental Petroleum Corporation and Subsidiaries

Equity Attributable to Common Stock
millions, except per-share amounts Preferred Stock Common Stock Treasury Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Total Equity
Balance at December 31, 2019 $ 9,762 $ 209 $ (10,653) $ 14,955 $ 20,180 $ (221) $ 34,232
Net loss — — — — (13,719) — (13,719)
Other comprehensive loss, net of tax — — — — — (62) (62)
Dividends on common stock, $0.81 per share — — — — (737) — (737)
Dividends on preferred stock, $6,444 per share — 6 — 438 (644) — (200)
Stock warrants issued — — — 870 (763) — 107
Issuance of common stock and other, net — 1 — 242 — — 243
Purchases of treasury stock — — (4) — — — (4)
Balance at September 30, 2020 $ 9,762 $ 216 $ (10,657) $ 16,505 $ 4,317 $ (283) $ 19,860

Equity Attributable to Common Stock
millions, except per-share amounts Preferred Stock Common Stock Treasury Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Total Equity
Balance at December 31, 2020 $ 9,762 $ 216 $ (10,665) $ 16,552 $ 2,996 $ (288) $ 18,573
Net income — — — — 785 — 785
Other comprehensive income, net of tax — — — — — 6 6
Dividends on common stock, $0.03 per share — — — — (29) — (29)
Dividends on preferred stock, $6,000 per share — — — — (600) — (600)
Issuance of common stock and other, net — 1 — 140 — — 141
Purchases of treasury stock — — (3) — — — (3)
Balance at September 30, 2021 $ 9,762 $ 217 $ (10,668) $ 16,692 $ 3,152 $ (282) $ 18,873


			Equity Attributable to Common Stock
millions, except per-share amounts	Preferred Stock		Common Stock		Treasury Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Equity
Balance as of December 31, 2020	$	9,762	$	216	$	(10,665)	$	16,552	$	2,996	$	(288)	$	18,573
Net loss	—		—		—		—		(146)		—		(146)
Other comprehensive income, net of tax	—		—		—		—		—		53		53
Dividends on common stock, $0.01 per share	—		—		—		—		(11)		—		(11)
Dividends on preferred stock, $2,000 per share	—		—		—		—		(200)		—		(200)
Shareholder warrants exercised	—		—		—		3		—		—		3
Issuance of common stock and other, net	—		1		—		30		—		—		31
Purchases of treasury stock	—		—		(3)		—		—		—		(3)
Balance as of March 31, 2021	$	9,762	$	217	$	(10,668)	$	16,585	$	2,639	$	(235)	$	18,300


			Equity Attributable to Common Stock
millions, except per-share amounts	Preferred Stock		Common Stock		Treasury Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Equity
Balance as of December 31, 2021	$	9,762	$	217	$	(10,673)	$	16,749	$	4,480	$	(208)	$	20,327
Net income	—		—		—		—		4,876		—		4,876
Other comprehensive income, net of tax	—		—		—		—		—		28		28
Dividends on common stock, $0.13 per share	—		—		—		—		(124)		—		(124)
Dividends on preferred stock, $2,000 per share	—		—		—		—		(200)		—		(200)
Shareholder warrants exercised	—		—		—		20		—		—		20
Options exercised	—		—		—		7		—		—		7
Issuance of common stock and other, net	—		—		—		9		—		—		9
Purchases of treasury stock	—		—		(36)		—		—		—		(36)
Balance as of March 31, 2022	$	9,762	$	217	$	(10,709)	$	16,785	$	9,032	$	(180)	$	24,907

The accompanying notes are an integral part of these ~~consolidated condensed financial statements.~~Consolidated Condensed Financial Statements.


Notes to Consolidated Condensed Financial Statements			Occidental Petroleum Corporation and Subsidiaries


NOTE 1 - GENERAL

NATURE OF OPERATIONS

~~In this report, "Occidental" means Occidental Petroleum Corporation, a Delaware corporation, and one or more entities in which it owns a controlling interest (subsidiaries).~~ Occidental conducts its operations through various subsidiaries and affiliates. Occidental has made its disclosures in accordance with United States generally accepted accounting principles as they apply to interim reporting, and condensed or omitted, as permitted by the U.S. Securities and Exchange Commission’s rules and regulations, certain information and disclosures normally included in ~~consolidated financial statements~~Consolidated Financial Statements and the notes thereto. These unaudited ~~consolidated condensed financial statements~~Consolidated Condensed Financial Statements should be read in conjunction with the audited ~~consolidated financial statements~~Consolidated Financial Statements and the notes thereto in ~~Occidental’s~~Occidental's Annual Report on Form 10-K for the year ended December 31, ~~2020 (the 2020 Form 10-K).~~2021.

In the opinion of Occidental’s management, the accompanying unaudited ~~consolidated condensed financial statements~~Consolidated Condensed Financial Statements contain all adjustments (consisting of normal recurring adjustments) necessary to fairly present Occidental’s ~~consolidated condensed balance sheets~~Consolidated Condensed Balance Sheets as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, and the ~~consolidated condensed statements~~Consolidated Condensed Statements of ~~operations, comprehensive income (loss)~~Operations, Comprehensive Income (Loss), ~~cash flows~~Cash Flows and ~~equity~~Stockholders' Equity for the three ~~and nine~~ months ended ~~September 30, 2021~~March 31, 2022 and ~~2020.~~2021. Certain data in the ~~financial statements~~Consolidated Condensed Financial Statements and notes for prior periods have been reclassified to conform to the current presentation. The income and cash flows for the periods ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ are not necessarily indicative of the income or cash flows to be expected for the full year.

CASH EQUIVALENTS AND RESTRICTED CASH EQUIVALENTS

Occidental considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents or restricted cash equivalents. The cash equivalents and restricted cash equivalents balances ~~at September 30, 2021 and 2020~~for the periods presented included investments in government money market funds in which the carrying value approximates fair value.

The following table provides a reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents as reported ~~at the end of the period~~ in the ~~consolidated condensed statements~~Consolidated Condensed Statements of ~~cash flows for the nine months ended September 30, 2021~~Cash Flows as of March 31, 2022 and ~~2020, respectively.~~

millions 2021 2020
Cash and cash equivalents $ 2,059 $ 1,896
Restricted cash and restricted cash equivalents 220 51
Cash and restricted cash included in assets held for sale — 113
Restricted cash and restricted cash equivalents included in long-term receivables and other assets, net 15 14
Cash, cash equivalents, restricted cash and restricted cash equivalents $ 2,294 $ 2,074
2021:

Total restricted cash and restricted cash equivalents were primarily associated with international joint ventures, a benefits trust and a judicially controlled account related to a Brazilian tax dispute. Cash and restricted cash included in assets held for sale at September 30, 2020 included restricted cash for the payments of future hard-minerals royalties conveyed, of which the related assets were sold in October 2020.


millions	2022		2021
Cash and cash equivalents	$	1,909	$	2,270
Restricted cash and restricted cash equivalents included in other current assets	25		183

Restricted cash and restricted cash equivalents included in long-term receivables and other assets, net	17		15
Cash, cash equivalents, restricted cash and restricted cash equivalents	$	1,951	$	2,468

SUPPLEMENTAL CASH FLOW INFORMATION

The following table represents U.S. federal, domestic state and international income taxes paid, tax refunds received and interest paid related to continuing operations during the ~~nine~~three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ respectively.

millions 2021 2020
Income tax payments $ (502) $ (375)
Income tax refunds received $ 70 $ 223
Interest paid (a)
$ (1,432) $ (1,253)


millions	2022		2021
Income tax payments	$	208	$	122
Income tax refunds received	$	70	$	42
Interest paid (a)	$	598	$	607

(a) Net of capitalized interest of ~~$46~~$11 million and ~~$64 million for the nine months ended September 30, 2021 and 2020, respectively.~~

~~WES INVESTMENT~~

In March 2021, Occidental sold 11.5 million limited partner units of Western Midstream Partners, LP (WES) for proceeds of approximately $200 million, resulting in a gain of $102 million. As of September 30, 2021, Occidental owned all of the 2% non-voting general partner interest and 49.6% of the limited partner units in WES. On a combined basis, with its 2.0% non-voting limited partner interest in WES Operating, a WES subsidiary, Occidental's total effective economic interest in WES and its subsidiaries was 51.7%.

~~The following table presents the related-party transactions between Occidental and WES for the nine months ended September 30, 2021 and 2020.~~

millions 2021 2020
Sales $ 111 $ 165
Purchases $ 17 $ 474
Transportation, gathering and other fees paid $ 717 $ 804

At the end of the third quarter 2020, Occidental recorded an other-than-temporary impairment of $2.7 billion, as the fair value of Occidental’s investment in WES had remained significantly lower than its book value for the majority of the nine months ended September 30, 2020. Occidental concluded that the difference between the fair value and book value of WES was not temporary, primarily given both the magnitude and the duration that the fair value was below its book value. This other-than-temporary impairment was calculated based on the closing market price of WES as of September 30, 2020. The market value of WES’s publicly traded common units is considered a Level 1 input. Occidental's equity method investment in WES was $1.9 billion as of September 30, 2020.

~~DISCONTINUED OPERATIONS~~

In October 2021, Occidental closed the sale of its Ghana assets for $750 million and net proceeds of $555 million, after closing adjustments to reflect an April 1, 2021 effective date. In addition, Occidental settled certain tax claims related to historical operations in Ghana for $170 million. As of September 30, 2021, the results of operations in Ghana, after-tax income of $3$15 million for the three months ended ~~September 30,~~March 31, 2022 and 2021, and after-tax losses of $32 million for the nine months ended September 30, 2021, continue to be presented as discontinued operations. The amounts related to the Ghana assets, of which approximately $1.0 billion and $1.4 billion are related to property, plant and equipment, net, as of September 30, 2021 and December 31, 2020, respectively, and the amounts related to Ghana liabilities, of which approximately $550 million and $670 million are related to deferred income taxes, asset retirement obligations and a finance lease liability as of September 30, 2021 and December 31, 2020, respectively, are presented as assets and liabilities held for sale.respectively.

DISCONTINUED OPERATIONS

During the first quarter of 2021, Occidental recorded a $403 million after-tax loss contingency in discontinued operations associated with its former operations in Ecuador, see Note 810 - ~~Lawsuits,~~Laws uits, Claims, Commitments and ~~Contingencies.~~Contingencies. In addition, the results of operations for Ghana for the three months ended March 31, 2021, an after-tax loss of $42 million, are presented as discontinued operations.


NOTE 2 - REVENUE

Revenue from customers is recognized when obligations under the terms of a contract with our customers are satisfied; this generally occurs with the delivery of oil, NGL, gas, chemicals or services, such as transportation. As of March 31, 2022, trade receivables, net, of $5.4 billion represent rights to payment, for which Occidental has satisfied its obligations under a contract and its right to payment is conditioned only on the passage of time.

The following table shows a reconciliation of revenue from customers to total net sales for the three months ended March 31, 2022 and 2021:


	Three months ended March 31,
millions	2022		2021

Revenue from customers	$	8,213	$	5,184
All other revenues (a)	136		109
Net sales	$	8,349	$	5,293

(a) Includes net marketing derivatives, collars and calls and chemical exchange contracts in 2021 and the same in 2022 with the exception of the collars and calls which expired on or before December 31, 2021.

DISAGGREGATION OF REVENUE FROM CONTRACTS WITH CUSTOMERS

The table below presents Occidental's revenue from customers by segment, product and geographical area. The oil and gas segment typically sells its oil, NGL and gas at the lease or concession area. Chemical segment revenues are shown by geographic area based on the location of the sale. Excluding net marketing revenue, midstream and marketing segment revenues are shown by the location of sale.


millions	United States		International		Eliminations		Total

Three months ended March 31, 2022
Oil and gas
Oil	$	4,048	$	751	$	—	$	4,799
NGL	698		62		—		760
Gas	455		58		—		513
Other	2		1		—		3
Segment total	$	5,203	$	872	$	—	$	6,075
Chemical	$	1,602	$	81	$	—	$	1,683
Midstream and marketing	$	648	$	99	$	—	$	747




Eliminations	$	—	$	—	$	(292)	$	(292)
Consolidated	$	7,453	$	1,052	$	(292)	$	8,213


millions	United States		International		Eliminations		Total

Three months ended March 31, 2021
Oil and gas
Oil	$	2,464	$	549	$	—	$	3,013
NGL	384		52		—		436
Gas	253		64		—		317
Other	(31)		—		—		(31)
Segment total	$	3,070	$	665	$	—	$	3,735
Chemical	$	1,037	$	50	$	—	$	1,087
Midstream and marketing	$	497	$	131	$	—	$	628




Eliminations	$	—	$	—	$	(266)	$	(266)
Consolidated	$	4,604	$	846	$	(266)	$	5,184


NOTE 3 - INVENTORIES

Finished goods primarily represents oil, which is carried at the lower of weighted-average cost or net realizable value, and caustic soda and chlorine, which are valued under the LIFO method. Inventories consisted of the following:


millions	March 31, 2022		December 31, 2021

Raw materials	$	108	$	96
Materials and supplies	798		783
Commodity inventory and finished goods	599		1,066
	1,505		1,945
Revaluation to LIFO	(99)		(99)
Total	$	1,406	$	1,846


NOTE 24 - DIVESTITURES AND OTHER TRANSACTIONS

DIVESTITURES

In ~~October 2021, Occidental closed the sale of its Ghana assets. See~~ ~~Note 1~~ ~~- General~~ ~~for additional information. This divestiture completes Occidental's large-scale asset divestiture program.~~

~~In June~~November 2021, Occidental entered into an agreement to sell certain non-strategic assets in the Permian Basin. The transaction closed in ~~July 2021~~January 2022 for net cash proceeds of approximately ~~$475~~$190 million. The difference in the proved assets' net book value and adjusted purchase price was treated as a ~~recovery of cost and~~ normal retirement, which resulted in no gain or loss being recognized.

~~In March 2021, Occidental completed the sale of certain non-operated assets in the DJ Basin for net cash proceeds of approximately $280 million.~~ The difference in the unproved assets' net book value and adjusted purchase price ~~was treated as a recovery of cost and normal retirement, which~~ resulted in noa gain ~~or loss being recognized.~~on sale of approximately $123 million. The gain has been presented within gains on sales of assets and equity investments, net in the Consolidated Condensed Statements of Operations.


