UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The unaudited pro forma condensed consolidated financial statements of Occidental Petroleum Corporation (Occidental) have been derived from our historical consolidated financial statements and are being presented to give effect to the spin-off of California Resources Corporation (California Resources) into an independent, publicly traded company. Effective with the filing of the Occidental Petroleum Corporation Form 10-K for the period ending December 31, 2014, California Resources Corporation will be reported as a discontinued operation of Occidental Petroleum Corporation. The unaudited pro forma condensed consolidated balance sheet has been prepared as though the spin-off of California Resources Corporation occurred on September 30, 2014. The unaudited pro forma condensed consolidated income statements have been prepared as though the spin-off of California Resources Corporation occurred on January 1, 2014. The following unaudited pro forma condensed consolidated financial statements should be read in conjunction with our historical financial statements and accompanying notes.
The pro forma adjustments are based on available information and assumptions management believes are factually supportable and for income statement purposes recurring in nature. The pro forma adjustments to reflect the spin-off of California Resources Corporation include:
| |
| • | Special cash distributions of $4.95 billion and $1.15 billion from California Resources Corporation to Occidental Petroleum Corporation in connection with the separation. |
| |
| • | The distribution of at least 80.1% of California Resources Corporation common stock to Occidental shareholders. |
| |
| • | Occidental Petroleum Corporation's remaining investment in California Resources Corporation's common stock. |
| |
| • | Costs incurred in connection with the separation of California Resources Corporation. |
| |
| • | Change in the unitary tax rate as a result of the separation of California Resources Corporation. |
No adjustments have been made for the costs of operating after the separation of California Resources Corporation, the potentially dilutive impact of changes to stock-based compensation resulting from the Employee Matters Agreement executed in connection with the separation, the use of proceeds from the special cash distribution from California Resources Corporation and any working capital adjustments to be determined after the separation as the impact of these items are not factually supportable at this time.
The unaudited pro forma condensed consolidated financial statements are for illustrative purposes only, and do not reflect what our financial position and results of operations would have been had the separation occurred on the dates indicated and are not necessarily indicative of our future financial position and future results of operations.
OCCIDENTAL PETROLEUM CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT
NINE MONTHS ENDED SEPTEMBER 30, 2014
(Amounts in millions, except per-share amounts)
|
| | | | | | | | | | | | | | |
| | | |
| | | Historical | | Separation of California Resources | | Pro Forma Adjustments | | Pro Forma |
| REVENUES AND OTHER INCOME | | | | | | | | |
| Net sales | | $ | 18,359 |
| | (3,354 | ) | | — |
| | $ | 15,005 |