NOTE 35 - ~~REVENUE~~LONG-TERM DEBT

Revenue from customers is recognized when obligations under the terms of a contract with our customers are satisfied, which generally occurs with the delivery of oil, natural gas liquids (NGL), gas, chemicals or services, such as transportation. As of September 30, 2021, trade receivables, net, of $3.5 billion represented rights to payment, for which

~~Occidental has satisfied its obligations under a contract and its right to payment is conditioned only on the passage of time.~~

The following table ~~presents a reconciliation of revenue from customers to total net sales for the three and nine months ended September 30, 2021 and 2020:~~

Three months ended September 30, Nine months ended September 30,
millions 2021 2020 2021 2020
Revenue from customers $ 6,880 $ 4,018 $ 18,166 $ 12,576
All other revenues (a)
(88) 90 (123) 1,073
Net sales $ 6,792 $ 4,108 $ 18,043 $ 13,649

~~(a)~~ ~~Includes net marketing derivatives, natural gas collars, oil collars and call options and chemical exchange contracts.~~summarizes Occidental's outstanding debt, including finance lease liabilities:

~~DISAGGREGATION OF REVENUE FROM CONTRACTS WITH CUSTOMERS~~


millions	March 31, 2022		December 31, 2021
Total borrowings at face value	$	25,187	$	28,493
Adjustments to book value:
Unamortized premium, net	660		670
Debt issuance costs	(114)		(135)
Net book value of debt	$	25,733	$	29,028
Long-term finance leases	540		504
Current finance leases	99		85
Total debt and finance leases	$	26,372	$	29,617
Less current maturities of financing leases	(99)		(85)
Less current maturities of long-term debt	(408)		(101)
Long-term debt, net	$	25,865	$	29,431

~~The table below presents Occidental's revenue~~DEBT ACTIVITY

In the first quarter of 2022, Occidental used cash on hand to repay debt with maturities ranging from ~~customers~~2022 through 2049 by ~~segment, product~~$3.3 billion. Subsequent to March 31, 2022, but before the date of this filing, Occidental paid off additional debt with maturities ranging from 2024 to 2049 and geographical area. The oil and gas segment typically sells its oil, NGL and gas at the lease or concession area. Chemical and midstream and marketing segment revenues are shown by geographic area based on the locationprincipal of ~~the sale.~~

millions United States International Eliminations Total
Three months ended September 30, 2021
Oil and gas
Oil $ 3,056 $ 766 $ — $ 3,822
NGL 642 90 — 732
Gas 399 76 — 475
Other 26 1 — 27
Segment total $ 4,123 $ 933 $ — $ 5,056
Chemical $ 1,329 $ 66 $ — $ 1,395
Midstream and marketing $ 543 $ 147 $ — $ 690
Eliminations $ — $ — $ (261) $ (261)
Consolidated $ 5,995 $ 1,146 $ (261) $ 6,880
$263 million.

millions United States International Eliminations Total
Three months ended September 30, 2020
Oil and gas
Oil $ 1,784 $ 535 $ — $ 2,319
NGL 252 53 — 305
Gas 155 80 — 235
Other 23 — — 23
Segment total $ 2,214 $ 668 $ — $ 2,882
Chemical $ 888 $ 51 $ — $ 939
Midstream and marketing $ 244 $ 135 $ — $ 379
Eliminations $ — $ — $ (182) $ (182)
Consolidated $ 3,346 $ 854 $ (182) $ 4,018
FAIR VALUE OF DEBT

millions United States International Eliminations Total
Nine months ended September 30, 2021
Oil and gas
Oil $ 8,548 $ 1,998 $ — $ 10,546
NGL 1,498 220 — 1,718
Gas 963 216 — 1,179
Other 18 2 — 20
Segment total $ 11,027 $ 2,436 $ — $ 13,463
Chemical $ 3,494 $ 175 $ — $ 3,669
Midstream and marketing $ 1,362 $ 430 $ — $ 1,792
Eliminations $ — $ — $ (758) $ (758)
Consolidated $ 15,883 $ 3,041 $ (758) $ 18,166

millions United States International Eliminations Total
Nine months ended September 30, 2020
Oil and gas
Oil $ 5,705 $ 1,779 $ — $ 7,484
NGL 592 158 — 750
Gas 476 251 — 727
Other 54 1 — 55
Segment total $ 6,827 $ 2,189 $ — $ 9,016
Chemical $ 2,591 $ 148 $ — $ 2,739
Midstream and marketing $ 986 $ 378 $ — $ 1,364
Eliminations $ — $ — $ (543) $ (543)
Consolidated $ 10,404 $ 2,715 $ (543) $ 12,576

The estimated fair value of Occidental’s debt as of March 31, 2022, and December 31, 2021, substantially all of which was classified as Level 1, was approximately $26.2 billion and $31.1 billion, respectively.


NOTE ~~4 - INVENTORIES~~

Finished goods primarily represent oil, which is carried at the lower of weighted-average cost or net realizable value, and caustic soda and chlorine, which are valued under the last in first out (LIFO) method. Inventories consisted of the following:

millions September 30, 2021 December 31, 2020
Raw materials $ 75 $ 70
Materials and supplies 843 848
Commodity inventory and finished goods 884 1,009
1,802 1,927
Revaluation to LIFO (29) (29)
Total $ 1,773 $ 1,898

During the nine months ended September 30, 2020, Occidental recognized an impairment of $54 million due to obsolete material and supplies inventory, and an impairment of $76 million due to lower-than-cost or net-realizable value adjustments primarily related to commodity inventories.


~~NOTE 5~~6 - DERIVATIVES

OBJECTIVE AND STRATEGY

Occidental uses a variety of derivative financial instruments and physical contracts to manage its exposure to commodity price fluctuations, interest rate risks and transportation commitments and to fix margins on the future sale of stored commodity volumes. Occidental also enters into derivative financial instruments for trading purposes.

Occidental may elect normal purchases and normal sales exclusions when physically delivered commodities are purchased or sold to a customer. Occidental occasionally applies cash flow hedge accounting treatment to derivative financial instruments to lock in margins on the forecasted sales of its natural gas storage volumes, and at times for other strategies, such as to lock in rates on ~~future~~ debt issuances. ~~The value of cash flow hedges was insignificant at September 30, 2021 and December 31, 2020.~~ Derivatives are carried at fair value and on a net basis when a legal right of offset exists with the same counterparty.

DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS

As of ~~September 30, 2021,~~March 31, 2022, Occidental’s derivatives not designated as ~~hedging instruments~~hedges consisted of ~~oil call options, natural gas collars,~~ interest rate swaps and marketing derivatives.

Derivative instruments that are not designated as hedging instruments are required to be recorded on the balance sheet at fair value. Changes in fair value will impact Occidental’s earnings through mark-to-market adjustments until the physical commodity is delivered or the financial instrument is settled. The fair value does not reflect the ~~ultimate~~ realized or cash value of the ~~instrument at settlement.~~

~~COLLARS AND OIL CALL OPTIONS~~

Occidental's Brent-priced call options were entered into in conjunction with three-way collars that expired in 2020. Net gains and losses associated with collars and call options are recognized in net sales.

~~Occidental's natural gas two-way collar derivative instruments settle in 2021 and were entered into to manage its near-term exposure to cash flow variability from natural gas price risk.~~

~~Occidental had the following collars and call options outstanding at September 30, 2021:~~


~~Collars and Call Options, not designated as hedges~~
~~2021 Settlement - oil~~
~~Call options sold (MMbbl)~~			~~32.2~~
	~~Average price per barrel (Brent oil pricing)~~
		~~Ceiling sold price (call)~~	$	~~74.16~~

~~2021 Settlement - natural gas~~
~~Natural gas collars (millions of MMbtu)~~			~~38.4~~
	~~Volume weighted-average price per MMbtu (NYMEX)~~
		~~Ceiling sold price (call)~~	$	~~3.61~~
		~~Floor purchased price (put)~~	$	~~2.50~~

instrument.

INTEREST RATE SWAPS

Occidental's interest rate swap contracts lock in a fixed interest rate in exchange for a floating interest rate indexed to the three-month London InterBank Offered Rate ~~(LIBOR)~~ throughout the reference period. Net gains and losses associated with interest rate swaps are recognized currently in gains ~~(losses)~~ on interest rate swaps, ~~and warrants, net.~~net in the Consolidated Condensed Statements of Operations.

Occidental had the following outstanding interest rate swaps ~~outstanding at September 30, 2021:~~as of March 31, 2022:


millions, except percentages			Mandatory	Weighted-Average
Notional Principal Amount		Reference Period	Termination Date	Interest Rate
$	275	September 2016 - 2046	September 2022	6.709	%
$	450	September 2017 - 2047	September 2023	6.445	%

Depending on market conditions, liability management actions or other factors, Occidental may enter into offsetting interest rate swap positions as well as amend or settle certain or all of the currently outstanding interest rate swaps.

Derivative settlements and collateralization are classified as cash flow from operating activities unless the derivatives contain an other-than-insignificant financing element, in which case the settlements and collateralization are classified

as cash flows from financing activities. ~~Net~~In the first quarter of 2022, net cash payments related to settlements of interest rate swap agreements ~~in advance of their mandatory termination dates~~ were $885 million for the nine months ended September 30, 2021, which included $815 million paid to settle interest rate swaps with notional principal amounts of $400 million and $350 million and weighted average interest rates of 6.348% and 6.662%, respectively. For the nine months ended September 30, 2021, $61$23 million. Additionally, $102 million of collateral was returned. ~~As of September 30, 2021 and December 31, 2020, $313 million and $374 million of collateral related to interest rate swaps had been netted against derivative liabilities, respectively.~~

MARKETING DERIVATIVES

Occidental's marketing derivative instruments not designated as hedges are short-duration physical and financial forward contracts. ~~Marketing derivative instruments do not include the collars and call options discussed above.~~ A substantial majority of Occidental's physically settled derivative contracts are index-based and carry no mark-to-market valuation in earnings. As of ~~September 30, 2021,~~March 31, 2022, the weighted-average settlement price of these forward contracts was ~~$69.26~~$96.63 per barrel ~~(Bbl)~~ and ~~$5.63~~$5.15 per ~~thousand cubic feet (Mcf)~~Mcf for crude oil and natural gas, respectively. The weighted-average settlement price was ~~$46.05~~$74.85 per ~~Bbl~~barrel and ~~$2.58~~$4.61 per Mcf for crude oil and natural gas, respectively, atas of December 31, ~~2020.~~2021. Net gains and losses associated with marketing derivative instruments not designated as hedging instruments are recognized currently in net sales.

The following table summarizes net short volumes associated with the outstanding marketing commodity derivatives not designated as hedging instruments.

September 30, 2021 December 31, 2020
Oil commodity contracts
Volume (MMbbl) (29) (31)
Natural gas commodity contracts
Volume (Bcf) (120) (117)


	March 31, 2022	December 31, 2021
Oil commodity contracts
Volume (MMbbl)	(23)	(28)
Natural gas commodity contracts
Volume (Bcf)	(111)	(136)

1413

FAIR VALUE OF DERIVATIVES

The following tables present the fair values of Occidental’s outstanding derivatives. Fair values are presented at gross amounts below, including when the derivatives are subject to ~~master~~ netting arrangements, and are presented on a net basis in the ~~consolidated condensed balance sheets.~~Consolidated Condensed Balance Sheets.


millions	millions	Fair Value Measurements Using						Netting (a)					Total Fair Value		millions	Fair Value Measurements Using						Netting (a)		Total Fair Value
Balance Sheet Classifications	Balance Sheet Classifications	Level 1		Level 2		Level 3				Balance Sheet Classifications		Level 1					Level 2		Level 3

September 30, 2021
Collars and Call Options

Accrued liabilities		$	—	$	(264)	$	—			$	—					$	(264)
March 31, 2022															March 31, 2022
Marketing Derivatives	Marketing Derivatives														Marketing Derivatives
Other current assets	Other current assets	1,732		101		—		(1,800)					33		Other current assets	$	3,486	$	323	$	—	$	(3,708)	$	101
Long-term receivables and other assets, net	Long-term receivables and other assets, net	147		1		—		(147)					1		Long-term receivables and other assets, net	71		1		—		(71)		1
Accrued liabilities	Accrued liabilities	(1,781)		(78)		—		1,800					(59)		Accrued liabilities	(3,796)		(264)		—		3,708		(352)
Deferred credits and other liabilities - other	Deferred credits and other liabilities - other	(148)		—		—		147					(1)		Deferred credits and other liabilities - other	(73)		—		—		71		(2)
Interest Rate Swaps	Interest Rate Swaps														Interest Rate Swaps

Accrued liabilities	Accrued liabilities	—		(312)		—		—					(312)		Accrued liabilities	—		(250)		—		—		(250)
Deferred credits and other liabilities - other	Deferred credits and other liabilities - other	—		(412)		—		—					(412)		Deferred credits and other liabilities - other	—		(343)		—		—		(343)

December 31, 2020
Collars and Call Options
Other current assets		$	—	$	25	$	—	$	—				$	25
Accrued liabilities		—		(42)		—		—					(42)
December 31, 2021															December 31, 2021
Marketing Derivatives	Marketing Derivatives														Marketing Derivatives
Other current assets	Other current assets	1,155		80		—		(1,204)					31		Other current assets	$	1,516	$	173	$	—	$	(1,645)	$	44
Long-term receivables and other assets, net	Long-term receivables and other assets, net	7		2		—		(7)					2		Long-term receivables and other assets, net	4		1		—		(4)		1
Accrued liabilities	Accrued liabilities	(1,252)		(81)		—		1,204					(129)		Accrued liabilities	(1,608)		(196)		—		1,645		(159)
Deferred credits and other liabilities - other	Deferred credits and other liabilities - other	(7)		—		—		7					—		Deferred credits and other liabilities - other	(4)		—		—		4		—
Interest Rate Swaps	Interest Rate Swaps														Interest Rate Swaps

Accrued liabilities	Accrued liabilities	—		(936)		—		—					(936)		Accrued liabilities	—		(315)		—		—		(315)
Deferred credits and other liabilities - other	Deferred credits and other liabilities - other	—		(822)		—		—					(822)		Deferred credits and other liabilities - other	—		(436)		—		—		(436)

(a)These amounts do not include collateral. As of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020, $313~~2021, $221 million and ~~$374~~$323 million of collateral related to interest rate swaps had been netted against derivative liabilities, respectively. Occidental netted ~~$48~~$296 million and ~~$85~~$110 million of collateral deposited with brokers against derivative liabilities related to marketing derivatives as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively.

1514

GAINS AND LOSSES ON DERIVATIVES

The following table presents ~~the effect of~~gains and (losses) related to Occidental's derivative instruments on the ~~consolidated condensed statements~~Consolidated Condensed Statements of ~~operations:~~Operations:

millions Three months ended September 30, Nine months ended September 30,
Income Statement Classification 2021 2020 2021 2020
Collars and Call Options
Net sales $ (101) $ 110 $ (339) $ 1,067
Marketing Derivatives
Net sales (a)
12 (18) 214 —
Interest Rate Swaps
Gains (losses) on interest rate swaps and warrants, net (26) 88 150 (577)


millions	Three months ended March 31,
Income Statement Classification	2022		2021

Collars and Calls
Net sales (a)	$	—	$	(72)
Marketing Derivatives
Net sales (b)	$	135	$	180
Interest Rate Swaps
Gains on interest rate swaps, net	$	135	$	399

(a)All of Occidental's calls and collars expired on or before December 31, 2021.

(b) Includes derivative and non-derivative marketing activity.

CREDIT RISK

The majority of Occidental's counterparty credit risk is related to the physical delivery of energy commodities to its customers and their inability to meet their settlement commitments. Occidental manages credit risk by selecting counterparties that it believes to be financially strong, by entering into netting arrangements with counterparties and by requiring collateral or other credit risk mitigants, as appropriate. Occidental actively evaluates the creditworthiness of its counterparties, assigns appropriate credit limits and monitors credit exposures against those assigned limits. Occidental also enters into future contracts through regulated exchanges with select clearinghouses and brokers, which are subject to minimal credit risk as a significant portion of these transactions settle on a daily margin basis.

Certain of Occidental's over-the-counter derivative instruments contain credit-risk-contingent features, primarily tied to credit ratings for Occidental or its counterparties, which may affect the amount of collateral that each party would need to post. The aggregate fair value of derivative instruments with ~~credit-risk-contingent~~credit-risk-related contingent features for which a net liability position existed ~~at September 30, 2021~~as of March 31, 2022, was $34 million (net of ~~$313~~$221 million of collateral), which was primarily related to interest rate swaps. The aggregate fair value of derivative instruments with credit-risk-contingent features for which a net liability position existed atas of December 31, ~~2020~~2021, was ~~$104~~$107 million (net of ~~$374~~$323 million of collateral), which was primarily related to interest rate swaps.


NOTE 67 - ~~FAIR VALUE MEASUREMENTS~~INCOME TAXES

~~FAIR VALUES - NONRECURRING~~LEGAL ENTITY REORGANIZATION

~~2021:~~

~~For~~To align Occidental’s legal entity structure with the ~~three~~nature of its business activities after completing the acquisition of Anadarko and ~~nine months ended September 30, 2021, Occidental recorded pre-tax impairments of $17 million and $173 million, respectively, related to non-core onshore domestic undeveloped leases~~subsequent large scale post-Acquisition divestiture program, management undertook a legal entity reorganization that ~~either expired or were set to expire~~was completed in the ~~near-term, where Occidental had no plans to pursue exploration activities.~~

~~2020:~~first quarter of 2022.

As a result of this legal entity reorganization, management made an adjustment to the ~~expected prolonged period~~tax basis in a portion of ~~lower~~its operating assets, thus reducing Occidental’s deferred tax liabilities. Accordingly, in the first quarter of 2022, Occidental recorded an estimated non-cash tax benefit of $2.6 billion in connection with this reorganization. The timing of any reduction in Occidental’s future cash taxes as a result of this legal entity reorganization will be dependent on a number of factors, including prevailing commodity prices, ~~brought~~capital activity level and production mix. Further refinement of the non-cash tax benefit may be necessary as Occidental finalizes its tax basis calculations, its tax returns and other information.

The following summarizes components of income tax benefit (expense) on by the COVID-19 pandemic’s impact on oil demand, Occidental tested substantially all of its oil and gas assets for impairment during the second quarter of 2020. Occidental recognized total pre-tax impairments to its oil and gas proved and unproved properties of $8.6 billion, of which $6.4 billion was included in oil and gas segment results and $2.2 billion ($1.4 billion net of tax) related to Ghana was included in discontinuedcontinuing operations for the three months ended ~~June 30, 2020.~~March 31, 2022 and 2021:

~~For~~


	Three months ended
millions	March 31, 2022			March 31, 2021
Income from continuing operations before income taxes	$	3,083		$	315
Current
Federal	$	(215)		$	30
State and Local	(34)			(10)
Foreign	(198)			(117)
Total current tax expense	$	(447)		$	(97)
Deferred
Federal	2,213			78
State and Local	73			4
Foreign	(46)			(1)
Total deferred tax benefit	$	2,240		$	81
Total income tax benefit (expense)	$	1,793		$	(16)
Income from continuing operations	$	4,876		$	299
Worldwide effective tax rate	(58)		%	5		%

Occidental's worldwide effective tax rate for the three months ended ~~June 30, 2020, Occidental recorded proved property pre-tax impairments of $1.2 billion primarily related to certain assets~~March 31, 2022 was negative 58%. The difference between the negative 58% effective tax rate for its domestic onshore and Gulf of Mexico assets and $0.9 billion to remeasure the Algeria oil and gas proved properties to their fair value. The fair value of the proved properties was measured based on the income ~~approach.~~

~~Also during~~from continuing operations for the three months ended ~~June 30, 2020, $4.3 billion of unproved property pre-tax impairments were recorded~~March 31, 2022, and the 21% U.S. federal statutory tax rate was primarily ~~related to domestic onshore unproved acreage.~~driven by a non-cash tax benefit associated with Occidental's legal entity reorganization, as described above, partially offset by higher tax rates in the foreign jurisdictions in which Occidental operates. The ~~fair value of this acreage was measured based on a market approach using an implied acreage valuation derived~~difference between the 5% effective tax rate for income from ~~domestic onshore market participants excluding the fair value assigned to proved properties.~~

Income approaches are considered Level 3 fair value estimates and include significant assumptions of future production and timing of production, commodity price assumptions, and operating and capital cost estimates,

discounted using a 10% weighted average cost of capital. Taxes were based on current statutory rates. Future production and timing of production were based on internal reserves estimates and internal economic models for a specific oil and gas asset. Internal reserve estimates consisted of proved reserves and risk adjusted unproved reserves based on reserve category. Price assumptions were based on a combination of market information and published industry resources adjusted for historical differentials. Price assumptions ranged from approximately $40 per Bbl of oil in 2020 increasing to approximately $70 per Bbl of oil in 2034, with an unweighted arithmetic average price of $59.17 and $62.42 for WTI and Brent indexed assetscontinuing operations for the 15-year period, respectively. Natural gas prices ranged from approximately $2.00 per Mcf in 2020 to approximately $3.60 per Mcf in 2034, with an unweighted arithmetic average price of $3.13 for NYMEX based assets for the 15-year period. Both oil and natural gas commodity prices were held flat after 2034 and were adjusted for location and quality differentials. Operating and capital cost estimates were based on current observable costs and were further escalated 1% in every period where commodity prices exceeded $50 per Bbl and 2% in every period where commodity prices exceeded $60 per Bbl. The weighted average cost of capital was calculated based on industry peers and approximated the cost of capital an external market participant would expect to obtain.

In the first quarter of 2020, Occidental's oil and gas segment recognized pre-tax impairment and related charges of $581 million primarily related to both proved and unproved oil and gas properties and a lower of cost or net realizable value adjustment for crude inventory. Occidental recorded proved property impairments of $293 million related to certain international assetsthree months ended March 31, 2021, and the ~~Gulf~~21% U.S. federal statutory tax rate was primarily driven by the jurisdictional mix of ~~Mexico. Occidental recorded unproved property impairments~~income. U.S. losses, taxed at a U.S. federal statutory rate of ~~$241 million primarily related~~21%, were mostly offset by foreign income that is subject to ~~domestic onshore undeveloped leases and offshore Gulf~~tax at statutory rates as high as 55%. In addition, the effective tax rate was impacted by benefits associated with the settlement of ~~Mexico where Occidental no longer intends to pursue exploration, appraisal or development activities primarily due to the reduction in near-term capital plans.~~federal tax audit matters.


~~NOTE 7 - LONG-TERM DEBT~~

~~The following table summarizes Occidental's outstanding debt, including finance lease liabilities:~~

millions September 30, 2021 December 31, 2020
Total borrowings at face value $ 30,760 $ 35,235
Adjustments to book value:
Unamortized premium, net 688 748
Debt issuance costs (135) (156)
Net book value of debt $ 31,313 $ 35,827
Long-term finance leases 330 316
Current finance leases 52 42
Total debt and finance leases $ 31,695 $ 36,185
Less current maturities of financing leases (52) (42)
Less current maturities of long-term debt (728) (398)
Long-term debt, net $ 30,915 $ 35,745

~~DEBT ACTIVITY~~

In the third quarter of 2021, Occidental completed a cash tender for outstanding senior notes with a face value of $3.0 billion and maturities ranging from 2022 through 2026, paid $224 million of senior notes upon maturity and fully retired $1.1 billion of floating interest rate notes due August 2022. As a result, the face value of total borrowings was reduced by $4.3 billion.

~~In the first quarter of 2021, Occidental repaid $174 million of debt upon maturity. No debt matured or was otherwise paid during the second quarter of 2021.~~

~~The following table summarizes debt repayments for the nine months ended September 30, 2021:~~


~~millions~~						~~Face Value~~


~~First quarter repayments:~~
~~4.850% senior notes due 2021~~	$	~~(147)~~
~~Variable rate bonds due 2021~~	~~(27)~~
~~Third quarter repayments:~~
~~2.700% senior notes due 2022~~	$	~~(278)~~
~~2.700% senior notes due 2023~~	~~(484)~~
~~3.450% senior notes due 2024~~	~~(81)~~
~~2.900% senior notes due 2024~~	~~(1,620)~~
~~3.500% senior notes due 2025~~	~~(229)~~
~~3.400% senior notes due 2026~~	~~(224)~~
~~3.200% senior notes due 2026~~	~~(110)~~
~~2.600% senior notes due 2021~~	~~(224)~~
~~Floating interest rate notes due August 2022~~	~~(1,051)~~
~~Total~~	$	~~(4,475)~~

~~FAIR VALUE OF DEBT~~

The estimated fair value of Occidental’s debt as of September 30, 2021 and December 31, 2020, substantially all of which was classified as Level 1, was approximately $33.0 billion and $33.8 billion, respectively.


NOTE 8 - ~~LAWSUITS, CLAIMS, COMMITMENTS~~RETIREMENT AND ~~CONTINGENCIES~~POSTRETIREMENT BENEFIT PLANS

~~LEGAL MATTERS~~

Occidental orhas various defined benefit pension plans for certain ~~of its subsidiaries are involved, in the normal course of business, in lawsuits, claims~~domestic union, non-union hourly and foreign national employees. In addition, Occidental also provides medical and other ~~legal proceedings that seek, among other things, compensation~~benefits for ~~alleged personal injury, breach~~certain active, retired and disabled employees and their eligible dependents.

Net periodic benefit gains related to pension benefits were zero and $11 million for the three months ended March 31, 2022, and 2021, respectively.

Net periodic benefit costs related to postretirement benefits were $19 million and $20 million for the three months ended March 31, 2022, and 2021, respectively.

Occidental's contributions to its defined benefit plans were $1 million and $147 million for the three months ended March 31, 2022, and 2021, respectively. The 2021 contributions were primarily due to distributions related to a separation program and freezing of ~~contract, property damage or other losses, punitive damages, civil penalties, or injunctive or declaratory relief. Occidental or certain of its subsidiaries also are involved~~benefit accruals for Anadarko employees in ~~proceedings~~2020 and for contributions which were previously deferred in 2020 under the ~~Comprehensive Environmental Response, Compensation,~~Coronavirus Aid, Relief, and Liability Act (CERCLA) and similar federal, regional, state, provincial, tribal, local and international environmental laws. These environmental proceedings seek funding or performance of remediation and, in some cases, compensation for alleged property damage, punitive damages, civil penalties and injunctive relief. Usually Occidental or such subsidiaries are among many companies in these environmental proceedings and have to date been successful in sharing response costs with other financially sound companies. Further, some lawsuits, claims and legal proceedings involve acquired or disposed assets with respect to which a third party or Occidental retains liability or indemnifies the other party for conditions that existed prior to the transaction.

In accordance with applicable accounting guidance, Occidental accrues reserves for outstanding lawsuits, claims and proceedings when it is probable that a liability has been incurred and the liability can be reasonably estimated.

In 2016, Occidental received payments from the Republic of Ecuador of approximately $1.0 billion pursuant to a November 2015 arbitration award for Ecuador’s 2006 expropriation of Occidental’s Participation Contract for Block 15. The awarded amount represented a recovery of 60% of the value of Block 15. In 2017, Andes Petroleum Ecuador Ltd. (Andes) filed a demand for arbitration, claiming it is entitled to a 40% share of the judgment amount obtained by Occidental. Occidental contends that Andes is not entitled to any of the amounts paid under the 2015 arbitration award because Occidental’s recovery was limited to Occidental’s own 60% economic interest in the block. On March 26, 2021, the arbitration tribunal issued an award in favor of Andes and against Occidental Exploration and Production Company (OEPC) in the amount of approximately $391 million plus interest. In June 2021, OEPC filed a motion to vacate the award due to concerns regarding the validity of the award. In addition, OEPC has made a demand for significant additional claims not addressed by the arbitration tribunal that OEPC has against Andes relating to Andes' 40% share of costs, liabilities, losses and expenses due under the farmout agreement and joint operating agreement to which Andes and OEPC are parties.

In August 2019, Sanchez Energy Corporation and certain of its affiliates (Sanchez) filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code. Sanchez is a party to agreements with Anadarko Petroleum Corporation and certain of its affiliates (Anadarko) as a result of its 2017 purchase of Anadarko's Eagle Ford Shale assets. Sanchez is attempting to reject some of the agreements related to the purchase of Anadarko’s Eagle Ford Shale assets (the Bankruptcy Litigation). If Sanchez was permitted to reject certain of those agreements, then Anadarko may owe deficiency payments to various third parties. Subsequent to the end of the third quarter of 2021, Occidental and certain of its affiliates reached an agreement in principle to resolve the Bankruptcy Litigation. Occidental expects the settlement, certain aspects of which will require court approval and the satisfaction of certain other conditions, to be finalized by the end of the fourth quarter of 2021. Occidental recorded a contingency reserve at September 30, 2021 associated with this expected settlement.

The ultimate outcome and impact of outstanding lawsuits, claims and proceedings on Occidental cannot be predicted. Management believes that the resolution of these matters will not, individually or in the aggregate, have a material adverse effect on Occidental’s consolidated condensed balance sheets. If unfavorable outcomes of these matters were to occur, future results of operations or cash flows for any particular quarterly or annual period could be materially adversely affected. Occidental’s estimates are based on information known about the legal matters and its experience in contesting, litigating and settling similar matters. Occidental reassesses the probability and estimability of contingent losses as new information becomes available.

~~TAX MATTERS~~

During the course of its operations, Occidental is subject to audit by tax authorities for varying periods in various federal, state, local and international tax jurisdictions. Tax years through 2017 for U.S. federal income tax purposes have been audited by the IRS pursuant to its Compliance Assurance Program and subsequent tax years are currently under review. Tax years through 2012 have been audited for state income tax purposes. Significant audit matters in international jurisdictions have been resolved through 2010. During the course of tax audits, disputes have arisen and other disputes may arise as to facts and matters of law. Occidental believes that the resolution of outstanding tax matters would not have a material adverse effect on its consolidated condensed balance sheets or consolidated condensed statements of operations.

For Anadarko, tax years through 2014 and tax year 2016 for U.S. federal tax purposes have been audited by the IRS. Tax years through 2008 have been audited for state income tax purposes. There are outstanding significant audit matters in one international jurisdiction. As stated above, during the course of tax audits, disputes have arisen and other disputes may arise as to facts and matters of law. Other than the matter discussed below, Occidental believes that the

~~resolution of these outstanding tax matters would not have a material adverse effect on its consolidated condensed balance sheets or consolidated condensed statements of operations.~~

Anadarko received an $881 million tentative refund in 2016 related to its $5.2 billion Tronox Adversary Proceeding settlement payment in 2015. In September 2018, Anadarko received a statutory notice of deficiency from the IRS disallowing the net operating loss carryback and rejecting Anadarko’s refund claim. As a result, Anadarko filed a petition with the U.S. Tax Court to dispute the disallowances in November 2018. The case was in the IRS appeals process until the second quarter of 2020. The case has since been returned to the U.S. Tax Court, where a trial date has been set for July 2022 and Occidental expects to continue pursuing resolution.

In accordance with ASC 740’s guidance on the accounting for uncertain tax positions, Occidental has recorded no tax benefit on the tentative cash tax refund of $881 million. As a result, should Occidental not ultimately prevail on the issue, there would be no additional tax expense recorded relative to this position for financial statement purposes other than future interest. However, in that event, Occidental would be required to repay approximately $1 billion ($996 million in federal taxes and $27 million in state taxes) plus accrued interest of approximately $300 million. A liability for this amount, with the accrued interest, is included in deferred credits and other liabilities-other.

~~INDEMNITIES TO THIRD PARTIES~~

Occidental, its subsidiaries, or both, have indemnified various parties against specified liabilities those parties might incur in the future in connection with purchases and other transactions that they have entered into with Occidental. These indemnities usually are contingent upon the other party incurring liabilities that reach specified thresholds. As of September 30, 2021, Occidental is not aware of circumstances that it believes would reasonably be expected to lead to indemnity claims that would result in payments materially in excess of reserves.Economic Security Act.