|
| Interest, dividends, and other income | | 107 |
| | 1 |
| | — |
| | 108 |
|
| Gain on sale of equity instruments | | 520 |
| | — |
| | — |
| | 520 |
|
| | | 18,986 |
| | (3,353 | ) | | — |
| | 15,633 |
|
| | | | | | | | | |
| COSTS AND OTHER DEDUCTIONS | | | | | | | | |
| Cost of sales | | 9,880 |
| | (1,753 | ) | | — |
| | 8,127 |
|
| Selling, general, and administrative and other operating expenses | | 1,327 |
| | (226 | ) | | (25 | ) | (a) | 1,076 |
|
| Asset impairments | | 471 |
| | — |
| | — |
| | 471 |
|
| Taxes other than on income | | 593 |
| | (163 | ) | | — |
| | 430 |
|
| Exploration expense | | 162 |
| | (71 | ) | | — |
| | 91 |
|
| Interest and debt expense, net | | 52 |
| | 6 |
| | — |
| | 58 |
|
| | | 12,485 |
| | (2,207 | ) | | (25 | ) | | 10,253 |
|
| | | | | | | | | |
| INCOME BEFORE INCOME TAXES AND OTHER ITEMS | | 6,501 |
| | (1,146 | ) | | 25 |
| | 5,380 |
|
| Provision for domestic and foreign income taxes | | (2,706 | ) | | 404 |
| | 42 |
| (b) | (2,260 | ) |
| Income from equity investments | | 243 |
| | — |
| | — |
| | 243 |
|
| INCOME FROM CONTINUING OPERATIONS | | 4,038 |
| | (742 | ) | | 67 |
| | 3,363 |
|
| Discontinued operations, net | | (1 | ) | | 742 |
| | — |
| | 741 |
|
| NET INCOME | | 4,037 |
| | — |
| | 67 |
| | 4,104 |
|
| Less: Net income attributable to noncontrolling interest | | (8 | ) | | — |
| | — |
| | (8 | ) |
| NET INCOME ATTRIBUTABLE TO COMMON STOCK | | $ | 4,029 |
| | — |
| | 67 |
| | $ | 4,096 |
|
| BASIC EARNINGS PER COMMON SHARE (attributable to common stock) | | | | | | | | |
| Income from continuing operations | | $ | 5.13 |
| | | | | | $ | 4.28 |
|
| Discontinued operations, net | | — |
| | | | | | 0.94 |
|
| BASIC EARNINGS PER COMMON SHARE | | $ | 5.13 |
| |
| |
| | $ | 5.22 |
|
| | | | | | | | | |
| DILUTED EARNINGS PER COMMON SHARE | | | | | | | | |
| Income from continuing operations | | $ | 5.13 |
| | | | | | $ | 4.27 |
|
| Discontinued operations, net | | — |
| | | | | | 0.94 |
|
| DILUTED EARNINGS PER COMMON SHARE | | $ | 5.13 |
| |
| |
| | $ | 5.21 |
|
| DIVIDENDS PER COMMON SHARE | | $ | 2.16 |
| | | | | | $ | 2.16 |
|
| See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements. | | | | | |
OCCIDENTAL PETROLEUM CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT
NINE MONTHS ENDED SEPTEMBER 30, 2013
(Amounts in millions, except per-share amounts)
|
| | | | | | | | | | | | | | |
| | | |
| | | Historical | | Separation of California Resources | | Pro Forma Adjustments | | Pro Forma |
| REVENUES AND OTHER INCOME | | | | | | | | |
| Net sales | | $ | 18,283 |
| | (3,205 | ) | | — |
| | $ | 15,078 |
|
| Interest, dividends, and other income | | 89 |
| | — |
| | — |
| | 89 |
|
| Gain on sale of equity instruments | | 131 |
| | — |
| | — |
| | 131 |
|
| | | 18,503 |
| | (3,205 | ) | | — |
| | 15,298 |
|
| | | | | | | | | |
| COSTS AND OTHER DEDUCTIONS | | | | | | | | |
| Cost of sales | | 9,531 |
| | (1,650 | ) | | — |
| | 7,881 |
|
| Selling, general, and administrative and other operating expenses | | 1,347 |
| | (185 | ) | | — |
| | 1,162 |
|
| Taxes other than on income | | 568 |
| | (141 | ) | | — |
| | 427 |
|
| Exploration expense | | 196 |
| | (81 | ) | | — |
| | 115 |
|
| Interest and debt expense, net | | 93 |
| | 12 |
| | — |
| | 105 |
|
| | | 11,735 |
| | (2,045 | ) | | — |
| | 9,690 |