NOTE 9 - ENVIRONMENTAL LIABILITIES AND EXPENDITURES

Occidental’s operations are subject to stringent federal, regional, state, provincial, tribal, local and international laws and regulations related to improving or maintaining environmental quality. The laws that require or address environmental remediation, including CERCLA and similar federal, regional, state, provincial, tribal, local and international laws, may apply retroactively and regardless of fault, the legality of the original activities or the current ownership or control of sites.

Occidental or certain of its subsidiaries participate in or actively monitor a range of remedial activities and government or private proceedings under these laws with respect to alleged past practices at operating, closed and third-party sites. Remedial activities may include one or more of the following: investigation involving sampling, modeling, risk assessment or monitoring; cleanup measures including removal, treatment or disposal; or operation and maintenance of remedial systems. The environmental proceedings seek funding or performance of remediation and, in some cases, compensation for alleged property damage, punitive damages, civil penalties, injunctive relief and government oversight costs.

ENVIRONMENTAL REMEDIATION

As of ~~September 30, 2021,~~March 31, 2022, Occidental participated in or monitored remedial activities or proceedings at ~~165~~166 sites. The following table presents Occidental’s current and non-current environmental remediation liabilities as of ~~September 30, 2021.~~March 31, 2022. The current portion, ~~$123~~$155 million, is included in accrued liabilities and the non-current portion, ~~$1.0 billion,~~$933 million, in deferred credits and other ~~liabilities - environmental~~liabilities-environmental remediation liabilities.

Occidental’s environmental remediation sites are grouped into four categories: sites listed or proposed for listing by the U.S. ~~Environmental Protection Agency (EPA)~~EPA on the CERCLA ~~National Priorities List (NPL)~~NPL and three categories of non-NPL sites—third-party sites, Occidental-operated sites and closed or non-operated Occidental sites.


millions, except number of sites	millions, except number of sites	Number of Sites	Remediation Balance		millions, except number of sites	Number of Sites	Remediation Balance
NPL sites	NPL sites	30	$	427	NPL sites	30	$	427
Third-party sites	Third-party sites	69	298		Third-party sites	69	269
Occidental-operated sites	Occidental-operated sites	16	131		Occidental-operated sites	15	120
Closed or non-operated Occidental sites	Closed or non-operated Occidental sites	50	267		Closed or non-operated Occidental sites	52	272
Total	Total	165	$	1,123	Total	166	$	1,088

As of ~~September 30, 2021,~~March 31, 2022, Occidental’s environmental ~~remediation~~ liabilities exceeded $10 million each at 1820 of the ~~165~~166 sites described above, and 9598 of the sites had liabilities from zero to $1 million each. Based on current estimates, Occidental expects to expend funds corresponding to approximately 40% of the period-end remediation balance at the

sites described above over the next three to four years and the remaining balance at these sites over the subsequent 10 or more years. Occidental believes its range of reasonably possible additional losses beyond those liabilities recorded for environmental remediation at these sites could be up to ~~$1.1~~$1.3 billion. The status of Occidental's involvement with the sites and related significant assumptions, including those sites indemnified by Maxus, ~~Energy Corporation (Maxus),~~ has not changed materially since December 31, ~~2020.~~2021.

MAXUS ENVIRONMENTAL SITES

When Occidental acquired Diamond Shamrock Chemicals Company in 1986, Maxus, a subsidiary of YPF, ~~S.A.,~~ agreed to indemnify Occidental for a number of environmental sites, including the Diamond Alkali Superfund Site ~~(Site)~~ along a portion of the Passaic River. On June 17, 2016, Maxus and several affiliated companies filed for Chapter 11 bankruptcy in ~~federal district court~~Federal District Court in the State of Delaware. Prior to filing for bankruptcy, Maxus defended and indemnified Occidental in connection with clean-up and other costs associated with the sites subject to the indemnity, including the Diamond Alkali Superfund Site.

In March 2016, the EPA issued a ~~Record of Decision (ROD)~~ROD specifying remedial actions required for the lower 8.3 miles of the Lower Passaic ~~River.~~River (OU-2). The ROD does not address any potential remedial action for the upper 9 miles of the Lower Passaic River or Newark Bay. During the third quarter of 2016, and following ~~Maxus’~~Maxus’s bankruptcy filing, ~~Occidental~~OxyChem and the EPA entered into an ~~Administrative Order on Consent (AOC)~~AOC to complete the design of the proposed clean-up plan outlined in the ROD at an estimated cost of $165 million. The EPA announced that it will pursue similar agreements with other potentially responsible parties.

Occidental has accrued a reserve relating to its estimated allocable share of the costs to perform the design and remediation called for in the AOC and the ROD as well as for certain other Maxus-indemnified sites. Occidental's accrued estimated environmental reserve does not consider any recoveries for indemnified costs. Occidental’s ultimate share of this liability may be higher or lower than the reserved amount, and is subject to final design plans and the resolution of Occidental's allocable share with other potentially responsible parties. Occidental continues to evaluate the costs to be incurred to comply with the AOC and the ROD and to perform remediation at other Maxus-indemnified sites in light of the Maxus bankruptcy and the share of ultimate liability of other potentially responsible parties. In June 2018, ~~Occidental~~OxyChem filed a complaint under CERCLA in ~~federal district court~~Federal District Court in the State of New Jersey against numerous potentially responsible parties for reimbursement of amounts incurred or to be incurred to comply with the AOC and the ROD, or to perform other remediation activities at the Diamond Alkali Superfund Site.

In September 2021, the EPA issued a ROD with an estimated cost of $441 million for an interim remedy plan for the upper 9 miles of the Lower Passaic River. At this time, ~~Occidental’s potential~~Occidental's role or responsibilities under this ROD, ~~if any,~~and those of other potentially responsible parties, have not ~~yet~~ been ~~agreed to~~determined with the EPA. Discussions between Occidental ~~will continue~~and the EPA

are ongoing about this ROD. In January 2022, OxyChem made an offer to ~~evaluate~~design and implement the ~~ROD issued~~interim remedy for the upper nine miles of the Lower Passaic ~~River.~~River (OU-4) subject to certain conditions. EPA sent a notice letter to OxyChem and other parties requesting good faith offers to implement the selected remedies at OU-2 and OU-4.

In June 2017, the court overseeing the Maxus bankruptcy approved a Plan of Liquidation ~~(Plan)~~ to liquidate Maxus and create a trust to pursue claims against current and former parents ~~YPF~~ and each of its respective subsidiaries and affiliates ~~(YPF)~~of YPF and Repsol, ~~S.A. and each of its respective subsidiaries and affiliates (Repsol),~~ as well as others to satisfy claims by Occidental and other creditors for past and future cleanup and other costs. In July 2017, the court-approved Plan of Liquidation became final and the trust became effective. The trust is pursuing claims against YPF, Repsol and others and is expected to distribute assets to Maxus' creditors in accordance with the trust agreement and Plan. In June 2018, the trust filed its complaint against YPF and Repsol in Delaware bankruptcy court asserting claims based upon, among other things, fraudulent transfer and alter ego. During 2019, the bankruptcy court denied Repsol's and YPF's motions to dismiss the complaint as well as their motions to move the case away from the bankruptcy court. Discovery remains ongoing at the time of this report. The bankruptcy court will hear motions for summary judgment in June 2022.


NOTE 10 - ~~RETIREMENT~~LAWSUITS, CLAIMS, COMMITMENTS AND ~~POSTRETIREMENT BENEFIT PLANS~~CONTINGENCIES

LEGAL MATTERS

Occidental or certain of its subsidiaries are involved, in the normal course of business, in lawsuits, claims and other legal proceedings that seek, among other things, compensation for alleged personal injury, breach of contract, property damage or other losses, punitive damages, civil penalties, or injunctive or declaratory relief. Occidental or certain of its subsidiaries also are involved in proceedings under CERCLA and similar federal, state, local and international environmental laws. These environmental proceedings seek funding or performance of remediation and, in some cases, compensation for alleged property damage, punitive damages, civil penalties and injunctive relief. Usually Occidental or such subsidiaries are among many companies in these environmental proceedings and have to date been successful in sharing response costs with other financially sound companies. Further, some lawsuits, claims and legal proceedings involve acquired or disposed assets with respect to which a third party or Occidental retains liability or indemnifies the other party for conditions that existed prior to the transaction.

In accordance with applicable accounting guidance, Occidental accrues reserves for outstanding lawsuits, claims and proceedings when it is probable that a liability has ~~various defined contribution~~been incurred and ~~defined benefit plans~~the liability can be reasonably estimated. Reserves for ~~its salaried, domestic union~~matters, other than for environmental remediation and ~~non-union hourly~~the arbitration award disclosed below, that satisfy this criteria as of March 31, 2022 and ~~certain foreign national employees.~~2021, were not material to Occidental’s Consolidated Condensed Balance Sheets.

In 2016, Occidental received payments from the Republic of Ecuador of approximately $1.0 billion pursuant to a November 2015 arbitration award for Ecuador’s 2006 expropriation of Occidental’s Participation Contract for Block 15. The awarded amount represented a recovery of 60% of the value of Block 15. In 2017, Andes filed a demand for arbitration, claiming it is entitled to a 40% share of the judgment amount obtained by Occidental. Occidental contends that Andes is not entitled to any of the amounts paid under the 2015 arbitration award because Occidental’s recovery was limited to Occidental’s own 60% economic interest in the block. On March 26, 2021, the arbitration tribunal issued an award in favor of Andes and against OEPC in the amount of $391 million plus interest. In June 2021, OEPC filed a motion to vacate the award due to concerns regarding the validity of the award. In addition, OEPC has made a demand for significant additional claims not addressed by the arbitration tribunal that OEPC has against Andes relating to Andes' 40% share of costs, liabilities, losses and expenses due under the farmout agreement and joint operating agreement to which Andes and OEPC are parties. In December 2021, the U.S. District Court Southern District of New York confirmed the arbitration award, plus prejudgment interest, in the aggregate amount of $558 million. OEPC has appealed the judgement.

If unfavorable outcomes of these matters were to occur, future results of operations or cash flows for any particular quarterly or annual period could be materially adversely affected. Occidental’s estimates are based on information known about the legal matters and its experience in contesting, litigating and settling similar matters. Occidental ~~also provides medical~~reassesses the probability and estimability of contingent losses as new information becomes available.

TAX MATTERS

During the course of its operations, Occidental is subject to audit by tax authorities for varying periods in various federal, state, local and international tax jurisdictions. Tax years through 2019 for U.S. federal income tax purposes have been audited by the IRS pursuant to its Compliance Assurance Program and subsequent taxable years are currently under review. Tax years through 2014 have been audited for state income tax purposes. Significant audit matters in international jurisdictions have been resolved through 2010. During the course of tax audits, disputes have arisen and other ~~benefits~~disputes may arise as to facts and matters of law.

For Anadarko, its taxable years through 2014 and tax year 2016 for ~~certain active, retired and disabled employees and their eligible dependents.~~U.S. federal tax purposes have been audited by the IRS. Tax years through 2008 have been audited for state income tax purposes. There is one outstanding significant tax

2118

~~The following table contains a summary of Occidental's retirement and postretirement benefits plan costs for the three and nine months ended September 30, 2021 and 2020:~~

Three months ended September 30, Nine months ended September 30,
millions 2021 2020 2021 2020
Net gains related to pension settlement and curtailment (a)
1 $ 8 11 $ 142
Net periodic benefit costs related to pension special termination benefits (a)
— $ 3 — $ 21
Net periodic benefit costs (gains) related to pension benefits excluding settlement, curtailment and special termination benefits (4) $ (2) (12) $ 22
Net periodic benefit costs related to postretirement benefits 23 $ 18 61 $ 56
Contributions to qualified and supplemental pension plans 5 $ 30 157 $ 132

~~(a)~~ ~~Net gains related to pension settlement and curtailment and costs of special termination benefits for the three and nine months ended September 30, 2021 and 2020 primarily~~matter in an international jurisdiction related to a ~~separation program~~discontinued operation. As stated above, during the course of tax audits, disputes have arisen and other disputes may arise as to facts and matters of law.

Other than the ~~freezing~~matter discussed below, Occidental believes that the resolution of these outstanding tax matters would not have a material adverse effect on its consolidated financial position or results of operations.

Anadarko received an $881 million tentative refund in 2016 related to its $5.2 billion Tronox Adversary Proceeding settlement payment in 2015. In September 2018, Anadarko received a statutory notice of deficiency from the IRS disallowing the net operating loss carryback and rejecting Anadarko’s refund claim. As a result, Anadarko filed a petition with the U.S. Tax Court to dispute the disallowances in November 2018. The case was in the IRS appeals process until the second quarter of 2020, however it has since been returned to the U.S. Tax Court, where a trial date has been set for July 2022 and Occidental expects to continue pursuing resolution.

In accordance with ASC 740’s guidance on the accounting for uncertain tax positions, Occidental has recorded no tax benefit ~~accruals~~on the tentative cash tax refund of $881 million. As a result, should Occidental not ultimately prevail on the issue, there would be no additional tax expense recorded relative to this position for ~~Anadarko employees.~~financial statement purposes other than future interest. However, in that event, Occidental would be required to repay approximately $1.1 billion in federal taxes, $28 million in state taxes and accrued interest of $329 million. A liability for this amount plus interest is included in deferred credits and other liabilities-other.

~~The increase~~INDEMNITIES TO THIRD PARTIES

Occidental, its subsidiaries, or both, have indemnified various parties against specified liabilities those parties might incur in ~~2021 contributions was primarily due~~the future in connection with purchases and other transactions that they have entered into with Occidental. These indemnities usually are contingent upon the other party incurring liabilities that reach specified thresholds. As of March 31, 2022, Occidental is not aware of circumstances that it believes would reasonably be expected to ~~distributions related~~lead to ~~the separation program and freezing~~indemnity claims that would result in payments materially in excess of ~~benefit accruals described above and for contributions which were previously deferred in 2020 under the Coronavirus Aid, Relief, and Economic Security Act.~~reserves.


NOTE 11 - EARNINGS PER SHARE AND STOCKHOLDERS' EQUITY

The following table presents the calculation of basic and diluted ~~net income (loss)~~EPS attributable to common ~~stockholders per share:~~

Three months ended September 30, Nine months ended September 30,
millions except share and per-share amounts 2021 2020 2021 2020
Net income (loss) from continuing operations $ 830 $ (3,655) $ 1,229 $ (12,384)
Income (loss) from discontinued operations (2) 80 (444) (1,335)
Net income (loss) 828 (3,575) 785 (13,719)
Less: Preferred stock dividends (200) (203) (600) (644)
Net income (loss) attributable to common stockholders $ 628 $ (3,778) $ 185 $ (14,363)
Less: Net income allocated to participating securities (5) — (1) —
Net income (loss), net of participating securities 623 (3,778) 184 (14,363)
Weighted-average number of basic shares 935.4 929.3 934.4 913.9
Basic income (loss) per common share $ 0.67 $ (4.07) $ 0.20 $ (15.72)
Net income (loss), net of participating securities $ 623 $ (3,778) $ 184 $ (14,363)
Weighted-average number of basic shares 935.4 929.3 934.4 913.9
Dilutive securities 22.3 — 19.8 —
Dilutive effect of potentially dilutive securities 957.7 929.3 954.2 913.9
Diluted income (loss) per common share $ 0.65 $ (4.07) $ 0.19 $ (15.72)
stockholders:

~~As of September 30,~~


	Three months ended March 31,
millions except per-share amounts	2022		2021

Net income from continuing operations	$	4,876	$	299
Loss from discontinued operations	—		(445)
Net income (loss)	$	4,876	$	(146)

Less: Preferred stock dividends	(200)		(200)
Net income (loss) attributable to common stock	$	4,676	$	(346)
Less: Net income allocated to participating securities	(34)		—
Net income (loss), net of participating securities	$	4,642	$	(346)
Weighted-average number of basic shares	936.7		933.1

Basic income (loss) per common share	$	4.96	$	(0.37)

Net income (loss), net of participating securities	4,642		(346)

Dilutive securities	997.7		947.9

Diluted income (loss) per common share	$	4.65	$	(0.36)

For the three months ended March 31, 2022, and 2021, warrants and options covering approximately 84 million and 87 million shares of Occidental common stock, respectively, were excluded from the diluted shares as their effect would have been anti-dilutive. ~~As of September 30, 2020, warrants and options covering approximately 200~~In April 2022, Occidental paid $200 million ~~shares of Occidental common~~cash in preferred stock ~~were excluded from the diluted shares as their effect would have been anti-dilutive.~~dividends.