|
| | | | | | | | | |
| INCOME BEFORE INCOME TAXES AND OTHER ITEMS | | 6,768 |
| | (1,160 | ) | | — |
| | 5,608 |
|
| Provision for domestic and foreign income taxes | | (2,782 | ) | | 410 |
| | — |
| | (2,372 | ) |
| Income from equity investments | | 288 |
| | — |
| | — |
| | 288 |
|
| INCOME FROM CONTINUING OPERATIONS | | 4,274 |
| | (750 | ) | | — |
| | 3,524 |
|
| Discontinued operations, net | | (14 | ) | | 750 |
| | — |
| | 736 |
|
| NET INCOME | | $ | 4,260 |
| | — |
| | — |
| | $ | 4,260 |
|
| BASIC EARNINGS PER COMMON SHARE | | | | | | | | |
| Income from continuing operations | | $ | 5.30 |
| | | | | | $ | 4.37 |
|
| Discontinued operations, net | | (0.02 | ) | | | | | | 0.91 |
|
| BASIC EARNINGS PER COMMON SHARE | | $ | 5.28 |
| |
| |
| | $ | 5.28 |
|
| | | | | | | | | |
| DILUTED EARNINGS PER COMMON SHARE | | | | | | | | |
| Income from continuing operations | | $ | 5.30 |
| | | | | | $ | 4.37 |
|
| Discontinued operations, net | | (0.02 | ) | | | | | | 0.91 |
|
| DILUTED EARNINGS PER COMMON SHARE | | $ | 5.28 |
| |
| |
| | $ | 5.28 |
|
| DIVIDENDS PER COMMON SHARE | | $ | 1.92 |
| | | | | | $ | 1.92 |
|
| See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements. | | | | | |
OCCIDENTAL PETROLEUM CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT
YEAR ENDED DECEMBER 31, 2013
(Amounts in millions, except per-share amounts)
|
| | | | | | | | | | | | | | |
| | | |
| | | Historical | | Separation of California Resources | | Pro Forma Adjustments | | Pro Forma |
| REVENUES AND OTHER INCOME | | | | | | | | |
| Net sales | | $ | 24,455 |
| | (4,285 | ) | | — |
| | $ | 20,170 |
|
| Interest, dividends, and other income | | 106 |
| | 1 |
| | — |
| | 107 |
|
| Gain on sale of equity instruments | | 1,175 |
| | — |
| | — |
| | 1,175 |
|
| | | 25,736 |
| | (4,284 | ) | | — |
| | 21,452 |
|
| | | | | | | | |
|
| COSTS AND OTHER DEDUCTIONS | | | | | | | |
|
| Cost of sales | | 7,562 |
| | (1,065 | ) | | — |
| | 6,497 |
|
| Selling, general, and administrative and other operating expenses | | 1,801 |
| | (257 | ) | | — |
| | 1,544 |
|
| Depreciation, depletion and amortization | | 5,347 |
| | (1,144 | ) | | — |
| | 4,203 |
|
| Asset impairments and related items | | 621 |
| | — |
| | — |
| | 621 |
|
| Taxes other than on income | | 749 |
| | (185 | ) | | — |
| | 564 |
|
| Exploration expense | | 256 |
| | (116 | ) | | — |
| | 140 |
|
| Interest and debt expense, net | | 118 |
| | 14 |
| | — |
| | 132 |
|
| | | 16,454 |
| | (2,753 | ) | | — |
| | 13,701 |
|
| | | | | | | | |
|
| INCOME BEFORE INCOME TAXES AND OTHER ITEMS | | 9,282 |
| | (1,531 | ) | | — |
| | 7,751 |
|
| Provision for domestic and foreign income taxes | | (3,755 | ) | | 541 |
| | — |
| | (3,214 | ) |
| Income from equity investments | | 395 |
| | — |
| | — |
| | 395 |
|
| INCOME FROM CONTINUING OPERATIONS | | 5,922 |
| | (990 | ) | | — |
| | 4,932 |
|
| Discontinued operations, net | | (19 | ) | | 990 |
| | — |
| | 971 |
|
| NET INCOME | | $ | 5,903 |
| | — |
| | — |
| | $ | 5,903 |
|
| BASIC EARNINGS PER COMMON SHARE | | | | | | | |
|
| Income from continuing operations | | $ | 7.35 |
| | | | | | $ | 6.12 |
|
| Discontinued operations, net | | (0.02 | ) | | | | | | 1.21 |
|
| BASIC EARNINGS PER COMMON SHARE | | $ | 7.33 |
| |
| |
| | $ | 7.33 |
|
| | | | | | | | |
|
| DILUTED EARNINGS PER COMMON SHARE | | | | | | | |
|
| Income from continuing operations | | $ | 7.34 |
| | | | | | $ | 6.12 |
|
| Discontinued operations, net | | (0.02 | ) | | | | | | 1.20 |
|
| DILUTED EARNINGS PER COMMON SHARE | | $ | 7.32 |
| |
| |
| | $ | 7.32 |
|
| DIVIDENDS PER COMMON SHARE | | $ | 2.56 |
| | | | | | $ | 2.56 |
|
| See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements. | | | | | |
OCCIDENTAL PETROLEUM CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT
YEAR ENDED DECEMBER 31, 2012
(Amounts in millions, except per-share amounts)
|
| | | | | | | | | | | | | | |
| | | |
| | | Historical | | Separation of California Resources | | Pro Forma Adjustments | | Pro Forma |
| REVENUES AND OTHER INCOME | | | | | | | | |
| Net sales | | $ | 24,172 |
| | (4,072 | ) | | — |
| | $ | 20,100 |
|
| Interest, dividends, and other income | | 81 |
| | (1 | ) | | — |
| | 80 |
|
| | | 24,253 |
| | (4,073 | ) | | — |
| | 20,180 |
|
| | | | | | | | |
|
| COSTS AND OTHER DEDUCTIONS | | | | | | | |
|
| Cost of sales | | 7,844 |
| | (1,314 | ) | | — |
| | 6,530 |
|
| Selling, general, and administrative and other operating expenses | | 1,602 |
| | (236 | ) | | — |
| | 1,366 |
|
| Depreciation, depletion and amortization | | 4,511 |
| | (926 | ) | | — |
| | 3,585 |
|
| Asset impairments and related items | | 1,751 |
| | (41 | ) | | — |
| | 1,710 |
|
| Taxes other than on income | | 680 |
| | (167 | ) | | — |
| | 513 |
|
| Exploration expense | | 345 |
| | (148 | ) | | — |
| | 197 |
|
| Interest and debt expense, net | | 130 |
| | 24 |
| | — |
| | 154 |
|
| | | 16,863 |
| | (2,808 | ) | | — |
| | 14,055 |
|
| | | | | | | | | — |
|
| INCOME BEFORE INCOME TAXES AND OTHER ITEMS | | 7,390 |
| | (1,265 | ) | | — |
| | 6,125 |
|
| Provision for domestic and foreign income taxes | | (3,118 | ) | | 459 |
| | — |
| | (2,659 | ) |
| Income from equity investments | | 363 |
| | — |
| | — |
| | 363 |
|
| INCOME FROM CONTINUING OPERATIONS | | 4,635 |
| | (806 | ) | | — |
| | 3,829 |
|
| Discontinued operations, net | | (37 | ) | | 806 |
| | — |
| | 769 |
|
| NET INCOME | | $ | 4,598 |
| | — |
| | — |
| | $ | 4,598 |
|
| BASIC EARNINGS PER COMMON SHARE | | | | | | | |
|
| Income from continuing operations | | $ | 5.72 |
| | | | | | $ | 4.72 |
|
| Discontinued operations, net | | (0.05 | ) | | | | | | 0.95 |
|
| BASIC EARNINGS PER COMMON SHARE | | $ | 5.67 |
| |
| |
| | $ | 5.67 |
|
| | | | | | | | |
|
| DILUTED EARNINGS PER COMMON SHARE | | | | | | | |
|
| Income from continuing operations | | $ | 5.71 |
| | | | | | $ | 4.72 |
|
| Discontinued operations, net | | (0.04 | ) | | | | | | 0.95 |
|
| DILUTED EARNINGS PER COMMON SHARE | | $ | 5.67 |
| |
| |
| | $ | 5.67 |
|
| DIVIDENDS PER COMMON SHARE | | $ | 2.16 |
| | | | | | $ | 2.16 |
|
| See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements. | | | | | |
OCCIDENTAL PETROLEUM CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT
YEAR ENDED DECEMBER 31, 2011
(Amounts in millions, except per-share amounts)
|
| | | | | | | | | | | | | | |
| | | |
| | | Historical | | Separation of California Resources | | Pro Forma Adjustments | | Pro Forma |
| REVENUES AND OTHER INCOME | | | | | | | | |
| Net sales | | $ | 23,939 |
| | (3,938 | ) | | — |
| | $ | 20,001 |
|
| Interest, dividends, and other income | | 180 |
| | 4 |
| | — |
| | 184 |
|
| | | 24,119 |