2219


NOTE 12 - SEGMENTS

Occidental conducts its operations through 3 segments: (1) oil and ~~gas~~gas; (2) ~~chemical~~chemical; and (3) midstream and marketing. Income taxes, interest income, interest expense, environmental remediation expenses, Anadarko acquisition-related costs and unallocated corporate expenses are included under corporate and eliminations. Intersegment sales eliminate upon consolidation and are generally made at prices approximating those that the selling entity would be able to obtain in third-party transactions. The following table presents Occidental’s industry segments:

millions
Oil and gas (a)
Chemical
Midstream and marketing (b)
Corporate and eliminations (c)
Total
Three months ended September 30, 2021
Net sales $ 4,955 $ 1,396 $ 702 $ (261) $ 6,792
Income (loss) from continuing operations before income taxes $ 1,467 $ 407 $ 20 $ (677) $ 1,217
Income tax expense — — — (387) (387)
Income (loss) from continuing operations $ 1,467 $ 407 $ 20 $ (1,064) $ 830
Three months ended September 30, 2020
Net sales $ 2,989 $ 937 $ 364 $ (182) $ 4,108
Income (loss) from continuing operations before income taxes $ (1,072) $ 178 $ (2,791) $ (373) $ (4,058)
Income tax benefit — — — 403 403
Income (loss) from continuing operations $ (1,072) $ 178 $ (2,791) $ 30 $ (3,655)
millions
Oil and gas (a)
Chemical
Midstream and marketing (b)
Corporate and eliminations (c)
Total
Nine months ended September 30, 2021
Net sales $ 13,124 $ 3,671 $ 2,006 $ (758) $ 18,043
Income (loss) from continuing operations before income taxes $ 2,036 $ 970 $ 272 $ (1,603) $ 1,675
Income tax expense — — — (446) (446)
Income (loss) from continuing operations $ 2,036 $ 970 $ 272 $ (2,049) $ 1,229
Nine months ended September 30, 2020
Net sales $ 10,089 $ 2,745 $ 1,358 $ (543) $ 13,649
Income (loss) from continuing operations before income taxes $ (8,570) $ 472 $ (4,085) $ (2,097) $ (14,280)
Income tax benefit — — — 1,896 1,896
Income (loss) from continuing operations $ (8,570) $ 472 $ (4,085) $ (201) $ (12,384)


millions	Oil and gas (a)		Chemical		Midstream and marketing (b)		Corporate and eliminations (c)		Total
Three months ended March 31, 2022
Net sales	$	6,075	$	1,684	$	882	$	(292)	$	8,349
Income (loss) from continuing operations before income taxes	$	2,898	$	671	$	(50)	$	(436)	$	3,083
Income tax benefit	—		—		—		1,793		1,793
Income (loss) from continuing operations	$	2,898	$	671	$	(50)	$	1,357	$	4,876

Three months ended March 31, 2021
Net sales	$	3,664	$	1,088	$	807	$	(266)	$	5,293
Income (loss) from continuing operations before income taxes	$	(62)	$	251	$	282	$	(156)	$	315
Income tax expense	—		—		—		(16)		(16)
Income (loss) from continuing operations	$	(62)	$	251	$	282	$	(172)	$	299

(a) The ~~three months ended September 30, 2021~~2022 amount included ~~$97~~$125 million of ~~net oil, gas, and CO~~2 ~~derivative losses and $17 million in asset impairments. The nine months ended September 30, 2021 included $277 million of net oil, gas, and CO~~2 derivative losses and $173 million of asset impairments. The three and nine months ended September 30, 2020 included $795 million in net asset sale losses. Additionally, the nine months ended September 30, 2020 included $7.0 billiongains related to ~~asset impairments and other charges partially offset by~~the sale of certain non-strategic assets in the Permian Basin. The 2021 amount included a ~~$1.1 billion gain on~~$135 million impairment charge related to non-core domestic undeveloped leases that either expired in the ~~oil collars and call options.~~first quarter of 2021 or were set to expire in the near-term, where Occidental had no plans to pursue exploration activities.

(b) The ~~three months ended September 30, 2021~~2022 amount included ~~$11~~$198 million of net derivative mark-to-market losses. ~~The nine months ended September 30,~~In March 2021, ~~included $124 million of gains on sales, primarily from the sale of~~Occidental sold 11.5 million limited partner units ~~in WES, and $176 million in derivative mark-to-market losses. The three and nine months ended September 30, 2020 included $2.7 billion of the other-than-temporary impairment~~ of WES ~~an equity investment. Additionally, the nine months ended September 30, 2020 included $1.4 billion~~for proceeds of ~~impairments related to the write-off~~approximately $200 million, resulting in a gain of ~~goodwill and a loss from an equity investment related to WES's write-off of its goodwill.~~$102 million.

(c) The ~~three months ended September 30, 2021~~2022 amount included ~~$88~~a non-cash tax benefit of $2.6 billion in connection with Occidental's legal entity reorganization, which is further discussed in the Income Taxes section of the Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part I, Item 2 of this Form 10-Q as well as a $135 million ~~of losses on debt tenders, $26 million of net derivative mark-to-market losses~~gain on interest rate swaps and ~~$29~~$65 million ofin Anadarko acquisition-related costs. The ~~nine months ended September 30,~~ 2021 amount included ~~$88~~a $399 million ~~of losses on debt tenders, $150 million net derivative mark-to-market gains~~gain on interest rate swaps and ~~$122~~$41 million ofin Anadarko acquisition-related costs. ~~The nine months ended September 30, 2020 included $302 million of Anadarko acquisition-related costs and a $577 million loss on interest rate swaps.~~

2320

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations ~~(MD&A)~~

The following discussion should be read together with the ~~consolidated condensed financial statements~~Consolidated Condensed Financial Statements and the notes to ~~consolidated condensed financial statements,~~Consolidated Condensed Financial Statements, which are included in this report in Part I, Item 1; the information set forth in Risk Factors under Part II, Item 1A; the ~~consolidated financial statements~~Consolidated Financial Statements and the notes to the ~~consolidated financial statements,~~Consolidated Financial Statements, which are included in Part II, Item 8 of Occidental's ~~2020~~Annual Report on Form ~~10-K;~~10-K for the year ended December 31, 2021; and the information set forth in Risk Factors under Part I, Item 1A of the ~~2020~~2021 Form 10-K.


INDEX			PAGE
Cautionary Statement Regarding Forward-Looking Statements			2522
Current Business Outlook			2623
Consolidated Results of Operations			2724
Segment Results of Operations and Items Affecting Comparability			2826
Income Taxes			3231
Liquidity and Capital Resources			31
Environmental Liabilities and Expenditures			32
Lawsuits, Claims, Commitments and Contingencies			33
~~Environmental Liabilities and Expenditures~~			3332

2421


CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Portions of this report contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, and they include, but are not limited to: any projections of earnings, revenue or other financial items or future financial position or sources of financing; any statements of the plans, strategies and objectives of management for future operations or business strategy; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. Words such as “estimate,” “project,” “predict,” “will,” “would,” “should,” “could,” “may,” “might,” “anticipate,” “plan,” “intend,” “believe,” “expect,” “aim,” “goal,” “target,” “objective,” "commit," "advance," “likely” or similar expressions that convey the prospective nature of events or outcomes are generally indicative of forward-looking statements. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this report. Unless legally required, Occidental does not undertake any obligation to update, modify or withdraw any forward-looking statements as a result of new information, future events or otherwise.

Although Occidental believes that the expectations reflected in any of its forward-looking statements are reasonable, actual results may differ from anticipated results, sometimes materially. In addition, historical, current and forward-looking sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve and assumptions that are subject to change in the future. Factors that could cause results to differ from those projected or assumed in any forward-looking statement include, but are not limited to: the scope and duration of the COVID-19 pandemic and ongoing actions taken by governmental authorities and other third parties in response to the pandemic; Occidental’s indebtedness and other payment obligations, including the need to generate sufficient cash flows to fund operations; Occidental’s ability to successfully monetize select assets and repay or refinance debt and the impact of changes in Occidental’s credit ratings; assumptions about energy markets; global and local commodity and commodity-futures pricing fluctuations; supply and demand considerations for, and the prices of, Occidental’s products and services; actions by ~~the Organization of the Petroleum Exporting Countries (OPEC)~~OPEC and non-OPEC oil producing countries; results from operations and competitive conditions; future impairments of our proved and unproved oil and gas properties or equity investments, or write-downs of productive assets, causing charges to earnings; unexpected changes in costs; availability of capital resources, levels of capital expenditures and contractual obligations; the regulatory approval environment, including Occidental's ability to timely obtain or maintain permits or other governmental approvals, including those necessary for drilling and/or development projects; Occidental's ability to successfully complete, or any material delay of, field developments, expansion projects, capital expenditures, efficiency projects, acquisitions or dispositions; risks associated with acquisitions, mergers and joint ventures, such as difficulties integrating businesses, uncertainty associated with financial projections, projected synergies, restructuring, increased costs and adverse tax consequences; uncertainties and liabilities associated with acquired and divested properties and businesses; uncertainties about the estimated quantities of oil, NGL and natural gas reserves; lower-than-expected production from development projects or acquisitions; Occidental’s ability to realize the anticipated benefits from prior or future streamlining actions to reduce fixed costs, simplify or improve processes and improve Occidental’s competitiveness; exploration, drilling and other operational risks; disruptions to, capacity constraints in, or other limitations on the pipeline systems that deliver Occidental’s oil and natural gas and other processing and transportation considerations; general economic conditions, including slowdowns, domestically or internationally, and volatility in the securities, capital or credit markets; inflation; ~~uncertainty from~~governmental actions, war (including the ~~expected discontinuance of LIBOR and transition to any other interest rate benchmark; governmental actions~~Russia-Ukraine war) and political conditions and events; legislative or regulatory changes, including changes relating to hydraulic fracturing or other oil and natural gas operations, retroactive royalty or production tax regimes, ~~deepwater~~deep-water and onshore drilling and permitting regulations and environmental regulation (including regulations related to climate change); environmental risks and liability under federal, regional, state, provincial, tribal, local and international environmental laws and regulations (including remedial actions); Occidental's ability to recognize intended benefits from its business strategies and initiatives, such as ~~Oxy Low Carbon Ventures~~Occidental's low carbon ventures businesses or announced greenhouse gas emissions reduction ~~targets;~~targets or net-zero goals; potential liability resulting from pending or future litigation; disruption or interruption of production or manufacturing or facility damage due to accidents, chemical releases, labor unrest, weather, power outages, natural disasters, cyber-attacks or insurgent activity; the creditworthiness and performance of Occidental's counterparties, including financial institutions, operating partners and other parties; failure of risk management; Occidental’s ability to retain and hire key personnel; supply, transportation, and labor constraints; reorganization or restructuring of Occidental’s operations; changes in state, federal or international tax rates; and actions by third parties that are beyond Occidental's control.

Additional information concerning these and other factors that may cause Occidental’s results of operations and financial position to differ from expectations can be found in Occidental’s other filings with the ~~U.S. Securities and Exchange Commission,~~SEC, including Occidental’s ~~2020~~2021 Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

2522


CURRENT BUSINESS OUTLOOK

Occidental’s operations, financial condition, cash flows and levels of expenditures are highly dependent on oil prices and, to a lesser extent, NGL and natural gas prices, the Midland-to-Gulf-Coast oil spreads and the prices it receives for its chemical products. ~~Oil prices have increased significantly in 2021. Occidental's~~The average ~~worldwide realized price~~WTI $/bbl for the three months ended ~~September 30, 2021~~March 31, 2022 was ~~$68.74,~~$94.29, compared to ~~$38.51 in~~$57.84 for the ~~same period~~three months ended March 31, 2021. The return of ~~2020. While the worldwide economy continues~~oil demand to ~~be impacted by~~its pre-pandemic levels coupled with the ongoing ~~effects~~global impact of the ~~COVID-19 pandemic~~Russia-Ukraine war and ~~emergence~~whether the oil industry will be able to sustain a continued supply response have resulted in a significant increase in benchmark oil prices. It is expected that the price of oil will be volatile for the foreseeable future given the current geopolitical risks and ~~spread of new variants of~~ the ~~virus,~~effects on oil demand ~~for Occidental's products has increased with the lifting of certain restrictions, including certain~~resulting from COVID-19-related travel restrictions and stay-at-home ~~orders. Current oil prices could be negatively impacted by a resurgence of COVID-19 cases, slow vaccine distribution~~orders in certain ~~large~~ international ~~economies,~~countries.

Occidental does not operate or own assets in either Russia or Ukraine, but continues to monitor any impacts resulting from the ~~recurrence or tightening of travel restrictions~~Russia-Ukraine war on the global markets for its commodities.

2022 PRIORITIES

Occidental’s capital and stay-at-home orders. We expect that oil prices in the near-term will continue to be influenced by the duration and severity of the COVID-19 pandemic and its resulting impact on oil and gas supply and demand.

~~Occidental's~~ operational priorities for ~~2021 continue to be~~2022 are intended to maximize cash flow by sustaining 2021 production ~~in-line with its 2020 fourth quarter rate with an annualized $2.9 billion capital budget and by maintaining a majority of the cost savings achieved in 2020. Occidental intends to use excess~~levels. Occidental's cash flow ~~generated during 2021, coupled with divestiture proceeds,~~priorities remain to continue to ~~strengthen~~reduce financial leverage while concurrently instituting a shareholder return framework and to maintain a robust liquidity position. In the current commodity price environment, Occidental expects to fund its ~~balance sheet by reducing its debt~~operational and ~~other financial obligations. Year~~capital requirements, return capital to ~~date,~~shareholders in the form of an increased dividend and institute an active share buy back program with cash flows from operations. During the first quarter of 2022, Occidental ~~has repaid a total~~generated cash flow from continuing operations of ~~$4.5~~$3.2 billion and incurred capital expenditures of ~~debt and retired $750 million in interest rate swaps, which are estimated to result in total annual interest and financing cost savings of approximately $170~~$858 million.

LIABILITY MANAGEMENT

In the ~~third~~first quarter of ~~2021,~~2022, Occidental ~~reduced total borrowings at face value~~used cash on hand to reduce debt with maturities ranging from 2022 through 2049 by ~~$4.3 billion, through a combination of cash tenders, scheduled repayments, and early retirements resulting in~~$3.3 billion. Occidental has remaining near-term debt maturities of ~~$728~~approximately $362 million in 2023 and $1.4 billion in 2024. Subsequent to March 31, 2022, but before the date of this filing, Occidental paid off additional debt with maturities ranging from 2024 to 2049 and ~~$465 million in 2023. During the nine months ended September 30, 2021, Occidental has reduced total borrowings at face value by $4.5 billion.~~principal of $263 million.

Occidental’s $2.3 billion Zero ~~Coupon senior notes due 2036 (Zero Coupons)~~Coupons can be put to Occidental in October of each year, in whole or in part, for the then accreted value of the outstanding Zero Coupons. The Zero Coupons can next be put to Occidental in October 2022, which, if put in whole, would require a payment of approximately $1.1 billion at such date. ~~None of the outstanding Zero Coupons were put to Occidental in October 2021.~~ Occidental currently has the ability to meet this obligation and may use available capacity under the ~~revolving credit facility (RCF)~~RCF to satisfy the put should it be exercised.

~~During the third quarter of 2021, Occidental cash settled certain~~The remaining interest rate swaps ~~in advance of their mandatory termination dates~~ with ~~a notional value of $750 million for $815 million. The interest rate swaps remaining with a notional value of $725 million and~~ a fair value of ~~approximately $410~~$372 million, net of collateral, as of ~~September 30, 2021,~~March 31, 2022, have mandatory termination dates in September 2022 and 2023. The interest rate swaps' fair value, and cash required to settle them on their termination dates, will continue to fluctuate with changes in interest rates through the mandatory termination dates. Depending on market conditions, liability management actions or other factors, Occidental may enter into offsetting interest rate swap positions or ~~amend~~settle or ~~settle~~amend certain or all of the currently outstanding interest rate ~~swaps, as appropriate.~~swaps.

As of March 31, 2022, Occidental had approximately $1.9 billion of cash and cash equivalents on hand, and as of the date of this filing, ~~Occidental had $5.0~~$4.0 billion of ~~committed~~ borrowing capacity and no drawn amounts under its RCF, which matures in ~~January 2023.~~June 2025. Additionally, Occidental has up to $400 million of available borrowing capacity ~~subject to monthly redetermination, under~~and no drawn amounts on its receivables securitization facility which matures in November 2022. Occidental intends to use excess cash flow and the net proceeds from the Ghana asset sale to repay additional indebtedness. The closing of the Ghana asset sale completed Occidental's large-scale asset divestiture program.December 2024. Occidental expects its cash on hand and funds available under its RCF to be sufficient to meet its ~~near-term~~ debt maturities, operating expenditures and other obligations for the next 12 months from the date of this filing.

DEBT RATINGS

As of ~~September 30, 2021,~~March 31, 2022, Occidental’s long-term debt was rated ~~Ba2~~Ba1 by Moody’s Investors Service, BBBB+ by Fitch Ratings and BBBB+ by Standard and Poor’s. ~~In the third quarter of 2021, Standard and Poor's upgraded Occidental's credit rating from BB- to BB.~~ Any downgrade in credit ratings could impact Occidental's ability to access capital markets and increase its cost of capital. In addition, given that Occidental’s current debt ratings are non-investment grade, Occidental may be requested, and in some cases be required, to provide collateral in the form of cash, letters of credit, surety bonds or other acceptable support as financial assurance of its performance and payment obligations under certain contractual arrangements such as pipeline transportation contracts, environmental remediation obligations, oil and gas purchase contracts and certain derivative instruments.

As of the date of this filing, Occidental has provided required financial assurances through a combination of cash, letters of credit and surety ~~bonds made available to it on a bilateral basis and~~bonds. Occidental has not issued any letters of credit under the RCF or other committed facilities. For additional information, see Risk Factors in Part I, Item 1A of Occidental’s ~~2020~~2021 Form 10-K.

~~IMPACT OF COVID-19 PANDEMIC TO GLOBAL OPERATIONS~~

Occidental continues to focus on protecting the health and safety of its employees and contractors during the COVID-19 pandemic. Certain workplace restrictions implemented in the initial stages of the pandemic for our offices and work sites for health and safety reasons were lifted in 2021 due to higher vaccination rates and lower infection rates. Other restrictions remain in place. Occidental has not incurred material costs as a result of new protocols and procedures. Occidental continues to monitor national, state and local government directives where it has operations and/or offices. Occidental has not incurred any significant disruptions to its day-to-day operations as a result of any workplace restrictions related to the COVID-19 pandemic to date; however, the extent to which the COVID-19 pandemic could adversely affect Occidental's business, results of operations and financial condition will depend on future developments, which remain uncertain.


CONSOLIDATED RESULTS OF OPERATIONS

Occidental’s operations and cash flows can vary significantly based on changes in oil, NGL and natural gas prices and the prices it receives for its chemical products. Such changes in prices could result in adjustments in capital investment levels and how such capital is allocated, which could impact production volumes. Significant changes have occurred in the macro-economic environment over the previous year, which have led to an increase in commodity prices, chemical product pricing, and correspondingly Occidental's results of operations and cash flows. Occidental's results of operations and cash flows are driven by these macro-economic effects rather than seasonality. In November 2020, the SEC issued a final rule to Regulation S-K which permits the option to discuss material changes to results of operations between the current and immediately preceding quarter. Occidental ~~reported after-tax income~~has elected to discuss its results of operations on a sequential-quarter basis starting with this filing. The implementation of this approach will provide more meaningful and useful information to investors to measure performance from ~~continuing operations~~the immediately preceding quarter. In accordance with this final rule, Occidental is not required to include a comparison of ~~$830 million on net sales of $6.8 billion,~~the current quarter and the same prior-year quarter for ~~the three months ended September 30, 2021,~~future filings.


	Three months ended
millions, except per-share amounts	March 31, 2022		December 31, 2021		March 31, 2021
Net sales	$	8,349	$	7,913	$	5,293
Income from continuing operations	$	4,876	$	1,561	$	299


Income from continuing operations — basic	$	4.96	$	1.44	$	0.11
Income from continuing operations — diluted	$	4.65	$	1.39	$	0.10

Q1 2022 compared to an after-tax loss from continuing operations of $3.7 billion on net sales of $4.1 billion for the same period of 2020. Diluted income from continuing operations per share was $0.65 for the three months ended September 30,Q4 2021 ~~compared to a diluted loss of $4.16 for the same period of 2020.~~

Occidental reported after-tax income from continuing operations of $1.2 billion on net sales of $18.0 billion for the nine months ended September 30, 2021, compared to an after-tax loss from continuing operations of $12.4 billion on net sales of $13.6 billion for the same period of 2020. Diluted income from continuing operations per share was $0.65 for the nine months ended September 30, 2021 compared to a diluted loss of $14.26 for the same period of 2020.

Excluding the impact of asset impairments, gains and losses on sales of assets and equity method investments, gains and losses on derivative mark-to-market adjustments, ~~and~~ acquisition-related costs, and the tax impact due to the legal entity reorganization, the increase in income from continuing operations for the three ~~and nine~~ months ended ~~September 30, 2021,~~March 31, 2022, compared to the ~~same periods in 2020,~~three months ended December 31, 2021, was primarily ~~related~~due to higher crude oil prices, partially offset by lower crude oil sales volumes in the oil and gas segment.

Q1 2022 compared to Q1 2021

Excluding the impact of asset impairments, gains and losses on sales of assets and equity method investments, gains and losses on derivative mark-to-market adjustments, acquisition-related costs, and the tax impact due to the legal entity reorganization, the increase in income from continuing operations for the three months ended March 31, 2022, compared to the three months ended March 31, 2021, was primarily due to higher crude oil, NGL and natural gas prices, ~~higher marketing margins~~lower DD&A rates in the ~~midstream~~oil and ~~marketing~~gas segment, ~~and~~ higher realized prices and margins across most chemical product lines, partially offset by lower crude oil sales ~~volumes, higher depreciation, depletion and amortization (DD&A) rates and higher chemical ethylene and energy costs.~~volumes.

SELECTED STATEMENTS OF OPERATIONS ITEMS


	Three months ended
millions	March 31, 2022		December 31, 2021		March 31, 2021
Net sales	$	8,349	$	7,913	$	5,293
Interest, dividends and other income	$	49	$	24	$	75
Gain on sale of assets, net	$	135	$	73	$	111
Oil and gas operating expenses	$	864	$	843	$	776
Transportation and gathering expense	$	347	$	366	$	329
Chemical and midstream cost of sales	$	818	$	771	$	594
Purchased commodities	$	811	$	675	$	558
Selling, general and administrative expenses	$	196	$	280	$	166
Other operating and non-operating expense	$	299	$	303	$	258
Taxes other than on income	$	335	$	262	$	210
Depreciation, depletion and amortization	$	1,643	$	1,966	$	2,194
Asset impairments and other charges	$	—	$	131	$	135
Anadarko Acquisition-related costs	$	65	$	31	$	41
Exploration expense	$	25	$	107	$	28
Interest and debt expense, net	$	371	$	385	$	395
Gains (losses) on interest rate swaps, net	$	135	$	(28)	$	399
Income from equity investments	$	189	$	168	$	121
Income tax benefit (expense)	$	1,793	$	(469)	$	(16)

Q1 2022 compared to Q4 2021

Net sales increased for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022, compared to the three months ended December 31, 2021, primarily due to higher crude oil prices, partially offset by lower sales volumes in the oil and gas segment.

Depreciation, depletion and amortization expenses decreased for the three months ended March 31, 2022, compared to the three months ended December 31, 2021, primarily as a result of lower production volumes and lower per Boe DD&A rates due to higher reported proved reserves as a result of positive price revisions.

The income tax benefit for the three months ended March 31, 2022, compared to an expense for the three months ended December 31, 2021, resulted primarily from the non-cash tax benefit associated with Occidental's legal entity reorganization. See Income Taxes section for further discussion.

Q1 2022 compared to Q1 2021

Net sales increased for the three months ended March 31, 2022, compared to the same ~~periods~~period in ~~2020,~~2021, primarily ~~as a result of~~due to higher crude oil, NGL and natural gas prices in the oil and gas segment and higher realized prices and sales volumes across most chemical product ~~lines~~lines.

Chemical and ~~higher marketing margins in the~~ midstream ~~and marketing segment, partially offset by lower crude oil~~cost of sales ~~volumes.~~

Gains on sales of assets and equity investments, net for the nine months ended September 30, 2021, was primarily related to a $102 million gain from the sale of limited partner units of WES in the first quarter of 2021. Losses on sales of assets and equity method investments, netincreased for the three ~~and nine~~ months ended September 30, 2020 primarily comprised of $431 million in losses associated with mineral and surface acres located in Wyoming, Colorado and Utah and $356 million in losses related to onshore oil and gas Colombia assets.

~~Transportation and gathering expense decreased for the nine months ended September 30, 2021~~March 31, 2022, compared to the same period in ~~2020,~~2021, primarily ~~as a result of lower domestic oil~~driven by higher raw material costs in the chemical segment and ~~gas production volumes.~~increased power generation costs related to the midstream and marketing segment.

Purchased commodities increased for the three ~~and nine~~ months ended ~~September 30, 2021~~March 31, 2022, compared to the same ~~periods~~period in ~~2020,~~2021, due to higher ~~crude~~ prices on third-party crude purchases related to the midstream and marketing segment.

~~Other operating~~Depreciation, depletion and ~~non-operating expense increased~~amortization expenses decreased for the ~~nine~~three months ended ~~September 30,~~March 31, 2022, compared to the same period of 2021, primarily as a result of lower per Boe DD&A rates due to higher reported proved reserves as a result of positive price revisions.

Gains on interest rate swaps, net, decreased for the three months ended March 31, 2022, compared to the same period in ~~2020,~~2021, primarily ~~due to~~as a ~~net gain in~~result of two interest rates swap tranches having settled during the ~~second~~third quarter of ~~2020 related~~2021 and thus no longer marked to ~~the settlement, curtailment, and special termination benefits on pension plans acquired from Anadarko.~~market.

~~Taxes other than on~~The income ~~increased for the nine months ended September 30, 2021 compared to the same period in 2020, primarily due to higher production taxes, which are directly tied to higher commodity prices.~~

~~Asset impairments and other charges~~tax benefit for the three months ended September 30, 2020 included a $2.7 billion other-than-temporary impairment on the WES equity investment. Asset impairments and other charges for the nine months ended September 30, 2020 also included $7.0 billion in pre-tax impairments on oil and gas proved and unproved properties, a $1.2 billion impairment of goodwill attributable to Occidental's ownership in WES and other impairments to both proved and unproved oil and gas properties and lower of cost or net realizable value adjustments for crude inventory.

~~Interest and debt expense, net increased for the nine months ended September 30, 2021~~March 31, 2022, compared to an expense for the same period in ~~2020, as a result of higher effective interest rates and premiums and fees related to debt tenders.~~2021, resulted primarily from the non-cash tax benefit associated with Occidental's legal entity reorganization. See Income Taxes section for further discussion.

Gains (losses) on interest rate swaps and warrants, net increased for the nine months ended September 30, 2021 compared to the same period in 2020, due to changes in the three-month LIBOR, upon which the floating rate of the

2725

~~underlying interest rate swaps are indexed. See~~ ~~Note~~ 5 ~~- Derivatives~~ ~~in the notes to the consolidated condensed financial statements in Part 1, Item 1 of this Form 10-Q for further discussion.~~

Income (loss) from equity investments for the nine months ended September 30, 2020 included a loss of approximately $240 million related to WES' write-off of its goodwill of $440 million in the first quarter of 2020.

Income tax expense increased for the three and nine months ended September 30, 2021 compared to the same periods in 2020, primarily due to higher pre-tax income. See further discussion under the heading ~~IncomeTaxes~~.


SEGMENT RESULTS OF OPERATIONS AND ITEMS AFFECTING COMPARABILITY

SEGMENT RESULTS OF OPERATIONS

Occidental’s principal businesses consist of three reporting segments: oil and gas, chemical and midstream and marketing. The oil and gas segment explores for, develops and produces oil and condensate, NGL and natural gas. The chemical segment mainly manufactures and markets basic chemicals and vinyls. The midstream and marketing segment purchases, markets, gathers, processes, transports and stores oil ~~condensate,~~(which includes condensate), NGL, natural gas, CO2 and power. It also ~~trades around~~optimizes its ~~assets, including~~ transportation and storage capacity, and invests in entities that conduct similar activities such as WES.

The following table sets forth the sales and earnings of each operating segment and corporate items for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022, December 31, 2021 and ~~2020:~~March 31, 2021:

Three months ended September 30, Nine months ended September 30,
millions 2021 2020 2021 2020
Net sales (a)
Oil and gas $ 4,955 $ 2,989 $ 13,124 $ 10,089
Chemical 1,396 937 3,671 2,745
Midstream and marketing 702 364 2,006 1,358
Eliminations (261) (182) (758) (543)
Total 6,792 4,108 18,043 13,649
Income (loss) from continuing operations
Oil and gas (b)
1,467 (1,072) 2,036 (8,570)
Chemical 407 178 970 472
Midstream and marketing (b)
20 (2,791) 272 (4,085)
Total 1,894 (3,685) 3,278 (12,183)
Unallocated corporate items (b)
Interest expense, net (449) (353) (1,229) (1,015)
Income tax benefit (expense) (387) 403 (446) 1,896
Other items, net (228) (20) (374) (1,082)
Income (loss) from continuing operations $ 830 $ (3,655) $ 1,229 $ (12,384)


	Three months ended
millions	March 31, 2022		December 31, 2021		March 31, 2021
Net sales (a)
Oil and gas	$	6,075	$	5,817	$	3,664
Chemical	1,684		1,575		1,088
Midstream and marketing	882		857		807
Eliminations	(292)		(336)		(266)
Total	8,349		7,913		5,293
Income (loss) from continuing operations
Oil and gas (b)	2,898		2,109		(62)
Chemical	671		574		251
Midstream and marketing (b)	(50)		(15)		282
Total	3,519		2,668		471
Unallocated Corporate Items (b)
Interest expense, net	(371)		(385)		(395)
Income tax benefit (expense)	1,793		(469)		(16)
Other items, net	(65)		(253)		239
Income from continuing operations	$	4,876	$	1,561	$	299

(a)Intersegment sales eliminate upon consolidation and are generally made at prices approximating those that the selling entity would be able to obtain in third-party transactions.