| | (3,934 | ) | | — |
| | 20,185 |
|
| | | | | | | | |
|
| COSTS AND OTHER DEDUCTIONS | | | | | | | |
|
| Cost of sales | | 7,385 |
| | (1,074 | ) | | — |
| | 6,311 |
|
| Selling, general, and administrative and other operating expenses | | 1,523 |
| | (211 | ) | | — |
| | 1,312 |
|
| Depreciation, depletion and amortization | | 3,591 |
| | (675 | ) | | — |
| | 2,916 |
|
| Taxes other than on income | | 605 |
| | (143 | ) | | — |
| | 462 |
|
| Exploration expense | | 258 |
| | (114 | ) | | — |
| | 144 |
|
| Interest and debt expense, net | | 298 |
| | 24 |
| | — |
| | 322 |
|
| | | 13,660 |
| | (2,193 | ) | | — |
| | 11,467 |
|
| | | | | | | | |
|
| INCOME BEFORE INCOME TAXES AND OTHER ITEMS | | 10,459 |
| | (1,741 | ) | | — |
| | 8,718 |
|
| Provision for domestic and foreign income taxes | | (4,201 | ) | | 628 |
| | — |
| | (3,573 | ) |
| Income from equity investments | | 382 |
| | — |
| | — |
| | 382 |
|
| INCOME FROM CONTINUING OPERATIONS | | 6,640 |
| | (1,113 | ) | | — |
| | 5,527 |
|
| Discontinued operations, net | | 131 |
| | 1,113 |
| | | | 1,244 |
|
| NET INCOME | | $ | 6,771 |
| | — |
| | — |
| | $ | 6,771 |
|
| BASIC EARNINGS PER COMMON SHARE | | | | | | | |
|
| Income from continuing operations | | $ | 8.16 |
| | | | | | $ | 6.79 |
|
| Discontinued operations, net | | 0.16 |
| | | | | | 1.53 |
|
| BASIC EARNINGS PER COMMON SHARE | | $ | 8.32 |
| |
| |
| | $ | 8.32 |
|
| | | | | | | | |
|
| DILUTED EARNINGS PER COMMON SHARE | | | | | | | |
|
| Income from continuing operations | | $ | 8.16 |
| | | | | | $ | 6.79 |
|
| Discontinued operations, net | | 0.16 |
| | | | | | 1.53 |
|
| DILUTED EARNINGS PER COMMON SHARE | | $ | 8.32 |
| |
| |
| | $ | 8.32 |
|
| DIVIDENDS PER COMMON SHARE | | $ | 1.84 |
| | | | | | $ | 1.84 |
|
| See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements. | | | | | |
OCCIDENTAL PETROLEUM CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2014
(Amounts in millions) |
| | | | | | | | | | | | | | |
| | | |
| | | Historical | | Separation of California Resources | | Pro Forma Adjustments | | Pro Forma |
| CURRENT ASSETS | | | | | | | | |
| Cash and cash equivalents | | $ | 2,897 |
| | (105 | ) | | 1,150 |
| (c) | $ | 3,942 |
|
| Restricted Cash | | — |
| | — |
| | 4,950 |
| (c) | 4,950 |
|
| Trade receivables, net | | 4,960 |
| | (441 | ) | | — |
| | 4,519 |
|
| Inventories | | 1,359 |
| | (72 | ) | | — |
| | 1,287 |
|
| Other current assets | | 1,291 |
| | (236 | ) | | — |
| | 1,055 |
|
| Total current assets | | 10,507 |
| | (854 | ) | | 6,100 |
| | 15,753 |
|
| INVESTMENTS IN UNCONSOLIDATED ENTITIES | | 1,544 |
| | — |
| | — |
| | 1,544 |
|
| PROPERTY, PLANT, AND EQUIPMENT | | | | | | | |
|
| Total Property, plant, and equipment | | 94,771 |
| | (22,680 | ) | | — |
| | 72,091 |
|
| Accumulated depreciation, depletion, and amortization | | (36,306 | ) | | 7,868 |
| | — |
| | (28,438 | ) |
| | | 58,465 |
| | (14,812 | ) | | — |
| | 43,653 |
|
| | | | | | | | |
|
| INVESTMENT IN CALIFORNIA RESOURCES COMPANY | | — |
| | — |
| | 997 |
| (d) | 997 |
|
| LONG-TERM RECEIVABLES AND OTHER ASSETS, NET | | 994 |
| | (34 | ) | | — |
| | 960 |
|
| TOTAL ASSETS | | $ | 71,510 |
| | (15,700 | ) | | 7,097 |
| | $ | 62,907 |
|
| | | | | | | | |
|
| CURRENT LIABILITIES | | | | | | | |
|
| Short-term borrowings | | $ | 1,599 |
| | — |