(b)Please refer to the Items Affecting Comparability table.

ITEMS AFFECTING COMPARABILITY

The following table sets forth items affecting the comparability of Occidental's earnings that vary widely and unpredictably in nature, timing and amount:

Three months ended September 30, Nine months ended September 30,
millions 2021 2020 2021 2020
Oil and gas
Asset impairments - domestic $ (17) $ (21) $ (173) $ (5,817)
Asset impairments - international — — — (1,195)
Asset sales gains (losses), net - domestic 14 (439) 14 (425)
Asset sales losses, net - international (12) (356) (12) (356)
Rig termination and others - domestic — (23) — (61)
Rig termination and others - international — (4) — (10)
Oil, gas and CO2 derivative gains (losses), net
(97) 136 (277) 1,059
Total oil and gas (112) (707) (448) (6,805)
Midstream and marketing
Asset sales gains (losses) and other, net — (46) 124 (46)
Goodwill and other asset impairment — (2,729) — (4,194)
Derivative gains (losses), net (11) (20) (176) 285
Total midstream and marketing (11) (2,795) (52) (3,955)
Corporate
Anadarko acquisition-related costs (29) (5) (122) (302)
Acquisition-related pension and curtailment gains — — — 114
Interest rate swap gains (losses), net (26) 88 150 (577)
Debt tender premium and related items, net (88) — (88) —
Warrants gains, net — — — 5
Total corporate (143) 83 (60) (760)
Valuation allowance on tax assets — (37) — (37)
State tax rate revaluation — — 55 —
Income taxes 60 386 123 1,607
Loss from continuing operations $ (206) $ (3,070) $ (382) $ (9,950)
Discontinued operations, net of taxes (a)
$ (2) $ 80 $ (444) $ (1,335)
Total $ (208) $ (2,990) $ (826) $ (11,285)


	Three months ended
millions	March 31, 2022		December 31, 2021		March 31, 2021
Oil and gas
Asset impairments - domestic	$	—	$	(109)	$	(135)
Asset sales gains, net - domestic	125		13		—
Asset sales gains, net - foreign	—		55		—
Oil, gas and CO2 derivative losses, net	—		(3)		(40)
Total oil and gas	125		(44)		(175)

Midstream and marketing
Asset sales gains, net	—		—		102
Asset impairments	—		(21)		—
Derivative gains (losses), net	(198)		(76)		15
Total midstream and marketing	(198)		(97)		117

Corporate
Anadarko acquisition-related costs	(65)		(31)		(41)
Interest rate swap gains (losses), net	135		(28)		399

Early debt extinguishment expenses	(18)		(30)		—
Total corporate	52		(89)		358

Income tax impact of legal entity reorganization	2,594		—		—
State tax revaluation	(29)		88		—
Income taxes	5		55		(65)
Income (loss) from continuing operations	2,549		(87)		235

Discontinued operations, net of taxes (a)	—		(24)		(445)
Total	$	2,549	$	(111)	$	(210)

(a) Included in discontinued operations, net of taxes ~~are~~for the first quarter and fourth quarters of 2021 were the results of ~~Occidental's~~ Ghana ~~assets~~ and a ~~$403 million~~ loss contingency ~~which was recorded in the first quarter of 2021~~ associated with Occidental's former operations in ~~Ecuador;~~Ecuador, see Note 8 10 - Lawsuits, Claims, Commitments and ~~Contingencies~~Contingencies.

~~in the notes to consolidated condensed financial statements in Part I, Item 1 of this Form 10-Q.~~

2927

OIL AND GAS SEGMENT

The following table sets forth the average sales volumes per day for oil and NGL in Mbbl and for natural gas in MMcf:


	Three months ended
	March 31, 2022	December 31, 2021	March 31, 2021
Sales Volumes per Day
Oil (Mbbl)
United States	483	506	488
International	97	124	114
NGL (Mbbl)
United States	210	225	200
International	23	38	26
Natural Gas (MMcf)
United States	1,219	1,323	1,294
International	347	475	414
Total Continuing Operations Volumes (Mboe) (a)	1,074	1,193	1,113
Operations Exited or Exiting (b)	—	—	28
Total Sales Volumes (Mboe) (a)	1,074	1,193	1,141

(a) Natural gas volumes have been converted to Boe based on energy content of six Mcf of gas to one barrel of oil. Barrels of oil equivalent does not necessarily result in price equivalency.

(b) Operations exited or exiting consisted of Ghana.

The following table presents information about Occidental's average realized prices and index prices:


	Three months ended
	March 31, 2022			December 31, 2021			March 31, 2021
Average Realized Prices
Oil ($/Bbl)
United States	$	93.23		$	75.78		$	56.18
International	$	85.42		$	73.79		$	53.39
Total Worldwide	$	91.91		$	75.39		$	55.65
NGL ($/Bbl)
United States	$	40.60		$	37.43		$	23.62
International	$	30.44		$	30.95		$	22.11
Total Worldwide	$	39.61		$	36.52		$	23.44
Natural Gas ($/Mcf)
United States	$	4.17		$	4.64		$	2.56
International	$	1.85		$	1.70		$	1.70
Total Worldwide	$	3.66		$	3.86		$	2.36

Average Index Prices
WTI oil ($/Bbl)	$	94.29		$	77.19		$	57.84
Brent oil ($/Bbl)	$	97.36		$	79.76		$	61.10
NYMEX gas ($/Mcf)	$	4.16		$	5.27		$	2.72

Average Realized Prices as Percentage of Average Index Prices
Worldwide oil as a percentage of average WTI	97		%	98		%	96		%
Worldwide oil as a percentage of average Brent	94		%	95		%	91		%
Worldwide NGL as a percentage of average WTI	42		%	47		%	41		%
Domestic natural gas as a percentage of average NYMEX	100		%	88		%	94		%

Q1 2022 compared to Q4 2021

Oil and gas segment ~~pre-tax~~ income was ~~$1.5 billion and $2.0~~$2.9 billion for the three ~~and nine~~ months ended ~~September 30, 2021, respectively,~~March 31, 2022, compared with segment ~~pre-tax losses~~income of ~~$1.1 billion and $8.6~~$2.1 billion for the ~~same periods in 2020, respectively.~~three months ended December 31, 2021. Excluding the impact of asset impairments and other charges and oil, gas and CO2 derivative gains (losses), oil and gas segment results for the three ~~and nine~~ months ended ~~September 30, 2021,~~March 31, 2022, compared to the ~~same periods in 2020,~~three months ended December 31, 2021, reflected higher ~~commodity~~oil prices and lower DD&A rates, partially offset by lower ~~crude oil~~ sales ~~volumes and higher DD&A rates.~~volumes.

As a result of Occidental's mid-year reserve review undertaken in the second quarter of 2021, DD&A rates for the second half of 2021 were lower compared to the first half of 2021 due to increased proved reserves primarily related to positive price revisions. Proved oil, NGL and natural gas reserves were estimated during this mid-year review using the unweighted arithmetic average of the first-day-of-the-month price for each month for the twelve months ended June 30, 2021, unless prices were defined by contractual arrangements. DD&A rates for the three and nine months ended September 30, 2020 were lower compared to the current period as a result of higher reported reserves volumes at year-end 2019, consistent with higher average prices in 2019.

The following table sets forth the average sales volumes per day for oil in thousands of barrels (Mbbl), for NGL in thousands of barrels equivalent (Mboe) and for natural gas in millions of cubic feet (MMcf):

Three months ended September 30, Nine months ended September 30,
2021 2020 2021 2020
Sales Volumes per Day
Oil (Mbbl)
United States 483 508 496 591
International 121 108 118 125
NGL (Mboe)
United States 219 212 214 224
International 36 36 33 37
Natural Gas (MMcf)
United States 1,295 1,439 1,303 1,609
International 496 527 471 544
Total Continuing Operations Volumes
(Mboe) (a)
1,158 1,192 1,157 1,336
Operations Exited or Exiting (a)
36 64 24 62
Total Sales Volumes (Mboe) (b)
1,194 1,256 1,181 1,398

~~(a)~~ ~~Operations exited or exiting included Colombia and Ghana.~~

~~(b)~~ Natural gas volumes have been converted to barrels of oil equivalent (Boe) based on energy content of six Mcf of gas to one barrel of oil. Barrels of oil equivalent does not necessarily result in price equivalency.

Average daily sales volumes from continuing operations were 1,158 Mboe per day (Mboe/d) for the three months ended September 30, 2021, compared to 1,192 Mboe/d for the same period in 2020. Average daily sales volumes from continuing operations for the first nine months of 2021 and 2020 were 1,157 Mboe/d and 1,336 Mboe/d, respectively. The decrease in average daily sales volumes from continuing operations of ~~34 Mboe/d and 179~~119 Mboe/d for the three ~~and nine~~ months ended ~~September 30, 2021, respectively,~~March 31, 2022, compared to the ~~same periods in 2020,~~three months ended December 31, 2021, primarily reflected the impact of the first full shut down of the Al Hosn Gas Plant to allow for tie in work for the expansion project, scheduled maintenance in Algeria, declines in ~~the Permian and DJ Basins~~domestic volumes as a result of reduced capital ~~investment.~~investment in the DJ Basin and Permian Basin and the impact of rising prices that reduce Occidental's share of production under production sharing contracts.

Q1 2022 compared to Q1 2021

Oil and gas segment income was $2.9 billion for the three months ended March 31, 2022, compared with segment losses of $62 million for the three months ended March 31, 2021. Excluding the impact of asset impairments and other charges and oil, gas and CO2 derivative gains (losses), oil and gas segment results for the three months ended March 31, 2022, compared to the three months ended March 31, 2021, reflected higher commodity prices and lower DD&A rates, partially offset by lower sales volumes and higher lease operating and transportation costs.

The decrease in average daily sales volumes from continuing operations of 67 Mboe/d for the three months ended March 31, 2022, compared to the same period in 2021, primarily reflected the impact of the first full shutdown of the Al Hosn Gas Plant to allow for tie in work for the expansion project, scheduled maintenance in Algeria and the impact of rising prices that reduce Occidental's share of production under production sharing contracts.

3029

~~The following table presents information about Occidental's average realized prices and index prices:~~

Three months ended September 30, Nine months ended September 30,
2021 2020 2021 2020
Average Realized Prices
Oil ($/Bbl)
United States $ 68.76 $ 38.22 $ 63.16 $ 35.27
International $ 68.65 $ 39.86 $ 61.98 $ 41.49
Total Worldwide $ 68.74 $ 38.51 $ 62.94 $ 36.36
NGL ($/Boe)
United States $ 35.20 $ 14.62 $ 28.20 $ 11.19
International $ 26.85 $ 16.24 $ 24.32 $ 15.79
Total Worldwide $ 34.01 $ 14.85 $ 27.68 $ 11.84
Natural Gas ($/Mcf)
United States $ 3.35 $ 1.18 $ 2.84 $ 1.09
International $ 1.68 $ 1.64 $ 1.68 $ 1.68
Total Worldwide $ 2.89 $ 1.31 $ 2.53 $ 1.24
Average Index Prices
WTI oil ($/Bbl) $ 70.56 $ 40.93 $ 64.82 $ 38.32
Brent oil ($/Bbl) $ 73.23 $ 43.37 $ 67.78 $ 42.53
NYMEX gas ($/Mcf) $ 3.71 $ 1.94 $ 3.06 $ 1.92
Average Realized Prices as Percentage of Average Index Prices
Worldwide oil as a percentage of average WTI 97 % 94 % 97 % 95 %
Worldwide oil as a percentage of average Brent 94 % 89 % 93 % 85 %
Worldwide NGL as a percentage of average WTI 48 % 36 % 43 % 31 %
Domestic natural gas as a percentage of average NYMEX 90 % 61 % 93 % 57 %

CHEMICAL SEGMENT

Q1 2022 compared to Q4 2021

Chemical segment ~~pre-tax~~ earnings for the three ~~and nine~~ months ended ~~September 30, 2021~~March 31, 2022 were ~~$407~~$671 million, ~~and $970 million, respectively,~~ compared to ~~$178 million and $472~~$574 million for the ~~same periods in 2020, respectively. Compared to the same periods in 2020, the~~ three ~~and nine~~ months ended ~~September 30, 2021 reflected improved~~December 31, 2021. The improvement in results was primarily driven by higher realized ~~prices~~pricing and margins across most product lines ~~partially offset by~~along with continued strong product demand.

Q1 2022 compared to Q1 2021

Chemical segment earnings for the three months ended March 31, 2022 were $671 million, compared to $251 million for the three months ended March 31, 2021. The improvement in results was primarily due to significantly higher realized pricing, volumes, and margins across most product lines. In February 2021, winter storm Uri interrupted production and sales across multiple facilities and increased costs of raw ~~material costs, primarily ethylene and energy.~~materials.

MIDSTREAM AND MARKETING SEGMENT

Q1 2022 compared to Q4 2021

Midstream and marketing segment ~~pre-tax earnings~~losses for the three ~~and nine~~ months ended ~~September 30, 2021~~March 31, 2022 were ~~$20~~$50 million, ~~and $272 million, respectively,~~ compared ~~to pre-tax~~with losses of ~~$2.8 billion and $4.1 billion~~$15 million for the ~~same periods in 2020, respectively.~~three months ended December 31, 2021. Excluding the impact of derivative losses and impairment charges, ~~net~~segment results improved as crude pricing continued to rise in the first quarter of 2022.

Q1 2022 compared to Q1 2021

Midstream and marketing segment losses for the three months ended March 31, 2022 were $50 million, compared with earnings of $282 million for the three months ended 2021. Excluding the impact of derivative ~~mark-to-market~~accounting and gains ~~and losses and asset sale gains and losses,~~on sales of assets, the ~~increase~~decrease in midstream and marketing segment results ~~for~~was primarily driven by the ~~nine months ended September 30, 2021,~~timing impact of crude export sales when compared to the ~~same period in 2020, was attributed to the rising crude oil price environment and its impact on export sales and higher realized sulfur prices at Al Hosn Gas.~~

current period.

3130


INCOME TAXES

The following table sets forth the calculation of the worldwide effective tax rate for income from continuing operations:

Three months ended September 30, Nine months ended September 30,
millions, except percentages 2021 2020 2021 2020
Income (loss) from continuing operations before income taxes $ 1,217 $ (4,058) $ 1,675 $ (14,280)
Income tax benefit (expense)
Domestic - federal and state (151) 511 (41) 2,178
International (236) (108) (405) (282)
Total income tax benefit (expense) (387) 403 (446) 1,896
Income (loss) from continuing operations $ 830 $ (3,655) $ 1,229 $ (12,384)
Worldwide effective tax rate 32% 10% 27% 13%


	Three months ended
millions, except percentages	March 31, 2022			December 31, 2021			March 31, 2021
Income from continuing operations before income taxes	$	3,083		$	2,030		$	315
Income tax benefit (expense)
Domestic - federal and state	2,037			(206)			102
International	(244)			(263)			(118)
Total income tax benefit (expense)	1,793			(469)			(16)
Income from continuing operations	$	4,876		$	1,561		$	299
Worldwide effective tax rate	(58)		%	23		%	5		%

Occidental estimates its annual effective income tax rate in recording its quarterly provision for income taxes in the various jurisdictions in which ~~Occidental~~the Company operates, adjusted for certain discrete items. Each quarter, Occidental updates these rates and records a cumulative adjustment to its income taxes by applying the rates to the pre-tax income excluding certain discrete items. Occidental’s quarterly estimate of its effective tax rates can vary significantly based on various forecasted items, including future commodity prices, capital expenditures, expenses for which tax benefits are not recognized and the geographic mix of pre-tax income and losses. The difference between the ~~32% and 27%~~negative 58% effective tax ~~rates~~rate for income from continuing operations for the three ~~and nine~~ months ended ~~September 30, 2021,~~March 31, 2022, and the 21% U.S. federal statutory tax rate iswas primarily driven by ~~the jurisdictional mix of income. U.S. income is taxed at~~ a ~~U.S. federal statutory rate of 21%, while international income is subject to~~non-cash tax ~~at statutory rates as high as 55%. In addition, the effective tax rate was impacted by a state margin tax rate reduction and one-time benefits~~benefit associated with Occidental's legal entity reorganization, as further described below, partially offset by higher tax rates in the ~~settlement~~foreign jurisdictions in which Occidental operates.

LEGAL ENTITY REORGANIZATION

To align Occidental’s legal entity structure with the nature of ~~federal~~its business activities after completing the acquisition of Anadarko and ~~state audit matters.~~subsequent large scale post-Acquisition divestiture program, management undertook a legal entity reorganization that was completed in the first quarter of 2022.

As a result of this legal entity reorganization, management made an adjustment to the tax basis in a portion of its operating assets, thus reducing Occidental’s deferred tax liabilities. Accordingly, in the first quarter of 2022, Occidental recorded an estimated non-cash tax benefit of $2.6 billion in connection with this reorganization. The timing of any reduction in Occidental’s future cash taxes as a result of this legal entity reorganization will be dependent on a number of factors, including prevailing commodity prices, capital activity level and production mix. Further refinement of the non-cash tax benefit may be necessary as Occidental finalizes its tax basis calculations, its tax returns and other information.


LIQUIDITY AND CAPITAL RESOURCES

~~At September 30, 2021,~~As of March 31, 2022, Occidental had ~~$2.1~~$1.9 billion in cash and cash ~~equivalents and $220 million in restricted cash and restricted cash equivalents classified as current assets.~~equivalents.

Operating cash flow from continuing operations was ~~$7.0~~$3.2 billion for the ~~nine~~three months ended ~~September 30, 2021,~~March 31, 2022, compared to ~~$2.5 billion~~$788 million for the ~~same period in 2020.~~three months ended March 31, 2021. The increase in operating cash flow from continuing operations was primarily due to higher commodity prices as compared to the same period in ~~2020. This increase was partially offset by an increase in working capital related to receivables, which increased largely as a result of the improvement in prices.~~2021.

Occidental’s net cash used by investing activities from continuing operations was ~~$1.2 billion~~$662 million for the ~~nine~~three months ended ~~September 30, 2021,~~March 31, 2022, compared to ~~$2.4 billion~~$273 million for the ~~same period in 2020.~~three months ended March 31, 2021. Capital expenditures, ~~for the nine months ended September 30, 2021 and 2020 were approximately $1.9 billion for each period,~~ of which substantially all were for the oil and gas ~~segment. For~~segment, were approximately $858 million for the ~~nine~~three months ended ~~September 30,~~March 31, 2022, compared to $579 million for the three months ended March 31, 2021. Additionally, for the three months ended March 31, 2021, $496 million from proceeds from sales of ~~equity investments and other~~ assets, net primarily included the ~~divestitures~~divestiture of ~~non-strategic assets in the Permian Basin and~~ non-operated assets in the DJ Basin ~~and~~as well as the sale of WES units.

Occidental’s net cash used by financing activities from continuing operations was ~~$6.0~~$3.4 billion for the ~~nine~~three months ended ~~September 30, 2021,~~March 31, 2022, compared to ~~approximately $1.6 billion~~$352 million for the ~~same period in 2020.~~three months ended March 31, 2021. Cash used by financing activities for the ~~nine~~three months ended ~~September 30,~~March 31, 2022 reflected the payments of $3.3 billion relating to long-term debt and dividend payments of $216 million on preferred and common stock. See Note 5 - Long-Term Debt in the notes to the Consolidated

Condensed Financial Statements in Part I, Item 1 of this Form 10-Q for additional information regarding debt payments, including payments subsequent to March 31, 2022. Cash used by financing activities for the three months ended March 31, 2021 reflected the dividend payments of ~~$630~~$211 million on preferred and common stock and payments on current maturities of long-term debt ~~repayments~~ of ~~$4.6 billion and $815 million paid in advance of the mandatory termination dates of interest rate swaps during the third quarter of 2021.~~$174 million.

As of ~~September 30, 2021,~~March 31, 2022, and as of the date of this filing, Occidental was in compliance with all covenants in its financing agreements. Occidental currently expects its cash on hand and funds available under its RCF to be sufficient to meet its near-term debt maturities, operating expenditures and other obligations for the next 12 months from the date of this filing.

For information regarding upcoming debt maturities and other near-term obligations see the Current Business Outlook section of the Management’s Discussion and Analysis of Financial Condition and Results of Operations.


~~LAWSUITS, CLAIMS, COMMITMENTS AND CONTINGENCIES~~

Occidental accrues reserves for outstanding lawsuits, claims and proceedings when it is probable that a liability has been incurred and the liability can be reasonably estimated. Occidental has disclosed its reserve balances for environmental remediation matters and its estimated range of reasonably possible additional losses for such matters. See ~~Note 8 - Lawsuits, Claims, Commitments and Contingencies~~ ~~in the notes to the consolidated condensed financial statements in Part I, Item 1 of this Form 10-Q for further information.~~


ENVIRONMENTAL LIABILITIES AND EXPENDITURES

Occidental’s operations are subject to stringent federal, regional, state, provincial, tribal, local and international laws and regulations related to improving or maintaining environmental quality. Occidental’s environmental compliance costs have generally increased over time and are expected to rise in the future. Occidental factors environmental expenditures for its operations as an integral part of its business planning process.

The laws that require or address environmental remediation, including CERCLA and similar federal, regional, state, provincial, tribal, local and international laws, may apply retroactively and regardless of fault, the legality of the original activities or the current ownership or control of sites. Occidental or certain of its subsidiaries participate in or actively monitor a range of remedial activities and government or private proceedings under these laws with respect to alleged past practices at operating, closed and third-party sites. Remedial activities may include one or more of the following: investigation involving sampling, modeling, risk assessment or monitoring; cleanup measures including removal, treatment or disposal; or operation and maintenance of remedial systems. The environmental proceedings seek funding or performance of remediation and, in some cases, compensation for alleged property damage, punitive damages, civil penalties, injunctive relief and government oversight costs.

See Note 9 - ~~Environmental~~Envir onmental Liabilities and Expenditures in the notes to the ~~consolidated condensed financial statements~~Consolidated Condensed Financial Statements in Part I, Item 1 of this Form 10-Q and the Environmental Liabilities and Expenditures section of Management’s Discussion and Analysis of Financial Condition and Results of Operations in the ~~2020~~2021 Form 10-K for additional information regarding Occidental’s environmental liabilities and expenditures.


LAWSUITS, CLAIMS, COMMITMENTS AND CONTINGENCIES

Occidental accrues reserves for outstanding lawsuits, claims and proceedings when it is probable that a liability has been incurred and the liability can be reasonably estimated. Occidental has disclosed its reserve balances for environmental remediation matters and its estimated range of reasonably possible additional losses for such matters. See Note 10 - Lawsuits, Claims, Commitments and Contingencies, in the notes to Consolidated Condensed Financial Statements in Part I, Item 1 of this Form 10-Q for further information.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

~~Except as discussed below, for~~For the ~~nine~~three months ended ~~September 30, 2021,~~March 31, 2022, there were no material changes in the information required to be provided under Item 305 of Regulation S-K included under Item 7A, Quantitative and Qualitative Disclosures About Market Risk in the ~~2020~~2021 Form 10-K.

As of September 30, 2021, Occidental had Brent-priced call options which enhanced the upside of three-way collars that expired in 2020, with an underlying volume of 350 thousand Bbl/d. These call options settle or expire ratably throughout the remainder of 2021. Brent prices have increased substantially since December 31, 2020 which has increased the fair value of the liability of these call options. See ~~Note 5 - Derivatives~~ ~~in the notes to the consolidated condensed financial statements in Part I, Item 1 of this Form 10-Q.~~

The following table shows a sensitivity analysis based on both a 5% and 10% change in Brent crude oil prices and their effects on the net derivative liability position of $174 million at September 30, 2021:

millions except percentages
Percent change in commodity prices Net derivative liability Change to fair value from
September 30, 2021 position
+ 5% $ (270) $ (96)
- 5% $ (99) $ 75
+ 10% $ (378) $ (204)
- 10% $ (49) $ 125

As of September 30, 2021, Occidental also had derivative instruments in place to reduce the price risk associated with future gas production of 630 thousand MMbtu/d through the remainder of 2021. NYMEX natural gas prices have increased substantially since December 31, 2020 which has increased the fair value of the liability of these options. See ~~Note 5 - Derivatives~~ ~~in the notes to the consolidated condensed financial statements in Part I, Item 1 of this Form 10-Q.~~

The following table shows a sensitivity analysis based on both a 5% and 10% change in NYMEX natural gas prices and their effects on the net derivative liability position of $90 million at September 30, 2021:

millions except percentages
Percent change in commodity prices Net derivative liability Change to fair value from
September 30, 2021 position
+ 5% $ (101) $ (11)
- 5% $ (79) $ 11
+ 10% $ (112) $ (22)
- 10% $ (68) $ 22

Item 4. Controls and Procedures

Occidental's President and Chief Executive Officer and its Senior Vice President and Chief Financial Officer supervised and participated in Occidental's evaluation of the effectiveness of its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based upon that evaluation, Occidental's President and Chief Executive Officer and ~~its~~ Senior Vice President and Chief Financial Officer concluded that Occidental's disclosure controls and procedures were effective as of ~~September 30, 2021.~~March 31, 2022.

During the three months ended March 31, 2022, Occidental converted its legacy Anadarko's information into Occidental's primary enterprise resource planning system. Certain existing internal controls were modified and new controls were implemented. This conversion affected Occidental's internal control over financial reporting. There has been no change in ~~Occidental's~~Occidental’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the ~~Securities~~ Exchange ~~Act of 1934)~~Act) during the ~~three months ended September 30, 2021,~~first quarter of 2022 that has materially affected, or is reasonably likely to materially affect, ~~Occidental's~~Occidental’s internal control over financial ~~reporting.~~reporting other than the system conversion.

Occidental is converting legacy Anadarko's information into Occidental's primary Enterprise Resource Planning system during the first quarter of 2022. Certain existing internal controls will be modified and new controls will be implemented.

Part II Other Information

Item 1. Legal Proceedings

Occidental has elected to use a $1 million threshold for disclosing certain proceedings arising under federal, state or local environmental laws when a governmental authority is a party. Occidental believes proceedings under this threshold are not material to Occidental's business and financial condition. Applying this threshold, there are no such proceedings to disclose for the quarter ended March 31, 2022. For information regarding other legal proceedings, see Note 8 -10 Lawsuits, Claims, Commitments and Contingencies in the ~~notes~~Notes to ~~the consolidated condensed financial statements~~Consolidated Condensed Financial Statements in Part I, Item 1 of this Form 10-Q.

Item 1A. Risk Factors

There have been no material changes from the risk factors included under Part I, Item 1A of Occidental’s ~~2020~~Annual Report on Form ~~10-K.~~10-K for the year ended December 31, 2021.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Occidental’s share repurchase activities for the three months ended March 31, 2022, were as follows:


Period	Total Number of Shares Purchased	(a)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Value of Shares that May Yet Be Purchased Under the Plans or Programs (millions)
January 1 - 31, 2022	149,072		$	34.95		—
February 1 - 28, 2022	135,996		$	39.35		—
March 1 - 31, 2022	445,678		$	58.37		—
Total 2022	730,746		$	50.05		—	$	3,000	(b)

(a) Represents purchases from the trustee of Occidental's defined contribution savings plan that are not part of publicly announced plans or programs.

(b) Represents the value of shares remaining in Occidental's share repurchase plan. In February 2022, Occidental announced an authorization to repurchase up to $3 billion of Occidental's shares. The program does not obligate Occidental to acquire any specific number of shares and may be discontinued at any time.

Item 6. Exhibits



~~4.1~~			Second Supplemental Indenture to that certain Indenture, dated as of August 18, 2011, by and between Occidental Petroleum Corporation and The Bank of New York Mellon Trust Company, N.A. (filed as Exhibit 4.1 to the Current Report on Form 8-K of Occidental dated July 14, 2021, filed July 15, 2021, File No. 1-9210).

~~4.2~~			Third Supplemental Indenture to that certain Indenture, dated as of August 8, 2019, by and between Occidental Petroleum Corporation and The Bank of New York Mellon Trust Company, N.A. (filed as Exhibit 4.2 to the Current Report on Form 8-K of Occidental dated July 14, 2021, filed July 15, 2021, File No. 1-9210).

31.1*			Certification of CEO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*			Certification of CFO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**			Certifications of CEO and CFO Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS*			Inline XBRL Instance Document.

101.SCH*			Inline XBRL Taxonomy Extension Schema Document.

101.CAL*			Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.LAB*			Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE*			Inline XBRL Taxonomy Extension Presentation Linkbase Document.

101.DEF*			Inline XBRL Taxonomy Extension Definition Linkbase Document.

104*			Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

# Indicates a management contract or compensatory plan or arrangement.

* Filed herewith.

** Furnished herewith.

3533


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 thereunto duly authorized.


			OCCIDENTAL PETROLEUM CORPORATION


~~November 4, 2021~~May 10, 2022			/s/ Christopher O. Champion
			Christopher O. Champion
			Vice President, Chief Accounting Officer and Controller

3634


	Three months ended September 30,				Nine months ended September 30,
millions except share and per-share amounts	2021		2020		2021		2020
Net income (loss) from continuing operations	$	830	$	(3,655)	$	1,229	$	(12,384)
Income (loss) from discontinued operations	(2)		80		(444)		(1,335)
Net income (loss)	828		(3,575)		785		(13,719)

Less: Preferred stock dividends	(200)		(203)		(600)		(644)
Net income (loss) attributable to common stockholders	$	628	$	(3,778)	$	185	$	(14,363)
Less: Net income allocated to participating securities	(5)		—		(1)		—
Net income (loss), net of participating securities	623		(3,778)		184		(14,363)
Weighted-average number of basic shares	935.4		929.3		934.4		913.9

Basic income (loss) per common share	$	0.67	$	(4.07)	$	0.20	$	(15.72)


Net income (loss), net of participating securities	$	623	$	(3,778)	$	184	$	(14,363)

Weighted-average number of basic shares	935.4		929.3		934.4		913.9
Dilutive securities	22.3		—		19.8		—
Dilutive effect of potentially dilutive securities	957.7		929.3		954.2		913.9

Diluted income (loss) per common share	$	0.65	$	(4.07)	$	0.19	$	(15.72)


millions except percentages
Percent change in commodity prices	Net derivative liability			Change to fair value from September 30, 2021 position
+ 5%		$	(270)		$	(96)
- 5%		$	(99)		$	75
+ 10%		$	(378)		$	(204)
- 10%		$	(49)		$	125