| | — |
| | $ | 1,599 |
|
| Accounts payable | | 5,511 |
| | (584 | ) | | — |
| | 4,927 |
|
| Accrued liabilities | | 2,337 |
| | (259 | ) | | — |
| | 2,078 |
|
| Domestic and foreign income taxes | | 74 |
| | — |
| | — |
| | 74 |
|
| Total current liabilities | | 9,521 |
| | (843 | ) | | — |
| | 8,678 |
|
| LONG-TERM DEBT, NET | | 6,837 |
| | — |
| | — |
| | 6,837 |
|
| DEFERRED CREDITS AND OTHER LIABILITIES | | | | | | | |
|
| Deferred domestic and foreign income taxes | | 7,634 |
| | (3,107 | ) | | (42 | ) | (b) | 4,485 |
|
| Other | | 3,433 |
| | (546 | ) | | — |
| | 2,887 |
|
| | | 11,067 |
| | (3,653 | ) | | (42 | ) | | 7,372 |
|
| | | | | | | | |
|
| STOCKHOLDERS' EQUITY | | | | | | | |
|
| Common stock, at par value | | 178 |
| | — |
| | — |
| | 178 |
|
| Treasury stock | | (8,146 | ) | | — |
| | — |
| | (8,146 | ) |
| Additional paid-in capital | | 7,570 |
| | — |
| | — |
| | 7,570 |
|
| Retained earnings | | 44,166 |
| | (11,204 | ) | | 7,139 |
| (e) | 40,101 |
|
| Accumulated other comprehensive loss | | (289 | ) | | — |
| | — |
| | (289 | ) |
| Total equity attributable to common stock | | 43,479 |
| | (11,204 | ) | | 7,139 |
| | 39,414 |
|
| Noncontrolling interest | | 606 |
| | — |
| | — |
| | 606 |
|
| Total Equity | | 44,085 |
| | (11,204 | ) | | 7,139 |
|
| 40,020 |
|
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | | $ | 71,510 |
| | (15,700 | ) | | 7,097 |
| | $ | 62,907 |
|
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
| | | | | |
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| |
| a. | Reduction of separation costs incurred related to the spin-off of California Resources Corporation. Expenses incurred primarily relate to compensation and benefits, legal, accounting, and information system costs. |
| |
| b. | Represents the change in the unitary tax rate as a result of the spin-off of California Resources Corporation. |
| |
| c. | Pursuant to the private letter ruling received from the Internal Revenue Service (IRS), immediately prior to the separation, California Resources Corporation distributed approximately $4.95 billion and $1.15 billion in cash primarily using the proceeds from the $5 billion in Senior Notes issued by California Resources Corporation in October 2014 and borrowings under the $1.0 billion Term Loan Facility and $2.0 billion Revolving Credit Facility. Under the terms of the IRS ruling, the proceeds from the Senior Notes will be used solely to pay dividends, repurchase common stock, repay debt, or a combination of the foregoing, within eighteen months following the distribution. |
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| d. | In connection with the spin-off, Occidental distributed at least 80.1% of California Resources Corporation common stock to Occidental shareholders. The remaining investment is recorded on the pro-forma balance sheet as an Investment in California Resource Corporation at cost. At year end the investment will be recorded at fair value as an available for sale asset with any unrealized gains or losses included in accumulated other comprehensive income. Occidental will dispose of this investment within eighteen months following the spin-off. |
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| e. | Stockholders’ equity was adjusted as a result of adjustments (b), (c) and (d). |
